1
Exhibit (c)(1)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
TEL-SAVE HOLDINGS, INC.
TSHCo, Inc.
AND
SYMETRICS INDUSTRIES, INC.
Dated as of
December 18, 1997
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TABLE OF CONTENTS
Page
----
I. ARTICLE I
The Offer
1.1 The Offer................................................ 1
1.2 Company Action........................................... 3
1.3 Directors................................................ 3
II. ARTICLE II
The Merger
2.1 The Merger............................................... 4
2.2 Effect of the Merger..................................... 5
2.3 Consummation of the Merger............................... 5
2.4 Certificate of Incorporation and
By-Laws; Directors and Officers........................ 6
2.5 Conversion of Securities................................. 6
2.6 Stock Options............................................ 6
2.7 Closing of Company Transfer Books........................ 7
2.8 Exchange of Certificates................................. 7
2.9 Funding of Paying Agent.................................. 8
2.10 Taking of Necessary Action;
Further Action......................................... 9
2.11 Merger Without Meeting of
Stockholders........................................... 9
2.12 No Further Ownership Rights
in Common Stock........................................ 9
III. ARTICLE III
Representations and Warranties of
Parent and Purchaser
3.1 Organization and Qualification........................... 10
3.2 Authority Relative to this Agreement..................... 10
3.3 Financing Arrangements................................... 11
3.4 Ownership of Shares...................................... 11
IV. ARTICLE IV
Representations and Warranties of
the Company
4.1 Organization and Qualification........................... 11
4.2 Subsidiaries............................................. 12
4.3 Capitalization........................................... 12
4.4 Authority Relative to this Agreement..................... 13
4.5 Commission Filings....................................... 14
3
4.6 Liabilities.............................................. 15
4.7 Litigation............................................... 15
4.8 Government Contracts..................................... 16
V. ARTICLE V
Conduct of Business Pending the Merger
5.1 Conduct of Business by the Company
Pending the Merger..................................... 16
VI. ARTICLE VI
Additional Agreements
6.1 Action of Stockholders................................... 18
6.2 Proxy Statement.......................................... 18
6.3 Expenses................................................. 19
6.4 Additional Agreements.................................... 19
6.5 Limitation on Negotiations............................... 19
6.6 Notification of Certain Matters.......................... 21
6.7 Access to Information.................................... 21
6.8 Stockholder Claims....................................... 22
6.9 Treatment of Employee Compensation
and Benefits........................................... 22
6.10 Indemnification Rights................................... 22
6.11 Takeover Law Exemption................................... 24
VII. ARTICLE VII
Conditions
7.1 Conditions to Obligations of Each
Party to Effect the Merger............................. 24
VIII. ARTICLE VIII
Termination, Amendment and Waiver
8.1 Termination.............................................. 25
8.2 Amendment................................................ 26
8.3 Grant of Stock Option
Upon Termination....................................... 27
8.4 Effect of Termination.................................... 27
8.5 Waiver................................................... 28
IX. ARTICLE IX
General Provisions
9.1 Brokers.................................................. 28
9.2 Public Statements........................................ 28
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9.3 Notices.................................................. 29
9.4 Interpretation........................................... 29
9.5 Severability............................................. 30
9.6 Miscellaneous............................................ 30
9.7 Counterparts............................................. 30
9.8 Survival................................................. 30
9.9 Third Party Beneficiaries................................ 31
Annex I
CONDITIONS TO THE OFFER
EXHIBITS
--------
Exhibit A Form of Tender and Option Agreement
Exhibit B Form of Stock Option Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 18, 1997 (the
"Agreement"), by and among Tel-Save Holdings, Inc., a Delaware corporation
("Parent"), TSHCo, Inc., a Delaware corporation and a subsidiary of Parent
("Purchaser"), and Symetrics Industries, Inc., a
Florida corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Purchaser
and the Company have approved the acquisition of the Company by Purchaser
pursuant to a tender offer (the "Offer") by Purchaser for all of the outstanding
shares of Common Stock, par value $0.25, of the Company, (the "Shares") at a
price of $15.00 in cash per Share followed by a merger (the "Merger") of
Purchaser with and into the Company, all upon the terms and subject to the
conditions set forth herein.
WHEREAS, contemporaneously with the execution and delivery of this
Agreement and as a condition to Parent's willingness to enter this Agreement,
(i) the Company, Parent and certain officers and directors of the Company are
entering into the Tender and Option Agreement in substantially the form of
Exhibit A hereto (the "Tender and Option Agreement"), and (ii) the Company and
Parent are entering into the Stock Option Agreement in substantially the form of
Exhibit B hereto (the "Stock Option Agreement").
NOW THEREFORE, in consideration of the premises and the mutual
agreements, provisions and covenants herein contained, the parties hereby agree
as follows:
1
ARTICLE I
THE OFFER
1.1 The Offer.
(a) Purchaser shall commence within the meaning of Rule 14d-2
under the Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder (the "Exchange Act"), the Offer within five
business days (as such term is defined in Rule 14e-1 under the Exchange Act (a
6
"Business Day")) after the date of this Agreement. The Offer, for all of the
outstanding Shares, will be subject only to a number of Shares being validly
tendered prior to the expiration of the Offer and not withdrawn which would
result in Purchaser's ownership of such number of Shares as represents at least
a majority of the outstanding Shares of the Company on a fully diluted basis
assuming exercise of all outstanding Options (as defined in Section 2.6), if
any, of the Company (the "Minimum Condition") and satisfaction or waiver of the
further conditions set forth in Annex I, any of which conditions (including the
Minimum Condition) may be waived in the sole discretion of Purchaser.
(b) Upon the terms and subject to the conditions of the Offer,
Purchaser shall purchase all Shares which are validly tendered on or prior to
the expiration of the Offer and not timely withdrawn. Purchaser may, at any
time, transfer or assign to one or more corporations, which are direct or
indirect subsidiaries of Parent, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but any such transfer or assignment shall
not relieve Purchaser of its obligations under the Offer or prejudice the rights
of tendering stockholders to receive payment for Shares properly tendered and
accepted for payment.
(c) The Offer shall remain open (except upon the occurrence of
the events specified in Section 8.1(a), 8.1(c)(i), and 8.1(d)) until January 21,
1998 (the "Expiration Date"), unless Purchaser shall have extended the period of
time for which the Offer is open as may be required by this Agreement, or
applicable law, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by Purchaser, shall expire. On
or prior to the date the Offer is commenced, Purchaser shall file with the
Securities and Exchange Commission (the "Commission") a Tender Offer Statement
on Schedule 14D-1 (together with all amendments and supplements thereto, the
"Schedule 14D-1") with respect to the Offer, that shall comply in all material
respects with the provisions of such Schedule and all applicable Federal
securities laws, and shall contain (including as an exhibit) or incorporate by
reference the Offer (or portions thereof) and forms of the related letter
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of transmittal and summary advertisement (the "Tender Offer Documents").
Purchaser shall not, without the prior written consent of the Board of Directors
of the Company, decrease or change the amount or form of the consideration
payable in the Offer, or impose additional conditions to the Offer. Subject to
the last sentence of paragraph (a), Purchaser may at any time, in its sole
discretion, extend the Offer.
