EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("AGREEMENT") is made and entered
into as of August 20, 2003, by and among: CUBIC CORPORATION, a Delaware
corporation ("PARENT"); CDA ACQUISITION CORPORATION, a Delaware corporation and
a wholly owned subsidiary of Parent ("ACQUISITION SUB"); and ECC INTERNATIONAL
CORP., a Delaware corporation (the "COMPANY"). Certain capitalized terms used in
this Agreement are defined in EXHIBIT A.
RECITALS
A. The Boards of Directors of Parent, Acquisition Sub and the
Company have each determined that it is in the best interests of their
respective stockholders for Parent to acquire the Company upon the terms and
subject to the conditions set forth herein.
B. It is proposed that Acquisition Sub make a cash tender offer (the
"OFFER") to acquire all of the outstanding shares of Company Common Stock (the
"SHARES") for $5.25 per share (such amount, or any greater amount per share paid
pursuant to the Offer, being the "PER SHARE AMOUNT"), net to the seller in cash,
upon the terms and subject to the conditions of this Agreement.
C. In furtherance of the acquisition of the Company by Parent, the
Boards of Directors of Parent, Acquisition Sub and the Company have each
approved a merger (the "MERGER") of Acquisition Sub with and into the Company,
with the Company as the surviving corporation (the "SURVIVING CORPORATION"),
upon the terms and subject to the conditions hereof.
D. The Board of Directors of the Company has, in light of and
subject to the terms and conditions hereof, resolved to recommend that the
stockholders of the Company tender their shares pursuant to the Offer.
E. In order to induce Parent and Acquisition Sub to enter into this
Agreement and to consummate the Transaction, concurrently with the execution and
delivery of this Agreement certain stockholders of the Company are executing
agreements to tender their shares of Company Common Stock and to vote against
certain transactions (the "STOCKHOLDER TENDER AGREEMENTS") in favor of Parent
and Acquisition Sub.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree
as follows:
SECTION 1. THE OFFER
1.1 THE OFFER.
(a) Provided that none of the events set forth in ANNEX I shall
have occurred or are continuing (other than the requirements set forth in
clauses "(i)," "(ii)," "(iii)(e)" and "(iii)(f)" of ANNEX I), as promptly as
practicable after the date of this Agreement (but in no event more than five
business days after the public announcement of the execution of this Agreement),
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Acquisition Sub shall commence (within the meaning of Rule 14d-2 under the
Exchange Act) the Offer.
(b) The obligation of Acquisition Sub to accept for payment and
to pay for any shares of Company Common Stock tendered pursuant to the Offer
shall be subject only to (i) the condition that there shall be validly tendered
a number of shares of Company Common Stock which, together with any outstanding
shares of Company Common Stock with respect to which Parent has sole beneficial
ownership, represents at least a majority of the Fully Diluted Number of Company
Shares (the "MINIMUM CONDITION") and (ii) the other conditions set forth in
Annex I. Acquisition Sub expressly reserves the right to increase the Per Share
Amount or to make any other changes in the terms and conditions of the Offer not
inconsistent with the provisions of this Agreement; provided, however, that
without the prior written consent of the Company, (i) the Minimum Condition may
not be amended or waived; and (ii) no change may be made that changes the form
of consideration to be paid, decreases the price per share of Company Common
Stock or the number of shares of Company Common Stock sought in the Offer,
imposes conditions to the Offer in addition to those set forth in Annex I, or
extends the expiration date of the Offer beyond the initial expiration date of
the Offer (except as provided in (c), below). Notwithstanding anything to the
contrary contained in this Agreement, the Offer may not be withdrawn prior to
the expiration date (or any rescheduled expiration date) of the Offer.
(c) The Offer shall initially be scheduled to expire 20 business
days following the commencement thereof. If, at any then-scheduled expiration
date, the conditions to the Offer have not been satisfied or waived (other than
conditions which are not capable of being satisfied), Acquisition Sub shall be
entitled to extend the Offer for such amount of time as Acquisition Sub
reasonably believes is necessary to cause such Offer conditions to be satisfied;
provided, however, that Acquisition Sub shall not be entitled to extend the
Offer to any date occurring after 60 business days following the commencement of
the Offer without the prior written consent of the Company. Notwithstanding
anything to the contrary contained in this Agreement: (i) Acquisition Sub may,
without the consent of the Company or any other Person (A) extend the Offer for
any period required by any rule or regulation of the SEC applicable to the Offer
and (B) if more than a majority of the Fully Diluted Number of Company Shares
but less than 90% of the Fully Diluted Number of Company Shares shall have been
validly tendered pursuant to the Offer as of the scheduled or extended
expiration date, extend the Offer for an additional period of not more than 20
business days, provided, however, that Acquisition Sub shall not be entitled to
extend the Offer pursuant to this clause (B) to any date occurring after 60
business days following the commencement of the Offer without the prior written
consent of the Company; and (ii) Acquisition Sub may, without the consent of the
Company or any other Person, elect to provide for a subsequent offering period
(and one or more extensions thereof) pursuant to, and in accordance with the
terms of, Rule 14d-11 under the Exchange Act.
(d) As promptly as practicable on the date of commencement of
the Offer, Parent and Acquisition Sub shall (i) file with the SEC a Tender Offer
Statement on Schedule TO with respect to the Offer that will contain or
incorporate by reference the offer to purchase and form of the related letter of
transmittal and (ii) cause the offer to purchase and related documents to be
disseminated to holders of shares of Company Common Stock. Parent and
Acquisition Sub agree that they shall cause the Schedule TO and all exhibits,
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amendments or supplements thereto (which together constitute the "OFFER
DOCUMENTS") filed by either Parent or Acquisition Sub with the SEC to comply in
all material respects with the Exchange Act and the rules and regulations
thereunder and other applicable laws (except that Parent and Acquisition Sub
shall have no obligation with respect to any information in the Offer Documents
supplied by the Company or its Representatives in writing). Each of Parent,
Acquisition Sub and the Company agrees to respond promptly to any comments of
the SEC or its staff and to promptly correct any information provided by it for
use in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect, and Parent further agrees to
take all steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of shares of Company Common Stock, in each case as and
to the extent required by applicable federal securities laws. The Company shall
promptly furnish to Parent and Acquisition Sub all information concerning the
Acquired Corporations and the Company's stockholders (i) that may be required in
connection with any action contemplated by this Section 1.1(d) within two
business days after the public announcement of the execution of this Agreement
and (ii) reasonably requested in connection with any action contemplated by this
Section 1.1(d) within two business days after such request. The Company and its
counsel shall be given reasonable opportunity to review and comment on the Offer
Documents prior to the filing thereof with the SEC. Parent and Acquisition Sub
agree to provide the Company and its counsel with any comments Parent,
Acquisition Sub or their counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after receipt of such comments.
1.2 COMPANY ACTIONS.
(a) The Company hereby consents to the Offer and represents that
its Board of Directors, at a meeting duly called and held, has (i) by the
unanimous vote of all directors of the Company, determined that this Agreement
and the transactions contemplated hereby, including the Offer and the Merger,
are fair to and in the best interests of the Company's stockholders, (ii) by
unanimous vote of all directors of the Company, approved and adopted this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, in accordance with the requirements of the DGCL, (iii) by unanimous vote
of all directors of the Company declared that this Agreement is advisable and
(iv) by unanimous vote of all directors of the Company, resolved to recommend
that stockholders of the Company accept the Offer and tender their shares of
Company Common Stock pursuant to the Offer and adopt this Agreement and approve
the Merger (the recommendation of the Company's Board of Directors that the
stockholders of the Company accept the Offer and tender their shares of Company
Common Stock pursuant to the Offer and adopt this Agreement and approve the
Merger being referred to as the "COMPANY BOARD RECOMMENDATION"). Subject to
Section 1.2(b): (A) the Company hereby consents to the inclusion of the Company
Board Recommendation in the Offer Documents; and (B) the Company Board
Recommendation shall not be withdrawn or modified in a manner adverse to Parent
or Acquisition Sub, and no resolution by the Board of Directors of the Company
or any committee thereof to withdraw or modify the Company Board Recommendation
in a manner adverse to Parent or Acquisition Sub shall be adopted or proposed.
(b) Notwithstanding anything to the contrary contained in
Section 1.2(a), at any time prior to the acceptance of shares of Company Common
Stock pursuant to the Offer, the Company Board Recommendation may be withdrawn
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or modified in a manner adverse to Parent and Acquisition Sub if: (i) an
unsolicited, bona fide written offer to purchase all of the outstanding shares
of Company Common Stock or all or substantially all of the Company's assets is
made to the Company and is not withdrawn; (ii) the Company provides Parent with
at least three business days prior notice of any meeting of the Company's Board
of Directors at which such Board of Directors will consider and determine
whether such offer is a Superior Offer; (iii) the Company's Board of Directors
determines in good faith that such offer constitutes a Superior Offer; (iv) the
Company's Board of Directors determines in good faith, after having taken into
account the advice of the Company's outside legal counsel, that, in light of
such Superior Offer, the withdrawal or modification of the Company Board
Recommendation is required in order for the Company's Board of Directors to
comply with its fiduciary obligations to the Company's stockholders under
applicable law; (v) the Company Board Recommendation is not withdrawn or
modified in a manner adverse to Parent at any time within three business days
after Parent receives written notice from the Company confirming that the
Company's Board of Directors has determined that such offer is a Superior Offer;
and (vi) neither the Company nor any of its Representatives shall have breached
or taken any action inconsistent with any of the provisions set forth in Section
5.3.
(c) As promptly as practicable on the day that the Offer is
commenced, the Company shall file with the SEC and disseminate to holders of
shares of Company Common Stock, in each case as and to the extent required by
applicable federal securities laws, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any exhibits, amendments or supplements thereto,
the "SCHEDULE 14D-9") that, subject to Section 1.2(b), shall reflect the Company
Board Recommendation. The Company agrees that it shall cause the Schedule 14D-9
to comply in all material respects with the Exchange Act and the rules and
regulations thereunder and other applicable laws (except that the Company shall
have no obligation with respect to any information in the Schedule 14D-9
supplied by Parent or Acquisition Sub or their Representatives in writing). Each
of Parent, Acquisition Sub and the Company agrees to respond promptly to any
comments of the SEC or its staff and to promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to holders
of shares of Company Common Stock, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given
reasonable opportunity to review and comment on the Schedule 14D-9 and any
amendment thereto prior to the filing thereof with the SEC. The Company agrees
to provide Parent and its counsel with any comments the Company or its counsel
may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after receipt of such comments.
(d) The Company shall promptly furnish Parent with a list of its
stockholders, mailing labels and any available listing or computer file
containing the names and addresses of all record holders of shares of Company
Common Stock and lists of securities positions of shares of Company Common Stock
held in stock depositories, in each case true and correct as of the most recent
practicable date, and shall provide to Parent such additional information
(including updated lists of stockholders, mailing labels and lists of securities
positions) and such other assistance as Parent may reasonably request in
connection with the Offer. Parent and Acquisition Sub and their agents shall
hold in confidence the information contained in any such labels, listings and
files, shall use such information only in connection with the Offer and the
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Merger and, if this Agreement shall be terminated, shall, upon request, deliver,
and shall use their reasonable efforts to cause their agents to deliver, to the
Company (or destroy) all copies and any extracts or summaries from such
information then in their possession or control.
1.3 DIRECTORS.
(a) Effective upon the acceptance of and payment for at least a
majority of the outstanding Shares pursuant to the Offer (the "OFFER ACCEPTANCE
TIME"), Parent shall be entitled to designate a majority of the total number of
directors on the Company's Board of Directors (giving effect to the election of
any additional directors pursuant to this Section). The Company shall take all
action necessary to cause Parent's designees to be elected or appointed to the
Company's Board of Directors, including increasing the number of directors and
seeking and accepting resignations of incumbent directors. At such time, to the
extent requested by Parent, the Company shall also cause individuals designated
by Parent to constitute at least the same percentage (rounded up to the next
whole number) on (i) each committee of the Board and (ii) each Board of
Directors of each Subsidiary of the Company (and each committee thereof) as the
number of directors designated by Parent represents on the Company's Board of
Directors; provided that if Parent and/or Acquisition Sub acquires 85% or more
of the shares of the Company Common Stock outstanding then Parent shall be
entitled to designate all members of (i) each committee of the Board and (ii)
each Board of Directors of each Subsidiary of the Company (and each committee
thereof). Notwithstanding the provisions of this Section 1.3, the parties hereto
shall use their respective reasonable efforts to ensure that at least one of the
members of the Company's Board of Directors shall, at all times prior to the
Effective Time (as hereinafter defined), be a director of the Company who was a
director of the Company on the date hereof (the "CONTINUING DIRECTOR"), provided
that if no Continuing Director shall remain for any reason, the other directors
of the Company then in office shall designate one person to fill such vacancy
who is not an officer or employee or affiliate of the Company, Parent or
Acquisition Sub or any of their respective affiliates and such person shall be
deemed to be a Continuing Director for all purposes of this Agreement.
(b) The Company's obligations to appoint Parent's designees to
the Company's Board of Directors shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly
take all actions, and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors, as Section 14(f) and Rule
14f-1 require in order to fulfill its obligations under this Section, so long as
Parent shall have provided to the Company on a timely basis the information
referred to in the following sentence. Parent shall supply to the Company in
writing and be solely responsible for any information with respect to itself and
its nominees, officers, directors and affiliates required by Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of Parent's designees
pursuant to Section 1.3(a) and until the Effective Time, the approval of a
majority of the Continuing Directors shall be required to authorize (and such
authorization shall constitute the authorization of the Company's Board of
Directors and no other action on the part of the Company, including any action
by any other director of the Company, shall be required to authorize) any
termination of this Agreement by the Company, any amendment of this Agreement
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requiring action by the Company's Board of Directors, any extension of time for
performance of any obligation or action hereunder by Parent or Acquisition Sub,
any waiver of compliance with any of the agreements or conditions contained
herein for the benefit of the Company, any consent or action by the Board of
Directors of the Company hereunder and any other action of the Company hereunder
which adversely affects the holders of shares of Company Common Stock (other
than Parent or Acquisition Sub); provided that, if there is no Continuing
Director, such actions may be effected by majority vote of the active Board of
Directors.
SECTION 2. MERGER TRANSACTION
2.1 MERGER OF ACQUISITION SUB INTO THE COMPANY. Upon the terms and
subject to the conditions set forth in this Agreement, at the Effective Time,
the Company and Parent shall consummate the Merger, whereby Acquisition Sub
shall be merged with and into the Company, and the separate existence of
Acquisition Sub shall cease. The Company will continue as the Surviving
Corporation.
2.2 EFFECT OF THE MERGER. The Merger shall have the effects set
forth in this Agreement and in the applicable provisions of the DGCL.
2.3 closing; effective time. The consummation of the Merger (the
"CLOSING") shall take place at the offices of Parent at 0000 Xxxxxx Xxxxxx, Xxx
Xxxxx, XX 00000, at 10:00 a.m. local time on a date to be designated by Parent
(the "CLOSING DATE"), which shall be no later than the third business day after
the satisfaction or waiver of the last to be satisfied or waived of the
conditions set forth in Section 7 (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or
waiver of such conditions). Subject to the provisions of this Agreement, a
certificate of merger satisfying the applicable requirements of the DGCL shall
be duly executed by the Company and, concurrently with or as soon as practicable
following the Closing, delivered to the Secretary of State of the State of
Delaware for filing. The Merger shall become effective upon the date and time of
the filing of such certificate of merger with the Secretary of State of the
State of Delaware (the "EFFECTIVE TIME").
2.4 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND OFFICERS.
Unless otherwise determined by Parent prior to the Effective Time:
(a) the Certificate of Incorporation of the Surviving
Corporation shall be amended and restated immediately after the
Effective Time to conform to EXHIBIT B;
(b) the Bylaws of the Surviving Corporation shall be amended
and restated as of the Effective Time to conform to the Bylaws of
Acquisition Sub as in effect immediately prior to the Effective
Time; and
(c) the directors and officers of the Surviving Corporation
immediately after the Effective Time shall be the respective
individuals who are directors and officers of Acquisition Sub
immediately prior to the Effective Time.
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2.5 CONVERSION OF SHARES.
(a) At the Effective Time, by virtue of the Merger and without
any further action on the part of Parent, Acquisition Sub, the Company or any
stockholder of the Company:
(i) any shares of Company Common Stock then held by the
Company or any wholly owned Subsidiary of the Company (or held in the
Company's treasury) shall be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange therefor;
(ii) any shares of Company Common Stock then held by Parent,
Acquisition Sub or any other wholly owned Subsidiary of Parent shall be
canceled and retired and shall cease to exist, and no consideration
shall be delivered in exchange therefor;
(iii) except as provided in clauses "(i)" and "(ii)" above
and subject to Section 2.5(b), each share of Company Common Stock then
outstanding (other than any Dissenting Shares, as defined below) shall
be converted into the right to receive the Per Share Amount (the "Merger
Consideration"), without interest;
(iv) each share of the common stock, $0.001 par value per
share, of Acquisition Sub then outstanding shall be converted into one
share of common stock of the Surviving Corporation; and
(v) all then outstanding Company Options shall be
terminated.
(b) If, between the date of this Agreement and the Effective
Time, the outstanding shares of Company Common Stock are changed into a
different number or class of shares by reason of any stock split, division or
subdivision of shares, stock dividend, reverse stock split, consolidation of
shares, reclassification, recapitalization or other similar transaction, then
the Merger Consideration shall be appropriately adjusted.
2.6 SURRENDER OF CERTIFICATES; STOCK TRANSFER BOOKS.
(a) Prior to the Effective Time, Parent shall designate a bank
or trust company reasonably acceptable to the Company to act as agent (the
"PAYING AGENT") for the holders of shares of Company Common Stock to receive the
funds to which holders of such shares shall become entitled pursuant to Section
2.5. Such funds shall be invested by the Paying Agent as directed by the
Surviving Corporation.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each Person who was, at the Effective Time, a holder
of record of shares of Company Common Stock entitled to receive the Merger
Consideration pursuant to Section 2.5 a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
certificates evidencing such shares (the "CERTIFICATES") shall pass, only upon
proper delivery of the Certificates to the Paying Agent) and instructions for
use in effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
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such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such 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 of
Company Common Stock formerly evidenced by such Certificate, and such
Certificate shall then be canceled. No interest shall accrue or be paid on the
Merger Consideration payable upon the surrender of any Certificate for the
benefit of the holder of such Certificate. If the payment equal to the Merger
Consideration is to be made to a Person other than the Person in whose name the
surrendered Certificate formerly evidencing shares of Company Common Stock is
registered on the stock transfer books of the Company, it shall be a condition
of payment that the Certificate so surrendered shall be endorsed properly or
otherwise be in proper form for transfer and that the Person requesting such
payment shall have paid all transfer and other similar Taxes required by reason
of the payment of the Merger Consideration to a Person other than the registered
holder of the Certificate surrendered, or shall have established to the
satisfaction of the Surviving Corporation that such Taxes either have been paid
or are not applicable.
(c) At any time following the sixth month after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of shares of Company Common Stock (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it), and, thereafter, such holders shall
be entitled to look to the Surviving Corporation (subject to abandoned property,
escheat and other similar laws) only as general creditors thereof with respect
to any Merger Consideration that may be payable upon due surrender of the
Certificates held by them. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Paying Agent shall be liable to any holder of a share of
Company Common Stock for any Merger Consideration delivered in respect of such
share to a public official pursuant to any abandoned property, escheat or other
similar law.
(d) At the close of business on the day of the Effective Time,
the stock transfer books of the Company with respect to the shares of Company
Common Stock shall be closed and thereafter there shall be no further
registration of transfers of shares of Company Common Stock on the records of
the Company. From and after the Effective Time, the holders of shares of Company
Common Stock outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such shares except as otherwise provided herein
or by applicable law.
(e) The Surviving Corporation, Parent and Acquisition Sub shall
be entitled to deduct and withhold (or cause the Paying Agent to deduct and
withhold) from the Merger Consideration payable to any holder of shares of
Company Common Stock or Company Options such amounts as it is required by any
Legal Requirement to deduct and withhold with respect to Taxes. To the extent
that amounts are so withheld, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the holder of the shares of
Company Common Stock or Company Options in respect of which such deduction and
withholding was made.
