Exhibit 2
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AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 1, 2001
AMONG
TERADYNE, INC.
RADIO ACQUISITION CORP.
AND
GENRAD, INC.
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TABLE OF CONTENTS
PAGE
ARTICLE I The Merger..............................................................................................1
SECTION 1.01. THE MERGER......................................................................................1
SECTION 1.02. CLOSING.........................................................................................1
SECTION 1.03. EFFECTIVE TIME OF THE MERGER....................................................................2
SECTION 1.04. EFFECTS OF THE MERGER...........................................................................2
SECTION 1.05. ARTICLES OF ORGANIZATION; BY-LAWS; PURPOSES.....................................................2
SECTION 1.06. DIRECTORS.......................................................................................2
SECTION 1.07. OFFICERS........................................................................................2
ARTICLE II Effect of the Merger on the Capital Stock of the Constituent Corporations.............................3
SECTION 2.01. EFFECT ON CAPITAL STOCK.........................................................................3
SECTION 2.02. EXCHANGE OF CERTIFICATES........................................................................3
SECTION 2.03. TREATMENT OF OPTIONS............................................................................6
SECTION 2.04. DISSENTING SHARES...............................................................................7
ARTICLE III Representations and Warranties.......................................................................8
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................8
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB...............................................21
ARTICLE IV Covenants Relating to Conduct of Business Prior to Merger............................................25
SECTION 4.01. CONDUCT OF BUSINESS BY THE COMPANY.............................................................25
ARTICLE V Additional Agreements.................................................................................28
SECTION 5.01. PREPARATION OF FORM S-4 AND PROXY STATEMENT; SHAREHOLDER MEETING..............................28
SECTION 5.02. ACCESS TO INFORMATION; CONFIDENTIALITY........................................................29
SECTION 5.03. REASONABLE BEST EFFORTS........................................................................30
SECTION 5.04. INDEMNIFICATION................................................................................30
SECTION 5.05. PUBLIC ANNOUNCEMENTS...........................................................................31
SECTION 5.06. NO SOLICITATION................................................................................32
SECTION 5.07. STOCK EXCHANGE LISTING.........................................................................33
SECTION 5.08. LETTERS OF THE COMPANY'S ACCOUNTANTS...........................................................33
SECTION 5.09. LETTERS OF PARENT'S ACCOUNTANTS................................................................33
SECTION 5.10. EMPLOYEE BENEFIT PLANS.........................................................................33
SECTION 5.11. COMPANY SENIOR CREDIT FACILITY..................................................................34
SECTION 5.12. INFORMATION SUPPLIED............................................................................34
ARTICLE VI Conditions Precedent.................................................................................35
SECTION 6.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.....................................35
SECTION 6.02. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB....................................................35
SECTION 6.03. CONDITIONS TO OBLIGATION OF THE COMPANY........................................................36
ARTICLE VII Termination, Amendment, and Waiver..................................................................37
SECTION 7.01. TERMINATION....................................................................................37
SECTION 7.02 EFFECT OF TERMINATION...........................................................................38
SECTION 7.03. AMENDMENT......................................................................................38
SECTION 7.04. EXTENSION; WAIVER..............................................................................39
SECTION 7.05. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION, OR WAIVER.....................................39
ARTICLE VIII General Provisions.................................................................................39
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SECTION 8.01. NONSURVIVAL OF REPRESENTATION AND WARRANTIES...................................................39
SECTION 8.02. FEES AND EXPENSES..............................................................................39
SECTION 8.03. NOTICES........................................................................................41
SECTION 8.04. DEFINITIONS....................................................................................41
SECTION 8.05. INTERPRETATION.................................................................................44
SECTION 8.06. COUNTERPARTS...................................................................................44
SECTION 8.07. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.................................................44
SECTION 8.08. GOVERNING LAW..................................................................................44
SECTION 8.09. ASSIGNMENT.....................................................................................44
SECTION 8.10. ENFORCEMENT....................................................................................44
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AGREEMENT AND PLAN OF MERGER, dated as of August 1, 2001, among
Teradyne, Inc., a Massachusetts corporation ("PARENT"), Radio Acquisition Corp.,
a Massachusetts corporation and a direct wholly owned subsidiary of Parent
("SUB"), and GenRad, Inc., a Massachusetts corporation (the "COMPANY").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have determined that the merger of Sub with and into the Company (the
"MERGER"), upon the terms and subject to the conditions set forth in this
Agreement, would be fair and in the best interests of their respective
shareholders;
WHEREAS, such Boards of Directors have approved the Merger, pursuant to
which each share of common stock, par value $1.00 per share, of the Company (the
"COMPANY COMMON STOCK", other than shares owned, directly or indirectly, by the
Company or any subsidiary (as defined in Section 8.04) of the Company or by
Parent, Sub or any other subsidiary of Parent, will be converted into the right
to receive the Merger Consideration (as defined in Section 2.01(c));
WHEREAS, the Merger and this Agreement require the vote of two-thirds
of the outstanding shares of the Company Common Stock for the approval thereof
(the "COMPANY SHAREHOLDER APPROVAL");
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "CODE");
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Massachusetts Business
Corporation Law ("MASSACHUSETTS LAW"), Sub shall be merged with and into the
Company at the Effective Time of the Merger (as defined below). Upon the
Effective Time of the Merger, the separate existence of Sub shall cease, and the
Company shall continue as the surviving corporation.
SECTION 1.02. CLOSING. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned pursuant to
Section 7.01, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the
Merger (the "CLOSING") will take place at 10:00 a.m. on the second business day
after satisfaction of the conditions set forth in Section 6.01 (or as soon as
practicable thereafter following satisfaction or waiver of the conditions set
forth in Sections 6.02 and 6.03) (the "CLOSING DATE"), at the offices of Xxxxx,
Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, unless
another date, time or place is agreed to in writing by the parties hereto.
SECTION 1.03. EFFECTIVE TIME OF THE MERGER. Upon the Closing, the
parties shall file with the Secretary of State of the Commonwealth of
Massachusetts a certificate of merger (the "ARTICLES OF MERGER") executed in
accordance with the relevant provisions of Massachusetts Law and shall make all
other filings or recordings required under Massachusetts Law. The Merger shall
become effective at such time as the Articles of Merger is duly filed with the
Secretary of the Commonwealth of Massachusetts, or at such other time as is
permissible in accordance with Massachusetts Law and as Sub and the Company
shall agree should be specified in the Articles of Merger (the time the Merger
becomes effective being the "EFFECTIVE TIME OF THE MERGER").