(d) As a condition to the Offer, each of the executive
officers and directors of the Company shall have agreed with Purchaser (i) to
tender in the Offer all of the Shares (and all securities convertible into or
exchangeable for Shares) beneficially owned by them and (ii) to grant to
Purchaser the option, exercisable within 180 days of the date hereof, to
purchase any and all such Shares and other securities (assuming conversion of
such securities in accordance with their terms into Shares) for the per share
price that would have been payable in the Offer, in the event the Offer is not
consummated for any reason and (A) a third party has made an Acquisition
Proposal (as such term is defined in Section 6.5 hereof), or (B) such officers
and directors intend to sell their Shares to a third party, in which case such
Shares will first be offered to Purchaser.
1.2 Company Action. The Company hereby consents to the Offer and
represents that its Board of Directors (i) has determined by a unanimous vote
that the Offer and the Merger are fair to, and in the best interests of, the
Company and its stockholders, (ii) has approved the Offer and the Merger, (iii)
has approved and adopted this Agreement, the Stock Option Agreement and the
Tender and Option Agreement and (iv) has resolved to recommend acceptance of the
Offer to, and adoption of this Agreement by, the Company's stockholders. As soon
as practicable after the date hereof, the Company shall file with the Commission
but in no event prior to such date as the Purchaser has filed the Tender Offer
Documents with the Commission and mail to holders of record and beneficial
owners of Shares a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the Offer (such Schedule 14D-9, as amended from time to time, the
"Schedule 14D- 9"), which shall reflect such determination and recommendation.
The Company shall from time to time furnish Purchaser with such additional
information, if
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any, including updated or additional lists of stockholders, mailing labels and
lists of securities positions, and other assistance as the Purchaser may
reasonably request in order to be able to communicate the Offer to the
stockholders of the Company.
1.3 Directors. Promptly upon the purchase by Purchaser of such
number of Shares as represents at least a majority of the outstanding Shares (on
a fully diluted basis assuming conversion of all outstanding Options) and from
time to time thereafter, Purchaser shall be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of the
Company as will give Purchaser, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Board of Directors of the Company equal to
the product of (a) the number of directors on the Board of Directors of the
Company (after giving effect to the appointment of such directors) and (b) the
percentage that such number of Shares so purchased bears to the number of Shares
outstanding, and the Company shall, upon request by Purchaser, promptly (i)
increase the size of the Board of Directors of the Company to the extent
permitted by its Articles of Incorporation and By-Laws (and amend the Articles
of Incorporation and By-Laws, if so required, to increase the size of the Board
of Directors to allow for such additional directors); and/or (ii) take all steps
necessary and appropriate to secure the resignations of such number of directors
as is necessary to enable Purchaser's designees to be elected to the Board of
Directors of the Company (and shall hold a Board meeting for such purpose); and
(iii) shall cause Purchaser's designees to be so elected. At any time after the
execution hereof, at the request of Purchaser, the Company shall promptly take,
at its expense, all action necessary to effect any such election, including
mailing to its stockholders the information required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder in form and substance
reasonably satisfactory to Purchaser and its counsel. Purchaser shall supply the
Company and be solely responsible for any information included in the filings
with the Commission with respect to itself and its nominees, officers, directors
and affiliates required by said Section 14(f) and Rule 14f-1. Prior to the
Effective Time (as defined in Section 2.3 hereof) the Board of Directors shall
at all times have
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at least one "Disinterested Director" (as such term is defined in Section
607.0901 of the Florida Business Corporation Act (the "Florida Law")).
2
ARTICLE II
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.3),
in accordance with this Agreement, the Florida Law and the General Corporation
Law of the State of Delaware, as amended (the "Delaware Law"), Purchaser shall
be merged with and into the Company, the separate existence of Purchaser (except
as may be continued by operation of law) shall cease, and the Company shall
continue as the surviving corporation. The Company in its capacity as the
corporation surviving the Merger, sometimes is referred to herein as the
"Surviving Corporation."
2.2 Effect of the Merger. The Surviving Corporation shall possess
all the rights, privileges, powers and franchises, of a public as well as a
private nature, and be subject to all the restrictions, disabilities and duties,
of each of Purchaser and the Company (collectively, the "Constituent
Corporations"); the Surviving Corporation shall be vested with the rights,
privileges, powers and franchises, all properties and assets and all debts due
on whatever account, and all other things in action or belonging to, and all and
every other interest of, each of the Constituent Corporations; and all debts,
liabilities and duties of each of the Constituent Corporations shall thenceforth
attach to the Surviving Corporation and may be enforced against it to the same
extent as if such debts, liabilities and duties had been incurred or contracted
by it, all with the effect set forth in Section 607.1106 of the Florida Law.
2.3 Consummation of the Merger. As soon as is practicable after the
satisfaction or waiver of the conditions set forth in Article VII, and in no
event later than five business days after such satisfaction or waiver, the
parties to this Agreement will cause a Certificate of Merger to be filed with
the Secretary of State of the State of Delaware, in such form as
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required by, and executed in accordance with, the relevant provisions of the
Delaware Law, including, if applicable, the procedures permitted by Section 253
of the Delaware Law (in which case references herein to the "Certificate of
Merger" shall refer instead to the "Certificate of Ownership and Merger"), and
the parties to this Agreement will cause Articles of Merger to be filed with the
Department of State of Florida, in such form as required by, and executed in
accordance with, the relevant provisions of the Florida Law, including, without
limitation, the relevant procedures set forth in Section 607.1105 and Section
607.1107 of the Florida Law. The Merger shall be effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State of
Delaware and the Articles of Merger are duly filed with the Department of State
of Florida, or at such later time as specified in the Certificate of Merger (the
"Effective Time").
2.4 Articles of Incorporation and By-Laws; Directors and Officers. The
Articles of Incorporation of the Company shall be the Articles of Incorporation
of the Surviving Corporation immediately after the Effective Time. The By-Laws
of Purchaser, as in effect immediately prior to the Effective Time, shall be the
By-Laws of the Surviving Corporation immediately after the Effective Time and
the directors of the Company shall submit their resignations at the Effective
Time. The directors of Purchaser holding office immediately prior to the
Effective Time shall be the directors of the Surviving Corporation immediately
after the Effective Time. The officers of the Company, other than the Chairman
of the Board, the Secretary and the Treasurer, holding office immediately prior
to the Effective Time shall be the officers (holding the same offices as they
held with the Company) of the Surviving Corporation immediately after the
Effective Time.
2.5 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Purchaser, the Company or the
holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares to be cancelled pursuant to Section 2.5(b)) is
applicable) shall automatically be cancelled and extinguished and be converted
into and become solely a
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right to receive $15.00 in cash (adjusted for stock splits or other similar
events) without interest (the "Common Stock Consideration").
(b) Each Share issued and outstanding immediately prior to the
Effective Time and held in the treasury of the Company or owned by Purchaser or
Parent shall automatically be cancelled and no payment shall be made with
respect thereto.
(c) Each share of capital stock of Purchaser issued and outstanding
immediately prior to the Effective Time shall be converted and changed into one
validly issued, fully paid and nonassessable share of such capital stock of the
Surviving Corporation.
