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EXHIBIT 10.16
AGREEMENT
AND
PLAN OF MERGER
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TABLE OF CONTENTS
ARTICLE I THE MERGER.......................................................................................1
1.1 The Merger.....................................................................................1
1.2 Effective Time; Closing........................................................................1
1.3 Effects of the Merger..........................................................................2
1.4 Subsequent Actions.............................................................................2
1.5 Certificate of Incorporation and Bylaws........................................................2
1.6 Directors and Officers.........................................................................2
1.7 Conversion of Shares...........................................................................3
1.8 Conversion of Acquisition's Capital Stock......................................................3
1.9 Employee Options, Employee Stock Purchase Plan and Rabbi Trust.................................3
ARTICLE II DISSENTING SHARES; EXCHANGE OF SHARES............................................................4
2.1 Dissenting Shares..............................................................................4
2.2 Exchange of Shares.............................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................................................6
3.1 Organization and Qualification; Subsidiaries...................................................6
3.2 Capitalization.................................................................................7
3.3 Authority Relative to this Agreement...........................................................8
3.4 Consents and Approvals; No Violation...........................................................8
3.5 SEC Filings; Financial Statements..............................................................9
3.6 Absence of Certain Changes and Events.........................................................10
3.7 Proxy Statement...............................................................................11
3.8 Material Assets...............................................................................11
3.9 Material Proceedings..........................................................................11
3.10 Employee Benefit Plans, Etc...................................................................11
3.11 Environmental Matters.........................................................................14
3.12 Labor Matters.................................................................................16
3.13 Intellectual Property.........................................................................17
3.14 Brokers.......................................................................................17
3.15 Taxes.........................................................................................17
3.16 Real Properties...............................................................................18
3.17 Compliance with Laws..........................................................................18
3.18 Interested Party Transactions.................................................................19
3.19 Insurance.....................................................................................19
3.20 Certain Business Practices....................................................................19
3.21 Y2K Compliance................................................................................19
3.22 Agreement, Contracts and Commitments..........................................................19
3.23 Merger Payments...............................................................................21
3.24 Government Contracts..........................................................................21
3.25 Certain Approvals.............................................................................22
3.26 Relationships with Customers, Suppliers and Representatives...................................23
3.27 Permits.......................................................................................23
3.28 Company Action................................................................................23
3.29 Opinion of Financial Advisor..................................................................23
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND ACQUISITION......................................24
4.1 Organization..................................................................................24
4.2 Authority Relative to This Agreement..........................................................24
4.3 Consents and Approvals; No Violation..........................................................24
4.4 Proxy Statement...............................................................................25
4.5 Financing.....................................................................................25
4.6 No Violation of the Margin Rules..............................................................25
4.7 Brokers.......................................................................................25
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER..........................................................25
ARTICLE VI ADDITIONAL AGREEMENTS...........................................................................28
6.1 No Solicitation...............................................................................28
6.2 Access to and Delivery of Information.........................................................30
6.3 Public Announcement...........................................................................31
6.4 Indemnification and Insurance.................................................................31
6.5 Continuation of Benefits......................................................................31
6.6 Severance Policy and Other Agreements.........................................................32
6.7 Reasonable Efforts............................................................................32
6.8 Proxy Statement...............................................................................33
6.9 Notification of Certain Matters; Equitable Relief.............................................34
6.10 Antitrust Notification........................................................................35
6.11 Takeover Statutes.............................................................................35
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................................................35
7.1 Conditions to Each Party's Obligation to Effect the Merger....................................35
7.2 Conditions to Obligation of the Company to Effect the Merger..................................35
7.3 Conditions to Obligation of Acquiror and Acquisition to Effect the Merger.....................36
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER..................................................................37
8.1 Termination...................................................................................37
8.2 Notice of Termination; Effect of Termination..................................................39
8.3 Fees and Expenses.............................................................................39
8.4 Amendment.....................................................................................40
8.5 Extension; Waiver.............................................................................40
ARTICLE IX MISCELLANEOUS...................................................................................40
9.1 Non-Survival of Representations and Warranties................................................40
9.2 Entire Agreement; Assignment..................................................................40
9.3 Validity......................................................................................41
9.4 Notices.......................................................................................41
9.5 Governing Law.................................................................................42
9.6 Interpretation................................................................................42
9.7 Counterparts..................................................................................42
9.8 Parties in Interest...........................................................................42
9.9 Severability..................................................................................42
9.10 Attorneys Fees................................................................................43
9.11 Expenses......................................................................................43
9.12 Waiver of Jury Trial..........................................................................43
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of March 23,
2000, by and among MACTEC, Inc., a Colorado corporation ("Acquiror"), CETCAM
Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of
Acquiror ("Acquisition"), and Xxxxxxx Xxxxxx Associates Group, Inc., a Delaware
corporation (the "Company").
RECITALS
A. The Boards of Directors of Acquiror, Acquisition and the Company have
each determined that it is in the best interests of their respective
stockholders for Acquisition to merge with and into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in this Agreement.
B. The Board of Directors of the Company (the "Board") has approved this
Agreement and the Merger as required by applicable law.
C. The Boards of Directors of Acquiror and Acquisition, and the sole
shareholder of Acquisition, have approved this Agreement and the Merger as
required by applicable law.
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, Acquiror, Acquisition and the Company hereby
agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII, and in
accordance with the GCL, at the Effective Time (as defined in Section 1.2),
Acquisition shall be merged with and into the Company. As a result of the
Merger, the separate corporate existence of Acquisition shall cease and the
Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation") and shall succeed to and assume all the rights and
obligations of Acquisition. Acquiror, as the sole stockholder of Acquisition,
hereby approves the Merger and this Agreement.
1.2 Effective Time; Closing. As soon as practicable after satisfaction or,
if permissible, waiver of all conditions to the Merger set forth in Article VII,
the parties shall cause the Merger to be consummated by filing a certificate of
merger with the Secretary of State of the State of Delaware (the "Certificate of
Merger"), in such form as required by and executed in accordance with the
relevant provisions of the GCL. The Merger shall become effective at the time
when the Certificate of Merger has been duly
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filed with the Secretary of State of the State of Delaware or at such later time
as is specified in the Certificate of Merger, as agreed by the parties (the
"Effective Time"). Contemporaneous with the filing of the Certificate of Merger,
a closing of the Merger shall be held at 9:00 a.m., Mountain Standard Time, at
the offices of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx 00000 or at such other time or location as the parties may
establish.
1.3 Effects of the Merger. The Merger shall have the effects set forth in
the GCL.
1.4 Subsequent Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Acquisition acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or otherwise to carry out this Agreement, the officers and directors of
the Surviving Corporation are authorized to execute and deliver, in the name and
on behalf of either the Company or Acquisition, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
1.5 Certificate of Incorporation and Bylaws.
(a) The Certificate of Incorporation of Acquisition, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, provided that, at the Effective
Time, the first item of the Certificate of Incorporation of the Surviving
Corporation shall read (until duly amended in accordance with applicable law) as
follows: "FIRST: The name of the Corporation is Xxxxxxx Environmental Science &
Engineering, Inc."
(b) The Bylaws of Acquisition, as in effect immediately prior to the
Effective Time, shall be the Bylaws of the Surviving Corporation (until duly
amended in accordance with applicable law).
1.6 Directors and Officers. The directors of Acquisition immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, and the officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, each to hold
office from the Effective Time in accordance with the Certificate of
Incorporation and the Bylaws of the Surviving Corporation.
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1.7 Conversion of Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of Acquiror, Acquisition, the Company or any
holder of Shares:
(a) each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares held by Acquiror, Acquisition or any
direct or indirect wholly owned subsidiary of Acquiror, in the Company's
treasury (other than Shares held in the rabbi trust of the Company) or by any
subsidiary of the Company (collectively, "Excluded Shares"), and other than
Dissenting Shares, as defined in Section 2.1) shall automatically be converted
into the right, subject to the provisions of Section 2.2(c), to receive a price
of $11.50 per share in cash, without interest thereon, subject to reduction for
applicable withholding taxes or stock transfer taxes payable by the seller (the
"Merger Consideration"), deliverable to the holder thereof upon surrender of the
certificate formerly representing such Share in the manner provided by Section
2.2; and
(b) each Excluded Share immediately prior to the Effective Time shall
be cancelled and shall cease to exist and no payment or other consideration
shall be made with respect thereto.
1.8 Conversion of Acquisition's Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of Acquiror,
Acquisition, the Company or any holder of any shares of the outstanding capital
stock of Acquisition, each share of common stock, par value $.01 per share, of
Acquisition issued and outstanding immediately prior to the Effective Time shall
be converted into and exchanged for one validly issued, fully paid and
nonassessable share of Class B Common Stock, par value $.01 per share, of the
Surviving Corporation.
1.9 Employee Options, Employee Stock Purchase Plan and Rabbi Trust.
(a) On or before the Effective Time, the Company shall accelerate the
unvested portion of all outstanding Company Options (as defined in Section
3.2(a)), conditioned upon the successful completion of the Merger. In lieu of
exercising such Company Options each holder thereof shall, upon surrender for
cancellation of the same to the Company on or before the Effective Time, be
entitled to receive from the Company, subject to applicable withholding
requirements, an amount in cash equal to the excess, if any, of (i) the product
of the number of Shares covered by such Company Options multiplied by the Merger
Consideration, over (ii) the product of the number of Shares covered by such
Company Options multiplied by the per-Share exercise or purchase price payable
upon exercise or purchase of the same. The Company on or before the Effective
Time shall use its reasonable best efforts to (x) obtain any requisite consents
from holders of Company Options to acquire Shares and (y) make any changes in
the Stock Option Plans (as defined in Section 3.2(a)) and Employee Stock
Purchase Plan and Company Options that are necessary to give effect to the
transactions contemplated by this Section 1.9(a).
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(b) The Company shall take such actions, on or before the Effective
Time, as are necessary to terminate the Company's Employee Stock Purchase Plan.
(c) The Company shall take such actions, on or before the Effective
Time, as are necessary to extinguish all liabilities of the Company's
Non-Qualified Deferred Compensation Plan adopted in November, 1987, and
terminate the Company's rabbi trust relating thereto.
ARTICLE II
DISSENTING SHARES; EXCHANGE OF SHARES
2.1 Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, each Share which is issued and outstanding immediately prior to the
Effective Time and which is held by a stockholder who has not voted such Shares
in favor of the Merger or consented thereto in writing and who is entitled by
applicable Delaware law to appraisal rights, and who shall have properly
demanded in writing appraisal for such Shares in accordance with Section 262 of
the GCL (collectively, the "Dissenting Shares"), shall not be converted into or
represent the right to receive the Merger Consideration, unless and until such
holders shall have failed to perfect or shall have effectively withdrawn or lost
their rights to appraisal and payment under the GCL. If any such holder shall
have so failed to perfect or shall have effectively withdrawn or lost such
right, his Shares shall thereupon be deemed to have been converted into and to
have become exchangeable for, at the Effective Time, the right to receive the
Merger Consideration, without any interest thereon, upon surrender of the
certificate formerly representing such Shares in the manner provided in Section
2.2. The Company shall give Acquiror prompt notice of any written demands for
appraisal or notices of dissent with respect to any Shares, any withdrawal of
any such demand, and any other instruments served pursuant to the GCL and
received by the Company, and Acquiror shall have the right to participate in and
to control all negotiations and proceedings with respect to any demands for
appraisal made by any holders of Dissenting Shares. Prior to the Effective Time,
the Company shall not, except with the prior written consent of Acquiror, make
any payment with respect to, or settle or offer to settle, any such demands.
2.2 Exchange of Shares.
(a) Prior to the Effective Time, Acquisition shall designate a bank or
trust company (which shall be insured by the Federal Deposit Insurance
Corporation (the "FDIC") and be reasonably acceptable to the Company) to act as
agent for the holders of Shares in connection with the Merger (the "Paying
Agent") to receive the funds constituting the Merger Consideration to which
holders of Shares become entitled at the Effective Time pursuant to Section
1.7(a), all such funds to be deposited in trust with the Paying Agent
immediately prior to the Effective Time on terms reasonably acceptable to the
Company. The aggregate Merger Consideration shall be invested by the Paying
Agent, as directed by Acquiror (so long as such directions do not impair the
rights of
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holders of Shares). Any net profits resulting from, or interest or income
produced by, such investments shall be payable as directed by Acquiror.