SECTION 1.04. EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of Massachusetts Law. As used herein,
"SURVIVING CORPORATION" shall mean and refer to the Company, at and after the
Effective Time of the Merger, as the surviving corporation in the Merger.
SECTION 1.05. ARTICLES OF ORGANIZATION; BY-LAWS; PURPOSES. (a) At the
Effective Time of the Merger, and without any further action on the part of the
Company or Sub, the articles of organization of Sub as in effect at the
Effective Time of the Merger, shall be the articles of organization of the
Surviving Corporation until thereafter amended as provided therein or by
applicable law.
(b) At the Effective Time of the Merger, and without any further action
on the part of the Company or Sub, the By-Laws of Sub as in effect at the
Effective Time of the Merger shall be the By-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
(c) The purposes of the Surviving Corporation shall be the purposes set
forth in the articles of organization of Sub in effect immediately prior to the
Effective Time of the Merger.
(d) The capitalization of the Surviving Corporation shall be as set
forth in the articles of organization of Sub in effect immediately prior to the
Effective Time of the Merger.
SECTION 1.06. DIRECTORS. The directors of Sub at the Effective Time of
the Merger shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.07. OFFICERS. The officers of Sub at the Effective Time of
the Merger shall be the officers of the Surviving Corporation, until the earlier
of their resignation or removal or until their respective successors are duly
elected or appointed and qualified, as the case may be.
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ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS
SECTION 2.01. EFFECT ON CAPITAL STOCK. As of the Effective Time of the
Merger, by virtue of the Merger and without any action on the part of the
Company, Sub, or any holder of any shares of Company Common Stock or any shares
of capital stock of Sub:
(a) COMMON STOCK OF SUB. Each share of common stock of Sub issued and
outstanding immediately prior to the Effective Time of the Merger shall be
converted into one share of the common stock, par value $0.01 per share, of the
Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED COMPANY COMMON
STOCK. Each share of Company Common Stock that is owned by the Company or by any
subsidiary of the Company, and each share of Company Common Stock that is owned
by Parent, Sub or any other subsidiary of Parent shall automatically be
cancelled and retired and shall cease to exist, and no cash, Parent Common Stock
(as defined Section 2.01(c)) or other consideration shall be delivered or
deliverable in exchange therefor.
(c) CONVERSION OF COMPANY COMMON STOCK. Each issued and outstanding
share of Company Common Stock (other than shares cancelled pursuant to Section
2.01(b) and any Dissenting Shares (as defined in and to the extent provided in
Section 2.04)) shall be converted into the right to receive 0.1733 shares (the
"EXCHANGE RATIO") of Common Stock, par value $0.125 per share, of Parent (the
"MERGER CONSIDERATION").
(d) CANCELLATION AND RETIREMENT OF COMPANY COMMON STOCK. As of the
Effective Time of the Merger, all shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time of the Merger shall no
longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such shares of
Company Common Stock (collectively, the "CERTIFICATES") shall, to the extent
such Certificate represents such shares, cease to have any rights with respect
thereto, except the right to receive the Merger Consideration (and cash in lieu
of fractional shares of Common Stock, par value $0.125 per share, of Parent (the
"PARENT COMMON STOCK")) to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.02.
SECTION 2.02. EXCHANGE OF CERTIFICATES. (a) EXCHANGE AGENT. As of the
Effective Time of the Merger, Parent shall enter into an agreement with such
bank or trust company as may be designated by Parent (the "EXCHANGE AGENT")
which shall provide that Parent shall deposit with the Exchange Agent, for the
benefit of the holders of Certificates, for exchange in accordance with this
Article II, certificates representing the shares of Parent Common Stock (such
shares of Parent Common Stock, together with any dividends or distributions with
respect thereto with a record date after the Effective Time of the Merger, and
any cash payable in lieu of any fractional shares of Parent Common Stock being
hereinafter referred to as the "EXCHANGE FUND") issuable pursuant to Section
2.01 in exchange for outstanding shares of Company Common Stock.
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(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time of the Merger, the Exchange Agent shall mail to each holder of
record of Certificates immediately prior to the Effective Time of the Merger
whose shares were converted into shares of Parent Common Stock pursuant to
Section 2.01, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass
only upon delivery of the Certificates to the Exchange Agent, and which shall be
in such form and have such other provisions as Parent may reasonably specify)
and (ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Parent Common Stock. Upon
surrender of a Certificate for cancellation (or indemnity reasonably
satisfactory to Parent and the Exchange Agent, if any of such Certificates are
lost, stolen or destroyed) to the Exchange Agent together with such letter of
transmittal, duly executed, the holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Parent Common Stock which such holder has the right to receive in
respect of the Certificate surrendered pursuant to the provisions of this
Article II (after taking into account all shares of Company Common Stock then
held by such holder), and the Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of shares of Company Common
Stock which is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Parent Common Stock may
be issued to a transferee if the Certificate is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.02, subject to the provisions of
Section 2.04, each Certificate shall be deemed at any time after the Effective
Time of the Merger to represent only the Parent Common Stock into which the
shares of Company Common Stock represented by such Certificate have been
converted as provided in this Article II and the right to receive upon such
surrender cash in lieu of any fractional shares of Parent Common Stock as
contemplated by this Section 2.02.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions with respect to Parent Common Stock with a record date after
the Effective Time of the Merger shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 2.02(e) until the surrender of such
Certificate in accordance with this Article II. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificate representing the whole shares of Parent
Common Stock issued in exchange therefor without interest, (i) at the time of
such surrender, the amount of any cash payable in lieu of any fractional share
of Parent Common Stock to which such holder is entitled pursuant to Section
2.02(e) and the amount of any dividends or other distributions with a record
date after the Effective Time of the Merger theretofore paid (but withheld
pursuant to the immediately preceding sentence) with respect to such whole
shares of Parent Common Stock, and (ii) at the appropriate payment date, the
amount of any dividends or other distributions with a record date after the
Effective Time of the Merger and a payment date subsequent to such surrender
payable with respect to such whole shares of Parent Common Stock.
(d) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All shares of
Parent Common Stock issued upon conversion of shares of Company Common Stock in
accordance
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with the terms hereof, and all cash paid pursuant to Sections 2.02(c) and
2.02(e), shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding prior
to the Effective Time of the Merger. If, after the Effective Time of the Merger,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this Article II.
(e) NO FRACTIONAL SHARES. (i) No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to any rights of a shareholder of Parent. In lieu
of such issuance of fractional shares, Parent shall pay each holder of
Certificates an amount in cash equal to the product obtained by multiplying (a)
the fractional share interest to which such holder (after taking into account
all shares of Company Common Stock held immediately prior to the Effective Time
of the Merger by such holder) would otherwise be entitled by (b) the average of
the closing sale prices for a share of Parent Common Stock on the New York Stock
Exchange ("NYSE") Composite Transaction Tape for the ten trading days
immediately preceding the date of the Effective Time of the Merger.