2.6 Stock Options. Each option (an "Option") to purchase Shares issued
by the Company which is outstanding at, and has vested by, the Effective Time
shall be cancelled by virtue of the Merger, without consideration except as
provided in this Section 2.6, and shall cease to exist. Each holder of an
Option, whether or not immediately exercisable, shall be entitled to receive,
for each Share issuable on exercise of such Option, an amount in cash equal to
the excess of (x) the Common Stock Consideration over (y) the per Share exercise
price of the Option as in effect immediately prior to the Effective Time. The
consideration due under this Section 2.6 shall be payable without interest after
(a) verification by the Paying Agent (as defined in Section 2.8) of the
ownership and terms of the particular Option by reference to the Company's
records, and (b) delivery in the manner provided in Section 2.8 of a written
instrument duly executed by the owner of the applicable Option, in a form
provided by the Paying Agent and setting forth (i) the aggregate number of
Options owned by that person and their respective issue dates and exercise
prices; (ii) a representation by the person that he or she is the owner of all
Options described pursuant to clause (i), and that none of those Options has
expired or ceased to be exercisable; and (iii) a confirmation of and consent to
the cancellation of all of the Options described pursuant to clause (i).
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2.7 Closing of Company Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed with respect to Shares
issued and outstanding immediately prior to the Effective Time and no further
transfer of such Shares shall thereafter be made on such stock transfer books.
If, after the Effective Time, valid certificates previously representing such
Shares are presented to the Surviving Corporation or the Paying Agent (as
defined in Section 2.8), they shall be exchanged as provided in Section 2.8.
2.8 Exchange of Certificates. Prior to the Effective Time,
Purchaser shall designate a bank or trust company to act as agent (the "Paying
Agent") for the holders of Shares to receive the funds necessary to effect the
exchange for cash of certificates which, immediately prior to the Effective
Time, represented Shares entitled to payment pursuant to Section 2.5(a). As soon
as practicable after the Effective Time, the Paying Agent shall mail a
transmittal form (the "Letter of Transmittal") to each holder of record of
certificates theretofore representing such Shares advising such holder of the
procedure for surrendering to the Paying Agent such certificates. If a check for
the Common Stock Consideration is to be issued in the name of a person other
than the person in whose name the certificates for Shares surrendered for
exchange are registered on the books of the Company, it shall be a condition of
the exchange that the person requesting such exchange shall pay to the Paying
Agent all transfer or other taxes required by reason of the issuance of such
check in the name of a person other than the registered owner of the
certificates surrendered, or shall establish to the satisfaction of the Paying
Agent that such taxes have been paid or are not applicable. Notwithstanding the
foregoing, neither the Paying Agent nor any party hereto shall be liable to a
holder of certificates theretofore representing Shares for any amount paid to a
public official pursuant to any applicable abandoned property, escheat or
similar laws. Upon the surrender and exchange of a certificate theretofore
representing Shares, the holder shall be paid by check, without interest
thereon, the Common Stock Consideration to which he or she is entitled
hereunder, less only such amount required to be withheld under applicable backup
withholding federal income tax regulations, and such certificate shall
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forthwith be cancelled. Until so surrendered and exchanged, each such
certificate shall represent solely the right to receive the Common Stock
Consideration into which the Shares it theretofore represented shall have been
converted pursuant to Sections 2.5(a), without interest, and the Surviving
Corporation shall not be required to pay the holder thereof the Common Stock
Consideration to which such holder otherwise would be entitled; provided that
customary and appropriate certifications and indemnities allowing for payment
against lost or destroyed certificates shall be permitted. If any certificates
representing any Shares shall not have been surrendered prior to five years
after the Effective Time (or immediately prior to such earlier date on which any
payment in respect thereof would otherwise escheat to or become the property of
any governmental unit or agency), the payment in respect of such certificates
shall, to the extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
2.9 Funding of Paying Agent. Purchaser shall transmit by wire, or other
acceptable means, to the Paying Agent prior to the Effective Time funds required
for the exchange of all Shares and cancellation of all Options in accordance
with this Agreement. The Paying Agent shall agree to hold such funds in trust
and deliver such funds (in the form of checks of the Paying Agent) in accordance
with this Section and Section 2.8. Any portion of such funds which has not been
paid to holders of the Shares or Options pursuant to Section 2.8 within six
months after the Effective Time shall promptly be paid to the party which
provided such funds, and thereafter holders of certificates representing the
right to receive the cash into which Shares or Options formerly represented by
such certificates shall have been converted pursuant to Section 2.5(a) or 2.6
who have not theretofore complied with Section 2.8 shall look solely to the
Surviving Corporation or the Paying Agent for payment of the amount of cash to
which they are entitled pursuant to this Agreement.
2.10 Taking of Necessary Action; Further Action. Purchaser and the
Company shall use all reasonable efforts to take all such actions as may be
necessary or appropriate in order to effectuate the
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Offer and the Merger as promptly as possible. If, at any time after the
Effective Time, any further actions are necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full right,
title and possession to all assets, property, rights, privileges, immunities,
powers and franchises of either or both of the Constituent Corporations, the
officers and directors of the Surviving Corporation are fully authorized in the
name of either or both of the Constituent Corporations or otherwise to take, and
shall take, all such actions.
2.11 Merger Without Meeting of Stockholders. Notwithstanding the
foregoing in this Article II, in the event that Purchaser shall acquire at least
80 percent of the shares of each class of stock of the Company, the parties
hereto agree to take all necessary and appropriate action, to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a meeting of stockholders of the Company in accordance with Section
607.1104 of the Florida Law.
2.12 No Further Ownership Rights in Common Stock. From and after the
Effective Time, the holders of Shares which were outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such Shares
except as otherwise provided in this Agreement or by applicable law. All cash
paid upon the surrender of Certificates in accordance with the terms hereof
shall be deemed to have been issued in full satisfaction of all rights
pertaining to the Shares.
3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
AND PURCHASER
Parent and Purchaser hereby jointly and severally represent and warrant
to the Company as follows:
3.1 Organization and Qualification. Each of Parent and Purchaser has
been duly incorporated and is validly existing as a corporation and in good
standing
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under the laws of the State of Delaware and has the requisite corporate power to
carry on its respective business as now conducted.
3.2 Authority Relative to this Agreement. Each of Parent and Purchaser
has the requisite corporate power and authority to enter into this Agreement and
to carry out its respective obligations hereunder. The execution and delivery of
this Agreement by Parent and Purchaser and the consummation by Parent and
Purchaser of the transactions contemplated hereby have been duly authorized by
the Boards of Directors of Parent and Purchaser, and no other corporate
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Purchaser and constitutes a valid and
binding obligation of each such company, enforceable in accordance with its
terms, except to the extent that enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the enforcement of creditors rights generally or
by equitable principles. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein by each
of Parent and Purchaser do not and will not conflict with or result in a breach
of or default under (a) its respective Certificate of Incorporation or By-Laws,
(b) any contract to which it is a party, or (d) any law, regulation, order,
judgment or decree, other than any such breaches or violations which will not,
individually or in the aggregate, have a material adverse effect on the ability
of Parent and Purchaser to consummate the transactions contemplated by this
Agreement. Other than in connection with or in compliance with the provisions of
the Delaware Law, Florida Law, the Exchange Act, the securities or blue-sky laws
of the various states of the United States and the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, (the "H-S-R Act"), no authorization,
consent or approval of or filing with, any public body, court or authority is
necessary on the part of Parent or Purchaser for the consummation by Parent and
Purchaser of the transactions contemplated by this Agreement, except for such
authorizations, consents, approvals and filings as to which the failure to
obtain or make would not, individually or in the
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aggregate, have a material adverse effect on the ability of Parent or Purchaser
to perform their respective obligations hereunder.
3.3 Financing Arrangements. Parent shall cause Purchaser to have funds
available to it on the Expiration Date sufficient to purchase the Shares
(including Shares issuable upon exercise of the Options) and to pay fees and
expenses related to the transactions contemplated hereby in accordance with the
terms of this Agreement.