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each person who was, immediately prior to the Effective
Time, a holder of record of Shares (other than holders of Excluded Shares), a
form of letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to a certificate which, immediately prior
to the Effective Time, represented any Shares (a "Certificate") shall pass, only
upon proper delivery of the Certificate to the Paying Agent and shall be in a
form and have such other provisions as Acquiror may reasonably specify) and
instructions for use in effecting the surrender of the Certificate for payment
of the appropriate Merger Consideration. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and any other documents
as may be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration for
each Share formerly represented by such Certificate (subject to required tax
withholdings), and such Certificate shall then be cancelled. No interest will be
accrued or paid on the Merger Consideration. If delivery of the Merger
Consideration is to be made to a person other than the person in whose name a
surrendered Certificate is registered, it shall be a condition to such delivery
that the Certificate so surrendered shall be properly endorsed or otherwise in
proper form for transfer and that the person requesting such delivery shall have
paid all transfer and other taxes required by reason of such delivery to a
person other than such registered holder or shall have established to the
satisfaction of the Surviving Corporation that such tax either has been paid or
is not applicable. If a mutilated Certificate is surrendered to the Paying Agent
or if the holder of a Certificate submits an affidavit to the Paying Agent
stating that the Certificate has been lost, destroyed or wrongfully taken, such
holder shall, if required by the Surviving Corporation, furnish an indemnity
bond sufficient in the reasonable judgment of the Surviving Corporation to
protect Acquiror, the Surviving Corporation and the Paying Agent from any loss
that any of them may suffer. Until surrendered in accordance with the provisions
of this Section 2.2, from and after the Effective Time each Certificate (other
than Certificates representing Excluded Shares and other than Certificates
representing Dissenting Shares) shall represent for all purposes only the right
to receive for each Share represented thereby the Merger Consideration. All
Merger Consideration paid upon surrender for exchange of any Certificate in
accordance with the terms of this Agreement shall be deemed to have been paid in
full satisfaction of all rights pertaining to such Certificate.
(c) At any time following 180 days after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds (including any interest received with respect thereto) which had
been made available to the Paying Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled to look
only to the Surviving Corporation (subject to abandoned property, escheat and
other similar laws) for distribution of the Merger Consideration, upon due
surrender of their Certificates. Notwithstanding the foregoing,
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none of Acquiror, Acquisition, Surviving Corporation or the Paying Agent shall
be liable to a holder of a Certificate for Merger Consideration properly
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(d) From and after the Effective Time, the holders of Certificates
evidencing ownership of Shares outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such Shares, except as
otherwise provided for herein or by applicable law.
(e) At the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no registration of transfers of
Shares on the records of the Company. If, after the Effective Time, Certificates
are presented to the Surviving Corporation, they shall be cancelled and
exchanged for the Merger Consideration as provided in this Section 2.2.
(f) Acquiror or the Paying Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of Shares such amounts as Acquiror or the Paying Agent is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code") or under any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
Acquiror or the Paying Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the Shares in
respect of which such deduction and withholding was made by the Acquiror or the
Paying Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Acquiror and Acquisition as follows:
3.1 Organization and Qualification; Subsidiaries. Each of the Company and
its subsidiaries (the "Subsidiaries") is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and each has all requisite corporate or other power and authority
to own, lease or operate the properties that it purports to own, lease or
operate and to conduct its business as it is now being conducted, except where
the failure to be so existing and in good standing or to have such power and
authority has not had and would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). Each of the Company and the
Subsidiaries is duly qualified or licensed as a foreign corporation to do
business and is in good standing in each jurisdiction where the property owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing which has not had and would not,
either individually or in the aggregate, have a Material Adverse Effect. When
used in connection with the Company or a Subsidiary, the term "Material Adverse
Effect" means any change in or effect on the business, assets, liabilities,
results of operations or
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condition (financial or otherwise) of the Company or any of the Subsidiaries
that has been or could reasonably be expected to be materially adverse to the
Company and the Subsidiaries taken as a whole or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement. The Company has heretofore delivered to Acquiror
true and complete copies of the charters and Bylaws of the Company and the
Subsidiaries as currently in effect. The Company is not in violation of any of
the provisions of its Certificate of Incorporation or Bylaws. Schedule 3.1(a)
contains a correct and complete list of (A) the legal name of each of the
Company's Subsidiaries, (B) the jurisdiction where each of such Subsidiaries is
incorporated or organized, (C) the jurisdictions in which each of the Company
and its Subsidiaries is qualified to transact business as a foreign corporation
and (D) the percentage of outstanding capital stock of such Subsidiaries that is
directly or indirectly owned by the Company. Schedule 3.1(b) sets forth a true
and complete list of the direct and indirect partnership, joint venture, or
other equity investments made by the Company or any of its Subsidiaries in any
person other than the Company's Subsidiaries, and the nature and amount of such
investments.
3.2 Capitalization.
(a) The authorized capital stock of the Company consists of 1,000,000
shares of preferred stock, par value $0.01 per share, none of which are issued
and outstanding, and 10,000,000 shares of Common Stock. As of the date hereof,
there were 5,100,996 shares of Common Stock issued and outstanding, all of which
are validly issued, fully paid and nonassessable, are entitled to vote on this
Agreement and are not subject to and were not issued in violation of any
preemptive rights. Schedule 3.2(a) contains a correct and complete list as of
the date hereof of each outstanding purchase right or option (each a "Company
Option") to purchase Shares, including all Company Options issued under the 1998
Stock Option Plan, the 1988 Stock Option and Restricted Stock Option Plan, the
1987 Stock Option Plan, and the Employment Agreement between the Company and
Xxxxxx X. Xxxxxxxx, Xx. in each case as amended to the date hereof
(collectively, the "Stock Option Plans"), including the holder, date of grant,
exercise price and number of Shares subject thereto. Since the date hereof, the
Company has not issued any shares of capital stock except pursuant to the
exercise of Company Options outstanding as of such date. The Stock Option Plans
and the Employee Stock Purchase Plan are the only plans under which Company
Options are outstanding. Other than Company Options outstanding as of the date
hereof and the Shares reserved for issuance upon exercise of those Company
Options, there are not now, and at the Effective Time there will not be, any
options, warrants, calls, rights, registration rights, subscriptions,
convertible securities or other rights or other agreements, arrangements or
commitments of any kind obligating the Company or any of its Subsidiaries to
issue, transfer, sell or register any securities of the Company. All shares of
Common Stock subject to issuance as described above, upon issuance on the terms
and conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There are
no outstanding contractual or other obligations of the Company or any of the
Subsidiaries to purchase, redeem or otherwise acquire any
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Shares or the capital stock of any Subsidiary. There are no bonds, debentures,
notes or other indebtedness having general voting rights (or convertible into
securities having such rights) ("Voting Debt") of the Company or any of its
Subsidiaries issued and outstanding. There are not now, and at the Effective
Time there will not be, any stockholder agreement, voting trust, proxies or
other agreements or understandings to which the Company or any Subsidiary is a
party or is bound relating to any shares of the capital stock of the Company or
any Subsidiary or granting to any person or group of persons the right to elect,
or to designate or nominate for election, a director to the Board of Directors
of the Company.
(b) All the outstanding shares of each of the Subsidiaries have been
validly issued and are fully paid and nonassessable, are not subject to and were
not issued in violation of any preemptive rights, and are owned by the Company
or a Subsidiary free and clear of all liabilities, obligations, claims, liens,
pledges, security interests, options, charges, encumbrances and interests of any
third party of any nature whatsoever. There are not now, and at the Effective
Time there will not be, any options, warrants, calls, rights, subscriptions,
convertible securities or other rights or other agreements, arrangements or
commitments of any kind relating to the issued or unissued capital stock or
other securities of any Subsidiary or otherwise obligating the Company or any
Subsidiary to issue, transfer or sell any securities of any Subsidiary.
3.3 Authority Relative to this Agreement. The Company has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of the Company (other than, with respect to the
Merger, the approval and adoption of this Agreement by the holders of a majority
of the outstanding Shares, if and to the extent required by applicable law).
This Agreement has been duly executed and delivered by the Company and, assuming
the due authorization, execution and delivery of this Agreement by Acquiror and
Acquisition, constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to (i) any
applicable bankruptcy, insolvency or other similar laws now or hereafter in
effect affecting creditors' rights generally, and (ii) general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
3.4 Consents and Approvals; No Violation. None of the execution and
delivery of this Agreement by the Company, the consummation by the Company of
the transactions contemplated hereby or compliance by the Company with any of
the provisions hereof will (i) conflict with or result in a breach of any
provision of the respective charters or Bylaws (or similar governing documents)
of the Company or any Subsidiary, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any court or
other governmental, administrative or regulatory authority, agency, commission,
body or other governmental entity ("Governmental Entity"), by the Company or any
Subsidiary except (A) pursuant to the Exchange Act, the Securities Act of 1933,
as amended (the "Securities Act"), certain state "blue sky" statutes, and the
Xxxx-
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Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (B)
for filing the Certificate of Merger pursuant to the GCL, and (C) novations
required under government contracts set forth on Schedule 3.4, (iii) except as
set forth on Schedule 3.4, result in a default (or an event which with notice or
lapse of time or both would become a default) or give to any third party any
right of termination, cancellation, amendment or acceleration under, result in
any loss of any material benefit or result in the creation of a lien or
encumbrance on any of the assets of the Company or any Subsidiary pursuant to,
any note, bond, mortgage, indenture, lease, permit, franchise, license,
agreement or other instrument or obligation to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary or any of their
respective assets may be bound or affected, or (iv) violate or conflict with any
order, writ, injunction, decree, statute, rule, regulation, permit or license
applicable to the Company or any Subsidiary or any of their respective
properties or assets; other than (A) such defaults, rights of termination,
cancellation, amendment or acceleration, liens and encumbrances, violations and
conflicts set forth pursuant to (iii) and (iv) above, and (B) such consents,
approvals, authorizations, permits or filings, as set forth pursuant to (ii)
above, the failure to obtain which, individually or in the aggregate, have not
had and would not have a Material Adverse Effect.
3.5 SEC Filings; Financial Statements.
(a) The Company has heretofore delivered or made available to Acquiror
or Acquisition true and complete copies of all forms, reports, registration
statements and documents filed with the SEC by it since May 31, 1994
(collectively, the "SEC Reports"), all of which, as of their respective dates,
complied in all material respects with all applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations promulgated
thereunder. None of the SEC Reports (including, without limitation, any
financial statements or schedules included therein) contained 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 made therein, in
light of the circumstances under which they were made, not misleading. Since May
31, 1994, the Company has made all filings required by the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder. None of the
Subsidiaries is required to file any statements or reports with the SEC pursuant
to Section 13(a) of 15(d) of the Exchange Act.
(b) Other than liabilities reflected in the unaudited consolidated
balance sheet of the Company as of November 30, 1999, including the notes
thereto (the "Balance Sheet"), the Company and its Subsidiaries do not have any
liabilities, either accrued or contingent (whether or not required to be
reflected in financial statements in accordance with generally accepted
accounting principles applied on a consistent basis ("GAAP"), including
liabilities arising under any Environmental Law, and whether due or to become
due, other than normal or recurring liabilities incurred since November 30, 1999
in the ordinary course of business consistent with past practice, which,
individually or in the aggregate, have not had and would not have a Material
Adverse Effect.
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(c) The audited and unaudited consolidated financial statements
included in the SEC Reports, any SEC Reports to be filed after the date of this
Agreement until the Effective Time, and the Balance Sheet (including any related
notes and schedules) were, or will be, prepared in conformity with GAAP during
the periods involved, except as otherwise noted therein, and with respect to the
published rules and regulations of the SEC applicable thereto, and each presents
fairly, or will represent fairly, the consolidated financial position of the
Company and its consolidated Subsidiaries as of their respective dates and the
consolidated results of their operations and changes in financial position for
the periods presented therein, as the case may be, subject, in the case of
unaudited interim financial statements included therein, to normal year-end
adjustments that in the aggregate are not material in amount and the absence of
notes.
(d) The Company has furnished to Acquiror a complete and correct copy
of any amendments or modifications which have not yet been filed with the SEC to
agreements, documents or other instruments which previously had been filed by
the Company with the SEC pursuant to the Securities Act and the rules and
regulations promulgated thereunder or the Exchange Act and the rules and
regulations promulgated thereunder.