(ii) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of Certificates with respect to any
fractional share interests, the Exchange Agent shall make available such amounts
to such holders of Certificates, subject to and in accordance with the terms of
Section 2.02(c).
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
deposited with the Exchange Agent pursuant to this Section 2.02 which remains
undistributed to the holders of the Certificates six months after the Effective
Time of the Merger shall be delivered to the Parent, upon demand, and any
holders of Certificates who have not theretofore complied with this Article II
shall thereafter look only to the Parent and only as general creditors thereof
for payment of their claim for Parent Common Stock, cash in lieu of fractional
shares of Parent Common Stock and any dividends or distributions with respect to
Parent Common Stock to which such holders may be entitled.
(g) NO LIABILITY. None of Parent, Sub, the Company or the Exchange
Agent shall be liable to any person in respect of any shares of Parent Common
Stock (or dividends or distributions with respect thereto) or cash from the
Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates shall not have
been surrendered prior to three years after the Effective Time of the Merger, or
immediately prior to such earlier date on which any Merger Consideration, any
cash in lieu of fractional shares of Parent Common Stock or any dividends or
distributions with respect to Parent Common Stock would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 3.01(d)),
any such Merger Consideration or cash shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
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(h) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Parent on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(i) ADJUSTMENT PROVISIONS. In the event Parent changes (or establishes
a record date for changing) the number of shares of Parent Common Stock issued
and outstanding prior to the Effective Time of the Merger as a result of a stock
split, stock dividend, recapitalization or similar transaction with respect to
the outstanding Parent Common Stock and the record date therefor shall be prior
to the Effective Time of the Merger, the Exchange Ratio shall be proportionately
adjusted. If, between the date hereof and the Effective Time of the Merger,
Parent shall merge, be acquired or consolidate with, by or into any other
corporation (a "BUSINESS COMBINATION") and the terms thereof shall provide that
Parent Common Stock shall be converted into or exchanged for the shares of any
other corporation or entity, then provision shall be made as part of the terms
of such Business Combination so that shareholders of the Company who would be
entitled to receive shares of Parent Common Stock pursuant to this Agreement
shall be entitled to receive, in lieu of each share of Parent Common Stock
issuable to such shareholders as provided herein, the same kind and amount of
securities or assets as shall be distributable upon such Business Combination
with respect to one share of Parent Common Stock (provided that nothing herein
shall be construed so as to release the acquiring entity in any such Business
Combination from its obligations under this Agreement as the successor to
Parent).
SECTION 2.03. TREATMENT OF OPTIONS. (a) At the Effective Time of the
Merger, each outstanding option to purchase Company Common Stock (a "COMPANY
STOCK OPTION") issued pursuant to the Company's 1991 Equity Incentive Plan, as
amended, 1991 Directors' Plan, as amended, 1994 Director Restricted Plan, as
amended, 1997 Non-Qualified Employee Stock Option Plan, as amended, 2001
Directors Stock Option Plan and Non-Statutory Stock Option Agreement by and
between Xxxxxx X. Xxxxxxxxx and the Company dated April 24, 2000 (collectively,
the "COMPANY STOCK PLANS"), whether vested or unvested, shall be deemed to
constitute an option to acquire, on the same terms and conditions as were
applicable under such Company Stock Option, the same number of shares of Parent
Common Stock as the holder of such Company Stock Option would have been entitled
to receive pursuant to the Merger had such holder exercised such option in full
immediately prior to the Effective Time of the Merger, at a price per share
equal to (y) the aggregate exercise price for the shares of Company Common Stock
otherwise purchasable pursuant to such Company Stock Option divided by (z) the
number of full shares of Parent Common Stock deemed purchasable pursuant to such
Company Stock Option; PROVIDED, HOWEVER, that in the case of any option to which
Section 421 of the Code applies by reason of its qualification under Section 422
of the Code ("INCENTIVE STOCK OPTIONS"), the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option shall be determined in order to comply with Section 424(a) of the
Code.
(b) As soon as practicable after the Effective Time of the Merger,
Parent shall deliver to the holders of Company Stock Options appropriate notices
setting forth such holders' rights pursuant to the Company Stock Plans and the
agreements evidencing the grants of such Company Stock Options shall continue in
effect on the same terms and conditions (subject to adjustments required by this
Section 2.03 after giving effect to the Merger and the provisions set
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forth above). If necessary, Parent shall comply with the terms of the Company
Stock Plans and ensure, to the extent required by, and subject to the provisions
of, the Company Stock Plans, that Company Stock Options that qualified as
incentive stock options prior to the Effective Time of the Merger continue to
qualify as incentive stock options after the Effective Time of the Merger.
(c) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery upon
exercise of Company Stock Options. As soon as practicable after the Effective
Time of the Merger, Parent shall file a registration statement on Form S-8 (or
any successor or other appropriate forms), or another appropriate form, with
respect to the shares of Parent Common Stock subject to such options and shall
use its reasonable best efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
options remain outstanding. With respect to those individuals who subsequent to
the Merger will be subject to the reporting requirements under Section 16(a) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), where
applicable, Parent shall administer the Company Stock Plans in a manner that
complies with Rule 16b-3 promulgated under the Exchange Act to the extent the
Company Stock Plans complied with such rule prior to the Merger.
(d) The Company shall terminate the Company Employee Stock Purchase
Plan (the "COMPANY ESPP") at or prior to the Closing Date.
SECTION 2.04. DISSENTING SHARES. (a) Notwithstanding any provision of
this Agreement to the contrary, the shares of any holder of Company Common Stock
who has demanded and perfected appraisal rights of such shares in accordance
with Massachusetts Law and who, as of the Effective Time, has not effectively
withdrawn or lost such appraisal rights ("DISSENTING SHARES"), shall not be
converted into or represent a right to receive Parent Common Stock pursuant to
Section 2.01(c), but the holder thereof shall only be entitled to such rights as
are granted by Massachusetts Law.
(b) Notwithstanding the foregoing, if any holder of shares of Company
Common Stock who demands appraisal of such shares under Massachusetts Law shall
effectively withdraw the right to appraisal, then, as of the later of the
Effective Time of the Merger and the occurrence of such event, such holder's
shares shall automatically be converted into and represent only the right to
receive Parent Common Stock, without interest thereon, upon surrender of the
Certificate representing such shares as provided in Section 2.01(c).