2.7 APPRAISAL RIGHTS. If the Merger is effectuated pursuant to
Section 253 of the DGCL, shares of Company Common Stock outstanding immediately
prior to the Effective Time and held by a holder who is entitled to demand and
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properly demands appraisal for such shares of Company Common Stock in accordance
with the DGCL (the "DISSENTING SHARES") shall not be converted into the right to
receive Parent Common Stock, unless such holder fails to perfect or withdraws or
otherwise loses his or her right to appraisal. If after the Effective Time such
holder (a "DISSENTING STOCKHOLDER") fails to perfect or withdraws or loses his
or her right to appraisal, each such share of Company Common Stock shall be
treated as if it had been converted as of the Effective Time into a right to
receive the Merger Consideration without any interest thereon (less any amounts
entitled to be deducted or withheld pursuant to Section 2.6(e)). The Company
shall give Parent prompt notice of any demands received by the Company for
appraisal of shares of Company Common Stock, and Parent shall have the right to
participate in all negotiations and proceedings with respect to such demands.
The Company shall not, without the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
2.8 FURTHER ACTION. If, at any time after the Effective Time, any
further action is reasonably determined by Parent to be necessary or desirable
to carry out the purposes of this Agreement or to vest the Surviving Corporation
with full right, title and possession of and to all rights and property of
Acquisition Sub and the Company, the officers and directors of the Surviving
Corporation and Parent shall be fully authorized (in the name of Acquisition
Sub, in the name of the Company and otherwise) to take such action.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Acquisition Sub as
follows:
3.1 SUBSIDIARIES; DUE ORGANIZATION; ETC.
(a) The Company has no Subsidiaries, except for the corporations
identified in Part 3.1(a)(i) of the Company Disclosure Schedule; and neither the
Company nor any of the other corporations identified in Part 3.1(a)(i) of the
Company Disclosure Schedule owns any capital stock of, or any equity interest of
any nature in, any other Entity, other than the Entities identified in Part
3.1(a)(ii) of the Company Disclosure Schedule. None of the Acquired Corporations
has agreed or is obligated to make, or is bound by any Contract under which it
may become obligated to make, any future investment in or capital contribution
to any other Entity. None of the Acquired Corporations has, at any time since
July 1, 1999, or, to the best of the Company's knowledge, at any time prior to
July 1, 1999, been a general partner of, or has otherwise been liable for any of
the debts or other obligations of, any general partnership, limited partnership
or other Entity.
(b) Each of the Acquired Corporations is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all necessary power and authority: (i)
to conduct its business in the manner in which its business is currently being
conducted; (ii) to own and use its assets in the manner in which its assets are
currently owned and used; and (iii) to perform its obligations under all
Contracts by which it is bound.
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(c) Each of the Acquired Corporations is qualified to do
business as a foreign corporation, and is in good standing, under the laws of
all jurisdictions where the nature of its business requires such qualification,
except where the failure to have such governmental approvals would not, either
individually or in the aggregate, have a Material Adverse Effect.
3.2 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company has
delivered to Parent accurate and complete copies of the certificate of
incorporation, bylaws and other charter and organizational documents of the
respective Acquired Corporations, including all amendments thereto.
3.3 CAPITALIZATION, ETC.
(a) The authorized capital stock of the Company consists of: (i)
20,000,000 shares of Company Common Stock, of which 7,908,022 shares have been
issued and are outstanding as of the date of this Agreement; and (ii) 1,000,000
shares of Preferred Stock, $.10 par value per share, of which no shares have
been issued or are outstanding. Except as set forth in Part 3.3(a)(i) of the
Company Disclosure Schedule, the Company does not hold any shares of its capital
stock in its treasury. All of the outstanding shares of Company Common Stock
have been duly authorized and validly issued, and are fully paid and
nonassessable. There are no shares of Company Common Stock held by any of the
other Acquired Corporations. Except as set forth in Part 3.3(a)(ii) of the
Company Disclosure Schedule: (i) none of the outstanding shares of Company
Common Stock is entitled or subject to any preemptive right, right of
participation, right of maintenance or any similar right; (ii) none of the
outstanding shares of Company Common Stock is subject to any right of first
refusal in favor of the Company; and (iii) there is no Acquired Corporation
Contract relating to the voting or registration of, or restricting any Person
from purchasing, selling, pledging or otherwise disposing of (or granting any
option or similar right with respect to), any shares of Company Common Stock.
None of the Acquired Corporations is under any obligation, or is bound by any
Contract pursuant to which it may become obligated, to repurchase, redeem or
otherwise acquire any outstanding shares of Company Common Stock.
(b) As of the date of this Agreement: (i) 0 shares of Company
Common Stock are subject to issuance pursuant to stock options granted and
outstanding under the Company's Director Equity Compensation Plan; (ii) 350,500
shares of Company Common Stock are subject to issuance pursuant to stock options
granted and outstanding under the Company's 1998 Stock Incentive Plan; (iii)
66,000 shares of Company Common Stock are subject to issuance pursuant to stock
options granted and outstanding under the Company's 1986 Stock Option Plan; (iv)
92,000 shares of Company Common Stock are subject to issuance pursuant to stock
options granted and outstanding under the Company's 1991 Stock Option Plan; and
(v) 354,172 shares of Company Common Stock are reserved for future issuance
pursuant to the Company's 2002 Employee Stock Purchase Plan (the "ESPP"). Part
3.3(b) of the Company Disclosure Schedule sets forth the following information
with respect to each Company Option outstanding as of the date of this
Agreement: (i) the particular plan (if any) pursuant to which such Company
Option was granted; (ii) the name of the optionee; (iii) the number of shares of
Company Common Stock subject to such Company Option; (iv) the exercise price of
such Company Option; (v) the date on which such Company Option was granted; (vi)
the applicable vesting schedule, and the extent to which such Company Option is
vested and exercisable as of the date of this Agreement; (vii) whether the
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vesting and/or exercisability of such Company Option shall accelerate in
connection with the transactions contemplated by this Agreement; and (viii) the
date on which such Company Option expires. The Company has delivered to Parent
accurate and complete copies of all stock option plans pursuant to which any of
the Acquired Corporations has ever granted stock options, and the forms of all
stock option agreements evidencing such options.
(c) Except as set forth in Part 3.3(b) of the Company Disclosure
Schedule, there is no: (i) outstanding subscription, option, call, warrant or
right (whether or not currently exercisable) to acquire any shares of the
capital stock or other securities of any of the Acquired Corporations; (ii)
outstanding security, instrument or obligation that is or may become convertible
into or exchangeable for any shares of the capital stock or other securities of
any of the Acquired Corporations; (iii) stockholder rights plan (or similar plan
commonly referred to as a "poison pill") or Contract under which any of the
Acquired Corporations is or may become obligated to sell or otherwise issue any
shares of its capital stock or any other securities; or (iv) condition or
circumstance that may give rise to or provide a basis for the assertion of a
claim by any Person to the effect that such Person is entitled to acquire or
receive any shares of capital stock or other securities of any of the Acquired
Corporations.
(d) All outstanding shares of Company Common Stock, Company
options, warrants and other securities of the Acquired Corporations have been
issued and granted in material compliance with (i) all applicable securities
laws and other applicable Legal Requirements, and (ii) all requirements set
forth in applicable Contracts.
(e) All of the outstanding shares of capital stock of each of
the Company's Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof, and are owned beneficially and of
record by the Company, free and clear of any Encumbrances.
3.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has delivered or made available to Parent
accurate and complete copies of all registration statements, proxy statements
and other statements, reports, schedules, forms and other documents filed by the
Company with the SEC since June 30, 2000, and all amendments thereto (the
"COMPANY SEC DOCUMENTS"). All statements, reports, schedules, forms and other
documents required to have been filed by the Company with the SEC have been so
filed on a timely basis. None of the Company's Subsidiaries is required to file
any documents with the SEC. As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing): (i) each of the Company SEC Documents complied in all
material respects with the applicable requirements of the Securities Act or the
Exchange Act (as the case may be) including, without limitation, the
requirements as to certifications of the Company SEC Documents as required by
the Xxxxxxxx-Xxxxx Act of 2002 (the "XXXXXXXX-XXXXX ACT") and the rules and
regulations promulgated by the SEC thereunder; and (ii) none of the Company SEC
Documents contained any untrue statement of a material fact or omitted to state
11
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) The financial statements (including any related notes)
contained in the Company SEC Documents: (i) complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods covered (except as
may be indicated in the notes to such financial statements or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC, and except that the
unaudited financial statements may not contain footnotes and are subject to
normal and recurring year-end adjustments that will not, individually or in the
aggregate, be material in amount), and (iii) fairly present the consolidated
financial position of the Company and its consolidated subsidiaries as of the
respective dates thereof and the consolidated results of operations and cash
flows of the Company and its consolidated subsidiaries for the periods covered
thereby.
(c) The Company has in place the "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act)
required in order for the Chief Executive Officer and Principal Financial and
Accounting Officer of the Company to engage in the review and evaluation process
mandated by the Exchange Act in connection with the Company's preparation of the
Company SEC Documents. The Company's "disclosure controls and procedures" are
reasonably designed to ensure that all material information (both financial and
non-financial) required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC,
and that all such material information is accumulated and communicated to the
Company's management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the Chief Executive Officer and
Principal Financial and Accounting Officer of the Company required under the
Exchange Act with respect to such reports.
(d) Except as set forth in Part 3.4(d) of the Company Disclosure
Schedule, the Company has in place internal controls that are designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements in accordance with GAAP, including
policies and procedures that: (i) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company and its Subsidiaries; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that receipts
and expenditures of the Company and its Subsidiaries are being made only in
accordance with authorization of management and the advisors of the Company and
its Subsidiaries, as applicable; and (iii) provide reasonable assurance
regarding prevention or timely detection of the unauthorized acquisition, use or
disposition of the assets of the Company or its Subsidiaries that could have a
material effect on the financial statements.
(e) At all times following the effective date of the
Xxxxxxxx-Xxxxx Act of 2002, the Audit Committee of the Company has taken all
actions that it has been required to take pursuant to, and has otherwise
complied in all material respects with, the applicable provisions of the
Xxxxxxxx-Xxxxx Act and rules and regulations of the SEC and the AMEX.
12
(f) The stock trading policy of the Company applicable to
trading in Company Common Stock by insiders of the Company provides for blackout
periods that prohibit transactions in Company Common Stock by insiders during
applicable Company pension plan blackout periods.
3.5 ABSENCE OF CHANGES. Between March 31, 2003 and the date of this
Agreement, other than as set forth in the Company Disclosure Schedule:
(a) there has not been any Material Adverse Effect on the
Acquired Corporations, and no event has occurred or circumstance has
arisen that, in combination with any other events or circumstances,
could reasonably be expected to have a Material Adverse Effect on
the Acquired Corporations;
(b)there has not been any material loss, damage or destruction
to, or any material interruption in the use of, any of the assets of
any of the Acquired Corporations (whether or not covered by
insurance) that has had or could reasonably be expected to have a
Material Adverse Effect on the Acquired Corporations;
(c) none of the Acquired Corporations has (i) declared,
accrued, set aside or paid any dividend or made any other
distribution in respect of any shares of capital stock, or (ii)
repurchased, redeemed or otherwise reacquired any shares of capital
stock or other securities;
(d) none of the Acquired Corporations has sold, issued or
granted, or authorized the issuance of, (i) any capital stock or
other security (except for Company Common Stock issued upon the
valid exercise of outstanding Company Options), (ii) any option,
warrant or right to acquire any capital stock or any other security
(except for Company Options identified in Part 3.3(b) of the Company
Disclosure Schedule), or (iii) any instrument convertible into or
exchangeable for any capital stock or other security;
(e) the Company has not amended or waived any of its rights
under, or permitted the acceleration of vesting under, (i) any
provision of any of the Company's stock option plans, (ii) any
provision of any Contract evidencing any outstanding Company Option,
or (iii) any restricted stock purchase agreement;
(f) there has been no amendment to the certificate of
incorporation, bylaws or other charter or organizational documents
of any of the Acquired Corporations, and none of the Acquired
Corporations has effected or been a party to any merger,
consolidation, share exchange, business combination,
recapitalization, reclassification of shares, stock split, reverse
stock split or similar transaction;
(g) none of the Acquired Corporations has received any written
Acquisition Proposal;
(h) none of the Acquired Corporations has formed any Subsidiary
or acquired any equity interest or other interest in any other
Entity;
13
(i) none of the Acquired Corporations has made any capital
expenditure which, when added to all other capital expenditures made
on behalf of the Acquired Corporations between March 31, 2003 and
the date of this Agreement, exceeds $100,000 in the aggregate;
(j) except in the ordinary course of business and consistent
with past practices, none of the Acquired Corporations has (i)
entered into or permitted any of the assets owned or used by it to
become bound by any Material Contract (as defined in Section 3.10),
or (ii) amended or terminated, or waived any material right or
remedy under, any Material Contract;
(k) none of the Acquired Corporations has (i) acquired, leased
or licensed any material right or other material asset from any
other Person, (ii) sold or otherwise disposed of, or leased or
licensed, any material right or other material asset to any other
Person, or (iii) waived or relinquished any right, except for rights
or other assets acquired, leased, licensed or disposed of in the
ordinary course of business and consistent with past practices;
(l) none of the Acquired Corporations has written off as
uncollectible, or established any extraordinary reserve with respect
to, any account receivable or other indebtedness in excess of
$25,000, individually or in the aggregate;
(m) none of the Acquired Corporations has made any pledge of
any of its assets or otherwise permitted any of its assets to become
subject to any Encumbrance, except for pledges of immaterial assets
made in the ordinary course of business and consistent with past
practices;
(n) none of the Acquired Corporations has (i) lent money to any
Person, or (ii) incurred or guaranteed any indebtedness for borrowed
money;
(o) none of the Acquired Corporations has (i) adopted,
established or entered into any Employee Plan, (ii) caused or
permitted any Employee Plan to be amended in any material respect,
or (iii) paid any bonus or made any profit-sharing or similar
payment to, or materially increased the amount of the wages, salary,
commissions, fringe benefits or other compensation or remuneration
payable to, any of its directors, officers or employees;
(p) none of the Acquired Corporations has changed any of its
methods of accounting or accounting practices in any material
respect;
(q) none of the Acquired Corporations has made any material Tax
election;
(r) none of the Acquired Corporations has commenced or settled
any Legal Proceeding;
14
(s) none of the Acquired Corporations has entered into any
transaction or taken any other action that has had, or could
reasonably be expected to have, a Material Adverse Effect on the
Acquired Corporations;
(t) none of the Acquired Corporations has entered into any
material transaction or taken any other material action outside the
ordinary course of business or inconsistent with past practices; and
(u) none of the Acquired Corporations has agreed or committed
to take any of the actions referred to in clauses "(c)" through
"(t)" above.
3.6 TITLE TO ASSETS. The Acquired Corporations own, and have good
and valid title to, all assets purported to be owned by them, including: (i) all
assets reflected on the Balance Sheet (except for inventory sold or otherwise
disposed of in the ordinary course of business since the date of the Balance
Sheet); and (ii) all other assets reflected in the books and records of the
Acquired Corporations as being owned by the Acquired Corporations. All of said
assets are owned by the Acquired Corporations free and clear of any
Encumbrances, except for (1) any lien for current taxes not yet due and payable
and (2) minor liens that have arisen in the ordinary course of business and that
do not (in any case or in the aggregate) materially detract from the value of
the assets subject thereto or materially impair the operations of any of the
Acquired Corporations.
3.7 RECEIVABLES; CUSTOMERS; INVENTORIES.
(a) Except as set forth in Part 3.7(a) of the Company Disclosure
Schedule, all existing accounts receivable of the Acquired Corporations
(including those accounts receivable reflected on the Balance Sheet that have
not yet been collected and those accounts receivable that have arisen since
March 31, 2003 and have not yet been collected) (a) represent valid obligations
of customers of the Acquired Corporations arising from bona fide transactions
entered into in the ordinary course of business, (b) are current and, to the
best of the Company's knowledge, will be collected in full when due, without any
counterclaim or set off (net of an allowance for doubtful accounts not to exceed
$25,000 in the aggregate).
(b) Part 3.7(b) of the Company Disclosure Schedule contains an
accurate and complete list as of the date of this Agreement of all loans and
advances made by any of the Acquired Corporations to any employee, director,
consultant or independent contractor, other than routine travel advances made to
employees in the ordinary course of business.
(c) Part 3.7(c) of the Company Disclosure Schedule accurately
identifies, and provides an accurate and complete breakdown of the revenues
received from, each customer or other Person that accounted for (i) more than
15% of the consolidated gross revenues of the Acquired Corporations in the
fiscal year ended June 30, 2003, or (ii) more than 15% of the consolidated gross
revenues of the Acquired Corporations in the fiscal quarter ended June 30, 2003.
The Company has not received any notice or other communication (in writing or
otherwise), and has not received any other information, indicating that any
customer or other Person identified in Part 3.7(c) of the Company Disclosure
Schedule may cease dealing with any of the Acquired Corporations or, to the best
15
knowledge of the Company, may otherwise reduce in any material respect the
volume of business transacted by such Person with any of the Acquired
Corporations below historical levels.
(d) The inventory of the Acquired Corporations reflected on the
Acquired Corporations' consolidated balance sheet as of March 31, 2003 that was
filed by the Company with the SEC prior to the date of this Agreement as part of
its Form 10-Q for its fiscal quarter ended March 31, 2003 (the "BALANCE SHEET")
was, and the current inventory (the "INVENTORY") of the Acquired Corporations
is, in usable and saleable condition in the ordinary course of business and, in
the case of inventory reflected on such Balance Sheet, at an amount not less
than the amounts carried therein. The finished goods, work in progress, raw
materials and other materials and supplies included in such Inventory are of a
standard which is not lower than the generally accepted standard prevailing in
the industries in which the business of each Acquired Corporation forms a part.
3.8 REAL PROPERTY; EQUIPMENT; LEASEHOLD. All material items of
equipment and other tangible assets owned by or leased to the Acquired
Corporations are adequate for the uses to which they are being put, are in
working order (ordinary wear and tear excepted) and are adequate for the conduct
of the business of the Acquired Corporations in the manner in which such
business is currently being conducted. None of the Acquired Corporations own any
real property or any interest in real property, except for: (i) the leaseholds
created under the real property leases identified in Part 3.8(a)(i) of the
Company Disclosure Schedule; and (ii) the land described in Part 3.8(a)(ii) of
the Company Disclosure Schedule to which the Company has good and marketable fee
title and which is owned by the Company free and clear of any Encumbrances,
except for the Encumbrances identified in Part 3.8(ii) of the Company Disclosure
Schedule.
3.9 PROPRIETARY ASSETS.
(a) Part 3.9(a)(i) of the Company Disclosure Schedule sets
forth, with respect to each Proprietary Asset owned by any of the Acquired
Corporations and registered with any Governmental Body or for which an
application has been filed with any Governmental Body and the names of the
jurisdictions covered by the applicable registration or application. Part
3.9(a)(ii) of the Company Disclosure Schedule identifies each Proprietary Asset
owned by any of the Acquired Corporations that is material to the business of
the Acquired Corporations. Part 3.9(a)(iii) of the Company Disclosure Schedule
identifies, and identifies any ongoing annual royalty or payment obligations in
excess of $10,000 per fiscal year with respect to, each Proprietary Asset that
is licensed or otherwise made available to any of the Acquired Corporations by
any Person and is material to the business of the Acquired Corporations (except
for any Proprietary Asset that is licensed to any Acquired Corporation under any
third party software license generally available to the public), and identifies
the Contract under which such Proprietary Asset is being licensed or otherwise
made available to such Acquired Corporation. The Acquired Corporations have good
and valid title to all of the Acquired Corporation Proprietary Assets identified
or required to be identified in Parts 3.9(a)(i) and 3.9(a)(ii) of the Company
Disclosure Schedule, free and clear of all Encumbrances, except for (i) any lien
for current taxes not yet due and payable, and (ii) minor liens that have arisen
in the ordinary course of business and that do not (individually or in the
aggregate) materially detract from the value of the Acquired Corporation
16
Proprietary Assets subject thereto or materially impair the operations of any of
the Acquired Corporations. The Acquired Corporations have a valid right to use,
license and otherwise exploit all Proprietary Assets identified in Part
3.9(a)(iii) of the Company Disclosure Schedule. Except as set forth in Part
3.9(a)(iv) of the Company Disclosure Schedule, none of the Acquired Corporations
has developed jointly with any other Person any Acquired Corporation Proprietary
Asset that is material to the business of the Acquired Corporations and with
respect to which such other Person has any rights. Except as set forth in Part
3.9(a)(v) of the Company Disclosure Schedule, there is no Acquired Corporation
Contract (with the exception of end user license agreements in the form
previously delivered by the Company to Parent) pursuant to which any Person has
any right (whether or not currently exercisable) to use, license or otherwise
exploit any Acquired Corporation Proprietary Asset.