(e) Schedule 3.5(e) lists all "Accommodation Obligations" (as defined
below) of the Company, the person in whose favor the Company has entered into
each such obligation, and the general nature of each obligation guaranteed, and
the amount of each Accommodation Obligation. "Accommodation Obligations" means
any contractual obligation, contingent or otherwise, of one person with respect
to any indebtedness, obligation or liability of another, if the primary purpose
or intent thereof by the person incurring the Accommodation Obligation is to
provide assurance to the obligee of such indebtedness, obligation or liability
of another that such indebtedness, obligation or liability shall be paid or
discharged, or that any agreements relating thereto shall be complied with, or
that the holders thereof shall be protected (in whole or in part) against loss
in respect thereof, including, without limitation, direct and indirect
guarantees, endorsements (except for collection or deposit in the ordinary
course of business), notes co-made or discounted, recourse agreements,
take-or-pay agreements, keep-well agreements, agreements to purchase security
thereof (other than such agreements to purchase in the ordinary course of
business) or to provide funds for the payment or discharge thereof agreements to
maintain solvency, assets, level of income, or other financial condition, and
agreements to make payment other than for value received. The amount of an
Accommodation Obligation shall be equal to the lesser of (i) the amount payable
under such Accommodation Obligation (if quantifiable) and (ii) the portion of
the obligation so guaranteed or otherwise supported.
(f) Schedule 3.5(f) sets forth an accurate list of all international
letters of credit and bonds and all other letters of credit and bonds issued for
the benefit of the Company in an amount greater than $100,000.
3.6 Absence of Certain Changes and Events. Since November 30, 1999, except
as disclosed on Schedule 3.6, (a) there has not occurred or arisen any event
having or that
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would have, and neither the Company nor any Subsidiary has suffered, any
Material Adverse Effect and (b) the Company and the Subsidiaries have conducted
their businesses only in the usual and ordinary course, consistent with past
practices.
3.7 Proxy Statement. The letter to stockholders, notice of meeting, proxy
statement and form of proxy, to be distributed to stockholders of the Company in
connection with the Merger (if required by applicable law), and any schedules
and exhibits required to be filed with the SEC in connection therewith (all such
documents, together with all amendments and supplements thereto, being referred
to herein as the "Proxy Statement"), will comply in all material respects with
the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is being made by the Company with respect to any
information supplied to the Company by Acquisition or any affiliate of
Acquisition specifically for inclusion in the Proxy Statement. The Proxy
Statement will not, at the time the Proxy Statement (or any amendment or
supplement thereto) is filed in final form with the SEC or first sent to
stockholders, at the time of the Special Meeting (and the date of any
adjournment thereof), or at the Effective Time, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, except that no
representation or warranty is being made by the Company with respect to any
information supplied to the Company by Acquisition or any affiliate of
Acquisition specifically for inclusion in the Proxy Statement.
3.8 Material Assets. The Company has good and marketable title to all
material assets reflected on the Balance Sheet except for (a) liens for current
taxes and assessments not yet past due, (b) inchoate mechanics' and
materialmen's liens for construction in progress, (c) workmen's, repairmen's,
warehousemen's and carriers' liens arising in the ordinary course of business,
and (d) all matters of record, liens and other imperfections of title and
encumbrances which matters, liens and imperfections, individually or in the
aggregate, have not had and would not have a Material Adverse Effect.
3.9 Material Proceedings. Except as disclosed in the SEC Reports or as
disclosed on Schedule 3.9, there are no civil, criminal or administrative
actions, suits or proceedings, claims, arbitrations or investigations pending
or, to the knowledge of the Company, threatened against or involving the
Company, any Subsidiary or the property or assets of the Company or any
Subsidiary, and neither the Company nor any Subsidiary is subject to any
outstanding order, writ, decree or injunction, which, in either case, has had or
would have a Material Adverse Effect.
3.10 Employee Benefit Plans, Etc.
(a) Schedule 3.10 lists (i) all "employee benefit plans" within the
meaning of Section 3(3) of ERISA, (ii) all employment agreements, including, but
not limited to, any individual benefit arrangement, policy or practice with
respect to any current or former employee or director of the Company or Member
of the Controlled Group, and
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(iii) all other employee benefit, bonus or other incentive compensation, stock
option, stock purchase, stock appreciation, severance pay, lay-off or reduction
in force, change in control, sick pay, vacation pay, salary continuation,
retainer, leave of absence, educational assistance, service award, employee
discount, fringe benefit plans, arrangements, policies or practices, whether
legally binding or not, which the Company or any Member of the Controlled Group
maintains, to which any of them contributes, or for which any of them has any
obligation or liability (collectively, the "Company Plans" and each a "Company
Plan").
(b) None of the Company Plans is a Defined Benefit Plan, and neither
the Company nor any Member of the Controlled Group has ever sponsored,
maintained or contributed to, or ever been obligated to contribute to, a Defined
Benefit Plan.
(c) None of the Company Plans is a Multiemployer Plan, and neither the
Company nor any Member of the Controlled Group has ever contributed to, or ever
been obligated to contribute to, a Multiemployer Plan.
(d) The Company does not maintain or contribute to any plan that
provides health benefits to an employee after the employee's termination of
employment or retirement except as required under Section 4980B of the Code and
Sections 601 through 608 of ERISA.
(e) Each Company Plan which is an "employee benefit plan," as defined
in Section 3(3) of ERISA, complies by its terms and in operation with the
requirements provided by any and all statutes, orders or governmental rules and
regulations currently in effect and applicable to the Company Plan, including
but not limited to ERISA and the Code.
(f) All reports, forms and other documents required to be filed with
any government entity or furnished to employees, former employees or
beneficiaries with respect to any Company Plan (including without limitation,
summary plan descriptions, Forms 5500 and summary annual reports) have been
timely filed and furnished and are accurate.
(g) Each of the Company Plans that is intended to qualify under
Section 401(a) of the Code has been determined by the Internal Revenue Service
so to qualify after January 1, 1989, and each trust maintained pursuant thereto
has been determined by the Internal Revenue Service to be exempt from taxation
under Section 501 of the Code. Nothing has occurred since the date of the
Internal Revenue Service's favorable determination letter that could adversely
affect the qualification of the Company Plan and its related trust. The Company
and each Member of the Controlled Group have timely amended and operated each of
the Company Plans to comply with the Small Business and Job Protection Act of
1996 and subsequent legislation enacted through the date hereof, and Section 501
of the Code.
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(h) All contributions for all periods ending prior to the Effective
Time (including periods from the first day of the current plan year to the
Effective Time) have been made prior to the Effective Time by the Company.
(i) All insurance premiums have been paid in full, subject only to
normal retrospective adjustments in the ordinary course, with regard to the
Company Plans for plan years ending on or before the Effective Time.
(j) With respect to each Company Plan:
(1) no prohibited transactions (as defined in Section 406 or 407
of ERISA or Section 4975 of the Code) have occurred for which a statutory
exemption is not available;
(2) no action or claims (other than routine claims for benefits
made in the ordinary course of Company Plan administration for which Company
Plan administrative review procedures have not been exhausted) are pending,
threatened or imminent against or with respect to the Company Plan, any employer
who is participating (or who has participated) in any Company Plan or any
fiduciary (as defined in Section 3(21) of ERISA), of the Company Plan;
(3) neither the Company, nor any fiduciary has any knowledge of
any facts that could give rise to any such action or claim; and
(4) it provides that it may be amended or terminated at any time
and, except for benefits protected under Section 411(d) of the Code, all
benefits payable to current, terminated employees or any beneficiary may be
amended or terminated by the Company at any time without liability.
(k) Neither the Company nor any Member of the Controlled Group has any
liability or is threatened with any liability (whether joint or several) (i) for
any excise tax imposed by Sections 4971, 4975, 4976, 4977 or 4979 of the Code,
or (ii) to a fine under Section 502 of ERISA.
(l) All of the Company Plans, to the extent applicable, are in
compliance with the continuation of group health coverage provisions contained
in Section 4980B of the Code and Sections 601 through 608 of ERISA.
(m) True, correct and complete copies of all documents creating or
evidencing any Company Plan have been delivered to Purchaser, and true, correct
and complete copies of all reports, forms and other documents required to be
filed with any governmental entity or furnished to employees, former employees
or beneficiaries (including, without limitation, summary plan descriptions,
Forms 5500 and summary annual reports for all plans subject to ERISA, but
excluding individual account statements and tax forms) have been delivered to
Purchaser. There are no negotiations, demands or proposals which are pending or
have been made which concern matters now
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covered, or that would be covered, by the type of agreements required to be
listed in Schedule 3.10.
(n) All expenses and liabilities relating to all of the Company Plans
have been, and will on the Effective Time be fully and properly accrued on the
Company's books and records and disclosed in accordance with generally accepted
accounting principles and in Company Plan financial statements.
(o) For purposes of this Section 3.10, the following terms have the
following meanings: "Defined Benefit Plan" means either a plan described in
Section 3(35) of ERISA or a plan subject to the minimum funding standards set
forth in Section 302 of ERISA and Section 412 of the Code. "ERISA" means the
Employee Retirement Income Security Act of 1974, as amended. "Member of the
Controlled Group" means each trade or business, whether or not incorporated,
which would be treated as a single employer with the Company under Section 4001
of ERISA or Section 414(b), (c), (m) or (o) of the Code. "Multiemployer Plan"
means a plan described in Section 3(37) of ERISA.
3.11 Environmental Matters.
(a) The term "Environmental Laws" means any federal, state, local or
foreign statute, law (including common law), treaty, ordinance, rule,
regulation, policy, permit, consent, approval, license, judgment, order, decree
or injunction relating to: (i) Releases (as defined in 42 U.S.C. Section
9601(22)) or threatened Releases of Hazardous Material (as hereinafter defined)
into the environment, (ii) the generation, treatment, storage, recycling,
presence, disposal, use, handling, manufacturing, transportation or shipment of
Hazardous Material, (iii) natural resources, or (iv) human health or the
environment, and includes all environmental laws or terms of similar import as
they are defined in any indemnification provision in any contract, lease, or
agreement to which Company is a party. The term "Hazardous Material" means (A)
hazardous substances (as defined in 42 U.S.C. Section 9601(14)), (B) petroleum,
including crude oil and any fractions thereof, (C) natural gas, synthetic gas
and any mixtures thereof, (D) asbestos and/or asbestos containing materials, (E)
polychlorinated byphenyls ("PCBs") or materials containing PCBs, (F) radioactive
materials, and (G) pollutants, contaminants or hazardous, toxic or dangerous
substances, materials or wastes or terms of similar import that are identified,
defined, listed or regulated under any Environmental Law or defined in any
indemnification provision in any contract, lease, or agreement to which the
Company is a party.
(b) Except as set forth on Schedule 3.11, during the period of
ownership or operation by the Company or its Subsidiaries of any of their
current or previously owned or leased properties, there have been no Releases of
Hazardous Material by the Company or any of its Subsidiaries in, on, under or
affecting such properties or any surrounding site, and there have been no
buildings or other structures containing asbestos in a form that is or could
become friable and no underground storage tanks on such properties, except in
each case for those which individually or in the aggregate have not had and
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would not have a Material Adverse Effect. Except as set forth on Schedule 3.11,
there have been no Releases of Hazardous Material by the Company or any of its
Subsidiaries in, on, under or affecting such properties or any surrounding site
at times outside of such periods of ownership, operation, or lease, or to the
knowledge of the Company, by any other party at any time except in each case for
those which individually on in the aggregate have not had and would not have a
Material Adverse Effect. At no time has either the Company or any of its
Subsidiaries generated, treated, stored, recycled, used, handled, transported or
disposed of any Hazardous Material in a manner that has led, or could reasonably
be anticipated to lead, to a Release at any location, except in each case for
those which individually or in the aggregate would not have a Material Adverse
Effect. To the knowledge of the executive officers of the Company, no third
party property is contaminated with any Hazardous Material that may subject the
Company or any of its Subsidiaries to liability under any Environmental Laws.
The Company has provided or made available to the Acquiror complete and correct
copies of all studies, reports, surveys, correspondence or other documents in
the Company's or any Subsidiary's possession, or to which the Company or any
Subsidiary has access, which relate to the presence or alleged presence of
Hazardous Material at, on or affecting any current or previously owned nor
leased property of the Company or any of its Subsidiaries.