(c) The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any shares of Company Common Stock, withdrawals of such
demands, and any other instruments served pursuant to Massachusetts Law and
received by the Company which relate to any such demand for appraisal and (ii)
the opportunity to participate in all negotiations and proceedings which take
place prior to the Effective Time of the Merger with respect to demands for
appraisal under Massachusetts Law. The Company shall not, except with the prior
written consent of Parent or as may be required by applicable law, voluntarily
make any payment with respect to any demands for appraisal of the Company Common
Stock or offer to settle or settle any such demands.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
set forth in the disclosure schedule (referencing the same section as this
Agreement) delivered by the Company to Parent and Sub at the time of execution
of this Agreement (the "COMPANY DISCLOSURE SCHEDULE"), the Company represents
and warrants to Parent and Sub as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of the Company and
each of its Subsidiaries (as defined in Section 3.01(b)) is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has the requisite corporate power and authority to
carry on its business as now being conducted. Each of the Company and each of
its Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction (domestic or foreign) in which the nature of its
business or the ownership or leasing of its properties makes such qualification
or licensing necessary, other than in such jurisdictions where the failure to be
so qualified or licensed (individually or in the aggregate) would not have a
Material Adverse Effect (as defined in Section 8.04) with respect to the
Company. The Company has delivered complete and correct copies of the Restated
Articles of Organization, as amended (the "Articles of Organization"), and
By-laws, as amended (the "By-laws"), of the Company as currently in effect. The
Company has made available to Parent and Sub complete and correct copies of the
certificates of incorporation and by-laws (or other organizational documents) of
each of its Subsidiaries, in each case as amended to the date of this Agreement.
(b) SUBSIDIARIES. The only direct or indirect subsidiaries (as defined
in Section 8.04) of the Company (other than any subsidiary of the Company that
does not constitute a "Significant Subsidiary" within the meaning of Rule 1-02
of Regulation S-X of the Securities and Exchange Commission (the "SEC")) are
those listed in Section 3.01(b) of the Company Disclosure Schedule (the
"SUBSIDIARIES"). All of the outstanding shares of capital stock of each
subsidiary of the Company have been validly issued and are fully paid and
nonassessable and, except as disclosed in Section 3.01(b) of the Company
Disclosure Schedule, are owned (of record and beneficially) by the Company, by
another wholly owned subsidiary of the Company or by the Company and another
such wholly owned subsidiary, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
except for permitted liens (as defined below) (collectively, "LIENS"). Except
for the ownership interests set forth in Section 3.01(b) of the Company
Disclosure Schedule, the Company does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership,
business association, joint venture or other entity.
(c) CAPITAL STRUCTURE. The authorized capital stock of the Company
consists of 60,000,000 shares of Company Common Stock, par value $1.00 per
share. As of the close of business on July 31, 2001, there were: (i) 28,552,465
shares of Company Common Stock issued and outstanding; (ii) 1,883,569 shares of
Company Common Stock held in the treasury of the Company; (iii) 1,226,350 shares
of Company Common Stock Options available for grant
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pursuant to the Company Stock Plans and 1,226,350 shares of Company Common Stock
reserved for issuance pursuant to the Company Stock Plans, and (iv) 3,048 shares
of Company Common Stock reserved for issuance pursuant to the Company ESPP.
Except as set forth above, as of the close of business on July 31, 2001, there
were no shares of capital stock or other equity securities of the Company
issued, reserved for issuance or outstanding. All outstanding shares of capital
stock of the Company are, and all shares which may be issued pursuant to the
Company Stock Plans will be, when issued, duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. All securities
issued by the Company were issued in compliance in all material respects with
all applicable federal and state securities laws and all applicable rules and
regulations promulgated thereunder. There are no outstanding bonds, debentures,
notes or other indebtedness or debt securities of the Company that have the
right to vote (or that are convertible into, or exchangeable for, securities
having the right to vote) on any matters on which shareholders of the Company
may vote (collectively, "VOTING DEBT"). Except as set forth above, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company or any
of its subsidiaries is a party or by which any of them is bound obligating the
Company or any of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity or
voting securities of the Company or of any of its subsidiaries or obligating the
Company or any of its subsidiaries to issue, grant, extend, accelerate the
vesting of or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations, commitments, understandings or arrangements of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire or
make any payment in respect of any shares of capital stock of the Company or any
of its subsidiaries. To the knowledge of the Company, there are no irrevocable
proxies with respect to shares of capital stock of the Company or any subsidiary
of the Company. Except as set forth in Section 3.01(c) of the Company Disclosure
Schedule, there are no agreements or arrangements pursuant to which the Company
is or could be required to register shares of Company Common Stock or other
agreements or arrangements with or, to the knowledge of the Company, among any
securityholders of the Company with respect to securities of the Company.
Since December 31, 2000, the Company has not (A) issued or permitted to
be issued any shares of capital stock, or securities exercisable for or
convertible into shares of capital stock, of the Company or any of its
subsidiaries, other than pursuant to any employee stock options issued prior to
the date hereof under the Company Stock Plans; (B) repurchased, redeemed or
otherwise acquired, directly or indirectly through one or more subsidiaries, any
shares of capital stock of the Company or any of its subsidiaries or (C)
declared, set aside, made or paid to the shareholders of the Company dividends
or other distributions on the outstanding shares of capital stock of the
Company.