(b) The Acquired Corporations have taken reasonable measures and
precautions to protect and maintain the confidentiality, secrecy and value of
all material Acquired Corporation Proprietary Assets (except Acquired
Corporation Proprietary Assets whose value would be unimpaired by disclosure).
Without limiting the generality of the foregoing, except as set forth in Part
3.9(b) of the Company Disclosure Schedule, (i) each current or former employee
of any Acquired Corporation who is or was involved in, or who has contributed
to, the creation or development of any material Acquired Corporation Proprietary
Asset has executed and delivered to such Acquired Corporation an agreement
(containing no exceptions to or exclusions from the scope of its coverage) that
is substantially identical to the form of the Company's Confidential Information
and Invention Assignment Agreement previously delivered by the Company to
Parent, and (ii) each current and former consultant and independent contractor
to any Acquired Corporation who is or was involved in, or who has contributed
to, the creation or development of any material Acquired Corporation Proprietary
Asset has executed and delivered to such Acquired Corporation an agreement
(containing no exceptions to or exclusions from the scope of its coverage) that
is substantially identical to the form of the Company's Consultant Confidential
Information and Invention Assignment Agreement previously delivered to Parent.
No current or former employee, officer, director, stockholder, consultant or
independent contractor has any right, claim or interest in or with respect to
any Acquired Corporation Proprietary Asset.
(c) To the best of the Company's knowledge: (i) all patents,
trademarks, service marks and copyrights held by any of the Acquired
Corporations are valid, enforceable and subsisting; (ii) none of the Acquired
Corporation Proprietary Assets and no Proprietary Asset that is currently being
developed by any of the Acquired Corporations (either by itself or with any
other Person) infringes, misappropriates or conflicts with any Proprietary Asset
owned or used by any other Person; (iii) none of the products, systems,
software, computer programs, source code, models, algorithms, formula,
compounds, inventions, designs, technology, proprietary rights or intangible
assets that is or has been designed, created, developed, assembled, manufactured
or sold by any of the Acquired Corporations is infringing, misappropriating or
making any unlawful or unauthorized use of any Proprietary Asset owned or used
by any other Person, and none of such products has at any time infringed,
misappropriated or made any unlawful or unauthorized use of any Proprietary
Asset owned or used by any other Person; (iv) none of the Acquired Corporations
has received any notice or other communication (in writing or otherwise) of any
actual, alleged, possible or potential infringement, misappropriation or
unlawful or unauthorized use of, any Proprietary Asset owned or used by any
17
other Person; and (v) no other Person is infringing, misappropriating or making
any unlawful or unauthorized use of, and no Proprietary Asset owned or used by
any other Person infringes or conflicts with, any material Acquired Corporation
Proprietary Asset.
(d) The Acquired Corporation Proprietary Assets constitute all
the Proprietary Assets necessary to enable the Acquired Corporations to conduct
their business in the manner in which such business has been and is being
conducted. Except as set forth in Part 3.9(d) of the Company Disclosure
Schedule, none of the Acquired Corporations has (i) licensed any of the material
Acquired Corporation Proprietary Assets to any Person on an exclusive basis, or
(ii) entered into any covenant not to compete or Contract limiting or purporting
to limit the ability of any Acquired Corporation to exploit fully any material
Acquired Corporation Proprietary Assets or to transact business in any market or
geographical area or with any Person.
(e) Except as set forth in Part 3.9(e)(i) of the Company
Disclosure Schedule, none of the Acquired Corporations has disclosed or
delivered to any Person, or permitted the disclosure or delivery to any escrow
agent or other Person, of any Acquired Corporation Source Code. No event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) will, or could reasonably be expected to, result in the
disclosure or delivery to any Person of any Acquired Corporation Source Code or
the release from any escrow of any other Acquired Corporation Proprietary Asset.
Part 3.9(e)(ii) of the Company Disclosure Schedule identifies each Contract
pursuant to which the Company has deposited or is required to deposit with an
escrowholder or any other Person of any Acquired Corporation Source Code, and
further describes whether the execution of this Agreement or the consummation of
any of the transactions contemplated hereby could reasonably be expected to
result in the release or disclosure of any Acquired Corporation Source Code or
the release from any escrow of any other Acquired Corporation Proprietary Asset.
(f) To the best of the Company's knowledge, except with respect
to demonstration or trial copies, no product, system, program or software module
designed, developed, sold, licensed or otherwise made available by any of the
Acquired Corporations to any Person contains any "back door," "time bomb,"
"Trojan horse," "worm," "drop dead device," "virus" or other software routines
or hardware components designed to permit unauthorized access or to disable or
erase software, hardware or data without the consent of the user.
3.10 CONTRACTS.
(a) Part 3.10(a) of the Company Disclosure Schedule identifies
each Acquired Corporation Contract that constitutes a "Material Contract." (For
purposes of this Agreement, each of the following shall be deemed to constitute
a "MATERIAL CONTRACT":
(i) any Contract (A) relating to the employment of, or the
performance of services by, any director, employee or consultant, (B)
pursuant to which any of the Acquired Corporations is or may become
obligated to make any severance, termination or similar payment (whether
or not in cash) to any current or former employee or director, or (C)
pursuant to which any of the Acquired Corporations is or may become
obligated to make any bonus or similar payment (other than payments
18
constituting base salary) in excess of $25,000 individually or $100,000
in the aggregate to any current or former employee or director;
(ii) any Contract relating to the acquisition, transfer,
development, sharing or license of any Proprietary Asset (except for any
Contract pursuant to which (A) any Proprietary Asset is licensed to the
Acquired Corporations under any third party software license generally
available to the public, or (B) any Proprietary Asset is licensed by any
of the Acquired Corporations to any Person on a non-exclusive basis);
(iii) any Contract that provides for indemnification of any
officer, director, employee or agent;
(iv) any Contract imposing any restriction on the right or
ability of any Acquired Corporation (A) to compete with any other
Person, (B) to acquire any product or other asset or any services from
any other Person, (C) to solicit, hire or retain any Person as an
employee, consultant or independent contractor, (D) to develop, sell,
supply, distribute, offer, support or service any product or any
technology or other asset to or for any other Person, (E) to perform
services for any other Person, or (F) to transact business or deal in
any other manner with any other Person;
(v) any Contract (other than Contracts evidencing Company
Options) (A) relating to the acquisition, issuance, voting,
registration, sale or transfer of any securities, (B) providing any
Person with any preemptive right, right of participation, right of
maintenance or similar right with respect to any securities, or (C)
providing any of the Acquired Corporations with any right of first
refusal with respect to, or right to repurchase or redeem, any
securities;
(vi) any Contract incorporating or relating to any guaranty,
any warranty or any indemnity or similar obligation, except for
Contracts substantially identical to the standard forms of end-user
licenses previously delivered by the Company to Parent and Contracts
pursuant to which the potential liability associated with any such
guaranty, warranty, indemnity or similar obligation could not reasonably
be expected to exceed $25,000;
(vii) any Contract relating to any currency hedging;
(viii) any Contract (A) imposing any confidentiality
obligation on any of the Acquired Corporations or on any other Person or
(B) containing "standstill" or similar provisions;
(ix) any Contract (A) to which any Governmental Body is a
party or under which any Governmental Body has any rights or
obligations, or (B) directly or indirectly benefiting any Governmental
Body (including any subcontract or other Contract between any Acquired
Corporation and any contractor or subcontractor to any Governmental
Body), except for Contracts that do not contemplate or involve the
receipt, payment or delivery of cash or other consideration in an amount
19
or having a value in excess of $25,000 in the aggregate or the
performance of services by or for an Acquired Corporation having a value
in excess of $25,000 in the aggregate;
(x) any Contract requiring that any of the Acquired
Corporations give any notice or provide any information to any Person
prior to considering or accepting any Acquisition Proposal or similar
proposal, or prior to entering into any discussions, agreement,
arrangement or understanding relating to any Acquisition Transaction or
similar transaction;
(xi) any Contract that has a term of more than 60 days and
that may not be terminated by an Acquired Corporation (without penalty)
within 60 days after the delivery of a termination notice by such
Acquired Corporation;
(xii) any Contract that contemplates or involves the
receipt, payment or delivery of cash or other consideration in an amount
or having a value in excess of $100,000 in the aggregate, or
contemplates or involves the performance of services by or for an
Acquired Corporation having a value in excess of $100,000 in the
aggregate; and
(xiii) any other Contract, if a breach of such Contract
could reasonably be expected to have a Material Adverse Effect on the
Acquired Corporations.)
The Company has delivered to Parent an accurate and complete copy of each
Acquired Corporation Contract that constitutes a Material Contract, with the
exception of any Acquired Corporation Contracts that are fully completed as to
performance but not formally closed per government regulation, copies of which,
in their current form, have been delivered (or which are specifically identified
in Part 3.10(a) of the Company Disclosure Schedule and will be delivered no
later than 15 days after the date of this Agreement) by the Company to Parent.
(b) To the best of the Company's knowledge, each Acquired
Corporation Contract that constitutes a Material Contract is valid and in full
force and effect, and is enforceable in accordance with its terms, subject to
(i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
(c) Except as set forth in Part 3.10(c) of the Company
Disclosure Schedule: (i) none of the Acquired Corporations has violated or
breached, or committed any default under, any Acquired Corporation Contract,
except for violations, breaches and defaults that have not had and could not
reasonably be expected to have a Material Adverse Effect on the Acquired
Corporations; and, to the best of the Company's knowledge, no other Person has
violated or breached, or committed any default under, any Acquired Corporation
Contract, except for violations, breaches and defaults that have not had and
would not reasonably be expected to have a Material Adverse Effect on the
Acquired Corporations; (ii) to the best of the Company's knowledge, no event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) could reasonably be expected to (A) result in a violation or
breach of any of the provisions of any Acquired Corporation Contract, (B) give
any Person the right to declare a default or exercise any remedy under any
20
Acquired Corporation Contract, (C) give any Person the right to receive or
require a rebate, chargeback, penalty or change in delivery schedule under any
Acquired Corporation Contract, (D) give any Person the right to accelerate the
maturity or performance of any Acquired Corporation Contract, (E) result in the
disclosure, release or delivery of any Acquired Corporation Source Code, or (F)
give any Person the right to cancel, terminate or modify any Acquired
Corporation Contract, except in each such case for defaults, acceleration
rights, termination rights and other rights that have not had and could not
reasonably be expected to have a Material Adverse Effect on the Acquired
Corporations; and (iii) since June 30, 2000, none of the Acquired Corporations
has received any notice or other communication regarding any actual or possible
violation or breach of, or default under, any Acquired Corporation Contract,
except in each such case for defaults, violations or breaches that have not had
and would not reasonably be expected to have a Material Adverse Effect on the
Acquired Corporations.
(d) Since July 1, 1999, except as set forth in Part 3.10(d) of
the Company Disclosure Schedule:
(i) the Acquired Corporations have not had any unresolved
determination of noncompliance, entered into any consent order or
undertaken any internal investigation relating directly or indirectly to
any Government Contract or Government Bid;
(ii) the Acquired Corporations have complied in all material
respects with all Legal Requirements with respect to all Government
Contracts and Government Bids;
(iii) to the best of the Company's knowledge, the Acquired
Corporations have not, in obtaining or performing any Government
Contract, violated (A) the Truth in Negotiations Act of 1962, as
amended, (B) the Service Contract Act of 1963, as amended, (C) the
Contract Disputes Act of 1978, as amended, (D) the Office of Federal
Procurement Policy Act, as amended, (E) the Federal Acquisition
Regulations (the "FAR") or any applicable agency supplement thereto, (F)
the Cost Accounting Standards, (G) the National Industrial Security
Program Operating Manual, (H) the Defense Industrial Security Regulation
(DOD 5220.22-R) or any related security regulations, or (I) any other
applicable procurement law or regulation or other Legal Requirement;
(iv) all facts set forth in or acknowledged by any Acquired
Corporation in any certification, representation or disclosure statement
submitted by any Acquired Corporation with respect to any Government
Contract or Government Bid were current, accurate and complete in all
material respects as of the date of submission;
(v) none of the Acquired Corporations nor, to the best of
the Company's knowledge, any of their respective employees have been
disbarred or suspended from doing business with any Governmental Body,
and, to the Acquired Corporations' best knowledge, no circumstances
exist that would warrant the institution of debarment or suspension
proceedings against any Acquired Corporation or any employee of any
Acquired Corporation;
21
(vi) no negative determinations of responsibility, as
contemplated in Part 9 of the FAR (Contractor Qualifications), have been
issued against any Acquired Corporation in connection with any
Government Contract or Government Bid;
(vii) no direct or indirect costs incurred by any Acquired
Corporation have been disallowed as a result of a finding or
determination of any kind by any Governmental Body other than as a
result of audits by Governmental Bodies;
(viii) no Governmental Body, and no prime contractor or
high-tier subcontractor of any Governmental Body, has withheld or set
off, or, to the best of the Company's knowledge, threatened to withhold
or set off, any amount due to any Acquired Corporation under any
Government Contract;
(ix) there are not and have not been any irregularities,
misstatements or omissions relating to any Government Contract or
Government Bid that have led to or, to the best of the Company's
knowledge, could reasonably be expected to lead to (A) any
administrative, civil, criminal or other investigation, Legal Proceeding
or indictment involving any Acquired Corporation or any of their
employees, (B) the disallowance of any costs submitted for payment by
any Acquired Corporation, (C) the recoupment of any payments previously
made to any Acquired Corporation, (D) a finding or claim of fraud,
defective pricing, mischarging or improper payments on the part of any
Acquired Corporation, or (E) the assessment of any penalties or damages
of any kind against any Acquired Corporation, which penalties or damages
could, individually or in the aggregate, have a Material Adverse Effect
on the Acquired Corporations;
(x) there is not any (A) outstanding claim against any
Acquired Corporation by, or dispute involving any Acquired Corporation
with, any prime contractor, subcontractor, vendor or other Person
arising under or relating to the award or performance of any Government
Contract, (B) fact known by any Acquired Corporation upon which any such
claim could reasonably be expected to be based or which may give rise to
any such dispute, or (C) to the best of the Company's knowledge, final
decision of any Government Body against any Acquired Corporation;
(xi) no Acquired Corporation is undergoing, and no Acquired
Corporation has undergone, any audit, and, to the best knowledge of the
Acquired Corporations, there is no impending audit, arising under or
relating to any Government Contract (other than normal routine audits
conducted in the ordinary course of business);
(xii) no Acquired Corporation is subject to any financing
arrangement or assignment of proceeds with respect to the performance of
any Government Contract;
(xiii) no payment has been made by any Acquired Corporation
or, to the Acquired Corporations' best knowledge, by a Person acting on
any Acquired Corporation's behalf to any Person (other than to any bona
fide employee or agent (as defined in subpart 3.4 of the FAR) of any
Acquired Corporation) which is or was contingent upon the award of any
22
Government Contract or which would otherwise be in violation of any
applicable procurement law or regulation or any other Legal Requirement;
(xiv) each Acquired Corporation's cost accounting system is
in material compliance with applicable regulations and other applicable
Legal Requirements, and has not been determined by any Governmental Body
not to be in compliance with any Legal Requirement;
(xv) each Acquired Corporation has complied in all material
respects with all applicable regulations and other Legal Requirements
and, to the best of the Company's knowledge, with all applicable
contractual requirements relating to the placement of legends or
restrictive markings on technical data, computer software and other
Acquired Corporation Proprietary Assets;
(xvi) in each case in which an Acquired Corporation has
delivered or otherwise provided any technical data, computer software or
Acquired Corporation Proprietary Asset to any Governmental Body in
connection with any Government Contract, such Acquired Corporation has
marked such technical data, computer software or Acquired Corporation
Proprietary Asset with all markings and legends (including any
"restricted rights" legend and any "government purpose license rights"
legend) necessary (under the FAR or other applicable Legal Requirements)
to ensure that no Governmental Body or other Person is able to acquire
any unlimited rights with respect to such technical data, computer
software or Acquired Corporation Proprietary Asset, except where failure
to do so has not had and will not have a Material Adverse Effect on any
Acquired Corporation;
(xvii) no Acquired Corporation has made any written
disclosure to any Governmental Body pursuant to any voluntary disclosure
agreement;
(xviii) each Acquired Corporation has reached agreement with
the cognizant government representatives approving and "closing" all
indirect costs charged to Government Contracts for fiscal 1997, 1998,
1999 and 2000, and those years are closed;
(xix) no Government Contract period of performance has been
shortened as a result of award term provisions;
(xx) there is no overhead rate ceiling on any current
Government Contract, and there is no profit impact associated with
overhead rate ceilings on prior completed Government Contracts;
(xxi) there are no Government Contracts with performance
bonds;
(xxii) the Acquired Corporations are not currently parties
to, or the makers of, any Government Contracts or Government Bids that
include forward pricing bidding and billing rates; and
23
(xxiii) each Acquired Corporation is not and will not be
required to make any filings with or give notice to, or to obtain any
Consent from, any Governmental Body under or in connection with any
Government Contract or Government Bid as a result of or by virtue of (A)
the execution, delivery of performance of this Agreement or any of the
other agreements referred to in this Agreement, or (B) the consummation
of the Merger or any of the other transactions contemplated by this
Agreement.
3.11 SALE OF PRODUCTS; PERFORMANCE OF SERVICES.
(a) Except as set forth in Part 3.11(a) of the Company
Disclosure Schedule, to the best of the Company's knowledge, each product,
system, program, Proprietary Asset or other asset designed, developed,
manufactured, assembled, sold, installed, repaired, licensed or otherwise made
available by any of the Acquired Corporations to any Person: (i) conformed and
complied in all material respects with the terms and requirements of any
applicable warranty or other Contract and with all applicable Legal
Requirements; and (ii) was free of any bug, virus, design defect or other defect
or deficiency at the time it was sold or otherwise made available, other than
any immaterial bug or similar defect that has not had and would not have an
adverse effect, in any material respect, on such product, system, program,
Acquired Corporation Proprietary Asset or other asset (or the operation or
performance thereof). Part 3.11(a) of the Company Disclosure Schedule contains
an accurate and complete copy of the most recent "bug list" with respect to each
product, system, program or software module of each of the Acquired
Corporations.
(b) All installation services, programming services,
integration services, repair services, maintenance services, support services,
training services, upgrade services and other services that have been performed
by the Acquired Corporations were performed properly and in conformity with the
terms and requirements of all applicable warranties and other Contracts and with
all applicable Legal Requirements.
(c) Except as set forth in Part 3.11(c) of the Company
Disclosure Schedule, since June 30, 2000, no customer or other Person has
asserted in writing or, to the best of the Company's knowledge, threatened to
assert any claim against any of the Acquired Corporations (i) under or based
upon any warranty provided by or on behalf of any of the Acquired Corporations,
or (ii) based upon any services performed by any of the Acquired Corporations.
3.12 LIABILITIES. None of the Acquired Corporations has any accrued,
contingent or other liabilities of any nature, either matured or unmatured,
except for: (a) liabilities identified as such in the "liabilities" column of
the Balance Sheet; (b) normal and recurring current liabilities that have been
incurred by the Acquired Corporations since March 31, 2003 in the ordinary
course of business and consistent with past practices; and (c) liabilities
described in Part 3.12 of the Company Disclosure Schedule.