(c) Neither the Company and its Subsidiaries has received any written
notice, demand, request for information, citation, summons, order, nor has it
entered into any order, settlement or decree relating to: (A) any violation of
any Environmental Laws or the institution or pendency of any suit, action,
claim, proceeding or investigation by any Governmental Entity or any third party
in connection with any alleged violation of Environmental Laws, or (B) the
response to or remediation of Hazardous Material at or arising from any of the
Company's or any Subsidiary's operations or current or previously owned or
leased properties.
(d) The Company and its Subsidiaries hold, and there are in full force
and effect, all material permits, licenses, authorizations and approvals
required under applicable Environmental Laws ("Environmental Permits") to
conduct the business of the Company and its Subsidiaries and to own, maintain
and operate all properties currently owned or operated by the Company or any of
its Subsidiaries, and all such Environmental Permits are in full force and
effect, except where instances of noncompliance, individually or in the
aggregate, have not had and would not have a Material Adverse Effect. Neither
the Company nor any Subsidiary is in default (without regard to requirements of
notice, lapse of time of elections or other persons) under any provision of the
Environmental Permits, and neither the Company nor any Subsidiary has received
any notice of any threatened cancellation, modification or non-renewal of any
Environmental Permit and no consent, approval, authorization, permit of, or
filing with or notification to any governmental or regulatory authority, agency
or entity is required with respect to the Environmental Permits for the change
in control of the Company resulting from the Merger, except where instances of
noncompliance or failure to transfer would not individually or in the aggregate,
have a Material Adverse Effect. The Company has
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delivered or made available to Acquiror a true and complete copy of each of the
Environmental Permits.
(e) Except as set forth on Schedule 3.11, to the knowledge of the
executive officers of the Company, there are and have been no circumstances or
conditions involving the Company, any of its Subsidiaries or their respective
employees that could reasonably be expected to result in any material claims,
liability or investigations under any Environmental Law or relating to Hazardous
Material arising out of the conduct of the Company's or any Subsidiary's
business, the ownership, operation, management of all or any portion of a
facility, or out of the arrangement for the storage, treatment, recycling,
transportation or disposal of, or ownership or possession or choice of the
treatment, storage or disposal facility for, any material with respect and to
the extent to which the Company or its Subsidiaries provided services before the
Effective Time.
(f) With respect to each contract or project pursuant to which the
Company or any of its Subsidiaries is responsible for the provision of
environmental remediation services ("Remediation Contract") that involves the
storage, generation, treatment, recycling, handling, transportation, or disposal
of any Hazardous Material or any arrangement for such services (collectively,
"Use of Hazardous Material"), either (a) such Remediation Contract contains
enforceable and prudent indemnification provisions protecting the Company or the
appropriate Subsidiary against liability with respect to the Use of Hazardous
Material as is consistent with national industry standards, or (b) the Use of
Hazardous Material has been subcontracted to a person or entity other than the
Company or any of its Subsidiaries pursuant to a written agreement that contains
enforceable and prudent indemnification provisions protecting the Company or the
appropriate Subsidiary against liability with respect to the Use of Hazardous
Material as is consistent with national industry standards, or (c) management of
the Company has determined, in the exercise of prudent business practices, that
such indemnification could not be reasonably obtained and that the rewards of
accepting such Remediation Contract outweigh the potential risks associated with
the Use of Hazardous Material.
3.12 Labor Matters. (i) There are no controversies pending or, to the
knowledge of the Company, threatened, between the Company or any of the
Subsidiaries and any group of their respective employees; (ii) neither the
Company nor any of the Subsidiaries is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or the Subsidiaries nor does the Company know of any activities of or
proceedings of any labor union to organize any such employees; (iii) neither the
Company nor any of the Subsidiaries has breached or otherwise failed to comply
with any provision of any such agreement or contract and there are no grievances
outstanding against any such parties under any such agreement or contract; (iv)
there are no unfair labor practice complaints pending against the Company or any
of the Subsidiaries before the National Labor Relations Board of any current
union representation questions involving employees of the Company or any of the
Subsidiaries; and (v) the Company has no knowledge of any strikes, slowdowns,
work stoppages, lockouts, or threats thereof, by or with respect to any
employees of the Company or any of the Subsidiaries. No consent of any union
which is a party to any collective
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bargaining agreement with the Company is required to consummate the transactions
contemplated by this Agreement.
3.13 Intellectual Property. The Company or the Subsidiaries own or possess
adequate licenses or other valid rights to use all patents, patent rights,
trademarks, service marks, software, computer programs, technology of any kind,
trade names, copyrights, all applications or licenses or other rights to use the
foregoing, know-how, trade secrets and other proprietary information
(collectively, "Intellectual Property") used or held for use in connection with
the business of the Company or any of the Subsidiaries as currently being, or
proposed to be, conducted, all as set forth on Schedule 3.13, and is unaware of
any assertions or claims challenging the validity of any of the Intellectual
Property; and to the best knowledge of the Company, the conduct of the business
of the Company and its Subsidiaries as now conducted or proposed to be conducted
does not and will not conflict with any Intellectual Property of others in any
material way. No material infringement, unauthorized use, misappropriation or
other misuse of any Intellectual Property owned by or licensed by or to the
Company or any of the Subsidiaries is known to the Company.
3.14 Brokers. None of the Company or any Subsidiary or any of their
respective officers, directors or employees has employed any broker, finder or
investment banker or incurred any liability that would be payable by the Company
for any brokerage, finder's or other fees or commissions in connection with the
transactions contemplated by this Agreement, other than in connection with the
engagement of CIBC World Markets Corp., pursuant to an engagement letter (as
amended) a copy of which the Company has delivered to Acquiror prior to the date
hereof.
3.15 Taxes. The Company and the Subsidiaries have filed all federal and
state tax returns and reports and, to the best of the Company's knowledge, all
state, local and foreign tax returns and reports required to be filed by them
and have paid and discharged all taxes shown as due thereon and have paid all
applicable state and local ad valorem taxes as are due, except such as are being
contested in good faith by appropriate proceedings and except where the failure
to do so has not had and would not have a Material Adverse Effect. Neither the
Internal Revenue Service nor any other taxing authority or agency is now
asserting or, to the best of the Company's knowledge, threatening to assert
against the Company or any of the Subsidiaries any deficiency or claim for
additional taxes or interest thereon or penalties in connection therewith.
Neither the Company nor any of its subsidiaries has granted any waiver of any
statute of limitations with respect to, or any extension of a period for the
assessment of, any federal, state, county, municipal or foreign income tax. The
accruals and reserves for taxes reflected in the Balance Sheet as of the date
thereof are adequate to cover all taxes accruable through such date (including
interest and penalties, if any, thereon). Neither the Company nor any of the
Subsidiaries has made an election under Section 341(f) of the Code. Except as
set forth on Schedule 3.15, neither the Company nor any of the Subsidiaries has
entered into any compensatory arrangements with respect to the performance of
services payment of which would result in a nondeductible expense to the Company
or the Subsidiary under Section 162(m) or Section 280G of the Code, or an
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excise tax to the recipient of such payment pursuant to Section 4999 of the
Code. The stock of the Company is not a "United States real property interest"
within the meaning of Section 897(c)(1) of the Code.
3.16 Real Properties.
(a) Each of the Company and its Subsidiaries has good and marketable
title to all of the real property owned by it, and all real property leases of
the Company or any of its Subsidiaries are in good standing, valid and effective
in accordance with their respective terms, and neither the Company nor its
Subsidiaries, nor, to the Company's knowledge, any other party, is in default
under any of such leases, other than defaults which, individually or in the
aggregate, have not had and would not have a Material Adverse Effect on the
Company.
(b) Except as disclosed in the Balance Sheet, each parcel of real
property owned or leased by the Company or any Subsidiary (i) is owned or leased
free and clear of all mortgages (other than for the mortgage on the property
located at 0000 Xxx Xxxxxxxx Xxxx., Xxxxxxx, Xxxxxxx), pledges, liens, security
interests, conditional and installment sale agreements, encumbrances, charges or
other claims of third parties of any kind, including, without limitation, any
easement, right of way or other encumbrance to title, or any option, right of
first refusal, or right of first offer (collectively, "Liens"), other than (A)
Liens for current taxes and assessments not yet past due, (B) inchoate
mechanics' and materialmen's Liens for construction in progress, (C) workmen's,
repairmen's, warehousemen's and carriers' Liens arising in the ordinary course
of business of the Company or such Subsidiary consistent with past practice, and
(D) all matters of record, Liens and other imperfections of title and
encumbrances that, individually or in the aggregate, have not had and would not
have a Material Adverse Effect, and (ii) is neither subject to any governmental
decree or order to be sold nor is being condemned, expropriated or otherwise
taken by any public authority with or without payment of compensation therefor,
nor, to the knowledge of the Company, has any such condemnation, expropriation
or taking been proposed, except as have not had and would not have a Material
Adverse Effect.
3.17 Compliance with Laws. Except as disclosed on Schedule 3.17, the
businesses of each of the Company and its Subsidiaries have not been, and are
not being, conducted in violation of any law, ordinance, regulation, judgment,
order, injunction, decree, arbitration award, license or permit of any
Governmental Entity, including any Environmental Laws (collectively, "Laws"),
except for violations or possible violations that, individually or in the
aggregate, have not had and would not have a Material Adverse Effect. Except as
disclosed in Schedule 3.17, no investigation or review by any Governmental
Entity with respect to the Company or any of its Subsidiaries is pending or, to
the knowledge of the Company, threatened, nor has any Governmental Entity
indicated an intention to conduct the same.
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3.18 Interested Party Transactions. Since August 11, 1999, no event has
occurred that could be required to be reported by the Company as a Certain
Relationship or Related Transaction, pursuant to Item 404 of Regulation S-K
promulgated by the SEC.
3.19 Insurance. The Company maintains the insurance policies listed on
Schedule 3.19(a) (the "Insurance Policies"). Each Insurance Policy is in full
force and effect and is valid, outstanding and enforceable, and all premiums due
thereon have been paid in full. None of the Insurance Policies will terminate or
lapse (or be affected in any other materially adverse manner) by reason of the
transactions contemplated by this Agreement. The Company and its Subsidiaries
have complied in all material respects with the provisions of each Insurance
Policy under which it is the insured party. No insurer under any Insurance
Policy has canceled or generally disclaimed liability under any such policy or,
to the Company's knowledge, indicated any intent to do so or not to renew any
such policy. All material claims under the Insurance Policies have been filed in
a timely fashion. Schedule 3.19(b) lists all claims made within the last three
(3) years against or under the Contractors Pollution Liability and Errors and
Omissions/Operations and Professional Services Insurance and other errors and
omissions insurance policies maintained by the Company or any of its
Subsidiaries.
3.20 Certain Business Practices. Neither the Company, any of its
Subsidiaries nor any directors, officers, agents or employees of the Company or
any of its Subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to political activity;
(ii) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iii)
made any other payment prohibited by applicable law.
3.21 Y2K Compliance. The status of the Company's Year 2000 compliance is as
set forth in the Company's Form 10-Q for its fiscal quarter ended November 30,
1999.
3.22 Agreement, Contracts and Commitments.
(a) Except for any contract filed as an exhibit to any SEC Report or
as set forth on Schedule 3.22(a) hereto (collectively, the "Company Material
Contracts"), neither the Company nor any of the Subsidiaries is a party to or is
bound by,
(i) any "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC);
(ii) any lease of machinery, equipment or other personal property
that contemplates payments by or to the Company or any of the Subsidiaries
individually exceeding $25,000 or in the aggregate exceeding $200,000 in any
twelve-month period;
(iii) any contract for the purchase of any equipment, materials or
supplies for a purchase price exceeding $25,000 for any such contract or group
of related contracts or $200,000 in the aggregate for all such contracts;
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(iv) any Governmental Contract (as defined in Section 3.24(c)) or
any commercial contract for the sale of the Company's services or products which
is likely to involve revenues to the Company of more than $250,000 in the
aggregate, over the remaining term;
(v) (A) any contract, agreement or instrument relating to or
evidencing purchase money indebtedness in excess of $100,000 or indebtedness for
borrowed money of the Company or any Subsidiary, (B) any Accommodation
Obligation in excess of $100,000 or (C) extension of credit by the Company or
any Subsidiary in excess of $100,000 or loan by the Company or any Subsidiary;
(vi) any non-competition agreement or any other agreement or
obligation which purports to limit in any respect the manner in which, the
localities in which, or the period during which the business of the Company or
the Subsidiaries may be conducted;
(vii) any partnership, joint venture, strategic alliance or
cooperation agreement (or any agreement similar to any of the foregoing);
(viii) any voting or other agreement governing how any Shares
shall be voted;
(ix) any contract or other agreement which would prohibit or
materially delay the consummation of the Merger or any of the transactions
contemplated by this Agreement;
(x) any brokerage or finders fee agreements other than agreements
for normal brokerage commissions or finders fees payable in the ordinary course
of business; or
(xi) any other contract that individually contemplates payments by
or to the Company or any of the Subsidiaries exceeding $50,000 in any
twelve-month period or which in the aggregate contemplate payments by or to the
Company or any of the Subsidiaries exceeding $200,000 in any twelve-month period
or which otherwise are material to the operations of the Company or any of the
Subsidiaries.