3.4 Ownership of Shares. As of the date hereof, and except as disclosed
on the latest Schedule 13D as filed by Parent with the Commission with respect
to the Common Stock, none of Parent, Purchaser or any of their subsidiaries owns
(beneficially or otherwise) any Shares (except for Shares that may be held in
any of their pension or employee benefit plans).
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser
that:
4.1 Organization and Qualification. The Company has been duly
incorporated and is validly existing as a corporation and in active status under
the laws of the State of Florida and has full corporate power and authority to
own its properties and conduct its business as presently owned and conducted.
The Company is duly qualified as a foreign corporation and in good standing in
each jurisdiction in which the character of its properties owned or leased or
the nature of its activities makes such qualification necessary except where the
failure to be so qualified, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on the business,
property, financial condition or results of operations of the Company and its
Subsidiary taken as a whole (a "Material Adverse Effect").
4.2 Subsidiaries. The Company has listed all subsidiaries required to
be so listed on Exhibit 21 to
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the Company's Annual Report on Form 10-K for the year ended March 31, 1997 (the
"Subsidiary"). The Subsidiary has been duly incorporated and is validly existing
as a corporation and is in good standing in its respective jurisdictions and has
full corporate power and authority to own its properties and conduct its
businesses as presently owned and conducted. Each Subsidiary is duly qualified
as a foreign corporation and in good standing in each jurisdiction in which the
character of its properties owned or leased or the nature of its activities
makes such qualification necessary except where the failure to be so qualified,
would not reasonably be expected to have a Material Adverse Effect.
4.3 Capitalization.
(a) As of December 17, 1997, the authorized equity capitalization
of the Company consists of 5,000,000 Shares, par value $.25 per share, of which
1,627,713 are outstanding. All of the outstanding shares of the Company's
capital stock are validly issued, fully paid and nonassessable. The aggregate
number of Shares subject to (i) outstanding warrants and (ii) outstanding
options that have been issued pursuant to the Company's 1983 and 1994 Stock
Option Plans as of December 17, 1997 is 178,768.
(b) Except as described in paragraph (a) above or in the Company's
Articles of Incorporation, there are no options, warrants, conversion privileges
or other rights, agreements, arrangements or commitments obligating the Company
or any of its subsidiaries to issue or sell any shares of capital stock of the
Company or of any of its subsidiaries or securities or obligations of any kind
convertible into or exchangeable for any shares of capital stock of the Company
or any of its subsidiaries. The holders of the outstanding Shares are not
entitled to any preemptive or other similar rights, except as set forth above.
Upon consummation of the Merger in accordance with the terms of this Agreement,
Purchaser will own the entire equity interest in the Company, and there will be
no options, warrants, conversion privileges or other rights, agreements,
arrangements or commitments obligating the Company or any of its subsidiaries to
issue or sell any shares of capital stock of the Company or any of its
subsidiaries other than such
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rights, options, warrants, conversion privileges or other agreements,
arrangements or commitments, that are the result of actions taken or caused to
be taken by or on behalf of Purchaser.
4.4 Authority Relative to this Agreement.
(a) The Company has the requisite corporate power and authority to
enter into this Agreement and, subject to adoption of this Agreement by its
stockholders as set forth in Section 6.1, to perform its obligations hereunder.
The Company and the Board of Directors has duly and validly taken all necessary
action required to be taken in order for this Agreement, the Tender and Option
Agreement, the Stock Option Agreement and all the transactions contemplated
hereby and thereby not to be subject to the requirements of the provisions of
Sections 607.0901 through 607.0903, inclusive, of the Florida Law, and the
Company is not aware of any other anti-takeover statutes or similar laws and
regulations which apply or purport to apply hereto or thereto (collectively, the
"Takeover Laws"). Except for adoption of this Agreement by its stockholders as
set forth in Section 6.1, no other corporate proceedings on the part of the
Company are necessary to authorize or consummate this Agreement and the
transactions contemplated hereby. The Board of Directors of the Company has
approved Parent and Purchaser and any other direct or indirect wholly-owned
subsidiary of Parent to which Parent may assign its rights hereunder, acquiring
a "control share" (as defined in Section 607.0902 of the Florida Law) pursuant
to the terms of this Agreement.
(b) This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery thereof by
Parent and Purchaser, constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms except to the extent that
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors rights' generally or by equitable principles. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein do not and will not conflict with or result
in a breach of or default under (i) the
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19
Company's Articles of Incorporation or by-laws, (ii) any contract or agreement
to which it is a party or by which the Company or any of its property is bound,
or (iii) any law, regulation, permit, order, judgment or decree, other than any
such breaches or defaults which will not, and would not reasonably be expected
to individually or in the aggregate, have a Material Adverse Effect. Other than
in connection with or in compliance with the provisions of the Delaware Law,
Florida Law, the Exchange Act, the securities or blue-sky laws of the various
states of the United States and the H-S-R Act, no authorization, consent or
approval of, or filing with, any public body, court or authority is necessary
for the consummation by the Company of the transactions contemplated by this
Agreement, other than such authorizations, consents, approvals, permits, filings
or notifications which, if not obtained or made, will not have a Material
Adverse Effect.
4.5 Commission Filings. Since January 1, 1995, the Company has filed
all reports, registration statements and other documents required to be filed
under the Exchange Act and the rules and regulations thereunder, and all such
reports, registration statements and other documents complied, in all material
respects, with the requirements of the Exchange Act, such compliance to be
determined, to the extent applicable, in accordance with the standards applied
to the Company Reports in the following two sentences. As of their respective
dates, the Company's Annual Report on Form 10-K for 1997, the Company's
Quarterly Reports on Form 10-Q in 1997, the Company's Current Report on Form 8-K
with respect to events which occurred in 1997 and the Company's 1997 Proxy
Statement (together, the "Company Reports") did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited consolidated interim financial
statements of the Company (including any related notes and schedules) included
in the reports referred to in clauses (i) and (ii) of the first sentence of this
paragraph have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis during the
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20
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended, subject, in the case of
the unaudited consolidated interim financial statements, to normal year-end
adjustments and any other adjustments described therein, and the fact that the
interim financial statements were prepared in accordance with the rules and
regulations of the Commission and, therefore, certain information required by
GAAP may have been omitted. Except as set forth in the Company Reports since
March 31, 1997, (i) there has not been a Material Adverse Effect, (ii) no events
have occurred other than events that affect the general economy or the Company's
industry generally which have had or which reasonably would be expected to have
a Material Adverse Effect, and (iii) except as permitted by this Agreement,
there has been (1) no direct or indirect redemption, purchase or other
acquisition of any shares of the Company's capital stock by the Company or any
subsidiary, (2) no declaration, setting aside or payment of any dividend or
other distribution by the Company in respect of the Company's Common Stock, (3)
no issuance of any shares of capital stock of the Company (except in connection
with the exercise of Options or grants of restricted stock, each in accordance
with its respective terms), (4) except as permitted by Section 5.1 or with
respect to any grants under the stock option and stock award plans referred to
in Section 4.3, no granting to any person of any option to purchase or other
right to acquire shares of capital stock of the Company, (5) no stock split or
other reclassification of the Company's capital stock, and (6) no change in the
accounting principles as reflected in the first footnote of the audited
financial statements of the Company for the fiscal year ending March 31, 1997.