3.13 COMPLIANCE WITH LEGAL REQUIREMENTS. Each of the Acquired
Corporations is, and has at all times since June 30, 2000 been, in compliance in
all material respects with all applicable Legal Requirements. Since June 30,
2000, none of the Acquired Corporations has received any notice or other
24
communication from any Governmental Body or other Person regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement.
3.14 CERTAIN BUSINESS PRACTICES. None of the Acquired Corporations,
and (to the best of the knowledge of the Company) no director, officer, agent or
employee of any of the Acquired Corporations, has (i) used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
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 unlawful payment.
3.15 GOVERNMENTAL AUTHORIZATIONS.
(a) The Acquired Corporations hold all Governmental
Authorizations necessary to enable the Acquired Corporations to conduct their
respective businesses in the manner in which such businesses are currently being
conducted, except where the failure to hold such Governmental Authorizations has
not had and would not reasonably be expected to have a Material Adverse Effect
on the Acquired Corporations. To the best of the Company's knowledge, all such
Governmental Authorizations are valid and in full force and effect. Each
Acquired Corporation is, and at all times since June 30, 2000 has been, in
substantial compliance with the terms and requirements of such Governmental
Authorizations, except where the failure to be in compliance with the terms and
requirements of such Governmental Authorizations has not had and would not
reasonably be expected to have a Material Adverse Effect on the Acquired
Corporations. Since June 30, 2000, none of the Acquired Corporations has
received any notice or other communication from any Governmental Body regarding
(a) any actual or possible violation of or failure to comply with any term or
requirement of any material Governmental Authorization, or (b) any actual or
possible revocation, withdrawal, suspension, cancellation, termination or
modification of any material Governmental Authorization. No Governmental Body
has at any time challenged in a writing delivered to the Company or any of its
Subsidiaries the right of any of the Acquired Corporations to design,
manufacture, offer or sell any of its respective products or services.
(b) Part 3.15(b) of the Company Disclosure Schedule describes
the terms of each grant, incentive or subsidy provided or made available to or
for the benefit of any of the Acquired Corporations by any U.S. or foreign
Governmental Body or otherwise. Each of the Acquired Corporations is in full
compliance with all of the terms and requirements of each grant, incentive and
subsidy identified or required to be identified in Part 3.15(b) of the Company
Disclosure Schedule. Neither the execution, delivery or performance of this
Agreement, nor the consummation of the Merger or any of the other transactions
contemplated by this Agreement, will (with or without notice or lapse of time)
give any Person the right to revoke, withdraw, suspend, cancel, terminate or
modify any grant, incentive or subsidy identified or required to be identified
in Part 3.15(b) of the Company Disclosure Schedule.
25
3.16 TAX MATTERS.
(a) Each of the Tax Returns required to be filed by or on
behalf of the respective Acquired Corporations with any Governmental Body with
respect to any taxable period ending on or before the Closing Date (the
"ACQUIRED CORPORATION RETURNS") (i) has been or will be filed on or before the
applicable due date (including any extensions of such due date), and (ii) has
been, or will be when filed, prepared in all material respects in compliance
with all applicable Legal Requirements. All amounts shown on the Acquired
Corporation Returns to be due on or before the Closing Date have been or will be
paid on or before the Closing Date.
(b) The Balance Sheet fully accrues all actual and contingent
liabilities for Taxes with respect to all periods through March 31, 2003 in
accordance with GAAP. Each Acquired Corporation will establish, in the ordinary
course of business and consistent with its past practices, reserves adequate for
the payment of all Taxes for the period from March 31, 2003 through the Closing
Date.
(c) Except as set forth in Part 3.16(c) of the Company
Disclosure Schedule, since July 1, 1999, (i) no Acquired Corporation Return has
ever been examined or audited by any Governmental Body; (ii) no extension or
waiver of the limitation period applicable to any of the Acquired Corporation
Returns has been granted (by the Company or any other Person); and (iii) no such
extension or waiver has been requested from any Acquired Corporation.
(d) Except as set forth in Part 3.16(d) of the Company
Disclosure Schedule, no claim or Legal Proceeding is pending or, to the best of
the knowledge of the Company, has been threatened against or with respect to any
Acquired Corporation in respect of any material Tax. There are no unsatisfied
liabilities for material Taxes (including liabilities for interest, additions to
tax and penalties thereon and related expenses) with respect to any notice of
deficiency or similar document received by any Acquired Corporation with respect
to any material Tax (other than liabilities for Taxes asserted under any such
notice of deficiency or similar document which are being contested in good faith
by the Acquired Corporations and with respect to which adequate reserves for
payment have been established on the Balance Sheet). There are no liens for
material Taxes upon any of the assets of any of the Acquired Corporations except
liens for current Taxes not yet due and payable. None of the Acquired
Corporations has been, and none of the Acquired Corporations will be, required
to include any adjustment in taxable income for any tax period (or portion
thereof) pursuant to Section 481 or 263A of the Code (or any comparable
provision of state or foreign Tax laws) as a result of transactions or events
occurring, or accounting methods employed, prior to the Closing. None of the
Acquired Corporations has made any distribution of stock of any controlled
corporation, as that term is defined in Code Section 355(a)(1).
(e) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of any of the Acquired Corporations that, considered
individually or considered collectively with any other such Contracts, will, or
could reasonably be expected to, give rise directly or indirectly to the payment
of any amount that would not be deductible pursuant to Section 280G or Section
162 of the Code (or any comparable provision under state or foreign Tax laws).
26
None of the Acquired Corporations is, or has ever been, a party to or bound by
any tax indemnity agreement, tax sharing agreement, tax allocation agreement or
similar Contract. None of the Acquired Corporations has any liability for Taxes
of any Person (other than another Acquired Corporation) under Treasury
Regulations Section 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or otherwise.
3.17 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.
(a) Part 3.17(a) of the Company Disclosure Schedule identifies
each Employee Plan. Part 3.17(a) also identifies each Legal Requirement pursuant
to which any of the Acquired Corporations is required to establish any reserve
or make any contribution for the benefit of any current or former employee
located in any foreign jurisdiction.
(b) Except as set forth in Part 3.17(a) of the Company
Disclosure Schedule, none of the Acquired Corporations maintains, sponsors or
contributes to, and none of the Acquired Corporations has at any time in the
past maintained, sponsored or contributed to, any Pension Plan.
(c) Except as set forth in Part 3.17(a) of the Company
Disclosure Schedule, none of the Acquired Corporations maintains, sponsors or
contributes to any Welfare Plan.
(d) With respect to each Employee Plan, the Company has
delivered to Parent: (i) an accurate and complete copy of such Employee Plan
(including all amendments thereto); (ii) an accurate and complete copy of the
annual report, if required under ERISA, with respect to such Employee Plan for
the last two years; (iii) an accurate and complete copy of the most recent
summary plan description, together with each summary of material modifications,
if required under ERISA, with respect to such Employee Plan, (iv) if such
Employee Plan is funded through a trust or any third party funding vehicle, an
accurate and complete copy of the trust or other funding agreement (including
all amendments thereto) and accurate and complete copies the most recent
financial statements thereof; (v) accurate and complete copies of all Contracts
relating to such Employee Plan, including service provider agreements, insurance
contracts, minimum premium contracts, stop-loss agreements, investment
management agreements, subscription and participation agreements and
recordkeeping agreements; and (vi) an accurate and complete copy of the most
recent determination letter received from the Internal Revenue Service with
respect to such Employee Plan (if such Employee Plan is intended to be qualified
under Section 401(a) of the Code).
(e) None of the Acquired Corporations is or has ever been
required to be treated as a single employer with any other Person under Section
4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code, except for
the Acquired Corporations. None of the Acquired Corporations has ever been a
member of an "affiliated service group" within the meaning of Section 414(m) of
the Code. None of the Employee Plans identified in the Company Disclosure
Schedule is a multi-employer plan (within the meaning of Section 3(37) of
ERISA). None of the Acquired Corporations has ever made a complete or partial
withdrawal from a multi-employer plan, as such term is defined in Section 3(37)
of ERISA, resulting in "withdrawal liability," as such term is defined in
27
Section 4201 of ERISA (without regard to subsequent reduction or waiver of such
liability under either Section 4207 or 4208 of ERISA).
(f) None of the Acquired Corporations has any plan or
commitment to create any Welfare Plan or any Pension Plan, or to modify or
change any existing Welfare Plan or Pension Plan (other than to comply with
applicable law) in a manner that would affect any current or former employee or
director of any of the Acquired Corporations.
(g) Except as set forth in Part 3.17(g) of the Company
Disclosure Schedule, no Employee Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former employee or
director of any of the Acquired Corporations after any termination of service of
such employee or director (other than benefit coverage mandated by applicable
law, including coverage provided pursuant to Section 4980B of the Code).
(h) With respect to any Employee Plan constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of COBRA have been complied with in all material respects. Part
3.17(h) of the Company Disclosure Schedule describes all obligations of the
Acquired Corporations as of the date of this Agreement under any of the
provisions of COBRA.
(i) Each of the Employee Plans has been operated and
administered in all material respects in accordance with its terms and with
applicable Legal Requirements, including ERISA, the Code and applicable foreign
Legal Requirements. The Acquired Corporations have performed all of their
respective obligations under the Employee Plans.
(j) Each of the Employee Plans intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service, and, to the best of the Company's knowledge,
nothing has occurred that would adversely affect such determination.
(k) Except as set forth in Part 3.17(k) of the Company
Disclosure Schedule, neither the execution, delivery or performance of this
Agreement, nor the consummation of the Merger or any of the other transactions
contemplated by this Agreement, will result in any bonus, golden parachute,
severance or other payment or obligation to any current or former employee or
director of any of the Acquired Corporations (whether or not under any Employee
Plan), or materially increase the benefits payable or provided under any
Employee Plan, or result in any acceleration of the time of payment or vesting
of any such benefits (other than the acceleration of vesting of any unvested
Company Options).
(l) Part 3.17(l) of the Company Disclosure Schedule contains a
list of all salaried employees of each of the Acquired Corporations as of the
date of this Agreement, and correctly reflects, in all material respects, their
salaries, any other compensation payable to them (including compensation payable
pursuant to bonus, deferred compensation or commission arrangements), their
dates of employment and their positions. None of the Acquired Corporations is a
party to any collective bargaining contract or other Contract with a labor union
involving any of its employees. All of the employees of the Acquired
Corporations are "at will" employees.
28
(m) Part 3.17(m) of the Company Disclosure Schedule identifies
each employee of any of the Acquired Corporations who is not fully available to
perform work because of disability or other leave and sets forth the basis of
such disability or leave and the anticipated date of return to full service.
(n) Each of the Acquired Corporations is in compliance in all
material respects with all applicable Legal Requirements and Contracts relating
to employment, employment practices, wages, bonuses and terms and conditions of
employment, including employee compensation matters.
(o) Each of the Acquired Corporations has adequate labor
relations sufficient to conduct its business as presently conducted, and none of
the Acquired Corporations has any knowledge of any facts indicating that (i) the
consummation of the Merger or any of the other transactions contemplated by this
Agreement will have a material adverse effect on the labor relations of any of
the Acquired Corporations or on the ability of any of the Acquired Corporations
to conduct its business as presently conducted, or (ii) any of the employees of
any of the Acquired Corporations intends to terminate his or her employment with
the Acquired Corporation with which such employee is employed.
3.18 ENVIRONMENTAL MATTERS. Except as set forth in Part 3.18 of the
Company Disclosure Schedule, each of the Acquired Corporations (i) is in
compliance in all material respects with all applicable Environmental Laws, and
(ii) to the best of the Company's knowledge, possesses all permits and other
Governmental Authorizations required under applicable Environmental Laws, and is
in compliance with the terms and conditions thereof. None of the Acquired
Corporations received any written notice or other written communication prior to
July 1, 1999 or has received any notice or other communication (in writing or
otherwise) since July 1, 1999, whether from a Governmental Body, citizens group,
employee or otherwise, that alleges that any of the Acquired Corporations is not
in compliance with any Environmental Law, and, to the best of the Company's
knowledge, there are no circumstances that may prevent or interfere with the
compliance by any of the Acquired Corporations with any Environmental Law in the
future. To the best of the Company's knowledge, (a) all property that is leased
to, controlled by or used by any of the Acquired Corporations, and all surface
water, groundwater and soil associated with or adjacent to such property, is
free of any material environmental contamination of any nature, (b) none of the
property leased to, controlled by or used by any of the Acquired Corporations
contains any underground storage tanks, asbestos, equipment using PCBs,
underground injection xxxxx, and (c) none of the property leased to, controlled
by or used by any of the Acquired Corporations contains any septic tanks in
which process wastewater or any Materials of Environmental Concern have been
disposed of. To the best of the Company's knowledge, no Acquired Corporation has
ever sent or transported, or arranged to send or transport, any Materials of
Environmental Concern to a site that, pursuant to any applicable Environmental
Law, (i) has been placed on the "National Priorities List" of hazardous waste
sites or any similar state list, (ii) is otherwise designated or identified as a
potential site for remediation, cleanup, closure or other environmental remedial
activity, or (iii) is subject to a Legal Requirement to take "removal" or
29
"remedial" action as detailed in any applicable Environmental Law or to make
payment for the cost of cleaning up any site.
3.19 INSURANCE. The Company has delivered to Parent a copy of all
material insurance policies and all material self insurance programs and
arrangements relating to the business, assets and operations of the Acquired
Corporations. Each of such insurance policies is in full force and effect. Since
June 30, 2001, none of the Acquired Corporations has received any notice or
other communication regarding any actual or possible (a) cancellation or
invalidation of any insurance policy, (b) refusal of any coverage or rejection
of any material claim under any insurance policy, or (c) material adjustment in
the amount of the premiums payable with respect to any insurance policy. Except
as set forth in Part 3.19 of the Company Disclosure Schedule, there is no
pending workers' compensation or other claim under or based upon any insurance
policy of any of the Acquired Corporations.
3.20 TRANSACTIONS WITH AFFILIATES. Except as set forth in the
Company SEC Documents filed prior to the date of this Agreement, between the
date of the Company's last proxy statement filed with the SEC and the date of
this Agreement, no event has occurred that would be required to be reported by
the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC. Part
3.20 of the Company Disclosure Schedule identifies each Person who is (or who
may be deemed to be) an "affiliate" (as that term is used in Rule 144 under the
Securities Act) of the Company as of the date of this Agreement.
3.21 LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth in Part 3.21 of the Company Disclosure
Schedule, there is no pending Legal Proceeding, and (to the best of the
Company's knowledge) no Person has threatened to commence any Legal Proceeding:
(i) that involves any of the Acquired Corporations or any of the assets owned or
used by any of the Acquired Corporations; or (ii) that challenges, or that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with, the Merger or any of the other transactions contemplated by this
Agreement. To the best of the Company's knowledge, no event has occurred, and no
claim, dispute or other condition or circumstance exists that could reasonably
be expected to, give rise to or serve as a basis for the commencement of any
such Legal Proceeding.
(b) There is no order, writ, injunction, judgment or decree to
which any of the Acquired Corporations, or any of the assets owned or used by
any of the Acquired Corporations, is subject. To the best of the Company's
knowledge, no officer or key employee of any of the Acquired Corporations is
subject to any order, writ, injunction, judgment or decree that prohibits such
officer or other employee from engaging in or continuing any conduct, activity
or practice relating to the business of any of the Acquired Corporations.
3.22 AUTHORITY; INAPPLICABILITY OF ANTI-TAKEOVER STATUTES; BINDING
NATURE OF AGREEMENT. The Company has full right, power and authority to enter
into and to perform its obligations under this Agreement. The Board of Directors
of the Company (at a meeting duly called and held) has (a) by the unanimous vote
of all directors of the Company, determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are fair
to and in the best interests of the Company's stockholders, (b) by unanimous
30
vote of all directors of the Company, approved and adopted this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, in
accordance with the requirements of the DGCL, (c) by unanimous vote of all
directors of the Company, declared that this Agreement is advisable, (d) by
unanimous vote of all directors of the Company, resolved to recommend that
stockholders of the Company accept the Offer and tender their shares of Company
Common Stock pursuant to the Offer and adopt this Agreement and approve the
Merger and (e) to the extent necessary, by unanimous vote adopted a resolution
having the effect of causing the Company not to be subject to any state takeover
law or similar Legal Requirement that might otherwise apply to the Merger or any
of the other transactions contemplated by this Agreement. This Agreement
constitutes the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies. Prior to the execution of the Stockholder Tender Agreements,
the Board of Directors of the Company approved the Stockholder Tender Agreements
and the transactions contemplated thereby. No state takeover statute or similar
Legal Requirement applies or purports to apply to the Merger, this Agreement or
any of the transactions contemplated hereby.
3.23 SECTION 203 OF THE DGCL NOT APPLICABLE. As of the date hereof
and at all times on or prior to the Effective Time, the Board of Directors of
the Company has and will take all actions so that the restrictions applicable to
business combinations contained in Section 203 of the DGCL are, and will be,
inapplicable to the execution, delivery and performance of this Agreement and to
the consummation of the Offer, the Merger and the other transactions
contemplated by this Agreement.
3.24 NO DISCUSSIONS. None of the Acquired Corporations, and no
Representative of any of the Acquired Corporations, is engaged, directly or
indirectly, in any discussions or negotiations with any other Person relating to
any Acquisition Proposal or any inquiry or indication of interest that could
lead to an Acquisition Proposal.
3.25 INTENT TO TENDER; VOTE REQUIRED. The Company has been advised
that all of its directors and executive officers and each stockholder of the
Company having representation on the Company's Board of Directors presently
intend to tender their shares of Company Common Stock pursuant to the Offer and
shall concurrently enter into the Stockholder Tender Agreements. The Required
Company Stockholder Vote, if required under applicable law, is the only vote of
the holders of any class or series of the Company's capital stock necessary to
adopt this Agreement, approve the Merger or consummate any of the other
transactions contemplated by this Agreement.
3.26 NON-CONTRAVENTION; CONSENTS. Neither (1) the execution,
delivery or performance of this Agreement, nor (2) the consummation by the
Company of the Offer, the Merger or any of the other transactions contemplated
by this Agreement, will directly or indirectly (with or without notice or lapse
of time):
(a) contravene, conflict with or result in a violation of (i)
any of the provisions of the articles or certificate of incorporation, bylaws or
other charter or organizational documents of any of the Acquired Corporations,
or (ii) any resolution adopted by the stockholders, the Board of Directors or
any committee of the Board of Directors of any of the Acquired Corporations;
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(b) contravene, conflict with or result in a violation of, or
give any Governmental Body or other Person the right to challenge the Merger or
any of the other transactions contemplated by this Agreement or to exercise any
remedy or obtain any relief under, any Legal Requirement or any order, writ,
injunction, judgment or decree to which any of the Acquired Corporations, or any
of the assets owned or used by any of the Acquired Corporations, is subject;
(c) contravene, conflict with or result in a violation of any
of the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate or modify, any Governmental
Authorization that is held by any of the Acquired Corporations or that otherwise
relates to the business of any of the Acquired Corporations or to any of the
assets owned or used by any of the Acquired Corporations;
(d) except as set forth in Part 3.26(d) of the Company
Disclosure Schedule, contravene, conflict with or result in a violation or
breach of, or result in a default under, any provision of any Acquired
Corporation Contract that constitutes a Material Contract, or give any Person
the right to (i) declare a default or exercise any remedy under any such
Acquired Corporation Contract, (ii) a rebate, chargeback, penalty or change in
delivery schedule under any such Acquired Corporation Contract, (iii) accelerate
the maturity or performance of any such Acquired Corporation Contract, or (iv)
cancel, terminate or modify any term of such Acquired Corporation Contract;
(e) result in the imposition or creation of any Encumbrance
upon or with respect to any asset owned or used by any of the Acquired
Corporations (except for minor liens that will not, in any case or in the
aggregate, materially detract from the value of the assets subject thereto or
materially impair the operations of any of the Acquired Corporations); or
(f) result in, or increase the likelihood of, the disclosure or
delivery to any escrowholder or other Person of any Acquired Corporation Source
Code, or the transfer of any material asset of any of the Acquired Corporations
to any Person.