(b) Except as set forth on Schedule 3.22(b) hereto, each Company
Material Contract is valid and binding on the Company (or, to the extent a
Subsidiary is a party, such Subsidiary) and, to the Company's knowledge, each
other party thereto, and each is in full force and effect, and the Company and
each Subsidiary and, to the Company's knowledge, each other party thereto have
performed all obligations required to be performed by them to date under each
Company Material Contract. Neither the Company nor any Subsidiary knows of, or
has given or received notice of, any violation or default under (nor, to the
knowledge of the Company, has there occurred any event or does there exist any
condition which with the passage of time or the giving of notice or both would
result in such a violation or default under) any Company Material Contract.
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(c) Schedule 3.22(c) lists all open projects having an original
project value greater than $250,000 that:
(i) are performed on a firm fixed price basis, or
(ii) are greater than five percent (5%) over budget; such Schedule
lists the amount the project is over budget.
(d) Schedule 3.22(d) lists all projects which:
(i) the client or any other contractor or subcontractor on the
project has made a claim that the Company has misperformed or negligently
performed such project, or is in breach of any project-related agreement;
(ii) there are current project reserves greater than $25,000; or
(iii) for which project reserves of greater than $25,000 have been
released or reversed within the past 180 days.
3.23 Merger Payments. Except as specifically identified and estimated on
Schedule 3.23, the execution and delivery of this Agreement, consummation or
announcement of any transaction contemplated by this Agreement or any subsequent
termination of employment will not result in any material payment (whether of
severance pay or otherwise) becoming due from the Company or any of its
Subsidiaries to any officer, employee, former employee or director thereof under
any management, employment, deferred compensation, severance (including any
payment, right or benefit resulting from a change in control), bonus or other
contract for personal services with any officer, director or employee or any
plan, agreement or understanding similar to any of the foregoing or any "rabbi
trust" or similar arrangement or material benefit under any of the Company Plans
being established or becoming accelerated, vested or payable.
3.24 Government Contracts. Except as disclosed in Schedule 3.24:
(a) With respect to each Government Contract or Bid to which the
Company and/or any of its Subsidiaries is a party: (i) all representations and
certifications were current, accurate and complete when made, and the Company
and its Subsidiaries have fully complied with all such representations and
certifications; (ii) no allegation has been made, either orally or in writing,
that the Company or any of its Subsidiaries is in breach or violation of any
material statutory, regulatory or contractual requirement; (iii) no termination
for convenience, termination for default, cure notice or show cause notice has
been issued; (iv) no cost in excess of $200,000 incurred by the Company, any of
its Subsidiaries or any of their respective subcontractors has been questioned
or disallowed; (v) no money due to the Company or any of its Subsidiaries has
been (or has threatened to be) withheld or set off; (vi) no request for a
contract price adjustment based on a claimed disallowance by a Governmental
Entity or claim of defective pricing or mischarging of any kind has been made;
and (vii) no claim or request
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for equitable adjustment or other demand by the Company or any Subsidiary
against any Governmental Entity or any third party has been made, and to the
best of the Company's knowledge, no basis therefor exists.
(b) Neither the Company, any of its Subsidiaries, any of their
respective affiliates, nor any of the Company's or any of its Subsidiaries'
directors, officers, employees, agents or consultants is (or for the last three
years has been) (i) under administrative, civil or criminal investigation,
indictment or information, audit or internal investigation with respect to any
alleged irregularity, misstatement or omission regarding a Government Contract
or Bid; or (ii) temporarily or permanently suspended, debarred or enjoined from
doing business with any Governmental Entity or from engaging in or continuing
any conduct or practice in connection with the activities of the Company or any
of the Subsidiaries or declared nonresponsible or ineligible for government
contracting. None of the Company, any of its Subsidiaries or any of their
respective affiliates has made a voluntary disclosure to any Governmental Entity
with respect to any alleged material irregularity, misstatement or omission
arising under or relating to any Government Contract or Bid. The Company knows
of no circumstances that would warrant the institution of suspension or
debarment proceedings or the finding of nonresponsibility or ineligibility of
the Company or any of its Subsidiaries in the future.
(c) Definitions. The following terms, as used herein, shall have the
following meanings:
"Bid" means any quotation, bid or proposal by the Company, any of its
Subsidiaries or any of their respective affiliates which, if accepted or
awarded, would lead to a contract with a Governmental Entity or any other
entity, including a prime contractor or a higher tier subcontractor to a
Governmental Entity, for the design, manufacture or sale of products or the
provision of services by the Company or any of its Subsidiaries.
"Governmental Contract" means any prime contract, subcontract, teaming
agreement or arrangement, joint venture, option, basic ordering agreement,
forward pricing rate agreement, letter contract, purchase order, delivery order,
Bid, change order, task order, arrangement or other commitment of any kind
relating to the business of the Company or any of its Subsidiaries between the
Company and/or any of its Subsidiaries and (1) any Governmental Entity, (2) any
prime contractor to a Governmental Entity or (3) any subcontractor with respect
to any contract described in clause (1) or (2).
3.25 Certain Approvals. The Board has approved the Merger and this
Agreement, and such approval is sufficient to render inapplicable to the Merger
and this Agreement the limitations on business combinations contained in any
restrictive provision of any "fair price," "moratorium," "control share
acquisition," "interested stockholder" or other similar anti-takeover statute or
regulation (including, without limitation, Section 203 of the GCL) or
restrictive provision of any applicable anti-takeover provision in the Company's
Certificate of Incorporation (including Article Fourteenth) or Bylaws.
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3.26 Relationships with Customers, Suppliers and Representatives. The
Company has not received written notice and has no knowledge that any customer,
supplier, or sales representative intends to cancel, terminate or otherwise
modify its relationship with the Company or any Subsidiary which would have a
Material Adverse Effect on the Company.
3.27 Permits. The Company and its Subsidiaries hold, and there are in full
force and effect, all permits, authorizations, licenses, permissions, or
consents of any Governmental Entity or other person or entity that are required
to be held by the Company or any of its Subsidiaries to own, maintain and
operate the assets and properties owned or leased by the Company or its
Subsidiaries or conduct their respective activities as currently conducted and
are material to the operations of the Company and its Subsidiaries, each of
which is described on Schedule 3.27 (the "Company Permits"). Except as described
on Schedule 3.27, (i) neither the Company nor any of its Subsidiaries is in
default (without regard to requirements of notice, lapse of time, or elections
of other persons, or any combination thereof) under any provision of the Company
Permits, (ii) neither the Company nor any of its Subsidiaries has received any
notice of any threatened cancellation, modification or non-renewal of any
Company Permit, and (iii) to the best of the Company's knowledge, no basis for
any such cancellation, modification or non-renewal exists.
3.28 Company Action. The Board, at a meeting duly called and held, has,
with knowledge of the terms and conditions in this Agreement, (i) determined
that the Merger is advisable, fair to and in the best interests of the Company
and its stockholders, (ii) approved and adopted this Agreement and the
transactions contemplated hereby, including the Merger, and such approval
constitutes approval of the Merger for purposes of Section 203 of the Delaware
General Corporation Law (the "GCL"), and (iii) resolved to recommend that the
stockholders of the Company approve and adopt this Agreement and the
transactions contemplated by this Agreement; provided, however, that such
recommendation and approval may be withdrawn, modified or amended to the extent
specifically set forth in Section 6.1(c).
3.29 Opinion of Financial Advisor. CIBC World Markets Corp. has rendered to
the Board an opinion to the effect that, as of the date of such opinion, the
Merger Consideration is fair, from a financial point of view, to the holders of
the Shares. The Company has provided to Acquiror a true and correct copy of such
opinion and has obtained the consent of CIBC World Markets Corp., subject to its
prior approval of the language used in connection with the reference, to the
reference thereto in the Proxy Statement and the inclusion in the Proxy
Statement of a copy of such written opinion.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND ACQUISITION
Each of Acquiror and Acquisition represents and warrants to the Company as
follows:
4.1 Organization. Each of Acquiror and Acquisition is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation and each has the requisite corporate power and authority to
own, lease and operate the properties that it purports to own, lease or operate
and to carry on its business as it is now being conducted, except where the
failure to be so existing and in good standing or to have such power and
authority would not, individually or in the aggregate, have a material adverse
effect on Acquiror and its subsidiaries, taken as a whole.
4.2 Authority Relative to this Agreement. Each of Acquiror and Acquisition
has full power and authority to execute and deliver this Agreement and to carry
out its obligations hereunder. The execution and delivery of this Agreement by
Acquiror and Acquisition and the consummation by Acquiror and Acquisition of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Acquiror and Acquisition. This
Agreement has been duly executed and delivered by Acquiror and Acquisition and,
assuming the due authorization, execution and delivery of this Agreement by the
Company, constitutes a legal, valid and binding agreement of Acquiror and
Acquisition, enforceable against Acquiror and Acquisition in accordance with its
terms, subject to (i) any applicable bankruptcy, insolvency or other similar
laws now or hereafter in effect affecting creditors' rights generally, and (ii)
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
4.3 Consents and Approvals; No Violation. None of the execution and
delivery of this Agreement by Acquiror and Acquisition, the consummation by
Acquiror and Acquisition of the transactions contemplated hereby or compliance
by Acquiror and Acquisition with any of the provisions hereof will (i) conflict
with or result in a breach of any provision of the certificate of incorporation
or Bylaws of Acquiror or Acquisition, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Entity by Acquiror or Acquisition, except (A) pursuant to the Exchange Act, the
Securities Act, certain state takeover statutes, the HSR Act and (B) for filing
the Certificate of Merger pursuant to the GCL, (iii) result in a default (or an
event which with notice or lapse of time or both would become a default) or give
to any third party any right of termination, cancellation, amendment or
acceleration under, or result in the creation of a lien or encumbrance on any of
the assets of Acquiror or Acquisition pursuant to, any note, license, agreement
or other instrument or obligation to which Acquisition is a party or by which
Acquiror or Acquisition or any of their respective assets may be bound or
affected or (iv) violate or conflict with any order, writ, injunction, decree,
statute, rule or regulation applicable to Acquiror or Acquisition or any of
their respective assets; other than (A) such defaults, rights of termination,
cancellation,
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amendment or acceleration, such liens and encumbrances, as set forth pursuant to
clauses (ii) and (iii) above and (B) such consents, approvals, authorizations,
permits or filings, as set forth pursuant to clause (iv) above, the failure to
obtain which, in the aggregate, would not have a material adverse effect on the
ability of Acquiror and Acquisition to perform their obligations set forth
herein or consummate the transactions, contemplated hereby.
4.4 Proxy Statement. The information relating to Acquisition or Acquiror
provided to the Company by Acquisition or Acquiror specifically for inclusion in
the Proxy Statement will, at the time the Proxy Statement is first sent to
stockholders, at the time of the Special Meeting or at the Effective Time, 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
made therein, in light of the circumstances under which they were made, not
misleading.
4.5 Financing. Acquiror (i) has received fully executed written
commitments, copies of which have been provided to the Company (the "Financing
Commitments"), to provide the funds necessary to satisfy all of Acquiror's and
Acquisition's obligations under this Agreement and in connection with the
transactions contemplated hereby and (ii) subject to the satisfaction of the
conditions to Acquiror's and Acquisition's obligations stated in Article VII,
will have at the Effective Time the necessary financing to perform such
obligations.