(d) AUTHORITY; NONCONTRAVENTION. The Company has the requisite
corporate power and authority to enter into this Agreement and, subject to the
Company Shareholder Approval in the case of the Agreement, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company, subject, in the case of this Agreement, to the
Company Shareholder
-9-
Approval. This Agreement has been duly executed and delivered by the Company and
(assuming due authorization, execution and delivery by Parent and Sub)
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. Except as set forth in Section
3.01(d) of the Company Disclosure Schedule, the execution and delivery of this
Agreement does not, and the consummation by the Company of the transactions
contemplated by this Agreement and compliance by the Company with the provisions
hereof and thereof will not, conflict with, or result in any breach or violation
of, or any default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancellation or acceleration of, or a "put"
right with respect to any obligation under, or to a loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any of its subsidiaries under, (i) the Articles of
Organization, as amended, or By-laws, of the Company or the comparable charter
or organizational documents of any of its subsidiaries, (ii) any loan or credit
agreement, note, note purchase agreement, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or license applicable
to the Company or any of its subsidiaries or their respective properties or
assets or (iii) subject to the governmental filings and other matters referred
to in the following sentence, any judgment, order, decree, statute, law,
ordinance, rule, regulation or arbitration award applicable to the Company or
any of its subsidiaries or their respective properties or assets, other than, in
the case of clauses (ii) and (iii), any such conflicts, breaches, violations,
defaults, rights, losses or Liens that individually or in the aggregate would
not have a Material Adverse Effect with respect to the Company or prevent or
materially delay the ability of the Company to consummate the transactions
contemplated by this Agreement. No consent, approval, order or authorization of,
or registration, declaration or filing with, or notice to, any federal, state or
local government or any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign (a "GOVERNMENTAL ENTITY"),
is required by or with respect to the Company or any of its subsidiaries in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated hereby or the
performance by the Company of its obligations hereunder, except for (i) such
filings as may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended (the "HSR ACT") and the filing of applications by the
Company pursuant to antitrust or similar laws in such foreign jurisdictions as
necessary, (ii) the filing with the SEC and the NYSE of (A) a proxy statement
relating to the Company Shareholder Approval (such proxy statement as amended or
supplemented from time to time, the "PROXY STATEMENT") and (B) such reports
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated hereby, (iii) the filing of the Articles of Merger
with the Secretary of State of the Commonwealth of Massachusetts and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, and (iv) such other consents, approvals, orders,
authorizations, registrations, declarations, filings or notices the failure of
which to make or obtain, individually or in the aggregate, could not reasonably
be expected to (x) prevent or materially delay consummation of the Merger or the
other transactions contemplated hereby or performance of the Company's
obligations hereunder or (y) have a Material Adverse Effect with respect to the
Company.
-10-
(e) SEC DOCUMENTS; UNDISCLOSED LIABILITIES. The Company has filed with
the SEC all reports, schedules, forms, statements and other documents required
pursuant to the Securities Act of 1933, as amended (the "Securities Act") and
the Exchange Act since January 1, 1998 (collectively, and in each case including
all exhibits and schedules thereto and documents incorporated by reference
therein, the "SEC DOCUMENTS"). As of their respective dates, the SEC Documents
(other than the SEC Financial Statements (as defined below)) comply in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents
(including any and all financial statements included therein) as of such dates
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any SEC Document
has been revised or superseded by a later filed SEC Document, none of the SEC
Documents (including any and all financial statements included therein) contains
any untrue statement of a material fact or omits to state 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. The consolidated financial statements of the Company included in all
SEC Documents filed since January 1, 1998 (the "SEC FINANCIAL STATEMENTS")
comply as to form in all material respects with applicable published accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited consolidated quarterly statements,
as permitted by Form 10-Q of the SEC), applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited quarterly statements, to normal recurring year-end audit adjustments).
Except as disclosed in Section 3.01(e) of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles to be recognized or
disclosed on a consolidated balance sheet of the Company and its subsidiaries or
in the notes thereto, except (i) liabilities reflected in the consolidated
balance sheet of the Company as of March 31, 2001 (the "2001 BALANCE SHEET") and
(ii) liabilities incurred since March 31, 2001 in the ordinary course of
business consistent with past practice.
(f) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by the Company in writing for inclusion or incorporation by reference
in (i) the registration statement on Form S-4 to be filed with the SEC by Parent
in connection with the issuance of Parent Common Stock in the Merger (the "FORM
S-4") will, at the time the Form S-4 becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) the Proxy Statement will, at the date it is first mailed
to the Company's shareholders or at the time of the Shareholders Meeting (as
defined in Section 5.01(c)), 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
-11-
under which they are made, not misleading. The Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations promulgated thereunder, except that no representation is
made by the Company with respect to statements made or incorporated by reference
therein based on information supplied in writing by Parent or Sub specifically
for inclusion or incorporation by reference therein.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
Section 3.01(g) of the Company Disclosure Schedule, since March 31, 2001 there
is not and has not been: (i) any Material Adverse Change (as defined in Section
8.04) with respect to the Company; (ii) any condition, event or occurrence
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect or give rise to a Material Adverse Change with respect
to the Company; (iii) any condition, event or occurrence which, individually or
in the aggregate, could reasonably be expected to prevent or materially delay
the ability of the Company to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder.
(h) LITIGATION; LABOR MATTERS; COMPLIANCE WITH LAWS. (i) Except as
disclosed in Section 3.01(h) of the Company Disclosure Schedule, there is (1) no
suit, action, claim, charge, arbitration, investigation or proceeding pending
before a Governmental Entity, and (2) to the knowledge of the Company, no suit,
claim, charge, action, arbitration, investigation or proceeding threatened
against or investigation pending with respect to the Company or any of its
subsidiaries that, individually or in the aggregate, would have a Material
Adverse Effect with respect to the Company or prevent or materially delay the
ability of the Company to consummate the transactions contemplated by this
Agreement or to perform its obligations hereunder, nor is there any judgment,
decree, citation, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its subsidiaries which,
individually or in the aggregate, has or could reasonably be expected to have,
any such effect.
(ii) Except as disclosed in Section 3.01(h)(ii) of the Company
Disclosure Schedule, (1) neither the Company nor any of its subsidiaries is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization; (2) to the
knowledge of the Company, neither the Company nor any of its subsidiaries is the
subject of any strike, grievance or other proceeding asserting that it or any
subsidiary has committed an unfair labor practice or seeking to compel it to
bargain with any labor organization as to wages or conditions of employment; (3)
there is no strike, work stoppage or other labor dispute involving it or any of
its subsidiaries pending or, to its knowledge, threatened; (4) no grievance is
pending or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries which, individually or in the aggregate, would have a
Material Adverse Effect with respect to the Company; (5) to the knowledge of the
Company, the Company and each subsidiary is in compliance with all applicable
laws (domestic and foreign), agreements, contracts and policies relating to
employment, employment practices, wages, hours, immigration matters and terms
and conditions of employment except for failures so to comply, if any, that,
individually or in the aggregate, would not have a Material Adverse Effect with
respect to the Company; (6) the Company has paid in full to all employees of the
Company and its subsidiaries all wages, salaries, commissions, bonuses, benefits
and other compensation due and payable to such employees under any policy,
practice, agreement, plan, program, statue or other
-12-
law except for failures, if any, that, individually or in the aggregate, would
not have a Material Adverse Effect with respect to the Company; (7) the Company
is not liable for any severance pay or other payments to any employee or former
employee arising from the termination of employment under any benefit or
severance policy, practice, agreement, plan, or program of the Company, nor to
the knowledge of the Company will the Company have any liability which exists or
arises, or may be deemed to exist or arise, under any applicable law or
otherwise, as a result of or in connection with the transactions contemplated
hereunder or as a result of the termination by the Company of any persons
employed by the Company or any of its subsidiaries on or prior to the Effective
Time of the Merger; and (8) the Company is in compliance with its obligations
pursuant to the Worker Adjustment and Retraining Notification Act of 1988
("WARN") and any similar state or local laws, and all other employee
notification and bargaining obligations arising under any collective bargaining
agreement, statute or otherwise.