4.6 Liabilities. The Company is not aware of any undisclosed
liabilities that could reasonably be expected to have a Material Adverse Effect
and the Company is not aware of any material liabilities that have been incurred
since the date of the Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
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21
4.7 Litigation. Except as disclosed in the Company Reports, there are
no claims, actions, proceedings, or investigations pending or, to the knowledge
of the Company, threatened in writing against the Company or any of its
subsidiaries or any of their officers or directors (in their capacity as such)
before any court or governmental or regulatory authority or body which would
reasonably be expected to result in a Material Adverse Effect and neither the
Company nor any of its subsidiaries or any of their officers or directors (in
their capacity as such) are subject to any writs, injunctions or decrees which
would reasonably be expected to result in a Material Adverse Effect.
4.8 Government Contracts. (a) The Company is in substantial compliance
with the Government Contracts to which it is a party. (The term "Government
Contract" means any prime contract with the U.S. Government and any subcontract
with a prime contractor or higher-tier subcontractor under a prime contract with
the U.S. Government.)
5
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
5.1 Conduct of Business by the Company Pending the Merger. The Company
covenants and agrees that, prior to the Effective Time, unless Purchaser shall
otherwise agree in writing or as otherwise expressly contemplated or permitted
by this Agreement:
(a) the businesses and affairs of the Company and its subsidiaries
shall be conducted only in the ordinary course of business and consistent with
past practice;
(b) except in connection with the adoption by the Company of a
shareholder rights plan that would not be applicable to, or adversely affect the
transactions contemplated hereby among the parties to this Agreement, neither
the Company nor any of its subsidiaries shall: (i) issue (except pursuant to
employee and non-employee director stock options outstanding on the date hereof
in accordance with their
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22
terms), sell, pledge, dispose of or encumber (or permit any of its subsidiaries
to issue, sell, pledge, dispose of or encumber): (A) any additional shares of,
or any options, warrants, conversion privileges or rights of any kind to acquire
any shares of, any capital stock of the Company or any of its subsidiaries, or
(B) any material assets of the Company or any of its subsidiaries except in the
ordinary course of business; (ii) amend or propose to amend the certificate or
articles of incorporation or bylaws or similar governing instruments of the
Company or any of its subsidiaries; (iii) split, combine or reclassify any
outstanding Shares, or declare, set aside or pay any dividend or other
distribution, payable in cash, stock, property or otherwise with respect to the
Shares; (iv) redeem, purchase or acquire, or offer to acquire (or permit any of
its subsidiaries to redeem, purchase or acquire or offer to acquire) any Shares
or other securities of the Company; or (v) enter into or modify any contract,
agreement, commitment or arrangement with respect to any of the matters set
forth in this Section 5.1(b);
(c) neither the Company nor any of its subsidiaries shall (i)
acquire (by merger, consolidation, acquisition of stock or assets or otherwise)
any corporation, partnership or other business organization or division or
material assets thereof for aggregate consideration in excess of $250,000; (ii)
incur any indebtedness for borrowed money or issue any debt securities except
the borrowing of working capital in the ordinary course of business and
consistent with past practice; or (iii) enter into or materially modify any
contract, agreement, commitment or arrangement with respect to any of the
foregoing;
(d) neither the Company nor any of its subsidiaries shall enter
into or modify any employment, severance or similar agreements or arrangements
with, or grant any bonuses, salary increases, severance or termination pay to,
any officers, directors or employees;
(e) neither the Company nor any of its subsidiaries shall adopt or
amend any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment or other
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23
employee benefit plan, agreement, trust, fund or arrangement for the benefit or
welfare of any officer, director or employee, other than (i) in the ordinary
course of business consistent with past practice for the benefit or welfare of
any employee, (ii) for the purpose of accelerating the vesting of stock options
that were granted on or before December 16, 1997 or (iii) to the extent required
by law;
(f) the Company shall use reasonable efforts (i) to cause its
current insurance (or reinsurance) policies not to be cancelled or terminated;
and (ii) to not permit any of the coverage thereunder to lapse, in any such case
unless prior to or promptly after such termination, cancellation or lapse,
replacement policies underwritten by insurance and reinsurance companies of
nationally recognized standing and with Best ratings no less favorable than
those of the insurance company providing the coverage which is being replaced
are obtained;
(g) the Company (i) shall use reasonable efforts, and cause each of
its subsidiaries to use reasonable efforts, to keep intact their respective
business organizations and good will, keep available the services of their
officers and employees as a group and maintain satisfactory relationships with
suppliers and customers and others having business relationships with them.
6
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Action of Stockholders. If required by law to approve the Merger,
the Company shall take all action necessary in accordance with the Florida Law
and its Articles of Incorporation and By-Laws to convene a meeting of its
stockholders promptly after the Expiration Date to consider and vote upon this
Agreement. If a meeting of the Company's stockholders is to be called, the
Company shall, if and to the extent requested by Purchaser, use all reasonable
efforts to solicit from stockholders of the Company proxies in favor of the
adoption of this Agreement and shall take all other action reasonably necessary,
or
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24
which otherwise may be reasonably requested by Purchaser, to secure a vote of
stockholders in favor of adoption of this Agreement, subject to the exercise of
fiduciary duties by the Board of Directors under applicable law. At any such
meeting, Purchaser shall vote or cause to be voted all of the Shares then owned
by Purchaser or its subsidiaries in favor of adoption of this Agreement and the
Company shall vote or cause to be voted all Shares with respect to which proxies
in the form distributed by the Company have been given, and not voted against
the adoption of this Agreement, in favor of adoption of this Agreement.
6.2 Proxy Statement. If necessary, the Company shall file with the
Commission under the Exchange Act, and shall use all reasonable efforts to have
processed to completion by the Commission, in each case at the earliest
practicable date, a proxy statement or information statement, as Purchaser shall
designate (the "Proxy Statement"), with respect to the adoption by the Company's
stockholders of this Agreement in form and substance reasonably satisfactory to
Purchaser and its counsel. The information provided by Purchaser and the
Company, respectively, for use in the Proxy Statement, the Schedule 14D-9 and
the Schedule 14D-1 shall be true and correct in all material respects and shall
not omit to state any material fact necessary in order to make such information
and the Proxy Statement, the Schedule 14D-1 and the Schedule 14D-9 not
misleading as of the date of the Proxy Statement, the Schedule 14D-1 and the
Schedule 14D-9, as appropriate. The Proxy Statement shall, subject to the
exercise of fiduciary duties by the Board of Directors under applicable law,
contain the determination and recommendation of the Board of Directors of the
Company referred to in Section 1.2. If no meeting of stockholders is required to
approve the adoption of this Agreement, the Company shall, promptly after the
Expiration Date, take all actions required in connection with the consummation
of the Merger pursuant to Section 253 of the Delaware Law and Section 607.1104
of the Florida Law.
6.3 Expenses. All costs and expenses incurred in connection with the
Offer, this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses, except as set forth in Section 8.3.
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6.4 Additional Agreements. Subject to the conditions herein provided,
each of the parties hereto agrees to use all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by the Offer and this Agreement,
including, without limitation, cooperating with Parent and Purchaser, using
reasonable efforts to obtain all necessary waivers, consents and approvals and
effecting all necessary registrations and filings, including, without
limitation, submissions of information requested by governmental authorities.