4.6 No Violation of the Margin Rules. None of the transactions contemplated
by this Agreement will violate or result in the violation of Section 7 of the
Exchange Act or any regulation promulgated pursuant thereto, including, without
limitation, Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
4.7 Brokers. None of Acquiror or Acquisition or any of their respective
officers, directors or employees has employed any broker, finder or investment
banker or incurred any liability, which would be payable by the Company, for any
brokerage, finder's or other fees or commissions in connection with the
transactions contemplated by this Agreement.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Except as otherwise specifically provided in this Agreement, from the date
of this Agreement to the Effective Time, the Company shall, and shall cause each
of the Subsidiaries to, conduct its operations only in the ordinary and usual
course of business and consistent with past practices and shall use its best
efforts, and shall cause each of the Subsidiaries to use their best efforts, to
preserve intact its present business organization, keep available the services
of its present officers, employees and consultants and preserve its present
relationships with licensors, licensees, customers, suppliers, employees, labor
organizations and others having business relationships with it. Without limiting
the
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generality of the foregoing, and except as otherwise specifically provided
in this Agreement, the Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, prior to the Effective Time, without the prior
written consent of Acquiror and Acquisition:
(a) propose or adopt any amendment to or otherwise change its
Certificate of Incorporation or Bylaws except as contemplated by this Agreement;
(b) authorize for issuance, sale, pledge, disposition or encumbrance,
or issue, sell, pledge, dispose of or encumber (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase,
convertible securities or otherwise), any capital stock of any class, any Voting
Debt or any other securities of, or any other ownership interest (including but
not limited to stock appreciation rights, phantom stock or stock-based
performance units) in, the Company or any Subsidiary (except for the issuance of
shares of Common Stock upon the exercise of Company Options granted under the
Stock Option Plans and the Employee Stock Purchase Plan and set forth on
Schedule 3.2(a)), or amend any of the terms of any such securities or agreements
outstanding on the date hereof, other than pursuant to the terms of this
Agreement;
(c) reclassify, combine, split or subdivide any shares of its capital
stock, or declare, set aside or pay any dividend or other distribution (whether
in cash, securities or property or any combination thereof) in respect of any
class or series of its capital stock;
(d) redeem, purchase or otherwise acquire, or propose or offer to
redeem, purchase or otherwise acquire, any outstanding Shares or other
securities of the Company or any Subsidiary or any securities convertible into
or exchangeable or exercisable for any Shares or other securities of the Company
or its Subsidiaries;
(e) (i) incur, assume or prepay any material liability, including,
without limitation, any indebtedness for borrowed money, (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any third party, (iii) make
any loans, advances or capital contributions to, or investments in, any third
party, (iv) mortgage or pledge any of its material assets, tangible or
intangible, or create or suffer to exist any material lien thereupon, or (v)
make any commitments for or authorize any new capital expenditures in excess of
$50,000 individually and $500,000 in the aggregate;
(f) except as required by law or pursuant to the terms of this
Agreement and except for amendments to the Employee Stock Purchase Plan to
provide that (i) if the Merger is to occur on or prior to June 30, 2000, the
last day of the six-month period shall be the day immediately prior to the day
on which the Merger occurs and (b) if the Merger is to occur after June 30,
2000, the Plan will be terminated effective on the day immediately prior to the
day on which the Merger is to occur and the moneys in participants' accounts
will be returned to them, enter into, adopt, terminate or amend in any material
respect any bonus, profit sharing, compensation, termination, stock option,
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stock appreciation right, restricted stock, performance unit, pension,
retirement, deferred compensation, employment, severance, termination pay or
other employee benefit agreement or arrangement, labor agreement, trust, plan,
fund or other arrangement for the benefit or welfare of any director, officer or
employee, or, except in the ordinary course of business consistent with past
practice, increase in any material manner the compensation or fringe benefits of
any director, officer or employee, or pay any benefit not required by any
existing plan and arrangement including, without limitation, the granting of
stock options, stock appreciation rights, shares of restricted stock or
performance units;
(g) enter into any agreement, contract, commitment or transaction
other than in the ordinary course of business, consistent with past practices;
(h) waive, assign, release or relinquish any material rights, cancel
any material (individually or in the aggregate) indebtedness, waive the benefits
of or agree to modify in any manner any confidentiality, standstill or similar
agreement to which the Company or any Subsidiary is a party, or permit any
insurance policy naming it as a beneficiary or loss payable payee, including the
Insurance Policies, to be cancelled or terminated;
(i) authorize, recommend, propose or enter into or announce an
intention to authorize, recommend, propose or enter into an agreement in
principle or a definitive agreement with respect to any merger, consolidation,
reorganization, recapitalization, liquidation, dissolution, or business
combination, any acquisition of a material amount of assets or securities, or
any disposition of a material amount of assets or securities;
(j) except as may be required as a result of a change in law or in
GAAP, change any of the accounting principles or practices used by it or revalue
in any respect any of its material assets, including writing down the value of
inventory or writing-off notes or accounts receivable, other than in the
ordinary course of business consistent with past practices;
(k) make, revoke or amend any tax election, settle or compromise any
federal, state, local or foreign income tax liability, waive or extend the
statute of limitations in respect of any such taxes or enter into or amend any
agreement with any tax authority;
(l) pay, discharge, settle, compromise or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise) other than the payment, discharge or satisfaction in
the ordinary course of business, consistent with past practices, of liabilities
reflected or reserved against in the Balance Sheet or incurred in the ordinary
course of business consistent with past practices since the date thereof;
(m) fail to maintain in full force and effect any Company Permit,
Environmental Permit or license (including contractor and professional
engineering
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licenses and qualifications to transact business) other than in the ordinary
course of business consistent with past practices; or
(n) commit or agree (in writing or otherwise) to take any of the
foregoing actions or any action or allow any other event to occur which would
make any representation or warranty in this Agreement materially untrue or
incorrect, including as of the date hereof and as of the Effective Time, as if
made as of such time.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 No Solicitation.
(a) For purposes of this Agreement:
(i) "Alternative Proposal" means any inquiry, proposal or offer,
whether written or oral and whether or not delivered to the Company's
stockholders generally, from any person or Group relating to any direct or
indirect acquisition or purchase of any material portion of the assets of the
Company and its Subsidiaries taken as a whole, or 20% or more of any class of
equity securities of the Company or any of its Subsidiaries, or any tender offer
or exchange offer (including by the Company or its Subsidiaries) that if
consummated could result in any person or Group beneficially owning 20% or more
of any class of equity securities of the Company or any of its Subsidiaries, or
any merger, consolidation, business combination, sale of all or substantially
all assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by this Agreement.
(ii) "Superior Proposal" means a bona fide offer, whether written
or oral, made by a third party to acquire, directly or indirectly, including
pursuant to a tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction,
for consideration consisting of cash and/or securities, more than 50% of the
total outstanding voting securities of the Company or all or substantially all
the assets of the Company, which offer is otherwise on terms which the Board
determines in its good faith judgment (after consultation with a financial
advisor of nationally recognized reputation) to be reasonably likely to be
completed (taking into account all material legal, financial, regulatory and
other aspects of the proposal and the person, entity or Group making the
proposal) and more favorable to the Company's stockholders from a financial
point of view than the Merger, and for which financing, to the extent required,
is then committed or which, in the good faith judgment of the Board, is as
likely to be obtained by such third party as is the financing of Acquiror
pursuant to the Financing Commitments.
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(iii) "Representative" means any of the officers, directors,
employees or agents of, or any investment banker, attorney, accountant or other
advisor or representative retained by, the Company or its Subsidiaries.
(iv) "Group" means any group as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder.
(b) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to its terms, the
Company shall not and shall direct its Representatives not to and shall cause
the Subsidiaries and their Representatives not to, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with
or provide any information to any person, entity or Group concerning any actual
or potential Alternative Proposal. The Company represents and warrants to
Acquiror and Acquisition that it, its Subsidiaries and their respective
Representatives have ceased any and all existing activities, discussions or
negotiations with any persons, entities or Groups conducted heretofore with
respect to any Alternative Proposal. Any violation of the restrictions set forth
in this Section 6.1(b) by any Representative of the Company or any of its
Subsidiaries shall be deemed to be a material breach of this Agreement by the
Company.
(c) (i) If the Board reasonably determines in good faith, after taking
into account the advice of its outside legal counsel, that it is necessary to do
so in order to comply with its fiduciary duties to the Company's stockholders
under applicable law, the Company and its Representatives may, in response to a
Superior Proposal that was unsolicited or that did not otherwise result from a
breach of this Section 6.1, furnish non-public information with respect to the
Company and participate in discussions and negotiations regarding such Superior
Proposal if the person, entity or Group submitting the Superior Proposal has
signed a confidentiality agreement usual and customary with respect to
transactions contemplated by the Superior Proposal. The Company shall furnish to
Acquiror any non-public information furnished pursuant to the preceding sentence
at the same time the Company furnishes such information to the person, entity or
Group submitting the Superior Proposal.
(ii) The Company shall promptly following receipt of any written
Alternative Proposal (and in any event not later than 24 hours after receipt
thereof), notify Acquiror of the receipt of the Alternative Proposal.
(iii) If the Board reasonably determines in good faith, after
taking into account the advice of its outside legal counsel, that it is
necessary to do so in order to comply with its fiduciary duties to the Company's
stockholders under applicable law, the Board may withdraw or modify its approval
or recommendation of this Agreement or the Merger, approve or recommend a
Superior Proposal, or enter into an Acquisition Agreement with respect to a
Superior Proposal, if the Company has (w) given Acquiror written notice (a
"Notice of Superior Proposal") advising Acquiror that the Board has received a
Superior Proposal specifying the material terms and conditions of the Superior
Proposal (including the proposed financing), identifying the person making such
Superior
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Proposal and including a copy of the Superior Proposal, (x) afforded Acquiror
three business days from the date the Notice of Superior Proposal was received
by Acquiror to propose to the Company such modifications to the transactions
contemplated by this Agreement as Acquiror may elect (a "Modified Proposal") and
(y) negotiated with Acquiror in good faith during the three business days
following the date on which the Notice of Superior Proposal was received by
Acquiror to enable Acquiror to negotiate a Modified Proposal during such three
business day period such that the subject Superior Proposal no longer
constitutes a Superior Proposal. Any amendment to the price or material terms of
a Superior Proposal shall require an additional Notice of Superior Proposal and
an additional three business day period thereafter, to the extent permitted
under applicable law, prior to public disclosure by the Board of its
recommendation with respect thereto.
(d) Nothing contained in this Section 6.1 or elsewhere in this
Agreement shall prohibit the Company from (i) taking and disclosing to its
stockholders a position contemplated by Rules 14d-9 and 14e-2(a) under the
Exchange Act or (ii) making any disclosure to the Company's stockholders if, in
the good faith judgment of the Board, after taking into account the advice of
its outside legal counsel, disclosure is required under applicable law,
provided, that neither the Company nor the Board nor any committee thereof
shall, except in strict compliance with the provisions of Section 6.1(c),
withdraw or modify, or publicly propose to withdraw or modify, its position with
respect to this Agreement or the Merger or approve or recommend, or propose to
approve or recommend, an Alternative Proposal.
6.2 Access to and Delivery of Information. From the date of this Agreement,
the Company shall, and shall cause its officers, directors, employees, auditors,
agents and subsidiaries, and the officers, directors, employees, auditors and
agents of each Subsidiary to, give Acquiror and Acquisition and each source of
financing for Acquiror in connection with the Merger (each a "Financing Source")
and the officers, employees, counsel, advisors and representatives of Acquiror,
Acquisition and each Financing Source (the "Agents"), access during regular
business hours to all officers, employees, agents, offices, properties, and
other facilities and to all books and records of the Company and each
Subsidiary, permit Acquiror, Acquisition and each Financing Source to make such
inspections and conduct such testing as it may require, and furnish Acquiror,
Acquisition and each Financing Source with such financial, operating,
environmental and other data and information as Acquiror or Acquisition, through
their Agents, may from time to time reasonably request. Acquisition and Acquiror
shall hold and shall cause their Agents to hold all information provided
pursuant to this Section 6.2 confidential to the extent required by the terms of
the Confidentiality Agreement. The Company shall furnish promptly to Acquiror
and Acquisition a copy of each report, schedule, registration statement and
other document filed by it or its Subsidiaries during such period pursuant to
the requirements of federal, state or foreign securities laws. The Company will
deliver or make available to Acquiror a true and complete copy of each of the
Company Permits within 10 days after the date of this Agreement. No
investigation made by Acquiror, Acquisition or any Agent pursuant to this
Section 6.2 shall affect any representations or warranties of the parties
contained in this Agreement or any conditions to their obligations hereunder.