(iii) The Company and its subsidiaries hold all permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities which
are material to the operation of the businesses of the Company and its
subsidiaries, taken as a whole (the "COMPANY PERMITS"). The Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply, individually or in the aggregate, would not have
a Material Adverse Effect with respect to the Company. Except as disclosed in
Section 3.01(h)(iii) of the Company Disclosure Schedule, the businesses of the
Company and its subsidiaries are not being conducted in violation of any law
(domestic or foreign), ordinance or regulation of any Governmental Entity,
except for possible violations which, individually or in the aggregate, do not
and would not have a Material Adverse Effect with respect to the Company.
(i) EMPLOYEE BENEFIT PLANS. (i) Section 3.01(i) of the Company
Disclosure Schedule contains a true and complete list of each "employee benefit
plan" (within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") (including, without limitation,
multiemployer plans within the meaning of Section 3(37) of ERISA)), stock
purchase, stock option, severance, employment, change-in-control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation and all
other employee benefit plans, agreements, programs, policies or other
arrangements relating to employment, benefits or entitlements, whether or not
subject to ERISA (including any funding mechanism therefor now in effect or
required in the future as a result of the transactions contemplated by this
Agreement or other activities taken by the Company on or prior to the date of
the Agreement), sponsored by the Company, one of its subsidiaries or any other
entity such as a co-employer, whether formal or informal, oral or written,
legally binding or not under which any employee or former employee of the
Company or any of its subsidiaries has any present or future right to benefits
based on such employee's employment with the Company or one of its subsidiaries
and under which the Company or any of its subsidiaries has any present or future
liability, except such plans, agreements, programs, policies or arrangements
which, individually or in the aggregate, would not impose more than an
immaterial cost to the Company. All such plans, agreements, programs, policies
and arrangements are herein collectively referred to as the "COMPANY PLANS".
-13-
(ii) With respect to each Company Plan, the Company has delivered to
Parent a current, accurate and complete copy (or, to the extent no such copy
exists, an accurate description) thereof and, to the extent applicable, (A) any
related trust agreement, annuity contact or other funding instrument; (B) the
most recent determination letter issued by the U.S. Internal Revenue Service
("IRS"); (C) any summary plan description and other material written
communications (or a description of any material oral communications) by the
Company to its employees concerning the extent of the benefits provided under a
Company Plan; and (D) for the three most recent years (I) the Form 5500 and
attached schedules; (II) audited financial statements; (III) actuarial valuation
reports; and (IV) attorney's response to an auditor's request for information.
(iii) Except as disclosed in Section 3.01(i) of the Company Disclosure
Schedule: (A) each Company Plan has been established and administered in
accordance with its terms, and in compliance with the applicable provisions of
ERISA, the Code and other applicable laws, rules and regulations (including the
applicable laws, rules and regulations of foreign jurisdiction), in each case,
in all material respects; (B) each Company Plan which is intended to be
qualified within the meaning of Code Section 401(a) is so qualified and has
received a favorable determination letter as to its qualification and, to the
Company's knowledge, nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification; (C) with respect to any
Company Plan, no actions, suits or claims (other than routine claims for
benefits in the ordinary course) are pending or, to the best knowledge of the
Company, threatened; (D) to the Company's knowledge, no facts or circumstances
exist which could give rise to any such actions, suits or claims and the Company
will promptly notify Parent in writing of any pending claims or, to the
knowledge of the Company, any threatened claims arising between the date hereof
and the Effective Time of the Merger; (E) neither the Company nor, to the
Company's knowledge, any other party has engaged in a prohibited transaction, as
such term is defined under Code Section 4975 or ERISA Section 406, which would
subject the Company or Parent or its subsidiaries to any material taxes,
penalties or other liabilities under the Code or ERISA; (F) no event has
occurred and no condition exists that can reasonably be expected to subject the
Company, either directly or by reason of its relationship to any member of its
"CONTROLLED GROUP" (defined as any organization which is deemed to be a single
employer with the Company within the meaning of Code Sections 414(b), (c), (m)
or (o) or ERISA Section 4001), to any material tax, fine or penalty imposed by
ERISA, the Code or other applicable laws, rules and regulations (including the
applicable laws, rules and regulations of any foreign jurisdiction), (F) all
contributions and payments accrued under each Company Plan, determined in
accordance with prior funding and accrual practices, as of the Effective Time of
the Merger have been or will be timely paid or made prior thereto and adequate
reserves have been provided for in the Company's SEC Financial Statements for
any premiums (or portions thereof) and for all benefits attributable to service
on or prior to the Effective Time of the Merger; (G) for each Company Plan with
respect to which a Form 5500 has been filed, no material change has occurred
with respect to the matters covered by the most recent Form 5500 since the date
thereof; and (H) no Company Plan provides for an increase in the rate of
contribution, benefit accrual or vesting of benefits on or after the date of
this Agreement.
(iv) Except as disclosed in Section 3.01(i) of the Company Disclosure
Schedule: (A) no Company Plan nor any "pension plan" (as defined in ERISA
Section 3 (2)) maintained or
-14-
contributed to by any member of the Company's Controlled Group has incurred any
"accumulated funding deficiency" as such term is defined in ERISA Section 302
and Code Section 412 (whether or not waived); (B) no event or condition exists
which could be deemed a reportable event within the meaning of ERISA Section
4043 which could result in a liability to the Company or any member of its
Controlled Group and no condition exists which could subject the Company or any
member of its Controlled Group to a fine under ERISA Section 4071; (C) as of the
Effective Time of the Merger, the Company and all members of its Controlled
Group have made all required premium payments when due to the Pension Benefit
Guaranty Corporation; (D) neither the Company nor any member of its Controlled
Group is subject to any liability to the PBGC for any plan termination occurring
on or prior to the Effective Time of the Merger; (E) no amendment has occurred
which has required or could require the Company or any member of its Controlled
Group to provide security pursuant to Code Section 401(a)(29); and (F) neither
the Company nor any member of its Controlled Group has engaged in a transaction
which could subject it to liability under ERISA Section 4069.