6.5 Limitation on Negotiations.
(a) From the date hereof until the termination hereof, the Company
and its subsidiaries will not, directly or indirectly, make, solicit, initiate
or encourage submission of proposals or offers from any persons (including any
of its officers or employees) relating to an Acquisition Proposal. As used
herein, the term "Acquisition Proposal" means any proposal or offer involving a
liquidation, dissolution, recapitalization, merger, consolidation or acquisition
or purchase of all or substantially all of the assets of, or a controlling
equity interest in, the Company or other similar transaction or business
combination involving the Company or its subsidiaries.
(b) Subject to the fiduciary duty of the Board of Directors, the
Company shall:
(i) immediately cease and cause to be terminated all
discussions or negotiations with third parties with respect to any Acquisition
Proposal, if any, existing on the date hereof; and
(ii) promptly notify Purchaser after receipt of any bona fide
Acquisition Proposal or any inquiry from any person relating to an Acquisition
Proposal and promptly provide Purchaser with a reasonable summary of the
financial and other material terms of such Acquisition Proposal.
(c) To the extent that the Board of Directors of the Company shall
conclude, acting in good faith, after receiving advice from outside counsel or
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its financial advisor, that the following action is necessary or appropriate in
order for the Board of Directors to act in a manner which is consistent with its
fiduciary duties under applicable law, the Company may:
(i) furnish or cause to be furnished information concerning
the Company and its businesses, properties or assets to a third party;
(ii) engage in discussions or negotiations with a third party
concerning an Acquisition Proposal initiated by such third party;
(iii) following receipt of an Acquisition Proposal, take and
disclose to its stockholders a position contemplated by Rule 14e-2(a) under the
Exchange Act or otherwise make disclosure to the Company's stockholders; and
(iv) following receipt of an Acquisition Proposal, (1) through
the Board of Directors, withdraw, modify or amend its recommendation referred
to in Section 1.2, and/or (2) enter into an agreement providing for the
consummation of such Acquisition Proposal.
(d) The Company will direct its financial
and other advisors and representatives to comply with each of the covenants
contained in this Section 6.5.
6.6 Notification of Certain Matters. Each party shall give prompt
notice to the others of (i) the occurrence or failure to occur of any event,
which occurrence or failure would cause or may cause any representation or
warranty on its part contained in this Agreement to be untrue or inaccurate in
any material respect; and (ii) any failure of such party, or any officer,
director, employee or agent thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder.
6.7 Access to Information.(a) From the date hereof to the Effective
Time, the Company shall, and shall cause its subsidiaries, officers, directors,
employees and agents to, afford the officers, employees and agents of Parent and
Purchaser reasonable access at all reasonable times to its officers, employees,
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27
agents, premises, books and records, and properties and shall furnish Purchaser
all financial, operating, personal, compensation, tax and other data and
information, Purchaser, through its officers, employees or agents, may
reasonably request.
(b) Parent and Purchaser, on the one hand, and the Company on the
other hand will hold, and each will use its best efforts to cause its
consultants, advisors, counsel and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
other party furnished to it in connection with the transactions contemplated by
this Agreement, except to the extent that such information can be shown to have
been (i) previously known on a nonconfidential basis by the other party, (ii) in
the public domain through no fault of the disclosing party or (iii) later
lawfully acquired from sources other than the Other party; provided that each
party may disclose such information to its officers, directors, employees,
consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such persons are informed of the
confidential nature of such information and are directed to treat such
information confidentially. Each party's obligation to hold such information in
confidence shall be satisfied if such party exercises the same care with respect
to such information as it would exercise to preserve the confidentiality of its
own similar information. If this Agreement is terminated, such confidence shall
be maintained and each party will, and will use its best efforts to cause its
respective officers, directors, employees, consultants, advisors, counsel and
agents to, destroy or deliver to the other party, upon request, all documents
and other materials, and all copies thereof, obtained by or on behalf of any
such person from the other party in connection with this Agreement that are
subject to such confidence.
6.8 Stockholder Claims. The Company shall not settle or compromise any
claim brought by any present, former or purported holder of any securities of
the Company in connection with the Offer or the Merger prior to the Effective
Time, without the prior written consent of Purchaser, which consent may not be
unreasonably withheld, and shall notify Purchaser
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promptly upon receipt of all written demands for appraisal rights. None of the
parties to this Agreement shall take any action to deprive any employee or
director of the Company of the benefits of the consideration payable with
respect to Options in accordance with Section 2.6.
6.9 Treatment of Employee Compensation and Benefits. The Company
and Purchaser agree that the employer-provided benefits and compensation for
nonunion employees under the Company's and the Subsidiary's employee benefit
plans and payroll as in effect as of the Effective Time (other than any feature
of any such plan that relates to the Shares) shall not be reduced after the
Effective Time (except to the extent consistent with the terms of this Agreement
and except to the extent necessary to comply with applicable law) at least until
the second anniversary of the Effective Time.
6.10 Indemnification Rights.
(a) From and after the Effective Time, to
the extent not covered by the insurance set forth in the next succeeding
sentence, Parent and Purchaser shall jointly and severally indemnify, defend and
hold harmless the officers, directors and employees of the Company or any of its
subsidiaries against all losses, expenses, claims, damages or liabilities
arising out of claims brought or made by third parties, including, without
limitation, derivative claims, in connection with the transactions contemplated
by this Agreement to the fullest extent permitted or required under applicable
law and shall advance expenses prior to the final disposition of such claims and
liabilities to which this sentence applies. Purchaser agrees that all rights to
indemnification now existing in favor of the directors, officers or employees of
the Company or any of its subsidiaries (including, without limitation, any
person who was or becomes a director, officer or employee prior to the Effective
Time (the "Indemnified Parties")) under the Florida Law or as provided in the
Company's Articles of Incorporation or by By-Laws with respect to matters
occurring on or
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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 after the Effective
Time (or, in the case of claims or other matters occurring on or prior to the
expiration of such six year period which have not been resolved prior to the
expiration of such six year period, until such matters are finally resolved) and
Purchaser shall honor, and shall cause the Company to honor, all such rights.
Purchaser shall cause to be maintained in effect for not less than six years
from the Effective Time the current policies of the directors' and officers'
liability insurance maintained by the Company (provided that Purchaser may
substitute therefor policies of at least the same coverage containing terms and
conditions which are no less advantageous) with respect to matters occurring on
or prior to the Effective Time; provided that in no event shall Purchaser or the
Company be required to expend annually more than 150% of the amount that the
Company spent for these purposes in the last fiscal year to maintain or procure
insurance coverage pursuant hereto; and provided further that if Purchaser or
the Company are unable to obtain the insurance called for by this section
Purchaser or the Company will obtain as much comparable insurance as is
available for such amount per year.
(b) Without limiting the foregoing, in the event any
claim, action, suit, proceeding or investigation to which the provisions of this
Section 6.10 are applicable is brought against any Indemnified Party (whether
arising before or after the Effective Time), (i) any counsel retained by the
Indemnified Parties for any period after the Effective Time shall be subject to
the approval of the Surviving Corporation (such approval to not be unreasonably
withheld); (ii) after the Effective Time, the Surviving Corporation shall pay
all reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; and (iii) after the Effective
Time, the Surviving Corporation will use reasonable efforts to assist in the
vigorous defense of any such matter, provided that the Surviving Corporation
shall not be liable for any settlement of any claim effected without its written
consent, which consent, however, shall not be unreasonably withheld. Any
Indemnified Party wishing to claim indemnification under this Section 6.10, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify the Surviving Corporation (but the failure so to notify the Surviving
Corporation shall not relieve it from any liability which it may have under this
Section
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6.10 except to the extent such failure materially prejudices the Surviving
Corporation). The Surviving Corporation shall be liable for the fees and
expenses hereunder with respect to only one law firm, in addition to local
counsel in each applicable jurisdiction, to represent the Indemnified Parties
as a group with respect to each such matter unless there is, under applicable
standards of professional conduct, a conflict between the positions of any two
or more Indemnified Parties that would preclude or render inadvisable joint or
multiple representation of such parties.