Except as may be required by the Exchange Act, the DGCL and the rules and
regulations of the SEC and AMEX, none of the Acquired Corporations was, is or
will be required to make any filing with or give any notice to, or to obtain any
Consent from, any Person in connection with (x) the execution, delivery or
performance of this Agreement by the Company, or (y) the consummation by the
Company of the Offer, the Merger or any of the other transactions contemplated
by this Agreement.
3.27 FAIRNESS OPINION. The Company's Board of Directors has received
the written opinion of Imperial Capital, LLC, financial advisor to the Company,
dated the date of this Agreement, to the effect that the Per Share Amount is
fair to the stockholders of the Company from a financial point of view. The
Company has furnished an accurate and complete copy of said written opinion to
Parent.
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3.28 FINANCIAL ADVISOR. Except for Imperial Capital, LLC, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the Offer, the Merger or any of the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of any of the Acquired Corporations. The total of all fees,
commissions and other amounts that have been paid by the Company to Imperial
Capital, LLC and all fees, commissions and other amounts that may become payable
to Imperial Capital, LLC by the Company if the Offer and the Merger is
consummated will not exceed $634,993. The Company has furnished to Parent
accurate and complete copies of all agreements under which any such fees,
commissions or other amounts have been paid or may become payable and all
indemnification and other agreements related to the engagement of Imperial
Capital, LLC.
3.29 FULL DISCLOSURE.
(a) This Agreement (including the Company Disclosure Schedule)
does not, and the certificate referred to in paragraph (f) of ANNEX I will not,
(i) contain any representation, warranty or information that is false or
misleading with respect to any material fact, or (ii) omit to state any material
fact necessary in order to make the representations, warranties and information
contained and to be contained herein and therein (in the light of the
circumstances under which such representations, warranties and information were
or will be made or provided) not false or misleading.
(b) None of the information to be supplied by or on behalf of
the Company for inclusion in the Offer Documents or the Schedule 14D-9 will, at
the time the Offer Documents and the Schedule 14D-9 are mailed to the
stockholders of the Company or at any time between the time the Offer Documents
and the Schedule 14D-9 are mailed to the stockholders of the Company and the
acceptance of shares of Company Common Stock pursuant to the Offer, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading. None
of the information to be supplied by or on behalf of the Company for inclusion
in the Proxy Statement will, at the time the Proxy Statement is mailed to the
stockholders of the Company or at the time of the Company Stockholders' Meeting
(or any adjournment or postponement thereof), contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated by the SEC thereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION
SUB
Parent and Acquisition Sub represent and warrant to the Company as
follows:
4.1 DUE ORGANIZATION. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Acquisition Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of Parent and Acquisition
Sub has all necessary power and authority: (a) to conduct its business in the
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manner in which its business is currently being conducted and (b) to own and use
its assets in the manner in which its assets are currently owned and used.
4.2 AUTHORITY; BINDING NATURE OF AGREEMENT. Parent and Acquisition
Sub have full right, power and authority to execute and deliver and perform
their obligations under this Agreement; and the execution, delivery and
performance by Parent and Acquisition Sub of this Agreement have been duly
authorized by all necessary action on the part of Parent and Acquisition Sub and
their respective boards of directors. This Agreement constitutes the legal,
valid and binding obligation of Parent and Acquisition Sub, enforceable against
them in accordance with its terms, subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of
law governing specific performance, injunctive relief and other equitable
remedies.
4.3 NON-CONTRAVENTION; CONSENTS. Neither the execution and delivery
of this Agreement by Parent and Acquisition Sub nor the consummation by Parent
and Acquisition Sub of the Offer or the Merger will (a) conflict with or result
in any breach of any provision of the certificate of incorporation or bylaws of
Parent or Acquisition Sub, (b) result in a default by Parent or Acquisition Sub
under any Contract to which Parent or Acquisition Sub is a party, except for any
default that has not had and will not have a material adverse effect on Parent
or Acquisition Sub as applicable, or (c) result in a violation by Parent or
Acquisition Sub of any order, writ, injunction, judgment or decree to which
Parent or Acquisition Sub is subject, except for any violation that has not had
and will not have a material adverse effect on Parent or Acquisition Sub as
applicable. Except as may be required by the Securities Act, the Exchange Act,
state securities or "blue sky" laws, the DGCL and the rules and regulations of
the SEC, NASD and AMEX, Parent is not and will not be required to make any
filing with or give any notice to, or to obtain any Consent from, any Person in
connection with the execution, delivery or performance of this Agreement or the
consummation of the Offer of the Merger.
4.4 DISCLOSURE. None of the information to be supplied by or on
behalf of Parent for inclusion in the Offer Documents or the Schedule 14D-9
will, at the time the Offer Documents and the Schedule 14D-9 are mailed to the
stockholders of the Company or at any time between the time the Offer Documents
and the Schedule 14D-9 are mailed to the stockholders of the Company and the
acceptance of shares of Company Common Stock pursuant to the Offer, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading. None
of the information to be supplied by or on behalf of Parent for inclusion in the
Proxy Statement will, at the time the Proxy Statement is mailed to the
stockholders of the Company or at the time of the Company Stockholders' Meeting
(or any adjournment or postponement thereof), contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
4.5 FUNDS. Acquisition Sub has, or will have prior to the
consummation of the Offer, sufficient funds available to satisfy in full the
obligation to pay for all of the shares of Company Common Stock in the Offer and
to pay the Merger Consideration in the Merger and to pay all of its fees and
expenses related to the Transactions.
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SECTION 5. CERTAIN COVENANTS OF THE COMPANY
5.1 ACCESS AND INVESTIGATION. During the period from the date of
this Agreement through the date on which designees of Parent constitute both (i)
a majority of the members of the Board of Directors of the Company and (ii) all
of the executive officers of the Company (the "PRE-CLOSING PERIOD"), upon
reasonable notice, the Company shall, and shall cause the respective
Representatives of the Acquired Corporations to: (a) provide Parent and Parent's
Representatives with reasonable access during normal business hours of the
Company to the Acquired Corporations' Representatives, personnel and assets and
to all existing books, records, Tax Returns, work papers and other documents and
information relating to the Acquired Corporations; and (b) provide Parent and
Parent's Representatives with such copies of the existing books, records, Tax
Returns, work papers and other documents and information relating to the
Acquired Corporations, and with such additional financial, operating and other
data and information regarding the Acquired Corporations, as Parent may
reasonably request. Unless otherwise required by any Legal Requirement, during
the Pre-Closing Period, Parent will disclose any such information which is
non-public only in accordance with the provisions of the Confidentiality
Agreement between the Company and Parent, dated June 7, 2002, and will otherwise
treat any such information during the Pre-Closing Period only in accordance with
the provisions of such Confidentiality Agreement. Without limiting the
generality of the foregoing, during the Pre-Closing Period, the Company shall
promptly provide Parent with copies of:
(a) all material operating and financial reports prepared by
the Acquired Corporations for the Company's senior management, including (i)
copies of the unaudited monthly consolidated balance sheets of the Acquired
Corporations and the related unaudited monthly consolidated statements of
operations, statements of stockholders' equity and statements of cash flows and
(ii) copies of any sales forecasts, marketing plans, development plans, discount
reports, write-off reports, hiring reports and capital expenditure reports
prepared for the Company's senior management;
(b) any written materials or communications sent by or on
behalf of the Company to its stockholders;
(c) any material notice, document or other communication sent
by or on behalf of any of the Acquired Corporations to any party to any Acquired
Corporation Contract or sent to any of the Acquired Corporations by any party to
any Acquired Corporation Contract (other than any communication that relates
solely to routine commercial transactions between an Acquired Corporation and
the other party to any such Acquired Corporation Contract and that is of the
type sent in the ordinary course of business and consistent with past
practices);
(d) any notice, report or other document filed with or sent to
any Governmental Body on behalf of any of the Acquired Corporations in
connection with the Merger or any of the other transactions contemplated by this
Agreement; and
(e) any material notice, report or other document received by
any of the Acquired Corporations from any Governmental Body.
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5.2 OPERATION OF THE COMPANY'S BUSINESS.
(a) During the Pre-Closing Period: (i) the Company shall ensure
that each of the Acquired Corporations conducts its business and operations (A)
in the ordinary course and in substantially the same manner as previously
conducted and (B) in material compliance with all applicable Legal Requirements
and the requirements of all Acquired Corporation Contracts that constitute
Material Contracts; (ii) the Company shall use its reasonable efforts to ensure
that each of the Acquired Corporations preserves intact its current business
organization, keeps available the services of its current officers and employees
and maintains its relations and goodwill with all suppliers, customers,
landlords, creditors, licensors, licensees, employees and other Persons having
business relationships with the respective Acquired Corporations; (iii) the
Company shall use its reasonable efforts to keep in full force all insurance
policies referred to in Section 3.19; (iv) the Company shall cause to be
provided all notices, assurances and support required by any Acquired
Corporation Contract relating to any Proprietary Asset in order to ensure that
no condition under such Acquired Corporation Contract occurs that could result
in, or could increase the likelihood of, (A) any transfer or disclosure by any
Acquired Corporation of any Acquired Corporation Source Code, or (B) a release
from any escrow of any Acquired Corporation Source Code that has been deposited
or is required to be deposited in escrow under the terms of such Acquired
Corporation Contract; (v) the Company shall promptly notify Parent of (A) any
notice or other communication from any Person alleging that the Consent of such
Person is or may be required in connection with any of the transactions
contemplated by this Agreement, and (B) any Legal Proceeding commenced, or, to
the best of its knowledge threatened, relating to or involving or otherwise
affecting any of the Acquired Corporations that relates to the consummation of
the transactions contemplated by this Agreement; and (vi) the Company shall (to
the extent requested by Parent) cause its officers and the officers of its
Subsidiaries to report regularly to Parent concerning the status of the
Company's business.
(b) During the Pre-Closing Period, the Company shall not
(without the prior written consent of Parent), and shall not permit any of the
other Acquired Corporations to:
(i) declare, accrue, set aside or pay any dividend or make
any other distribution in respect of any shares of capital stock, or
repurchase, redeem or otherwise reacquire any shares of capital stock
or other securities;
(ii) sell, issue, grant or authorize the issuance or grant
of (A) any capital stock or other security, (B) any option, call,
warrant or right to acquire any capital stock or other security, or (C)
any instrument convertible into or exchangeable for any capital stock
or other security (except that (1) the Company may issue shares of
Company Common Stock (x) upon the valid exercise of Company Options
outstanding as of the date of this Agreement, and (y) pursuant to the
ESPP);
(iii) except as contemplated by Section 6.3, amend or waive
any of its rights under, or accelerate the vesting under, any provision
of any of the Company's stock option plans, any provision of any
agreement evidencing any outstanding stock option or any restricted
stock purchase agreement, or otherwise modify any of the terms of any
outstanding option or other security or any related Contract;
36
(iv) amend or permit the adoption of any amendment to its
certificate of incorporation or bylaws or other charter or
organizational documents, or effect or become a party to any merger,
consolidation, share exchange, business combination, amalgamation,
recapitalization, reclassification of shares, stock split, reverse
stock split, division or subdivision of shares, consolidation of shares
or similar transaction;
(v) form any Subsidiary or acquire any equity interest or
other interest in any other Entity;
(vi) make any capital expenditure (except that the Acquired
Corporations may make capital expenditures that, when added to all
other capital expenditures made on behalf of the Acquired Corporations
during the Pre-Closing Period, do not exceed $100,000 in the
aggregate);
(vii) enter into or become bound by, or permit any of the
assets owned or used by it to become bound by, any Material Contract,
or amend or terminate, or waive or exercise any material right or
remedy under, any Material Contract;
(viii) acquire, lease or license any right or other asset
from any other Person or sell or otherwise dispose of, or lease or
license, any right or other asset to any other Person (except in each
case for immaterial assets acquired, leased, licensed or disposed of by
the Company in the ordinary course of business and consistent with past
practices), or waive or relinquish any material right;
(ix) lend money to any Person, or incur or guarantee any
indebtedness;
(x) establish, adopt or amend any employee benefit plan,
pay any bonus or make any profit-sharing or similar payment to, or
increase the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its directors,
officers or employees (except that the Company (A) may make routine,
reasonable salary increases that have been disclosed to Parent prior to
the date of this Agreement in connection with the Company's customary
employee review process, and (B) may pay customary bonus payments and
profit sharing payments consistent with past practices payable in
accordance with existing bonus and profit sharing plans referred to in
Part 3.17(a) of the Company Disclosure Schedule);
(xi) hire any employee at the level of supervisor or above
or with an annual base salary in excess of $75,000, or enter into an
employment relationship with anyone which is other than "at-will", or
promote any employee except in order to fill a position vacated after
the date of this Agreement;
(xii) change any of its pricing policies, product return
policies, product maintenance polices, service policies, product
modification or upgrade policies, personnel policies or other business
policies, or any of its methods of accounting or accounting practices
in any respect;
37
(xiii) make any Tax election;
(xiv) commence or settle any Legal Proceeding;
(xv) enter into any material transaction or take any other
material action outside the ordinary course of business or
substantially inconsistent with past practices; or
(xvi) agree or commit to take any of the actions described
in clauses "(i)" through "(xv)" of this Section 5.2(b).
(c) During the Pre-Closing Period, the Company shall promptly
notify Parent in writing of: (i) the discovery by the Company of any event,
condition, fact or circumstance that occurred or existed on or prior to the date
of this Agreement and that caused or constitutes a material inaccuracy in any
representation or warranty made by the Company in this Agreement; (ii) any
event, condition, fact or circumstance that occurs, arises or exists after the
date of this Agreement and that would cause or constitute a material inaccuracy
in any representation or warranty made by the Company in this Agreement if (A)
such representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement; (iii) any material breach of any
covenant or obligation of the Company; and (iv) any event, condition, fact or
circumstance that would make the timely satisfaction of any of the conditions
set forth in Annex I impossible or unlikely or that has had or could reasonably
be expected to have a Material Adverse Effect on the Acquired Corporations.
Without limiting the generality of the foregoing, the Company shall promptly
advise Parent in writing of any Legal Proceeding or material claim threatened,
commenced or asserted against or with respect to any of the Acquired
Corporations. No notification given to Parent pursuant to this Section 5.2(c)
shall limit or otherwise affect any of the representations, warranties,
covenants or obligations of the Company contained in this Agreement.
5.3 NO SOLICITATION.
(a) Unless and until this Agreement shall have been terminated
pursuant to Section 8.1, the Company shall not directly or indirectly, and shall
not authorize or permit any of the other Acquired Corporations or any
Representative of any of the Acquired Corporations directly or indirectly to,
(i) solicit, initiate, encourage, induce or facilitate the making, submission or
announcement of any Acquisition Proposal (including by granting any waiver under
Section 203 of the DGCL) or take any action that could reasonably be expected to
lead to an Acquisition Proposal, (ii) furnish any information regarding any of
the Acquired Corporations to any Person in connection with or in response to an
Acquisition Proposal or an inquiry or indication of interest that could lead to
an Acquisition Proposal, (iii) engage in discussions or negotiations with any
Person with respect to any Acquisition Proposal or any inquiry or indication of
interest that could lead to an Acquisition Proposal, (iv) approve, endorse or
recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any Contract contemplating or otherwise relating to any
Acquisition Transaction; provided, however, that prior to the acceptance of
shares of Company Common Stock pursuant to the Offer, this Section 5.3(a) shall
38
not prohibit the Company from furnishing nonpublic information regarding the
Acquired Corporations to, or entering into discussions with, any Person in
response to a Superior Offer that is submitted to the Company by such Person
(and not withdrawn) if (1) neither the Company nor any Representative of any of
the Acquired Corporations shall have breached or taken any action inconsistent
with any of the provisions set forth in this Section 5.3, (2) the Board of
Directors of the Company concludes in good faith, after having taken into
account the advice of its outside legal counsel, that such action is required in
order for the Board of Directors of the Company to comply with its fiduciary
obligations to the Company's stockholders under applicable law, (3) at least two
business days prior to furnishing any such nonpublic information to, or entering
into discussions with, such Person, the Company gives Parent written notice of
the identity of such Person and of the Company's intention to furnish nonpublic
information to, or enter into discussions with, such Person, and the Company
receives from such Person an executed confidentiality agreement containing
customary limitations on the use and disclosure of all nonpublic written and
oral information furnished to such Person by or on behalf of the Company and
containing customary "standstill" provisions, and (4) at least two business days
prior to furnishing any such nonpublic information to such Person, the Company
furnishes such nonpublic information to Parent (to the extent such nonpublic
information has not been previously furnished by the Company to Parent). Without
limiting the generality of the foregoing, the Company acknowledges and agrees
that any action inconsistent with any of the provisions set forth in the
preceding sentence by any Representative of any of the Acquired Corporations,
whether or not such Representative is purporting to act on behalf of any of the
Acquired Corporations, shall be deemed to constitute a breach of this Section
5.3 by the Company. Notwithstanding the foregoing, nothing contained in this
Section 5.3(a) shall prohibit the Company or the Company's Board of Directors
from taking and disclosing to the Company's stockholders a position with respect
to a tender or exchange offer by a third party pursuant to Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act.
(b) The Company shall promptly (and in no event later than 24
hours after receipt of any Acquisition Proposal, any inquiry or indication of
interest that could lead to an Acquisition Proposal or any request for nonpublic
information) advise Parent orally and in writing of any Acquisition Proposal,
any inquiry or indication of interest that could lead to an Acquisition Proposal
or any request for nonpublic information relating to any of the Acquired
Corporations (including the identity of the Person making or submitting such
Acquisition Proposal, inquiry, indication of interest or request, and the terms
thereof) that is made or submitted by any Person during the Pre-Closing Period.
The Company shall keep Parent fully informed with respect to the status of any
such Acquisition Proposal, inquiry, indication of interest or request and any
modification or proposed modification thereto.
(c) The Company shall immediately cease and cause to be
terminated any existing discussions with any Person that relate to any
Acquisition Proposal or any inquiry or indication of interest that could lead to
an Acquisition Proposal.
(d) The Company agrees not to release or permit the release of
any Person from, or to waive or permit the waiver of any provision of, any
confidentiality, "standstill" or similar agreement to which any of the Acquired
Corporations is a party or under which any of the Acquired Corporations has any
rights, and will use its best efforts to enforce or cause to be enforced each
such agreement at the request of Parent. The Company also will promptly request
39
each Person that has executed, on or after June 30, 2000, a confidentiality
agreement in connection with its consideration of a possible Acquisition
Transaction or equity investment to return all confidential information
heretofore furnished to such Person by or on behalf of any of the Acquired
Corporations.
SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES
6.1 STOCKHOLDER APPROVAL; PROXY STATEMENT.
(a) If the adoption of this Agreement by the Company's
stockholders is required by law, the Company shall, as promptly as practicable
following the expiration of the Offer, take all action necessary under all
applicable Legal Requirements to call, give notice of and hold a meeting of the
holders of Company Common Stock to vote on the adoption of this Agreement (the
"COMPANY STOCKHOLDERS' MEETING"). The Company shall ensure that all proxies
solicited in connection with the Company Stockholders' Meeting are solicited in
compliance with all applicable Legal Requirements. Once the Company
Stockholders' Meeting has been duly called and notice thereof has been delivered
to the Company's stockholders, the Company shall not postpone or adjourn the
Company Stockholders' Meeting without the written consent of Parent, which
consent shall not be unreasonably withheld.
(b) If the adoption of this Agreement by the Company's
stockholders is required by law, the Company shall, as soon as practicable
following the expiration of the Offer, prepare and file with the SEC the Proxy
Statement and shall use all reasonable efforts to respond to any comments of the
SEC or its staff and to cause the Proxy Statement to be mailed to the Company's
stockholders, as promptly as practicable. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its Representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement. The Company shall give Parent an opportunity to comment on any
correspondence with the SEC or its staff or any proposed material to be included
in the Proxy Statement prior to transmission to the SEC or its staff and shall
not transmit any such material to which Parent reasonably objects. If at any
time prior to the Company Stockholders' Meeting there shall occur any event that
should be set forth in an amendment or supplement to the Proxy Statement, the
Company shall promptly prepare such an amendment or supplement and after
obtaining the consent of Parent to such amendment or supplement, shall promptly
transmit such amendment or supplement to the Company's stockholders.