(v) Except as disclosed in Section 3.01(i) of the Company Disclosure
Schedule with respect to each of the Company Plans which is not a multiemployer
plan within the meaning of Section 4001(a)(3) of ERISA but is subject to Title
IV of ERISA (or a substantially similar provision of a foreign jurisdiction), as
of the Effective Time of the Merger, except as disclosed in Section 3.01(i) of
the Company Disclosure Schedule, the assets of each such Company Plan are at
least equal in value to the present value of all accrued benefits (vested and
unvested) of the participants in such Company Plan on a termination basis using
the assumptions established by the PBGC as in effect on the most recent
Valuation Date.
(vi) Except as disclosed in Section 3.01(i) of the Company Disclosure
Schedule (such disclosures to indicate the amount of any expected liability)
with respect to any multiemployer plan (within the meaning of Section 4001(a)(3)
of ERISA) to which the Company or any member of its Controlled Group has any
liability or contributes (or has at any time contributed or had an obligation to
contribute): (A) the Company and each member of its Controlled Group has or will
have, as of the Effective Time of the Merger, made all contributions to each
such multiemployer plan required by the terms of such multiemployer plan or any
collective bargaining agreement; (B) neither the Company nor any member of its
Controlled Group has incurred any material withdrawal liability under Title IV
of ERISA or would be subject to such liability if, as of the Effective Time of
the Merger, the Company or any member of its Controlled Group were to engage in
complete withdrawal (as defined in ERISA Section 4203) or partial withdrawal (as
defined in ERISA Section 4205) from any such multiemployer plan; (C) no such
multiemployer plan is in reorganization or insolvent (as those terms are defined
in ERISA Sections 4241 and 4245, respectively); and (D) neither the Company nor
any member of its Controlled Group has engaged in a transaction which could
subject it to liability under ERISA Section 4212(c).
(vii) (A) Each Company Plan which is intended to meet the requirements
for tax-favored treatment under Subchapter B of Chapter 1 of Subtitle A of the
Code meets such requirements; and (B) the Company has received a favorable
determination from the Internal Revenue Service with respect to any trust
intended to be qualified within the meaning of Code Section 501(c)(9).
-15-
(viii) Section 3.01(i)(viii) of the Company Disclosure Schedule sets
forth, on a plan by plan basis, the present value of accrued benefits to present
or former employees of the Company under each unfunded Company Plan that
provides for deferred compensation or supplemental retirement benefits.
(ix) Except as set forth in Section 3.01(i)(ix) of the Company
Disclosure Schedule, no Company Plan exists which could result in the payment to
any Company employee of any money or other property or rights or accelerate or
provide any other rights or benefits to any Company employee as a result of the
transaction contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code section 280G.
(j) TAXES. Except as disclosed in Section 3.01(j) of the Company
Disclosure Schedule: (i) the Company and each of its subsidiaries, and any
affiliated consolidated, combined, unitary or aggregate group of which the
Company or any of its subsidiaries is or has been a member have timely filed all
Tax Returns required to be filed and such Tax Returns are complete and correct
in all material respects, have paid all Taxes required to be paid, whether or
not shown as being due on such Tax Returns, and have provided adequate reserves
in their financial statements for any Taxes that have not been paid; (ii) each
of the Company and its Subsidiaries has withheld and paid all Taxes and
maintained all records required to have been withheld, paid and maintained in
connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder or other third party; (iii) the charges, accruals and
reserves for Taxes reflected on the books of the Company and its subsidiaries
are adequate to cover the Tax liabilities accruing or payable by the Company and
its subsidiaries in respect of periods prior to the date hereof (including
interest and penalties, if any, thereon and Taxes being contested); (iv) no
material claim for unpaid Taxes has become a lien against the property of the
Company or any of its subsidiaries (other than with respect to Taxes not yet due
and payable) or is being asserted against the Company or any of its
subsidiaries; (v) no audit or other proceeding with respect to any Taxes due
from or with respect to the Company or any of its subsidiaries or any Tax Return
filed by or with respect to the Company or any of its subsidiaries is pending,
threatened or being conducted by any governmental or Tax authority; (vi) no
extension or waiver of the statute of limitations on the assessment of any Taxes
has been granted by the Company or any of its subsidiaries or is currently in
effect; (vii) none of the Company or any of its subsidiaries is doing business
or engaged in a trade or business in any jurisdiction in which it has not filed
all required material Tax Returns; (viii) neither the Company nor any of its
subsidiaries is subject to liability for Taxes of any Person (other than the
Company or its subsidiaries), including, without limitation, liability arising
from the application of Treasury Regulation section 1.1502-6 or any analogous
provision of state, local or foreign law, or as a transferee or successor, by
contract, or otherwise; (ix) neither the Company nor its subsidiaries is or has
been a party to any Tax allocation or sharing agreement with any person which is
not currently a member of the affiliated group of which the Company is currently
a member; (x) no consent under Section 341(f) of the Code has been filed with
respect to the Company or any of its subsidiaries; (xi) neither the Company nor
any of its Subsidiaries is a party to any agreement, contract, arrangement or
plan that has resulted or would result, separately or in the aggregate, in the
payment of (a) any "excess parachute payments" within the meaning of Section
280G of the Code (without regard to the exceptions set forth in Sections
280G(b)(4) and 280G(b)(5) of the
-16-
Code) or (b) any amount for which a deduction would be disallowed or deferred
under Section 162 or Section 404 of the Code; (xii) none of the Company Common
Stock is subject to a "substantial risk of forfeiture" within the meaning of
Section 83 of the Code; and (xiii) neither the Company nor any of its
Subsidiaries has been either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in any
distribution of stock intended to qualify for tax-free treatment under the Code.
As used herein, "TAXES" shall mean all taxes of any kind, including, without
limitation, those on or measured by or referred to as income, gross receipts,
sales, use, ad valorem, franchise, profits, license, withholding, payroll,
employment, excise, severance, estimated, stamp, occupation, premium, value
added, property or windfall profits taxes, customs, duties or similar fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any
governmental authority, domestic or foreign. As used herein, "TAX RETURN" shall
mean any return, report or statement required to be filed with any governmental
authority with respect to Taxes.
(k) PROPERTIES. Except as disclosed in Section 3.01(k) of the Company
Disclosure Schedule, the Company or one of its subsidiaries (i) has good and
marketable title to all the properties and assets (A) reflected in the 2001
Balance Sheet as being owned by the Company or one of its subsidiaries (other
than any such properties or assets sold or disposed of since such date in the
ordinary course of business consistent with past practice) or (B) acquired after
March 31, 2001 which are material to the Company's business on a consolidated
basis, free and clear of all Liens. The Company has good and valid leasehold
interests in all real property leases, subleases and occupancy agreements to
which the Company is a party (the "LEASES") and is in sole possession of the
properties purported to be leased thereunder. Each Lease is in full force and
effect and constitutes a legal, valid and binding obligation of, and is legally
enforceable against, the respective parties thereto. There is no uncured breach
or default exists on the part of landlord under any of the Leases, and the
Company has no knowledge of breach or default or any event, condition or state
of facts, which with the giving of notice or the passage of time, or both, would
constitute a breach or default under the Lease by the Company. Except as
disclosed in Section 3.01(h), there is no suit, action, arbitration or other
proceeding with respect to the Leases or the premises leased under the Leases.