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6.3 Public Announcement. Acquiror and the Company shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to any of the transactions contemplated by this Agreement, shall
provide to the other party for review a copy of any such press release or
statement a reasonable time prior to such release or statement and shall not
issue any such press release or make any such public statement prior to such
consultation and review, except where advised by outside legal counsel that
consultation is not practicable in order to comply with applicable law or any
listing agreement with applicable securities exchanges.
6.4 Indemnification and Insurance.
(a) Acquisition and Acquiror hereby acknowledge the existence and
continued effect of and agree to cause the Surviving Corporation to honor in
accordance with their respective terms certain indemnity agreements (the
"Indemnity Agreements") listed on Schedule 6.4(a), true and complete copies of
which the Company has provided to Acquiror, that are outstanding as of the date
hereof between the Company and certain of the Company's former and existing
directors and officers.
(b) All rights to indemnification existing in favor of the present or
former directors, officers, employees, fiduciaries and agents of the Company or
any of its Subsidiaries (collectively, the "Indemnified Parties") as provided in
the certificate or articles of incorporation, bylaws or similar documents of any
of the Company or any of its Subsidiaries as in effect as of the date hereof (as
reflected in such documents provided to Acquiror prior to the date of this
Agreement) with respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect for a period of
not less than six years unless and to the extent otherwise required by
applicable law.
(c) Acquiror shall cause the Company, and from and after the Effective
Time, the Surviving Corporation, to purchase a six-year extended reporting
period endorsement under the current policy of directors' and officers'
liability insurance maintained by the Company set forth on Schedule 3.19(a), a
true and complete copy of which the Company has provided to Acquiror; provided
that (i) the Surviving Corporation may substitute therefor other policies not
less advantageous (other than to a de minimis extent) to the beneficiaries of
the current policies, (ii) such substitution shall not result in any gaps or
lapses in coverage with respect to matters occurring prior to the Effective Time
and (iii) the Surviving Corporation shall not be required to pay an annual
premium for such coverage in excess of 150% of the last annual premium paid (the
"Maximum Premium") by the Company prior to the date hereof (which the Company
represents to be $102,000 for the 12-month period ended July 1, 2000). If the
Surviving Corporation is unable to obtain the insurance required by this Section
6.4(c) for the Maximum Premium it shall obtain as much comparable insurance as
possible for an annual premium equal to the Maximum Premium.
6.5 Continuation of Benefits. During the period from the Effective Time
through the first anniversary thereof, Acquiror shall maintain or cause to be
maintained wages,
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compensation levels, employee pension and welfare plans for the benefit of
employees and former employees of the Company and the Subsidiaries, which are,
in the aggregate, substantially the same as or not materially less favorable in
the aggregate than those generally in effect with respect to similarly situated
employees of Acquiror. Buyer shall maintain the Company's existing medical,
health and dental employee benefit plans ("Existing Company Medical Plans") in
effect from the Effective Time through December 31, 2000. For all Employee
Benefits of Acquiror and its affiliates after the Effective Time, Acquiror
shall, to the extent permitted under its benefit plans, cause all service with
the Company or any of its Subsidiaries prior to the Effective Time of employees
to be treated as service with Acquiror and its affiliates for eligibility,
vesting and benefit accrual purposes to the same extent that such service is
taken into account by the Company and its Subsidiaries as of the date hereof,
except to the extent such treatment will result in duplication of benefits. From
and after the Effective Time, Acquiror shall, to the extent permitted under the
relevant plan and within Acquiror's control, (i) cause any pre-existing
condition or limitation and any eligibility waiting periods (to the extent such
limitations or waiting periods did not apply to the employees of the Company
under its plans in existence as of the date hereof) under any group health plans
of Acquiror or any of its Subsidiaries to be waived with respect to employees of
the Company and their eligible dependents and (ii) give each employee of the
Company credit for the plan year in which the Effective Time occurs toward
applicable deductions and annual out-of-pocket limits for expenses incurred
prior to the Effective Time (or such later date on which participation
commences) during the applicable plan year. "Employee Benefits" shall mean
benefits provided under any of the following employee plans: medical, health,
dental, life insurance, long-term disability, severance, pension, retirement or
savings plan, policy or arrangement, including those such plans for which
coverage is generally limited to officers or a select group of highly
compensated employees. If so requested by Acquiror, the Company shall,
immediately prior to the Effective Time, cause to be terminated any one or more
Company Plans (as that term is defined in Section 3.10), other than Existing
Company Medical Plans, by taking all such corporate action, preparing, filing
and furnishing all such notices to employees, trustees, insurance companies,
service providers and Governmental Entities as may be necessary or appropriate,
and making arrangements for the distribution of assets as may be required in
order to effectuate such termination prior to the Effective Time.
6.6 Severance Policy and Other Agreements. Except as contemplated by
Section 7.3(g), Acquiror shall honor or cause to be honored all severance and
retention agreements and employment agreements with the Company's directors,
officers and employees set forth on Schedule 6.6. The Company represents and
warrants that it has provided to Acquiror true and complete copies of such
agreements.
6.7 Reasonable Efforts. Subject to the terms and conditions herein, each of
the parties hereto agrees to use its reasonable best efforts to take or cause to
be taken all action, and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement and to obtain in a timely manner
all waivers, consents and approvals
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of, and to make all filings with and notifications to, any Governmental Entity
or any other third parties as are necessary in order to consummate the
transactions contemplated by this Agreement, including but not limited to
cooperation in the preparation and filing of the Proxy Statement, any required
filings under the HSR Act, or other foreign filings and any amendments to any
thereof. In addition, if at any time prior to the Effective Time any event or
circumstance relating to either the Company or Acquiror or Acquisition or any of
their respective subsidiaries should be discovered by the Company or Acquiror,
as the case may be, which should be set forth in the Proxy Statement, the
discovering party promptly shall inform the other parties of such event or
circumstance. If at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, including
the execution of additional instruments, the proper officers and directors of
each party to this Agreement shall take all such necessary action. The Company
shall use its reasonable best efforts to take or cause to be taken all action,
and to do, or cause to be done, all things necessary, proper or advisable to
ensure that the Surviving Corporation has the full benefit of all of the
Environmental Permits after the Effective Time.
6.8 Proxy Statement.
(a) The Company shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders as soon as practicable after the date of this Agreement for
the purpose of approving and adopting this Agreement and the transactions
contemplated hereby, including the Merger, for the purpose of considering and
taking action upon this Agreement (the "Special Meeting") and shall not, unless
required by applicable laws to do so, adjourn, postpone or cancel (or propose to
adjourn, postpone or cancel) such Special Meeting without the prior consent of
Acquiror;
(ii) subject to Section 6.1(c), include in the Proxy Statement the
recommendation of the Board that the stockholders of the Company vote in favor
of the approval and adoption of this Agreement and the transactions contemplated
hereby, including the Merger; and
(iii) use its best efforts to (A) obtain and furnish the
information required to be included by it in the Proxy Statement, file the
preliminary Proxy Statement with the SEC on or before April 17, 2000 and, after
consultation with Acquiror and Acquisition, respond promptly to any comments
made by the SEC with respect to the Proxy Statement and any preliminary version
thereof and cause the Proxy Statement to be mailed to its stockholders at the
earliest practicable time following the date of this Agreement and (B) solicit
from the stockholders of the Company proxies in favor of the approval and
adoption of this Agreement and the transactions contemplated hereby, including
the Merger, and, subject to Section 6.1(c), take all other actions reasonably
necessary or advisable to secure the approval and adoption of this Agreement and
the transactions contemplated hereby, including the Merger, by the Company's
stockholders.
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(b) The Company shall promptly correct the Proxy Statement if and to
the extent that it becomes false or misleading in any material respect (and each
of Acquiror and Acquisition, with respect to written information supplied by it
specifically for use in the Proxy Statement, shall promptly notify the Company
of any required corrections of such information and cooperate with the Company
with respect to correcting such information), shall supplement the information
contained in the Proxy Statement to include any information that becomes
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (and each of Acquiror and Acquisition
shall supplement the information provided by it specifically for use in the
Proxy Statement to include any information that shall become necessary in order
to make the statements therein that are based on such provided information, in
light of the circumstances under which they were made, not misleading), and
shall take all steps necessary to cause the Proxy Statement, as so corrected or
supplemented, to be filed with the SEC and disseminated to the Company's
stockholders, in each case to the extent required by applicable federal
securities laws. Acquiror and its counsel shall be given a reasonable
opportunity to review and comment on the Proxy Statement prior to its filing
with the SEC or dissemination to the stockholders of the Company. The Company
shall provide to Acquiror and its counsel any comments and correspondence the
Company or its counsel may receive from the SEC with respect to the Proxy
Statement promptly after receipt thereof.
(c) The Company shall, or shall cause its transfer agent to, make all
stock records and other records relating to the Shares and the Company's
stockholders available to Acquiror and Acquisition as is necessary or advisable
to effect the intent of this Agreement.
6.9 Notification of Certain Matters; Equitable Relief.
(a) The Company shall give prompt written notice to Acquiror, and
Acquiror shall give prompt written notice to the Company, of the occurrence (or
nonoccurrence) of any event, the occurrence (or nonoccurrence) of which would be
likely to cause any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect and of any material failure of
either party to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder; provided, however, that delivery
of any notice pursuant to this Section 6.9 shall not limit or otherwise affect
the remedies available to either party hereunder.
(b) Each of the Company, Acquiror and Acquisition shall give prompt
written notice to the other parties hereto of any notice or other communication
from any third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement.
(c) The parties hereto 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
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to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
6.10 Antitrust Notification. Each of the Company and Acquiror shall as
promptly as practicable, but in no event later than ten (10) business days
following the execution of this Agreement, file with the United States Federal
Trade Commission and the United States Department of Justice the notification
and report form, if any, required for the transactions contemplated hereby and
any supplemental information requested in connection therewith pursuant to the
HSR Act. Each of the parties hereto shall use commercially reasonable efforts to
obtain any clearance required under the HSR Act for the consummation of the
transactions contemplated hereby; provided; however, that nothing contained
herein shall require (i) Acquiror or any of its subsidiaries to divest or hold
separate any portion of its assets or the assets of the Company or (ii) the
Company or any of its subsidiaries to divest or hold separate any portion of its
assets.
6.11 Takeover Statutes. If any state takeover statute or other similar
statute or regulation becomes or is deemed to become applicable to the Merger,
this Agreement or any of the transactions contemplated hereby, the Company shall
promptly use its reasonable best efforts to take all action necessary to render
such statute or regulation inapplicable to all of the foregoing.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party hereto to consummate the Merger is subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) this Agreement shall have been adopted by the affirmative vote of
the stockholders of the Company by the requisite vote in accordance with the
Company's Certificate of Incorporation as in effect on the date hereof and the
GCL;
(b) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
court or Governmental Entity of competent jurisdiction and be in effect which
prohibits, restrains, enjoins or restricts the consummation of the Merger; and
(c) any waiting period applicable under the HSR Act shall have
terminated or expired.
7.2 Conditions to Obligation of the Company to Effect the Merger. The
obligation of the Company to effect the Merger is further subject to the
satisfaction at or prior to the Effective Time of the following conditions, any
one or both of which may be waived by the Company:
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(a) each of Acquiror and Acquisition shall have performed in all
material respects each of its obligations under this Agreement required to be
performed by it at or prior to the Effective Time pursuant to the terms hereof;
and
(b) Acquiror and Acquisition shall not have materially breached any of
their material representations or warranties in the Merger Agreement (without
giving effect to any limitation as to materiality or Material Adverse Effect in
such representations and warranties).