(c) Notwithstanding anything to the contrary contained in this
Agreement, if Acquisition Sub shall own by virtue of the Offer or otherwise at
least 90% of the outstanding shares of Company Common Stock, the parties shall
take all necessary and appropriate action to cause the merger of Acquisition Sub
and the Company to become effective as soon as practicable after the expiration
of the Offer without a stockholders' meeting in accordance with Section 253 of
the DGCL.
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(d) Parent agrees to cause all shares of Company Common Stock
owned by Parent or any subsidiary of Parent to be voted in favor of the adoption
of the Agreement at the Company Stockholders' Meeting.
6.2 REGULATORY APPROVALS. Each party shall use all reasonable
efforts to file, as soon as practicable after the date of this Agreement, all
notices, reports and other documents required to be filed by such party with any
Governmental Body with respect to the Offer, the Merger and the other
transactions contemplated by this Agreement, and to submit promptly any
additional information requested by any such Governmental Body. Each of the
Company and Parent shall (1) give the other party prompt notice of the
commencement or overt threat of commencement of any Legal Proceeding by or
before any Governmental Body with respect to the Merger or any of the other
transactions contemplated by this Agreement, (2) keep the other party informed
as to the status of any such Legal Proceeding or overt threat, and (3) promptly
inform the other party of any communication to or from any Governmental Body
regarding the Merger or any of the other transactions contemplated by this
Agreement. Except as may be prohibited by any Governmental Body or by any Legal
Requirement, (a) the Company and Parent will consult and cooperate with one
another, and will consider in good faith the views of one another, in connection
with any analysis, appearance, presentation, memorandum, brief, argument,
opinion or proposal made or submitted in connection with any Legal Proceeding by
or before any Governmental Body with respect to the Merger or any of the other
transactions contemplated by this Agreement, and (b) in connection with any such
Legal Proceeding, each of the Company and Parent will permit authorized
Representatives of the other party to be present at each meeting or conference
relating to any such Legal Proceeding and to have access to and be consulted in
connection with any document, opinion or proposal made or submitted to any
Governmental Body in connection with any such Legal Proceeding. At the request
of Parent, the Company shall agree to divest, sell, dispose of, hold separate or
otherwise take or commit to take any action that limits its freedom of action
with respect to its or its Subsidiaries' ability to operate or retain any of the
businesses, product lines or assets of the Company or any of its Subsidiaries,
provided that any such action is conditioned upon the consummation of the Offer.
6.3 STOCK OPTIONS.
(a) Prior to the Offer Acceptance Time, the Company shall take
all action that may be necessary (under the plans pursuant to which Company
Options are outstanding and otherwise) to accelerate the vesting and
exercisability of each unexpired and unexercised Company Option then in effect
so that each such Company Option shall be fully vested and exercisable prior to
the Offer Acceptance Time. As of the Effective Time, each unexpired and
unexercised Company Option then in effect (and each plan, if any, under which
any Company Option may be granted) shall be terminated, and each holder of any
such Company Option shall be paid, in full satisfaction of such Company Option,
a cash payment in an amount in respect thereof equal to the product of: (i) the
excess, if any, of the Merger Consideration over the exercise price of such
Company Option and (ii) the number of shares of Company Common Stock subject to
the Company Option, less any income or employment or other Tax withholding
required under the Code or any provision of applicable law.
(b) Prior to the Effective Time, the Company shall take all
action that may be necessary (under the plans pursuant to which Company Options
are outstanding and otherwise) to effectuate the provisions of this Section 6.3
41
(other than actions required pursuant to the first sentence of Section 6.3(a) to
be taken prior to the Offer Acceptance Time, which shall be taken prior to the
Offer Acceptance Time) and to ensure that, from and after the Effective Time,
holders of Company Options have no rights with respect thereto other than those
specifically provided in this Section 6.3.
(c) Prior to the Offer Acceptance Time, the Company shall take
all actions necessary or required under the ESPP and Legal Requirements to
ensure that, except for the six month offering period under the ESPP that
commenced on July 1, 2003, no additional offering shall be authorized or
commenced. The rights of participants in the ESPP with respect to any offering
period then underway under the ESPP shall be determined by treating the last
business day prior to the Effective Time as the last day of such offering period
and by making such other pro-rata adjustments as may be necessary to reflect the
shortened offering period but otherwise treating such shortened offering period
as a fully effective and completed offering period for all purposes under the
ESPP. Prior to the Offer Acceptance Time, the Company shall take all actions
(including, if appropriate, amending the terms of the ESPP) that are necessary
to give effect to the transactions contemplated by this Section 6.3(c).
6.4 EMPLOYEE BENEFITS.
(a) Parent agrees that all employees of the Acquired
Corporations who continue employment with Parent, the Surviving Corporation or
any Subsidiary of the Surviving Corporation after the Effective Time
("CONTINUING EMPLOYEES") shall be eligible to continue to participate in the
Surviving Corporation's health and welfare benefit plans; provided, however,
that (i) nothing in this Section 6.4 or elsewhere in this Agreement shall limit
the right of Parent or the Surviving Corporation to amend or terminate any such
health or welfare benefit plan at any time, and (ii) if Parent or the Surviving
Corporation terminates any such health or welfare benefit plan, then (upon
expiration of any appropriate transition period), the Continuing Employees shall
be eligible to participate in Parent's health and welfare benefit plans, to
substantially the same extent as similarly situated employees of Parent. Nothing
in this Section 6.4(a) or elsewhere in this Agreement shall be construed to
create a right in any employee to employment with Parent, the Surviving
Corporation or any other Subsidiary of the Surviving Corporation and the
employment of each Continuing Employee shall be "at will" employment.
(b) At Parent's request, the Company agrees to take (or cause to
be taken) all actions necessary or appropriate to terminate, effective
immediately prior to the Effective Time, any employee benefit plan sponsored by
any of the Acquired Corporations (or in which any of the Acquired Corporations
participate) that contains a cash or deferred arrangement intended to qualify
under section 401(k) of the Code. For the one-year period immediately following
the Effective Time, Parent shall cause the Surviving Corporation to provide, or,
pursuant to Section 6.4(a)(ii), Parent shall provide, such health or welfare
benefit plans and arrangements as are no less favorable, taken as a whole, to
employees of the Surviving Corporation than the health or welfare benefit plans
or arrangements provided by the Company as of the date of this Agreement.
42
6.5 INDEMNIFICATION OF OFFICERS AND DIRECTORS.
(a) All rights to indemnification existing in favor of those
Persons who are directors and officers of the Company as of the date of this
Agreement (the "INDEMNIFIED PERSONS") for their acts and omissions occurring
prior to the Effective Time, as provided in the Company's bylaws (as in effect
as of the date of this Agreement) and as provided in the indemnification
agreements between the Company and said Indemnified Persons (as in effect as of
the date of this Agreement) in the forms disclosed by the Company to Parent
prior to the date of this Agreement, shall survive the Merger and shall be
observed by the Surviving Corporation to the fullest extent available under
Delaware law for a period of six years from the Effective Time, and any claim
made requesting indemnification pursuant to such indemnification rights within
such six-year period shall continue to be subject to this Section 6.5(a) and the
indemnification rights provided under this Section 6.5(a) until disposition of
such claim.
(b) From the Effective Time until the sixth anniversary of the
Effective Time (the "TAIL PERIOD"), the Surviving Corporation shall maintain in
effect, for the benefit of the Indemnified Persons with respect to their acts
and omissions occurring prior to the Effective Time, the existing policy of
directors' and officers' liability insurance maintained by the Company as of the
date of this Agreement in the form disclosed by the Company to Parent prior to
the date of this Agreement (the "EXISTING POLICY"); provided, however, that (i)
in no event shall the Surviving Corporation be required pursuant to this Section
6.5(b) to make aggregate payments under the Existing Policy over the Tail Period
in excess of $250,000 and (ii) once the Surviving Corporation has made aggregate
payments under the Existing Policy over the Tail Period of $250,000, the
Surviving Corporation shall have no further payment obligation under this
Section 6.5(b) with respect to the Existing Policy, and, in the event that any
amounts in excess of $250,000 become due from the Surviving Corporation with
respect to the Existing Policy under this Section 6.5(b), the Surviving
Corporation shall have no further obligation under this Section 6.5(b) to
maintain the Existing Policy in effect and may cancel or otherwise terminate the
Existing Policy in its sole discretion, provided that the Surviving Corporation
has used reasonable efforts to provide each of the Indemnified Persons notice of
its intention to cancel or otherwise terminate the Existing Policy at least 15
business days prior to the cancellation or termination of the Existing Policy.
6.6 ADDITIONAL AGREEMENTS.
(a) Subject to Section 6.6(b), Parent and the Company shall use
all reasonable efforts to take, or cause to be taken, all actions necessary to
consummate the Offer and the Merger and make effective the other transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, but subject to Section 6.6(b), each party to this Agreement (i) shall
make all filings (if any) and give all notices (if any) required to be made and
given by such party in connection with the Offer and the Merger and the other
transactions contemplated by this Agreement, (ii) shall use all reasonable
efforts to obtain each Consent (if any) required to be obtained (pursuant to any
applicable Legal Requirement or Contract, or otherwise) by such party in
connection with the Offer and the Merger and each of the other transactions
contemplated by this Agreement, and (iii) shall use all reasonable efforts to
lift any restraint, injunction or other legal bar to the Offer or the Merger.
43
The Company shall promptly deliver to Parent a copy of each such filing made,
each such notice given and each such Consent obtained by the Company during the
Pre-Closing Period.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Parent shall not have any obligation under this Agreement: (i) to
dispose of or transfer or cause any of its Subsidiaries to dispose of or
transfer any assets, or to commit to cause any of the Acquired Corporations to
dispose of any assets; (ii) to discontinue or cause any of its Subsidiaries to
discontinue offering any product or service, or to commit to cause any of the
Acquired Corporations to discontinue offering any product or service; (iii) to
license or otherwise make available, or cause any of its Subsidiaries to license
or otherwise make available, to any Person, any technology, software or other
Proprietary Asset, or to commit to cause any of the Acquired Corporations to
license or otherwise make available to any Person any technology, software or
other Proprietary Asset; (iv) to hold separate or cause any of its Subsidiaries
to hold separate any assets or operations (either before or after the Closing
Date), or to commit to cause any of the Acquired Corporations to hold separate
any assets or operations; (v) to make or cause any of its Subsidiaries to make
any commitment (to any Governmental Body or otherwise) regarding its future
operations or the future operations of any of the Acquired Corporations; or (vi)
to contest any Legal Proceeding relating to the Offer or the Merger if Parent
determines in good faith upon the advice of outside counsel that contesting such
Legal Proceeding might not be advisable.
6.7 DISCLOSURE. Parent and the Company shall consult with each other
before issuing any press release or otherwise making any public statement with
respect to the Offer, the Merger or any of the other transactions contemplated
by this Agreement. Without limiting the generality of the foregoing, the Company
shall not, and shall not permit any of its Subsidiaries or any Representative of
any of the Acquired Corporations to, make any disclosure to employees of any of
the Acquired Corporations, to the public or otherwise regarding the Offer, the
Merger or any of the other transactions contemplated by this Agreement unless
(a) Parent shall have approved such disclosure or (b) the Company shall have
been advised by its outside legal counsel that such disclosure is required by
applicable law. In addition to the foregoing, the Company shall notify Parent
prior to the issuance of any press release and, unless prohibited by any Legal
Requirement, shall provide Parent with a copy of such press release for review
in advance of its issuance.
6.8 RESIGNATION OF OFFICERS AND DIRECTORS. The Company shall use all
reasonable efforts to obtain and deliver to Parent on or prior to the Offer
Acceptance Time the resignation of the Company's directors as required by
Section 1.3 and the resignation of each of the Company's officers and each of
the officers and directors of the Company's Subsidiaries as may be required by
Parent.
6.9 TAKEOVER LAWS; ADVICE OF CHANGES.
(a) If any Takeover Law may become, or may purport to be,
applicable to the transactions contemplated in this Agreement, each of Parent
and the Company and the members of their respective boards of directors will
grant such approvals and take such actions as are necessary so that the
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms and conditions contemplated hereby and thereby and
44
otherwise act to eliminate the effect of any Takeover Law on any of the
transactions contemplated by this Agreement.
(b) Each of the Company and Parent will give prompt notice to
the other (and will subsequently keep the other informed on a current basis of
any developments related to such notice) upon its becoming aware of the
occurrence or existence of any fact, event or circumstance that (i) is
reasonably likely to result in any Material Adverse Effect with respect to it,
(ii) would cause or constitute a breach of any representations, warranties or
covenants contained herein or (iii) is reasonably likely to result in any of the
conditions set forth in Section 7 or in ANNEX I not being able to be satisfied
prior to the Effective Date.
6.10 AUDITED CONSOLIDATED FINANCIAL STATEMENTS. On or before
September 2, 2003, the Company shall cause to be delivered to Parent (a) the
consolidated balance sheet and related consolidated statements of operations and
cash flows showing the financial condition of the Acquired Corporations as of
June 30, 2003 and the results of operations and cash flows of the Acquired
Corporations for the fiscal year ended June 30, 2003, all audited by
PriceWaterhouseCoopers LLP or other independent public accountants of recognized
national standing reasonably acceptable to Parent and accompanied by an opinion
of such accountants (which shall not be qualified in any respect) to the effect
that such consolidated financial statements fairly present the financial
condition and results of operations and cash flows of the Acquired Corporations
on a consolidated basis in accordance with GAAP consistently applied (the
"AUDITED CONSOLIDATED FINANCIAL STATEMENTS") and (b) a copy of the Company's
Annual Report on Form 10-K for its fiscal year ending June 30, 2003, as filed
with the SEC.
SECTION 7. CONDITIONS PRECEDENT TO THE MERGER
The obligations of the parties to effect the Merger are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
7.1 STOCKHOLDER APPROVAL. If required by applicable Legal
Requirements, this Agreement shall have been duly adopted by the Required
Company Stockholder Vote.
7.2 NO RESTRAINTS. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
7.3 CONSUMMATION OF OFFER. Acquisition Sub shall have accepted for
payment and paid for shares of Company Common Stock pursuant to the Offer.
SECTION 8. TERMINATION
8.1 TERMINATION. This Agreement may be terminated prior to the
Effective Time (whether before or after the adoption of this Agreement by the
Required Company Stockholder Vote):
(a) by mutual written consent of Parent and the Company;
45
(b) by either Parent or the Company if the Offer shall have
expired without the acceptance for payment of shares of Company Common Stock
pursuant to the Offer; provided, however, that (i) a party shall not be
permitted to terminate this Agreement pursuant to this Section 8.1(b) if the
failure of the acceptance for payment of shares of Company Common Stock pursuant
to the Offer is attributable to a failure on the part of such party to perform
in all material respects any covenant in this Agreement required to be performed
by such party at or prior to the acceptance for payment of shares of Company
Common Stock pursuant to the Offer and such party has not cured such failure
within ten days after having received notice thereof; and (ii) the Company shall
not be permitted to terminate this Agreement pursuant to this Section 8.1(b)
unless the Company shall have made any payment required to be made to Parent
pursuant to Sections 8.3(a) and 8.3(b) and shall have paid to Parent any fee
required to be paid to Parent pursuant to Section 8.3(c);
(c) by either Parent or the Company if the acceptance for
payment of shares of Company Common Stock pursuant to the Offer shall not have
occurred on or prior to the close of business on the date that is 75 business
days after the date of this Agreement; provided, however, that (i) a party shall
not be permitted to terminate this Agreement pursuant to this Section 8.1(c) if
the failure of the acceptance for payment of shares of Company Common Stock
pursuant to the Offer by the close of business on the date that is 75 business
days after the date of this Agreement is attributable to a failure on the part
of such party to perform in all material respects any covenant in this Agreement
required to be performed by such party at or prior to the acceptance for payment
of shares of Company Common Stock pursuant to the Offer and such party has not
cured such failure within ten days after having received notice thereof; and
(ii) the Company shall not be permitted to terminate this Agreement pursuant to
this Section 8.1(c) unless the Company shall have made any payment required to
be made to Parent pursuant to Sections 8.3(a) and 8.3(b) and shall have paid to
Parent any fee required to be paid to Parent pursuant to Section 8.3(c);
(d) by either Parent or the Company if a court of competent
jurisdiction or other Governmental Body shall have issued a final and
nonappealable order, decree or ruling, or shall have taken any other action,
having the effect of permanently restraining, enjoining or otherwise prohibiting
the acceptance for payment of shares of Company Common Stock pursuant to the
Offer or the Merger or making consummation of the Offer or the Merger illegal;
(e) by Parent (at any time prior to the acceptance for payment
of shares of Company Common Stock pursuant to the Offer) if a Triggering Event
shall have occurred;
(f) by Parent if (at any time prior to the acceptance for
payment of shares of Company Common Stock pursuant to the Offer) (i) any of the
Company's representations and warranties contained in this Agreement shall be
inaccurate as of the date of this Agreement, or shall have become inaccurate as
of a date subsequent to the date of this Agreement (as if made on such
subsequent date), such that the condition set forth in paragraph (b) of ANNEX I
46
would not be satisfied (it being understood that, for purposes of determining
the accuracy of such representations and warranties as of the date of this
Agreement or as of any subsequent date, (A) all "Material Adverse Effect"
qualifications and other materiality qualifications, and any similar
qualifications, contained in such representations and warranties shall be
disregarded and (B) any update of or modification to the Company Disclosure
Schedule made or purported to have been made after the date of this Agreement
shall be disregarded), or (ii) any of the Company's covenants contained in this
Agreement shall have been breached such that the condition set forth in
paragraph (c) of ANNEX I would not be satisfied; provided, however, that in the
event of an inaccuracy in any of the Company's representations and warranties as
of a date subsequent to the date of this Agreement, Parent may not terminate
this Agreement under this Section 8.1(f) on account of such inaccuracy unless
such inaccuracy has not been cured within ten days after the Company has
received notice thereof;
(g) by the Company if (at any time prior to the acceptance for
payment of shares of Company Common Stock pursuant to the Offer) (i) any of
Parent's representations and warranties contained in this Agreement shall be
inaccurate as of the date of this Agreement, or shall have become inaccurate as
of a date subsequent to the date of this Agreement (as if made on such
subsequent date), except that any inaccuracies in such representations and
warranties will be disregarded if the circumstances giving rise to all such
inaccuracies (considered collectively) do not constitute, and could not
reasonably be expected to have, a material adverse effect on the Parent (it
being understood that, for purposes of determining the accuracy of such
representations and warranties as of the date of this Agreement or as of any
subsequent date, all "Material Adverse Effect" qualifications and other
materiality qualifications, and any similar qualifications, contained in such
representations and warranties shall be disregarded), or (ii) if Parent shall
not have complied with in all material respects Parent's covenants contained in
this Agreement; provided, however, that in the event of an inaccuracy in any of
Parent's representations and warranties as of a date subsequent to the date of
this Agreement or a failure to comply with Parent's covenants, the Company may
not terminate this Agreement under this Section 8.1(g) on account of such
inaccuracy or breach unless such inaccuracy or breach has not been cured within
ten days after Parent has received notice thereof;
(h) by the Company if Acquisition Sub shall not have commenced
(within the meaning of Rule 14d-2 under the Exchange Act) the Offer on or prior
to the fifth business day after the public announcement of the execution of this
Agreement; provided, however, that the Company shall not be permitted to
terminate this Agreement pursuant to this Section 8.1(h) if (i) the failure to
commence the Offer on or prior to the fifth business day after the public
announcement of the execution of this Agreement is attributable to a failure on
the part of the Company to perform any covenant in this Agreement required to be
performed by the Company at or prior to the fifth business day after the public
announcement of the execution of this Agreement, (ii) a Triggering Event shall
have occurred or (iii) any of the Company's representations and warranties
contained in this Agreement shall be inaccurate as of the date of this
Agreement, or shall have become inaccurate as of a date subsequent to the date
of this Agreement (as if made on such subsequent date) and on or prior to the
fifth business day after the public announcement of the execution of this
Agreement, such that the condition set forth in paragraph (b) of ANNEX I would
47
not be satisfied (it being understood that, for purposes of determining the
accuracy of such representations and warranties as of the date of this Agreement
or as of any subsequent date, (A) all "Material Adverse Effect" qualifications
and other materiality qualifications, and any similar qualifications, contained
in such representations and warranties shall be disregarded and (B) any update
of or modification to the Company Disclosure Schedule made or purported to have
been made after the date of this Agreement shall be disregarded);
(i) by either Parent or the Company if the acceptance for
payment of shares of Company Common Stock pursuant to the Offer shall not have
occurred on or prior to the close of business on the date that is 120 days after
the date of this Agreement; or
(j) by the Company at any time prior to the acceptance for
payment of shares of Company Common Stock pursuant to the Offer, in order to
accept a Superior Offer and enter into the Specified Agreement (as defined
below) relating to such Superior Offer, if (i) such Superior Offer shall not
have resulted from any breach of Section 5.3, (ii) the Board of Directors of the
Company, after satisfying all of the requirements set forth in Section 1.2(b),
shall have authorized the Company to enter into a binding written definitive
acquisition agreement providing for the consummation of a transaction
constituting a Superior Offer (the "Specified Agreement"), (iii) the Company
shall have delivered to Parent a written notice containing a summary of the
material terms and conditions of the Specified Agreement, which notice shall
confirm that the other party's Board of Directors has confirmed its
authorization to execute and deliver the Specified Agreement on behalf of the
other party immediately upon termination of this Agreement by the Company
pursuant to this Section 8.1(j), (iv) a period of at least three business days
shall have elapsed since the receipt by Parent of such notice, and the Company
shall have made its Representatives reasonably available during such period for
the purpose of engaging in negotiations with Parent regarding a possible
amendment of the Offer or a possible alternative transaction, (v) any proposal
by Parent to amend the Offer or enter into an alternative transaction shall have
been considered by the Board of Directors of the Company in good faith, and the
Company's Board of Directors shall have determined in good faith (after having
taken into account the advice of the Company's outside legal counsel and the
advice of an independent financial advisor of nationally recognized reputation
(it being understood that Imperial Capital, LLC shall be deemed a financial
advisor of nationally recognized reputation for purposes of this Agreement))
that the terms of the proposed amended Offer (or other alternative transaction)
are not as favorable to the Company's stockholders, from a financial point of
view, as the transaction contemplated by the Specified Agreement, and (vi) the
Company shall have made any payment required to be made to Parent pursuant to
Sections 8.3(a) and 8.3(b) and shall have paid to Parent any fee required to be
paid to Parent pursuant to Section 8.3(c).