6.11 Takeover Law Exemption. The Company shall not take any action
that would cause the transactions contemplated by this Agreement, the Stock
Option Agreement or the Tender and Option Agreement to be subject to
requirements imposed by any Takeover Law and the Company shall take all
reasonably necessary steps within its control to ensure this Agreement, the
Stock Option Agreement and the Tender and Option Agreement and the transactions
contemplated hereby and thereby are not subject to such Takeover Laws, or if
reasonably necessary shall cooperate with Parent and Purchaser in challenging
the validity or applicability of, any applicable Takeover Law, as now or
hereafter in effect, including, without limitation, Sections 607.0901 through
607.0903, inclusive, of the Florida Law.
7
ARTICLE VII
CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) the Offer shall have been consummated
in accordance with its terms; provided, however, that this condition shall be
deemed to be satisfied if Purchaser fails to accept for payment and pay for
Shares pursuant to the Offer other than as a result of a failure of a condition
thereof;
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(b) the waiting period applicable to the consummation of
the Merger under the H-S-R Act shall have expired or been terminated;
(c) there shall have been no law, statute, rule or
regulation, domestic or foreign, enacted or promulgated which is in effect and
has the effect of making the acquisition of Shares illegal or otherwise
prohibits consummation of the Merger;
(d) there shall not be in effect any preliminary or final
injunction or temporary restraining order or other order or decree issued by any
foreign or United States federal or state court or foreign or United States
federal or administrative agency or authority, enjoining, restraining or
otherwise prohibiting the Offer, the Merger or the acquisition by Purchaser of
Shares; and
(e) the shareholder notification, information statement
and proxy requirements, if any, imposed by the Florida Law, the Delaware Law or
by federal law shall have been satisfied.
8
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether prior to or after approval by the stockholders of
the Company:
(a) by written mutual consent of Purchaser and the
Company;
(b) by either Purchaser or the Company:
(i) if the Offer shall not have been consummated
by March 1, 1998; or
(ii) at any time after June 30, 1998 if the
conditions set forth in Section 7.1 shall not have been satisfied or waived; or
(c) by Purchaser:
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32
(i) if (1) the Board of Directors of the Company
shall have failed to recommend, or shall have withdrawn, its approval or
recommendation of the Offer or the Merger or shall have resolved to do any of
the foregoing; or (2) if the Company shall have entered into a definitive
agreement to accept an Acquisition Proposal;
(ii) if the Board of Directors of the Company
shall have modified its approval of the Offer or the Merger in a manner adverse
to Purchaser and the Minimum Condition shall not have been met on the Expiration
Date;
(iii) if as a result of the failure of any
conditions set forth in Annex I hereto the Offer shall have terminated or
expired without Purchaser or a subsidiary of Parent having purchased any Shares
thereunder; or
(d) by the Company: if the Company withdraws its
recommendation of the Offer or the Merger pursuant to Section 6.5(c)(iv)(1), or
takes the actions described in Section 6.5(c)(iv)(2), and such action is taken
pursuant to, and in compliance with, such provision.
Notwithstanding the above, neither the Company nor Purchaser shall be permitted
to terminate this Agreement if the event which gave rise to such termination
right is a result of or arose in connection with any action or inaction of the
party seeking to terminate taken or not taken in breach of the terms hereof.
8.2 Amendment. Subject to applicable law, this Agreement may be
amended by an instrument signed by each of the parties hereto before or after
approval of the Merger by the stockholders of the Company, if required;
provided, however, that after approval of the Merger by the stockholders of the
Company, no amendment may be made which decreases the amount of the Common Stock
Consideration or effects any change which would materially and adversely affect
the stockholders of the Company without the further approval of the stockholders
of the Company.
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8.3 Grant of Stock Option Upon Termination. The Company agrees that
if this Agreement is terminated pursuant to:
(a) Section 8.1(b)(ii) and at the time of
such termination any person, entity or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Parent or Purchaser) shall have become the
beneficial owner of more than 20% of the outstanding Shares (with appropriate
adjustments for reclassifications of capital stock, stock dividends, stock
splits, reverse stock splits and similar events) and such person, entity or
group (or any subsidiary of such person, entity or group) thereafter shall enter
into a definitive agreement with the Company to accept an Acquisition Proposal
at any time on or prior to the date which is six months after the termination of
this Agreement and such transaction is thereafter consummated;
(b) Sections 8.1(c)(i) or Section 8.1(d);
(c) Section 8.1(c)(ii) and at the time of
termination of this Agreement, the Company shall enter into a definitive
agreement to accept an Acquisition Proposal at any time on or prior to the date
which is six months after the termination of this Agreement; or
(d) Section 8.1(c)(iii) and such failure
was the result of any action taken by or on behalf of the Company giving rise to
an Event specified in paragraph (a), (b), (c), (d), (f), (g) or (i) of Annex I
and such action was in breach of the Company's obligations hereunder, and with
respect to an Event specified in paragraph (g), if such action was taken by the
Company for the purpose of causing Purchaser to terminate this Agreement;
then the Company shall grant to Purchaser the option, pursuant to the Stock
Option Agreement, to purchase that number of Shares which would equal 19.9% of
the aggregate number of Shares outstanding after giving effect to the exercise
of such option.
8.4 Effect of Termination.
(a) The provisions of Sections 6.3 (expenses), 6.7
(return of information upon
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termination), 6.10 (indemnification) and 8.3 (grant of option upon termination)
shall survive the termination of this Agreement.
(b) The rights of termination provided for
in Section 8.1 shall not be an exclusive remedy hereunder but shall be in
addition to any other legal or equitable remedies that may be available to any
nondefaulting party hereto arising out of any default hereunder by any other
party hereto; provided, however, that in the event that the amount set forth in
Section 8.3 shall have been paid to Purchaser, this Agreement shall forthwith
become void and there shall be no liability on the part of either the Company or
its respective officers or directors, except for a willful and intentional
breach of any representation, warranty, covenant or agreement contained herein.
8.5 Waiver. At any time prior to the Effective Time, any party
hereto may (i) extend the time for the performance of any of the obligations or
other acts of any other party hereto or (ii) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations, in
each case only to the extent such obligations, agreements and conditions
are intended for its benefit.
9
ARTICLE IX
GENERAL PROVISIONS
9.1 Brokers. The Company represents and warrants that no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission, or to the reimbursement of any of its expenses, in connection
with the Offer or the Merger or any similar transaction based upon arrangements
made by or on behalf of the Company, except for the arrangements between the
Company and Xxxxxxx Xxxxx & Associates, Inc.
9.2 Public Statements. Except as required by applicable law or
stock exchange regulation, none of Parent or Purchaser, on the one hand, or the
Company, on the other hand, shall make any public announcement or statement with
respect to the Offer, the Merger or
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this Agreement without the approval of the Company or Purchaser, respectively,
which approval shall not be unreasonably withheld. Moreover, the parties hereto
agree to consult with each other prior to issuing each public announcement or
statement with respect to the Offer, the Merger or this Agreement.