7.3 Conditions to Obligation of Acquiror and Acquisition to Effect the
Merger. The obligation of Acquiror and Acquisition to effect the Merger is
further subject to the satisfaction at or prior to the Effective Time of the
following conditions, any one or more of which may be waived by Acquiror and
Acquisition:
(a) the Company shall have performed in all material respects each of
its obligations under this Agreement required to be performed by it at or prior
to the Effective Time pursuant to the terms hereof;
(b) there shall not have been any regulation, legislation, statute,
rule, injunction, judgment or other order promulgated, enacted, entered or
enforced or deemed applicable to the Merger by any Governmental Entity and be in
effect (other than the routine application to the Merger or other subsequent
business combination of waiting periods under the HSR Act), that in the
reasonable judgment of Acquiror prohibits or limits or seeks to prohibit or
limit the ownership or operation by Acquiror or Acquisition or any other
affiliate of Acquiror of all or any portion of the business or assets of the
Company and the Subsidiaries or of Acquiror or Acquisition or any other
affiliate of Acquiror or compels or seeks to compel Acquiror or Acquisition or
any other affiliate of Acquiror to dispose of or to hold separately all or any
portion of the business or assets of the Company or any of the Subsidiaries or
of Acquiror or Acquisition or any other affiliate of Acquiror, or imposes or
seeks to impose any limitation on Acquiror or Acquisition or any other affiliate
of Acquiror to conduct their business or own such assets;
(c) there shall have been instituted or pending any action, proceeding
or counterclaim by any Governmental Entity, challenging the consummation of the
Merger, or seeking to, directly or indirectly, result in any of the consequences
referred to in clause (b) above;
(d) no Material Adverse Effect shall have occurred;
(e) the Company shall not have materially breached any of its material
representations or warranties in the Merger Agreement (without giving effect to
any limitation as to materiality or Material Adverse Effect in such
representations and warranties);
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(f) there shall not have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) any limitation
(whether or not mandatory) by any Governmental Entity on, or other event or
circumstance that materially and adversely affects, the extension of credit by
banks or other lending institutions, (iii) any banking moratorium declared by
New York, Texas or United States authorities, any material adverse change in the
market for syndicated facilities similar in nature to the credit facilities of
Acquiror or any material disruption of, or material adverse change in,
financial, banking or capital markets generally, in each case as determined by
Acquiror in its sole reasonable discretion, (iv) a commencement of a war, armed
hostilities or other national or international crisis involving the United
States or (v) in the case of any of the foregoing existing at the time of the
execution of the Merger Agreement, a material acceleration or worsening thereof;
and
(g) the Company shall have $14.5 million of available cash prior to
payment of (i) amounts payable pursuant to Section 1.9(a), and (ii) transaction
fees and expenses incurred by the Company in connection with the transactions
contemplated by this Agreement.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
8.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time by
written notice, notwithstanding approval thereof by the stockholders of the
Company:
(a) by mutual written consent duly authorized by the Board of Directors
of Acquiror and the Board;
(b) by either Acquiror or the Company if:
(i) a Governmental Entity shall have issued an order, decree or
ruling or taken any other action, in any case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger, which order, decree,
ruling or other action is final and nonappealable; provided, that the party
seeking to terminate this Agreement shall have used its reasonable efforts to
remove, lift, vacate or reverse such order, decree or ruling; or
(ii) the Board has recommended, or the Company has entered into an
Acquisition Agreement with respect to, an Alternative Proposal except that the
Company may not exercise its right to terminate the Agreement pursuant to this
Section 8.1(b)(ii) unless the Acquisition Agreement is with respect to a
Superior Proposal, the Company has strictly complied with the terms and
procedures set forth in Section 6.1 and prior to such termination the Company
has paid the Termination Fee described in Section 8.3(b); or
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(iii) if the Merger shall not have been consummated by August 31,
2000 (the "Outside Date"); provided, however, that the right to terminate this
Agreement is not available to any party that is then in material breach of any
of its material covenants, obligations, representations or warranties in this
Agreement (without giving effect to any limitation as to materiality or Material
Adverse Effect in such representations and warranties) or if such party's
material breach has been the cause of, or resulted in, the failure of the Merger
to occur on or before the Outside Date; or
(c) by Acquiror if:
(i) the Company shall have failed to include in the Proxy Statement
the recommendation of the Board that the stockholders of the Company approve and
adopt this Agreement and the transactions contemplated hereby, including the
Merger;
(ii) the Board or any committee thereof shall have (A) withdrawn or
modified (including but not limited to by amendment of or supplement to the
Proxy Statement) or publicly proposed to withdraw or modify in a manner adverse
to Acquiror or Acquisition its approval or recommendation of this Agreement or
the Merger; (B) approved or recommended or publicly proposed to approve or
recommend any Alternative Proposal; (C) resolved to effect any of the foregoing;
or (D) failed to reaffirm publicly and unconditionally its recommendation to the
Company's stockholders to approve and adopt this Agreement and the transactions
contemplated hereby, including the Merger, which public affirmation must be made
within five business days after Acquiror's written request to do so (which
request may be made at any time that an Alternative Proposal is pending) and
must also include the unconditional rejection of such Alternative Proposal (to
the extent not previously publicly withdrawn); or
(iii) the Company is in material breach of any of its material
covenants, obligations, representations or warranties in this Agreement (without
giving effect to any limitation as to materiality or Material Adverse Effect in
such representations and warranties); provided that if such breach is curable
through the exercise of the Company's commercially reasonable efforts, Acquiror
may not terminate this Agreement under this Section 8.1(c)(iii) unless such
breach is not cured on or prior to the date that is twenty (20) days after
written notice of such breach is given by Acquiror to the Company; or
(d) by the Company if Acquiror or Acquisition is in material breach of
any of its material covenants, obligations, representations or warranties in
this Agreement (without giving effect to any limitation as to materiality or
Material Adverse Effect in such representations and warranties); provided that
if such breach is curable through exercise of Acquiror's or Acquisition's
commercially reasonable efforts, the Company may not terminate this Agreement
under this Section 8.1(d) unless such breach is not cured on or prior to the
date that is twenty (20) days after written notice of such breach is given by
the Company to Acquiror.
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8.2 Notice of Termination; Effect of Termination.
(a) Any termination of this Agreement under Section 8.1 above shall be
effective immediately upon the delivery of written notice by the terminating
party to the other parties hereto.
(b) In the event of the termination of this Agreement as provided in
Section 8.1, this Agreement shall be of no further force or effect, except (i)
as set forth in this Section 8.2, Section 8.3 and Article IX (miscellaneous),
each of which shall survive the termination of this Agreement, and (ii) nothing
herein shall relieve any party from liability for any breach of this Agreement.
(c) No termination of this Agreement shall affect the obligations of
the parties contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their terms.
8.3 Fees and Expenses.
(a) The Company shall reimburse Acquiror in the amount of $500,000 as
reimbursement for all of its costs and expenses in connection with this
Agreement and the Merger ("Transaction Expenses") if this Agreement has been
terminated by Acquiror pursuant to Section 8.1(c)(iii), provided that Acquiror
is not in material breach of any of its material covenants, obligations,
representations or warranties in this Agreement (without giving effect to any
limitation as to materiality or material adverse effect in such representations
and warranties), and Acquiror shall reimburse the Company in an amount of
$500,000 as reimbursement for Transaction Expenses if this Agreement has been
terminated by the Company pursuant to Section 8.1(d), provided that the Company
is not in material breach of any of its material covenants, obligations,
representations or warranties in this Agreement (without giving effect to any
limitation as to materiality or Material Adverse Effect in such representations
and warranties).
(b) If this Agreement is terminated pursuant to Section 8.1(b)(ii) or
Section 8.1(c)(i) or (ii), the Company shall promptly pay Acquiror a termination
fee of $2,500,000 (the "Termination Fee") in immediately available funds by wire
transfer to an account designated by Acquiror.
(c) In addition to the Company's obligations under Section 8.3(a), if
(i) this Agreement is terminated pursuant to Section 8.1(c)(iii)
and the Company is unable to prove by a preponderance of the evidence that the
breach by the Company was not willful and prior to the first anniversary of such
termination, the Company enters into a definitive agreement with respect to an
Alternative Proposal or an Alternative Proposal is consummated, or
(ii) this Agreement is terminated pursuant to Section 8.1(c)(iii)
and the Company proves by a preponderance of the evidence that the breach by the
Company
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was not willful and prior to the first anniversary of such termination, the
Company enters into a definitive agreement with respect to an Alternative
Proposal or an Alternative Proposal is consummated and the consideration per
Share expected to be paid in connection with such transaction is an amount equal
to (x) $11.50, less (y) the amount determined by dividing the Termination Fee by
the number of Shares then outstanding, within one business day of the execution
of such agreement or consummation of such Alternative Proposal, the Company
shall pay Acquiror the Termination Fee less Transaction Expenses previously paid
to Acquiror pursuant to Section 8.3(a) in immediately available funds by wire
transfer to an account designated by Acquiror.
8.4 Amendment. This Agreement may be amended by action taken by the
Company, Acquiror and Acquisition at any time before or after adoption of the
Merger by the stockholders of the Company (if required by applicable law);
provided, however, that, after any such approval by the stockholders of the
Company, no amendment shall be made that is not otherwise permitted pursuant to
Section 251(d) of the GCL. This Agreement may not be amended except by an
instrument in writing signed on behalf of the parties hereto.
8.5 Extension; Waiver. At any time prior to the Effective Time, each party
hereto (in the case of the Company, acting through the Board) may (i) extend the
time for the performance of any of the obligations or other acts of the other
party, (ii) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document, certificate or writing
delivered pursuant hereto or (iii) subject to Section 8.4, waive compliance by
the other party with any of the covenants and agreements contained herein. Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
ARTICLE IX
MISCELLANEOUS
9.1 Non-Survival of Representations and Warranties. The representations and
warranties made in this Agreement shall not survive beyond the Effective Time.
This Section 9.1 shall have no effect upon any covenant, agreement or obligation
whether to be performed before or after the Effective Time.
9.2 Entire Agreement; Assignment. This Agreement (including the documents,
schedules and instruments referred to herein) together with the Confidentiality
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof and supersedes all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof. This Agreement shall not be assigned by
operation of law or otherwise and any attempted assignment of this Agreement in
violation of this sentence shall be void; provided, however, that Acquiror may
assign
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its rights and Acquisition may assign its rights, interest and obligations to
any wholly-owned subsidiary of Acquiror without the consent of the Company
provided that no such assignment shall relieve Acquiror of any liability for any
breach by such assignee. Nothing in this Section 9.2 shall be deemed to
supersede or terminate the rights of the Company pursuant to the Confidentiality
Agreement.
9.3 Validity. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
9.4 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier, or by registered or
certified mail (postage prepaid, return receipt requested) or confirmed
facsimile transmission to the respective parties as follows:
If to Acquiror or Acquisition:
MACTEC, Inc.
0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: J. Xxxxxxx Xxxx
Fax: (000) 000-0000
with a copy to
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Stocks
Fax: (000) 000-0000
If to the Company:
Xxxxxxx Xxxxxx Associates Group, Inc.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Fax: (000) 000-0000
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with a copy to
Howard, Rice, Nemerovski, Xxxxxx
Xxxx & Xxxxxx, P.C.
A Professional Corporation
Three Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided, that notice of any change of address shall be effective only upon
receipt thereof).
9.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
9.6 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When reference is made in this Agreement to a
Section or Article, such reference shall be to a Section or Article of this
Agreement, unless otherwise indicated. Whenever the words "include," "includes,"
or "including" are used in this Agreement, they shall be deemed to be followed
by the words "without limitations." The words "herein," "hereby," "hereof,"
"hereto," "hereunder" and words of similar import refer to this Agreement.
9.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
9.8 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and, except as set forth in Section
6.4, nothing in this Agreement, express or implied, is intended to confer upon
any other person any rights or remedies of any nature whatsoever under or by
reason of this Agreement.
9.9 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in fall 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 contemplated hereby, subject to the terms and conditions hereof,
are fulfilled to the fullest extent possible.
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9.10 Attorneys Fees. In the event of any dispute hereunder, the prevailing
party shall be entitled to the recovery of reasonable attorneys fees.
9.11 Expenses. Except as set forth in Section 8.3(a), all fees, costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such fees, costs and
expenses.
9.12 Waiver of Jury Trial. Each of Acquiror, Acquisition and the Company
hereby irrevocably waives all right to trial by jury in any action, proceeding
or counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to this Agreement, the transactions contemplated hereby or the actions
of such parties in the negotiation, administration, performance and enforcement
hereof.
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IN WITNESS WHEREOF, each of the parties signed below has caused this
Agreement to be executed on its behalf by its officer thereunto duly authorized
the day and year first above written:
MACTEC, INC.
a Colorado corporation
By: /s/ Xxxxx X. State
-------------------------------------
Name: Xxxxx X. State
Title: President
CETCAM ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. State
-------------------------------------
Name: Xxxxx X. State
Title: President
XXXXXXX XXXXXX ASSOCIATES GROUP,
INC., a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer
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