8.2 EFFECT OF TERMINATION. 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; provided, however, that (i) this Section 8.2, Section 8.3 and
Section 9 shall survive the termination of this Agreement and shall remain in
full force and effect, and (ii) the termination of this Agreement shall not
48
relieve any party from any liability for any breach of any representation,
warranty, covenant, obligation or other provision contained in this Agreement.
8.3 EXPENSES; TERMINATION FEES.
(a) Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Offer or the Merger is consummated; provided,
however, that (i) (A) if this Agreement is terminated by Parent or the Company
pursuant to Section 8.1(b) or Section 8.1(c), (B) after the date of this
Agreement and at or prior to the time of the termination of this Agreement an
Acquisition Proposal shall have been disclosed, announced, commenced, submitted
or made, and (C) the Company consummates or is subject to a Specified
Acquisition Transaction within 270 days of such termination or the Company or
any of its Representatives signs a definitive agreement within 270 days of such
termination providing for a Specified Acquisition Transaction, or (ii) this
Agreement is terminated by Parent pursuant to Section 8.1(e) or by the Company
pursuant to Section 8.1(j), then (without limiting any obligation of the Company
to pay any fee payable pursuant to Section 8.3(c)), the Company shall make a
nonrefundable cash payment to Parent, at the time specified in Section 8.3(b),
in an amount equal to the aggregate amount of all fees and expenses (including
all attorneys' fees, accountants' fees, financial advisory fees and filing fees)
that have been paid or that may become payable by or on behalf of Parent in
connection with the preparation and negotiation of this Agreement and otherwise
in connection with the Offer and the Merger, up to an aggregate amount of
$350,000.
(b) If (i) (A) this Agreement is terminated by Parent or the
Company pursuant to Section 8.1(b) or Section 8.1(c), (B) after the date of this
Agreement and at or prior to the time of the termination of this Agreement an
Acquisition Proposal shall have been disclosed, announced, commenced, submitted
or made, and (C) the Company consummates or is subject to a Specified
Acquisition Transaction within 270 days of such termination or the Company or
any of its Representatives signs a definitive agreement within 270 days of such
termination providing for a Specified Acquisition Transaction, or (ii) this
Agreement is terminated by Parent pursuant to Section 8.1(e) or by the Company
pursuant to Section 8.1(j), then the Company shall pay to Parent, in cash at the
time specified in the next sentence (and in addition to the amounts payable
pursuant to Section 8.3(a)), a nonrefundable fee in the amount equal to the
greater of (i) $1,250,000.00 or (ii) 3% of the Per Share Amount multiplied by
the Fully Diluted Number of Company Shares. In the case of termination of this
Agreement by Parent or the Company pursuant to Section 8.1(b) or Section 8.1(c),
the fee referred to in the preceding sentence and the amount payable pursuant to
Section 8.3(a) shall be paid by the Company on or prior to the date of execution
of the definitive agreement relating to the Specified Acquisition Transaction
described in clause (i)(C) above or, if there is no such definitive agreement,
on or prior to the date of consummation of the Specified Acquisition
Transaction; in the case of termination of this Agreement by Parent pursuant to
Section 8.1(e), the fee referred to in the preceding sentence and the amount
payable pursuant to Section 8.3(a) shall be paid by the Company within three
business days after such termination; and in the case of termination of this
Agreement by the Company pursuant to Section 8.1(j), the fee referred to in the
preceding sentence and the amount payable pursuant to Section 8.3(a) shall be
paid by the Company at or prior to the time of such termination.
49
(c) If the Company fails to pay when due any amount payable
under this Section 8.3, then (i) the Company shall reimburse Parent for all
costs and expenses (including reasonable fees and disbursements of counsel)
incurred in connection with the collection of such overdue amount and the
enforcement by Parent of its rights under this Section 8.3, and (ii) the Company
shall pay to Parent interest on such overdue amount (for the period commencing
as of the date such overdue amount was originally required to be paid and ending
on the date such overdue amount is actually paid to Parent in full) at a rate
per annum equal to the "prime rate" (as announced by Bank of America or any
successor thereto) in effect on the date such overdue amount was originally
required to be paid.
SECTION 9. MISCELLANEOUS PROVISIONS
9.1 AMENDMENT. Subject to Section 1.3, this Agreement may be amended
with the approval of the respective Boards of Directors of the Company and
Parent at any time. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
9.2 WAIVER. No failure on the part of any party to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of any party in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. No party shall be deemed to have waived any claim
arising out of this Agreement, or any power, right, privilege or remedy under
this Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given.
9.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties contained in this Agreement or in any certificate
or schedule or other document delivered pursuant to this Agreement shall survive
the Merger.
9.4 ENTIRE AGREEMENT; COUNTERPARTS. This Agreement and the other
agreements referred to herein constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, among or between any
of the parties with respect to the subject matter hereof and thereof; provided,
however, that the Confidentiality Agreement dated June 7, 2002 between the
Company and Parent (other than the sixth paragraph and the second sentence of
the eighth paragraph) shall not be superseded and shall remain in full force and
effect. This Agreement may be executed in several counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
instrument.
9.5 APPLICABLE LAW; JURISDICTION. 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. In any action between any of the parties arising
out of or relating to this Agreement or any of the transactions contemplated by
this Agreement: (a) each of the parties irrevocably and unconditionally consents
and submits to the exclusive jurisdiction and venue of the state and federal
50
courts located in the State of Delaware; (b) if any such action is commenced in
a state court, then, subject to applicable law, no party shall object to the
removal of such action to any federal court located in Delaware; (c) each of the
parties irrevocably waives the right to trial by jury; and (d) each of the
parties irrevocably consents to service of process by first class certified
mail, return receipt requested, postage prepaid, to the address at which such
party is to receive notice in accordance with Section 9.9.
9.6 DISCLOSURE SCHEDULE. The Company Disclosure Schedule shall be
arranged in separate parts corresponding to the numbered and lettered sections
contained in Section 3, and the information disclosed in any numbered or
lettered part shall be deemed to relate to and to qualify only the particular
representation or warranty set forth in the corresponding numbered or lettered
section in Section 3, and shall not be deemed to relate to or to qualify any
other representation or warranty.
9.7 ATTORNEYS' FEES. In any action at law or suit in equity to
enforce this Agreement or the rights of any of the parties hereunder, the
prevailing party in such action or suit shall be entitled to receive a sum for
its reasonable attorneys' fees and all other reasonable costs and expenses
incurred in such action or suit.
9.8 ASSIGNABILITY. This Agreement shall be binding upon, and shall
be enforceable by and inure solely to the benefit of, the parties hereto and
their respective successors and assigns; provided, however, that neither this
Agreement nor any of the Company's rights hereunder may be assigned by the
Company without the prior written consent of Parent, and any attempted
assignment of this Agreement or any of such rights by the Company without such
consent shall be void and of no effect. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person (other than the parties
hereto) any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
9.9 NOTICES. Any notice or other communication required or permitted
to be delivered to any party under this Agreement shall be in writing and shall
be deemed properly delivered, given and received (a) upon receipt when delivered
by hand, (b) two business days after sent by registered mail or by courier or
express delivery service or (c) upon receipt when received by facsimile prior to
6:00 p.m. recipient's local time, else on the business day following such date
of receipt, provided that in each case the notice or other communication is sent
to the address or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone number as such
party shall have specified in a written notice given to the other parties
hereto):
if to Parent or Acquisition Sub:
Xxxx X. Xxxxxx
Cubic Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Facsimile No. (000) 000-0000
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with copies to:
Xxxxxxx X. Xxxxx
Cubic Corporation
0000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Facsimile No. (000) 000-0000
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx Godward LLP
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Facsimile No. (000) 000-0000
if to the Company:
Xxxxxx X. Xxxxxxx
ECC International Corp.
0000 Xxxx Xxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx, Esq.
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
9.10 COOPERATION. The Company agrees to cooperate fully with Parent
and to execute and deliver such further documents, certificates, agreements and
instruments and to take such other actions as may be reasonably requested by
Parent to evidence or reflect the transactions contemplated by this Agreement
and to carry out the intent and purposes of this Agreement.
9.11 SEVERABILITY. In the event that any provision of this
Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those as to
which it is determined to be invalid, unlawful, void or unenforceable, shall not
be impaired or otherwise affected and shall continue to be valid and enforceable
to the fullest extent permitted by law.
9.12 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
52
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections," "Exhibits," "Annexes" and "Schedules" are intended to
refer to Sections of this Agreement and Exhibits, Annexes or Schedules to this
Agreement.
(e) The bold-faced headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
9.13 SAFE HARBOR LANGUAGE.
(a) Notwithstanding anything herein to the contrary, any party
to this Agreement (and any director, advisor, employee, Representative,
shareholder, member, manager or other agent of any party to this Agreement) may
disclose to any and all Persons, without limitation of any kind, the tax
treatment and tax structure of the Transactions and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure; provided however, that such disclosure may
not be made to the extent reasonably necessary to comply with any applicable
federal or state securities laws; and provided further, that for this purpose,
(i) the "tax treatment" of the Transactions means the purported or claimed
federal income tax treatment of the Transactions, and (ii) the "tax structure"
of the Transactions means any fact that may be relevant to understanding the
purported or claimed federal income tax treatment of the Transactions.
(b) For the avoidance of doubt, the parties acknowledge and
agree that the tax treatment and tax structure of the Transactions does not
include the name of any party to the Transactions or any sensitive business
information (including, without limitation, specific information about any
party's intellectual property or other proprietary assets) unless such
information may be related or relevant to the purported or claimed federal
income tax treatment of the Transactions.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
CUBIC CORPORATION
By: ____________________________
Name:___________________________
Title:__________________________
CDA ACQUISITION CORPORATION
By: ____________________________
Name:___________________________
Title:__________________________
ECC INTERNATIONAL CORP.
By: ____________________________
Name:___________________________
Title:__________________________
54
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A and Annex
I):
ACQUIRED CORPORATION CONTRACT. "ACQUIRED CORPORATION CONTRACT" shall
mean any Contract: (a) to which any of the Acquired Corporations is a party; (b)
by which any of the Acquired Corporations or any asset of any of the Acquired
Corporations is or may become bound or under which any of the Acquired
Corporations has, or may become subject to, any obligation; or (c) under which
any of the Acquired Corporations has or may acquire any right or interest.
ACQUIRED CORPORATION PROPRIETARY ASSET. "ACQUIRED CORPORATION
PROPRIETARY ASSET" shall mean any Proprietary Asset owned by or licensed to any
of the Acquired Corporations or otherwise used by any of the Acquired
Corporations.
ACQUIRED CORPORATION SOURCE CODE. "ACQUIRED CORPORATION SOURCE CODE"
shall mean any source code, or any portion, aspect or segment of any source
code, relating to any Acquired Corporation Proprietary Asset.
ACQUIRED CORPORATIONS. "ACQUIRED CORPORATIONS" shall mean the
Company and each of its Subsidiaries, collectively.
ACQUISITION PROPOSAL. "ACQUISITION PROPOSAL" shall mean any offer or
proposal (other than an offer or proposal made or submitted by Parent)
contemplating or otherwise relating to any Acquisition Transaction.
ACQUISITION TRANSACTION. "ACQUISITION TRANSACTION" shall mean any
transaction or series of transactions involving:
(a) any merger, consolidation, amalgamation, share
exchange, business combination, issuance of securities, acquisition
of securities, recapitalization, tender offer, exchange offer or
other similar transaction in which any of the Acquired Corporations
is a constituent corporation and (i) in which a Person or "group"
(as defined in the Exchange Act and the rules promulgated
thereunder) of Persons directly or indirectly acquires beneficial or
record ownership of securities representing more than 10% of the
outstanding securities of any class of voting securities of any of
the Acquired Corporations or any surviving entity or (ii) in which
any of the Acquired Corporations issues securities representing more
than 10% of the outstanding securities of any class of voting
securities of any of the Acquired Corporations;
(b) any sale, lease, exchange, transfer, license,
acquisition or disposition of any business or businesses or assets
that constitute or account for 10% or more of the consolidated net
revenues, net income or assets of any of the Acquired Corporations;
or
(c) any liquidation or dissolution of any of the
Acquired Corporations.
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AGREEMENT. "AGREEMENT" shall mean the Agreement and Plan of Merger
to which this Exhibit A is attached, as it may be amended from time to time.
AMEX. "AMEX" shall mean the American Stock Exchange, LLC.
COBRA. "COBRA" shall mean Section 4980B of the Code.
CODE. "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
COMPANY COMMON STOCK. "COMPANY COMMON STOCK" shall mean the common
stock, $0.10 par value per share, of the Company.
COMPANY DISCLOSURE SCHEDULE. "COMPANY DISCLOSURE SCHEDULE" shall
mean the disclosure schedule that has been prepared by the Company in accordance
with the requirements of Section 9.6 of the Agreement and that has been
delivered by the Company to Parent on the date of the Agreement and signed by
the President of the Company.
COMPANY OPTIONS. "COMPANY OPTIONS" shall mean all options to
purchase shares of Company Common Stock (whether granted by the Company pursuant
to the Company's stock option plans, assumed by the Company in connection with
any merger, acquisition or similar transaction or otherwise issued or granted).
COMPANY PREFERRED STOCK. "COMPANY PREFERRED STOCK" shall mean the
preferred stock, $0.10 par value per share, of the Company.
COMPANY STOCKHOLDERS' MEETING. "COMPANY STOCKHOLDERS' MEETING" shall
mean a meeting of the holders of Company Common Stock to vote on the adoption of
this Agreement.
CONSENT. "CONSENT" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTRACT. "CONTRACT" shall mean any written, oral or other
agreement, contract, subcontract, lease, understanding, instrument, note,
option, warranty, purchase order, license, sublicense, insurance policy, benefit
plan or legally binding commitment or undertaking of any nature.
DGCL. "DGCL" shall mean the Delaware General Corporation Law, as
amended.
EMPLOYEE PLAN. "EMPLOYEE PLAN" shall mean any salary, bonus,
vacation, deferred compensation, incentive compensation, stock purchase, stock
option, severance pay, termination pay, death and disability benefits,
hospitalization, medical, life or other insurance, flexible benefits,
supplemental unemployment benefits, profit-sharing, pension or retirement plan,
program or agreement and each other employee benefit plan or arrangement
sponsored, maintained, contributed to or required to be contributed to by any of
the Acquired Corporations for the benefit of any current or former employee of
any of the Acquired Corporations.
ENCUMBRANCE. "ENCUMBRANCE" shall mean any lien, pledge,
hypothecation, charge, mortgage, security interest, encumbrance, claim,
infringement, interference, option, right of first refusal, preemptive right,
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community property interest or restriction of any nature (including any
restriction on the voting of any security, any restriction on the transfer of
any security or other asset, any restriction on the receipt of any income
derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any asset).
ENTITY. "ENTITY" shall mean any corporation (including any
non-profit corporation), general partnership, limited partnership, limited
liability partnership, joint venture, estate, trust, company (including any
company limited by shares, limited liability company or joint stock company),
firm, society or other enterprise, association, organization or entity.
ERISA. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
ENVIRONMENTAL LAW. "ENVIRONMENTAL LAW" shall mean any federal,
state, local or foreign Legal Requirement relating to pollution or protection of
human health or the environment (including ambient air, surface water, ground
water, land surface or subsurface strata), including any law or regulation
relating to emissions, discharges, releases or threatened releases of Materials
of Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern.
EXCHANGE ACT. "EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended.
FULLY DILUTED NUMBER OF COMPANY SHARES. "FULLY DILUTED NUMBER OF
COMPANY SHARES" shall mean the sum of (i) the aggregate number of shares of
capital stock of the Company outstanding immediately prior to the acceptance of
shares of Company Common Stock pursuant to the Offer, plus (ii) the aggregate
number of shares of capital stock of the Company issuable upon the exercise of
any "in the money" option, warrant or other right to acquire capital stock of
the Company, or the conversion of any convertible securities, outstanding
immediately prior to the acceptance of shares of Company Common Stock pursuant
to the Offer. An option or warrant shall be considered "in the money" if the Per
Share Amount exceeds the exercise price of such option or warrant.
GOVERNMENTAL AUTHORIZATION. "GOVERNMENTAL AUTHORIZATION" shall mean
any: (a) permit, license, certificate, franchise, permission, variance,
clearance, registration, qualification or authorization issued, granted, given
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement; or (b) right under any Contract with any
Governmental Body.
GOVERNMENT BID. "GOVERNMENT BID" shall mean any quotation, bid or
proposal submitted to any Governmental Body or any proposed prime contractor or
higher-tier subcontractor of any Governmental Body.
GOVERNMENTAL BODY. "GOVERNMENTAL BODY" shall mean any: (a) nation,
state, commonwealth, province, territory, county, municipality, district or
other jurisdiction of any nature; (b) federal, state, local, municipal, foreign
or other government; or (c) governmental or quasi-governmental authority of any
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nature (including any governmental division, department, agency, commission,
instrumentality, official, ministry, fund, foundation, center, organization,
unit, body or Entity and any court or other tribunal).
GOVERNMENT CONTRACT. "GOVERNMENT CONTRACT" shall mean any prime
contract, subcontract, letter contract, purchase order or delivery order
executed or submitted to or on behalf of any Governmental Body or any prime
contractor or higher-tier subcontractor, or under which any Governmental Body or
any such prime contractor or subcontractor otherwise has or may acquire any
right or interest.