9.3 Notices. All notices and other communications hereunder shall
be given by telephone and immediately confirmed in writing and shall be deemed
given if delivered personally or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Purchaser:
c/o Tel-Save Holdings, Inc.
0000 Xxxxx 000
Xxx Xxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel
With copies to:
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx,
Esq.
(b) if to the Company:
Symetrics Industries, Inc.
0000 X. Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
with copies to:
Xxxxx X. Xxxxxxxx
Grocock, Xxxxxx & Xxxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
9.4 Interpretation. When a reference is made in this Agreement to a
subsidiary of Parent or the Company, the word "subsidiary" means any
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"majority-owned subsidiary" (as defined in Rule 12b-2 promulgated under the
Exchange Act) of Parent or the Company, as the case may be; provided, however,
that the Company shall in no event and at no time be considered a subsidiary of
Purchaser for purposes of this Agreement. 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. References to Sections and Articles
refer to sections and articles of this Agreement unless otherwise stated.
9.5 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify the Agreement to preserve, to the extent legally
permitted, each party's anticipated benefits and obligations under this
Agreement.
9.6 Miscellaneous. This Agreement and the Confidentiality Agreement
constitute the entire agreement, and supersede all other prior agreements and
undertakings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement (i) is not intended to confer upon any
other person any rights or remedies hereunder, except as set forth in Section
9.9; and (ii) shall not be assigned by operation of law or otherwise, except
that Parent and Purchaser may assign all or any portion of their rights under
this Agreement to any of their subsidiaries (provided, however, that in the
event of any such assignment, Parent or Purchaser, as the case may be, shall
cause such assignee to execute and become a party to this agreement and such
assignee shall be vested with all the rights and obligations assigned to it by
the assignor as if it were named in this Agreement), but no such assignment
shall relieve Parent or Purchaser, as applicable, of their obligations
hereunder, and except that this Agreement may be assigned by operation of law to
any corporation with or into which Purchaser may be merged; (d) shall be
governed in all respects, including validity, interpretation and effect, by the
internal laws of the
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State of Delaware, without giving effect to the principles of conflict of laws
thereof; and (e) the parties hereto expressly consent to the personal
jurisdiction of the courts of the United States of America and of the courts of
the State of Delaware, in each case sitting in the State of Delaware.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but together shall be
construed as one document.
9.8 Survival. The representations, warranties, covenants and
agreements of the parties set forth herein shall terminate as of the Effective
Time, except as provided in Sections 6.9 and 6.10.
9.9 Third Party Beneficiaries. The parties entitled to the employee
benefits pursuant to the terms of Section 6.9 and indemnification pursuant to
the terms of Section 6.10 are expressly made third party beneficiaries solely of
Section 6.9 and Section 6.10, respectively, of this Agreement.
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused
this Agreement to be executed on the date first written above by their
respective officers thereunder duly authorized.
TEL-SAVE HOLDINGS, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chairman and CEO
TSHCo, Inc.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chairman and CEO
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SYMETRICS INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
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Annex I
CONDITIONS TO THE OFFER
Purchaser shall not be required to continue the Offer or to accept
for payment, purchase or pay for any Shares tendered, may postpone the
acceptance for payment, purchase of, and/or payment for, Shares, may amend or
terminate the Offer, and may extend the Offer beyond January 21, 1998 (the
"Initial Expiration Date") in which event the expiration date (the "Expiration
Date") shall mean the latest time and date which the Offer as so extended by
Purchaser, shall expire), whether or not any Shares have theretofore been
purchased or paid for, (i) if a number of Shares which would result in
Purchaser's ownership of at least a majority of the outstanding Shares of the
Company on a fully diluted basis shall not have been validly tendered and not
withdrawn, or (ii) if, at any time on or after December 22, 1997 and prior to
the time of payment for any such Shares (whether or not theretofore accepted for
payment pursuant to the Offer), any of the following events (each, an "Event")
shall have occurred, (an Event shall be deemed to have occurred notwithstanding,
where applicable, the provision for a cure period) (each of paragraphs (a)
through (i) providing a separate and independent condition to Purchaser's
obligations pursuant to the Offer), provided, however, that Purchaser may
terminate the Offer at any time if any of the other conditions hereunder shall
have occurred (including during the period of any such extension) and may waive
any Event at any time (including during the period of any such extension):
(a) there shall be in effect any preliminary or final
injunction or temporary restraining order or other order or decree issued by any
foreign or United States federal or state court or foreign or United States
federal or administrative agency or authority, enjoining, restraining or
otherwise prohibiting the Offer, the Merger or the acquisition by Parent or
Purchaser of Shares;
(b) an action or a proceeding shall have been commenced
by any governmental agency under federal or state antitrust laws or any other
applicable law before any court or any governmental or other
40
administrative or regulatory authority or agency, domestic or foreign, or there
shall be an imminent threat which, would reasonably be expected to result in the
foregoing, or any of the Authorizations listed in Section 3.2 or 4.4 shall have
been conditioned in such a manner, that would reasonably be expected to (i)
materially restrict or prohibit consummation of the Offer or the Merger or any
other merger or business combination between the Company, Parent and Purchaser,
(ii) impose material limitations on the ability of Parent or Purchaser
effectively to acquire or hold or to exercise full rights of ownership of the
Shares acquired by it, including, but not limited to, the right to vote the
Shares purchased by it on all matters properly presented to the stockholders of
the Company, or (iii) impose material limitations on the ability of either
Purchaser or the Company to continue effectively to conduct all or any material
portion of its respective business as heretofore conducted or to continue to own
or operate effectively all or any material portion of its respective assets as
heretofore owned or operated;
(c) there shall have been any law, statute, rule or
regulation, domestic or foreign, enacted, promulgated or proposed that, directly
or indirectly, would reasonably be expected to result in any of the consequences
referred to in paragraph (b) above;
(d) a material adverse change in the business, property,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole shall have occurred;
(e) there shall have occurred (i) any general suspension
of trading in securities on the NASDAQ National Market, (ii) a declaration of a
banking moratorium or any suspension of payments by United States authorities on
the extension of credit by lending institutions, or (iii) a commencement of a
war, armed hostilities or other international or national calamity directly or
indirectly involving the United States which would reasonably be expected to
have a material adverse effect on the business, property, financial condition or
results of operations of the Company and its subsidiaries taken as a whole;
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(f) any representation or warranty of the Company in the
Agreement and Plan of Merger shall at any time prove to have been incorrect in
any material respect at the time made;
(g) the Company shall fail to perform or comply in any
material respect with any covenant or agreement to be performed or complied with
by the Company under the Agreement and Plan of Merger;
(h) the Company and Purchaser shall have agreed to
terminate the Offer or the Agreement and Plan of Merger or the Tender Agreement
is no longer in full force and effect;
(i) the Board of Directors of the Company or the
Company, as the case may be, shall have (i) publicly (including by amendment of
the Schedule 14D-9) withdrawn its recommendation to stockholders of acceptance
of the Offer and adoption of the Agreement and Plan of Merger, or shall have
resolved to do so; or (ii) entered into an agreement with a third party
providing for the acquisition or purchase of all or substantially all of the
assets of, or equity interest, in the Company by such third party; and
(j) the Offer shall not have been consummated by March
1, 1998.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may be asserted by Parent and Purchaser regardless of the
circumstances giving rise to such condition or may be waived by Parent or
Purchaser in whole at any time or in part from time in its reasonable
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right and may be asserted at any time and
from time to time.
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