HSR ACT. "HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
LEGAL PROCEEDING. "LEGAL PROCEEDING" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
LEGAL REQUIREMENT. "LEGAL REQUIREMENT" shall mean any federal,
state, local, municipal, foreign or other law, statute, constitution, principle
of common law, resolution, ordinance, code, edict, decree, rule, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental Body (or
under the authority of AMEX).
MATERIAL ADVERSE EFFECT. An event, violation, inaccuracy,
circumstance or other matter will be deemed to have a "MATERIAL ADVERSE EFFECT"
on the Acquired Corporations if such event, violation, inaccuracy, circumstance
or other matter (considered together with all other matters that would
constitute exceptions to the representations and warranties of the Company set
forth in the Agreement, disregarding any "Material Adverse Effect" or other
materiality qualifications, or any similar qualifications, in such
representations and warranties) had or could reasonably be expected to have a
material adverse effect on (i) the business, condition, capitalization, assets,
liabilities, operations or financial performance of the Acquired Corporations
taken as a whole, (ii) the ability of the Company to consummate the Merger or
any of the other transactions contemplated by the Agreement or to perform any of
its material obligations under the Agreement, or (iii) Parent's ability to vote,
receive dividends with respect to or otherwise exercise ownership rights with
respect to the stock of the Surviving Corporation.
MATERIALS OF ENVIRONMENTAL CONCERN. "MATERIALS OF ENVIRONMENTAL
CONCERN" shall include chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum and petroleum products and any other substance that is now
or hereafter regulated by any Environmental Law or that is otherwise a danger to
health, reproduction or the environment.
NASD. "NASD" shall mean the National Association of Securities
Dealers, Inc.
PENSION PLAN. "PENSION PLAN" shall mean any employee pension benefit
plan (as defined in Section 3(2) of ERISA), or any similar pension benefit plan
under the laws of any foreign jurisdiction, whether or not excluded from
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coverage under specific Titles or Subtitles of ERISA for the benefit of
employees or former employees of any of the Acquired Corporations.
PERSON. "PERSON" shall mean any individual, Entity or Governmental
Body.
PROPRIETARY ASSET. "PROPRIETARY ASSET" shall mean any: (a) patent,
patent application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service xxxx (whether
registered or unregistered), service xxxx application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, source code, model, algorithm, formula, compound,
invention, design, blueprint, engineering drawing, proprietary product,
technology, proprietary right or other intellectual property right or intangible
asset; or (b) right to use or exploit any of the foregoing.
PROXY STATEMENT. "PROXY STATEMENT" shall mean the proxy or
information statement of the Company to be sent to the Company's stockholders in
connection with the Company Stockholders' Meeting.
REPRESENTATIVES. "REPRESENTATIVES" shall mean officers, directors,
employees, attorneys, accountants, advisors and representatives.
REQUIRED COMPANY STOCKHOLDER VOTE. "REQUIRED COMPANY STOCKHOLDER
VOTE" shall mean the affirmative vote of the holders of a majority of the shares
of Company Common Stock outstanding on the record date for the Company
Stockholders' Meeting.
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
SECURITIES ACT. "SECURITIES ACT" shall mean the Securities Act of
1933, as amended.
SPECIFIED ACQUISITION TRANSACTION. "SPECIFIED ACQUISITION
TRANSACTION" shall mean any transaction or series of transactions involving:
(a) any merger, consolidation, amalgamation, share
exchange, business combination, issuance of securities, acquisition
of securities, recapitalization, tender offer, exchange offer or
other similar transaction in which any of the Acquired Corporations
is a constituent corporation and in which a Person or "group" (as
defined in the Exchange Act and the rules promulgated thereunder) of
Persons directly or indirectly acquires beneficial or record
ownership of securities representing more than 50% of the
outstanding securities of any class of voting securities of any of
the Acquired Corporations or any surviving entity; or
(b) any sale, lease, exchange, transfer, license,
acquisition or disposition of any business or businesses or assets
that constitute or account for more than 50% of the consolidated net
revenues, net income or assets of any of the Acquired Corporations.
SUBSIDIARY. An entity shall be deemed to be a "SUBSIDIARY" of
another Person if such Person directly or indirectly owns or purports to own,
beneficially or of record, (a) an amount of voting securities of other interests
in such Entity that is sufficient to enable such Person to elect at least a
A-5
majority of the members of such Entity's Board of Directors or other governing
body, or (b) at least 50% of the outstanding equity or financial interests or
such Entity.
SUPERIOR OFFER. "SUPERIOR OFFER" shall mean an unsolicited, bona
fide written offer made by a third party to purchase all of the outstanding
shares of Company Common Stock or all or substantially all of the Company's
assets on terms that the Board of Directors of the Company determines, in its
reasonable judgment, based upon a written opinion of an independent financial
advisor of nationally recognized reputation (it being understood that Imperial
Capital, LLC shall be deemed a financial advisor of nationally recognized
reputation for purposes of this Agreement), to be more favorable to the
Company's stockholders than the terms of the Offer or the Merger; provided,
however, that any such offer shall not be deemed to be a "Superior Offer" if any
financing required to consummate the transaction contemplated by such offer is
not committed and is not reasonably capable of being obtained by such third
party.
TAKEOVER LAWS. "TAKEOVER LAWS" means (1) any "moratorium," "control
share acquisition," "fair price," "supermajority," "affiliate transactions," or
"business combination statute or regulation" or other similar state
anti-takeover laws and regulations and (2) Section 203 of the DGCL.
TAX. "TAX" shall mean any tax (including any income tax, franchise
tax, capital gains tax, gross receipts tax, value-added tax, surtax, estimated
tax, unemployment tax, national health insurance tax, excise tax, ad valorem
tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax,
withholding tax or payroll tax), levy, assessment, tariff, duty (including any
customs duty), deficiency or fee, and any related charge or amount (including
any fine, penalty or interest), imposed, assessed or collected by or under the
authority of any Governmental Body.
TAX RETURN. "TAX RETURN" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
TRANSACTIONS. "TRANSACTIONS" shall mean (a) the execution and
delivery of the Agreement, and (b) all of the transactions contemplated by the
this Agreement, including the Offer and the Merger.
TRIGGERING EVENT. A "TRIGGERING EVENT" shall be deemed to have
occurred if: (i) the Board of Directors of the Company shall have failed to
recommend that the Company's stockholders accept the Offer and tender their
shares of Company Common Stock pursuant to the Offer or vote to adopt the
Agreement, or shall have withdrawn or modified in a manner adverse to Parent the
Company Board Recommendation; (ii) the Company shall have failed to include in
the Schedule 14D-9 the Company Board Recommendation or a statement to the effect
that the Board of Directors of the Company has determined and believes that the
Offer and the Merger is in the best interests of the Company's stockholders;
(iii) the Board of Directors of the Company fails to publicly reaffirm
(including, if so requested by Parent, by the issuance of a press release) the
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Company Board Recommendation, or fails to publicly reaffirm (including, if so
requested by Parent, by the issuance of a press release) its determination that
the Offer and the Merger is in the best interests of the Company's stockholders,
within five business days after Parent requests in writing that such
recommendation or determination be reaffirmed; (iv) the Board of Directors of
the Company shall have approved, endorsed or recommended any Acquisition
Proposal; (v) the Company shall have entered into any letter of intent or
similar document or any Contract relating to any Acquisition Proposal; (vi) a
tender or exchange offer relating to securities of the Company shall have been
commenced and the Company shall not have sent to its securityholders, within ten
business days after the commencement of such tender or exchange offer, a
statement disclosing that the Company recommends rejection of such tender or
exchange offer; (vii) any Person or "group" (as defined in the Exchange Act and
the rules promulgated thereunder) of Persons directly or indirectly acquires or
agrees to acquire, or discloses an intention to acquire, beneficial or record
ownership of securities representing more than 10% of the outstanding securities
of any class of voting securities of the Company; or (viii) any of the Acquired
Corporations or any Representative of any of the Acquired Corporations shall
have breached or taken any action inconsistent with any of the provisions set
forth in Section 5.3; provided, however, that the failure to provide any notice
required to be given pursuant to Section 5.3 shall not constitute a breach of
Section 5.3 solely for the purpose of determining whether a Triggering Event has
occurred so long as such notice is provided within twenty-four hours of the time
specified in Section 5.3.
WELFARE PLAN. "WELFARE PLAN" shall mean any employee welfare benefit
plan (as defined in Section 3(1) of ERISA or any similar welfare benefit plan
under the laws of any foreign jurisdiction, whether or not excluded from
coverage under specific Titles or Subtitles of ERISA), for the benefit of any
current or former employees or directors of any of the Acquired Corporations.
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ANNEX I
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or the Agreement
and Plan of Merger to which this Annex I is attached (the "AGREEMENT"), and in
addition to (and not in limitation of) Acquisition Sub's rights to extend and
amend the Offer (subject to the provisions of the Agreement), and subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) relating to
Acquisition Sub's obligation to pay for or return tendered shares after
termination of the Offer, Acquisition Sub shall not be required to accept for
payment or pay for any shares of Company Common Stock tendered pursuant to the
Offer and may terminate the Offer and the Agreement, if (i) the Minimum
Condition has not been satisfied, (ii) there shall be in effect any voluntary
agreement between Parent and the United States Federal Trade Commission or the
United States Department of Justice pursuant to which Parent has agreed not to
accept for payment shares of Company Common Stock pursuant to the Offer for any
period of time, or (iii) at any time after the date of the Agreement, and before
acceptance for payment of any shares of Company Common Stock, Parent shall have
determined in its reasonable good faith discretion that any of the following
events shall have occurred and be continuing:
(a) the representations and warranties of the Company
contained in the Agreement shall not have been accurate in all
material respects as of the date of the Agreement (it being
understood that, for purposes of determining the accuracy of such
representations and warranties, (i) all "Material Adverse Effect"
qualifications and other materiality qualifications contained in
such representations and warranties shall be disregarded and (ii)
any update of or modification to the Company Disclosure Schedule
made or purported to have been made after the date of the Agreement
shall be disregarded);
(b) the representations and warranties of the Company
contained in the Agreement shall not be accurate in all respects as
of the expiration date of the Offer (as such expiration date may be
extended in accordance with the terms of the Agreement) as if made
on and as of such expiration date, except that any inaccuracies in
such representations and warranties will be disregarded if the
circumstances giving rise to all such inaccuracies (considered
collectively) do not constitute, and could not reasonably be
expected to have, a Material Adverse Effect on the Acquired
Corporations; provided, however, that, for purposes of determining
the accuracy of such representations and warranties, (i) all
"Material Adverse Effect" qualifications and other materiality
qualifications contained in such representations and warranties
shall be disregarded and (ii) any update of or modification to the
Company Disclosure Schedule made or purported to have been made
after the date of the Agreement shall be disregarded;
(c) the Company shall have breached or failed in any
material respect to perform or comply with any covenant or
obligation that the Company is required to comply with or to perform
at or prior to the expiration date of the Offer (as such expiration
date may be extended in accordance with the terms of the Agreement);
(d) since the date of the Agreement, there shall have
occurred any Material Adverse Effect on the Acquired Corporations,
or any event shall have occurred or circumstance shall exist that,
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in combination with any other events or circumstances, would have a
Material Adverse Effect on the Acquired Corporations;
(e) any material Consent required to be obtained in
connection with the Offer, the Merger or the other transactions
contemplated by the Agreement (including the Consents identified in
Part 3.26(d) of the Company Disclosure Schedule) shall not have been
obtained or shall not be in full force and effect;
(f) Parent and the Company shall not have received each
of the following agreements and documents or any of the following
agreements or documents shall not be in full force and effect: (i) a
certificate executed on behalf of the Company by its Chief Executive
Officer and Chief Financial Officer confirming that the conditions
set forth in paragraphs (a), (b), (c) and (d) of this ANNEX I have
been duly satisfied and (ii) the written resignations of all
officers and directors of the Company and its Subsidiaries as and to
the extent required by Section 6.8 of the Agreement;
(g) there shall have been issued by any court of
competent jurisdiction and remain in effect any temporary
restraining order, preliminary or permanent injunction or other
order preventing the consummation of the Offer or the Merger or
there shall have been any action taken, or any Legal Requirement or
order promulgated, entered, enforced, enacted, issued or deemed
applicable to the Offer or the Merger by any Governmental Entity
which directly or indirectly (i) prohibits, or makes illegal, the
acceptance for payment of or payment for shares of Company Common
Stock or the consummation of the Offer or the Merger, (ii) renders
Acquisition Sub unable to accept for payment or pay for some or all
of the shares of Company Common Stock, (iii) imposes material
limitations on the ability of Parent effectively to exercise full
rights of ownership of the shares of Company Common Stock, including
the right to vote the shares of Company Common Stock purchased by it
on all matters properly presented to the Company's stockholders,
(iv) prohibits or imposes any material limitations on Parent's
direct or indirect ownership or operation (or that of any of its
affiliates) of all or a material portion of their or the Company's
businesses or assets, (v) compels Parent or its affiliates to
dispose of or hold separate any portion of the business or assets of
the Company or Parent and their respective Subsidiaries which would
be material in the context of the Company and its subsidiaries taken
as a whole, (vi) obliges the Company, Parent or any of their
respective Subsidiaries to pay material damages in connection with
the transactions contemplated by the Agreement or (vii) which
otherwise constitutes a Material Adverse Effect on the Company;
(h) there shall be pending or threatened any Legal
Proceeding in which a Governmental Body is or is threatened to
become a party or is otherwise involved, or either Parent or the
Company shall have received a communication from any Governmental
Body in which such Governmental Body indicates the possibility of
commencing any Legal Proceeding or taking any other action, or any
other Legal Proceeding shall be pending, in each case: (i)
challenging or seeking to restrain or prohibit the consummation of
the Offer or the Merger or any of the other transactions
contemplated by the Agreement; (ii) relating to the Offer or the
Merger and seeking to obtain from Parent or any of the Acquired
I-2
Corporations, any damages or other relief that may be material to
Parent or the Acquired Corporations; (iii) seeking to prohibit or
limit in any material respect Parent's ability to vote, receive
dividends with respect to or otherwise exercise ownership rights
with respect to the stock of the Surviving Corporation; (iv) that
could materially and adversely affect the right of Parent or any of
the Acquired Corporations to own the assets or operate the business
of the Acquired Corporations; or (v) seeking to compel any of the
Acquired Corporations, Parent or any Subsidiary of Parent to dispose
of or hold separate any material assets as a result of the Offer or
the Merger or any of the other transactions contemplated by the
Agreement;
(i) a Triggering Event shall have occurred;
(j) the Agreement shall have been terminated in
accordance with its terms; or
(k) in the good faith judgment of Parent, a material
adverse difference shall exist between (i) the Acquired
Corporations' financial condition or results of operations or cash
flows as of or for the fiscal year ended June 30, 2003 as reflected
in the unaudited consolidated financial statements of the Acquired
Corporations as of and for the fiscal year ended June 30, 2003
delivered by the Company to Parent prior to the date of this
Agreement and (ii) the Acquired Corporations' financial condition or
results of operations or cash flows as reflected in the Audited
Consolidated Financial Statements delivered by the Company to Parent
in accordance with Section 6.10.
The foregoing conditions are for the sole benefit of Parent and Acquisition Sub
and may be waived by Parent and Acquisition Sub, in whole or in part at any time
and from time to time, in the sole discretion of Parent and Acquisition Sub. The
failure by Parent or Acquisition Sub 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 which may be asserted at any time and
from time to time.
I-3
EXHIBITS
Exhibit A - Certain Definitions
Exhibit B - Surviving Corporation Certificate of Incorporation
================================================================================
AGREEMENT AND PLAN OF MERGER
among:
CUBIC CORPORATION,
a Delaware corporation;
CDA ACQUISITION CORPORATION,
a Delaware corporation; and
ECC INTERNATIONAL CORP.,
a Delaware corporation
---------------------------
Dated as of August 20, 2003
---------------------------
TABLE OF CONTENTS
PAGE
Section 1. The Offer..........................................................1
1.1 The Offer..........................................................1
1.2 Company Actions....................................................3
1.3 Directors..........................................................5
Section 2. Merger Transaction.................................................6
2.1 Merger of Acquisition Sub into the Company.........................6
2.2 Effect of the Merger...............................................6
2.3 Closing; Effective Time............................................6
2.4 Certificate of Incorporation and Bylaws; Directors and Officers....6
2.5 Conversion of Shares...............................................7
2.6 Surrender of Certificates; Stock Transfer Books....................7
2.7 Appraisal Rights...................................................8
2.8 Further Action.....................................................9
Section 3. Representations and Warranties of the Company......................9
3.1 Subsidiaries; Due Organization; Etc................................9
3.2 Certificate of Incorporation and Bylaws...........................10
3.3 Capitalization, Etc...............................................10
3.4 SEC Filings; Financial Statements.................................11
3.5 Absence of Changes................................................13
3.6 Title to Assets...................................................15
3.7 Receivables; Customers; Inventories...............................15
3.8 Real Property; Equipment; Leasehold...............................16
3.9 Proprietary Assets................................................16
3.10 Contracts.........................................................18
3.11 Sale of Products; Performance of Services.........................24
3.12 Liabilities.......................................................24
3.13 Compliance with Legal Requirements................................24
3.14 Certain Business Practices........................................25
3.15 Governmental Authorizations.......................................25
3.16 Tax Matters.......................................................26
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TABLE OF CONTENTS
(CONTINUED)
PAGE
3.17 Employee and Labor Matters; Benefit Plans.........................27
3.18 Environmental Matters.............................................29
3.19 Insurance.........................................................30
3.20 Transactions with Affiliates......................................30
3.21 Legal Proceedings; Orders.........................................30
3.22 Authority; Inapplicability of Anti-takeover Statutes;
Binding Nature of Agreement.......................................30
3.23 Section 203 of the DGCL Not Applicable............................31
3.24 No Discussions....................................................31
3.25 Intent to Tender; Vote Required...................................31
3.26 Non-Contravention; Consents.......................................31
3.27 Fairness Opinion..................................................32
3.28 Financial Advisor.................................................33
3.29 Full Disclosure...................................................33
Section 4. Representations and Warranties of Parent and Acquisition Sub......33
4.1 Due Organization..................................................33
4.2 Authority; Binding Nature of Agreement............................34
4.3 Non-Contravention; Consents.......................................34
4.4 Disclosure........................................................34
4.5 Funds.............................................................34
Section 5. Certain Covenants of the Company..................................35
5.1 Access and Investigation..........................................35
5.2 Operation of the Company's Business...............................36
5.3 No Solicitation...................................................38
Section 6. Additional Covenants of the Parties...............................40
6.1 Stockholder Approval; Proxy Statement.............................40
6.2 Regulatory Approvals..............................................41
6.3 Stock Options.....................................................41
6.4 Employee Benefits.................................................42
6.5 Indemnification of Officers and Directors.........................43
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TABLE OF CONTENTS
(CONTINUED)
PAGE
6.6 Additional Agreements.............................................43
6.7 Disclosure........................................................44
6.8 Resignation of Officers and Directors.............................44
6.9 Takeover Laws; Advice of Changes..................................44
6.10 Audited Consolidated Financial Statements.........................45
Section 7. Conditions Precedent to The Merger................................45
7.1 Stockholder Approval..............................................45
7.2 No Restraints.....................................................45
7.3 Consummation of Offer.............................................45
Section 8. Termination.......................................................45
8.1 Termination.......................................................45
8.2 Effect of Termination.............................................48
8.3 Expenses; Termination Fees........................................49
Section 9. Miscellaneous Provisions..........................................50
9.1 Amendment.........................................................50
9.2 Waiver............................................................50
9.3 No Survival of Representations and Warranties.....................50
9.4 Entire Agreement; Counterparts....................................50
9.5 Applicable Law; Jurisdiction......................................50
9.6 Disclosure Schedule...............................................51
9.7 Attorneys' Fees...................................................51
9.8 Assignability.....................................................51
9.9 Notices...........................................................51
9.10 Cooperation.......................................................52
9.11 Severability......................................................52
9.12 Construction......................................................52
9.13 Safe Harbor Language..............................................53
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