The Company has not received notice and does not otherwise have knowledge of any
pending, threatened or contemplated condemnation proceeding affecting any
premises owned or leased by the Company or any of its subsidiaries or any part
thereof or of any sale or other disposition of any such owned or leased premises
or any part thereof in lieu of condemnation. The real property leased to the
Company under the Leases encompasses all real property used by the Company, and
the Company owns no real property and does not have any options to purchase real
property. The landlord under each of the Company's material Leases has performed
all initial improvements required to be performed by it under such lease and all
tenant improvements allowances have been paid to the Company as tenant under
such Leases. All insurance required to be maintained by the Company under each
of the Leases is in full force and effect.
(l) ENVIRONMENTAL MATTERS. Except as set forth on the Company
Disclosure Schedule or as could not be reasonably expected to result in any
liability under Environmental Laws (as defined in Section 8.04) to the Company
or any of its subsidiaries which, individually or in the aggregate, would have a
Material Adverse Effect with respect to the Company:
-17-
(i) the Company and its subsidiaries hold and are in
compliance with all Environmental Permits (as defined in Section 8.04),
and the Company and its subsidiaries are, and have been, otherwise in
compliance with all Environmental Laws and, to the knowledge of the
Company, there are no conditions that might prevent or interfere with
such compliance in the future;
(ii) neither the Company nor any of its subsidiaries has
received any Environmental Claim, and to the knowledge of the Company
there is no threatened Environmental Claim;
(iii) neither the Company nor any of its subsidiaries has
entered into any consent decree, order or agreement under any
Environmental Law;
(iv) there are no (A) underground storage tanks, (B)
polychlorinated biphenyls, (C) friable asbestos or asbestos-containing
materials, (D) sumps, (E) surface impoundments, (F) landfills, or (G)
sewers or septic systems present at any facility currently owned,
leased, operated or otherwise used by the Company or any of its
subsidiaries that could reasonably be expected to give rise to
liability of the Company or any of its subsidiaries under any
Environmental Laws;
(v) there are no past (including, without limitation, with
respect to assets or businesses formerly owned, leased or operated by
the Company or any of its subsidiaries) or present actions, activities,
events, conditions or circumstances, including without limitation the
release, threatened release, emission, discharge, generation,
treatment, storage or disposal of Hazardous Materials, that could
reasonably be expected to give rise to liability of the Company or any
of its subsidiaries under any Environmental Laws;
(vi) no modification, revocation, reissuance, alteration,
transfer, or amendment of the Environmental Permits, or any review by,
or approval of, any third party of the Environmental Permits is
required in connection with the execution or delivery of this Agreement
or the consummation of the transactions contemplated hereby or the
continuation of the business of the Company or its subsidiaries
following such consummation;
(vii) Hazardous Materials (as defined in Section 8.04) have
not been generated, transported, treated, stored, disposed of, arranged
to be disposed of, released or threatened to be released at, on, from
or under any of the properties or facilities currently owned, leased or
otherwise used by the Company or any of its subsidiaries, in violation
of or so as could result in liability under, any Environmental Laws;
and
(viii) neither the Company nor any of its subsidiaries has
contractually assumed any liabilities or obligations under any
Environmental Laws.
(m) CONTRACTS; DEBT INSTRUMENTS. (i) Neither the Company nor any of its
subsidiaries is, or has received any notice or has any knowledge that any other
party is, in default in any
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respect under any contract, agreement, commitment, arrangement, lease, policy or
other instrument to which it or any of its subsidiaries is a party or by which
it or any such subsidiary is bound, except for those defaults which would not,
either individually or in the aggregate, have a Material Adverse Effect with
respect to the Company; and, to the knowledge of the Company, there has not
occurred any event that with the lapse of time or the giving of notice or both
would constitute such a default.
(ii) The Company has made available to Parent (x) true and correct
copies of all loan or credit agreements, notes, bonds, mortgages, indentures and
other agreements and instruments pursuant to which any indebtedness (as defined
in Section 8.04) of the Company or any of its subsidiaries is outstanding and
(y) accurate information regarding the respective principal amounts currently
outstanding thereunder.
(iii) Except as set forth in Section 3.01(m) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is party to or bound
by any agreement which, pursuant to the requirements of Form 10-K under the
Exchange Act, would be required to be filed as an exhibit to an Annual Report on
Form 10-K of the Company except (A) agreements included or incorporated by
reference as exhibits to the Company's Annual Report on Form 10-K for the fiscal
year ended December 30, 2000 and (B) agreements entered into after the date of
this Agreement in compliance with Section 4.01 hereof.
(n) BROKERS. No broker, investment banker, financial advisor or other
person, other than Xxxxxxx Xxxxx & Company, LLC ("XXXXXXX XXXXX"), the fees and
expenses of which will be paid by the Company (pursuant to fee agreements,
copies of which have been provided to Parent) is entitled to any broker's
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company agrees to indemnify Parent and
Sub and to hold Parent and Sub harmless from and against any and all claims,
liabilities or obligations with respect to any other fee, commission or expense
asserted by any person on the basis of any act or statement alleged to have been
made by the Company or its affiliates.
(o) OPINION OF FINANCIAL ADVISOR. The Company has received the opinion
of Xxxxxxx Xxxxx, dated the date of this Agreement, to the effect that, as of
such date, the Merger Consideration is fair to the Company's shareholders from a
financial point of view, a signed copy of which opinion has been or will be
delivered to Parent and Sub. The Company has obtained the consent of Xxxxxxx
Xxxxx to the reproduction and inclusion of such opinion in full in any Proxy
Statement, provided that Xxxxxxx Xxxxx and its counsel have had a reasonable
opportunity to review the same before any submission or distribution thereof.
(p) BOARD RECOMMENDATION; STATE ANTITAKEOVER LAW. The Board of
Directors of the Company, at a meeting duly called and held, has by unanimous
vote of those directors present (i) approved this Agreement and the Merger and
has taken all actions necessary on the part of the Company to render the
restrictions on take-over bids and business combinations contained in Sections
110C and 110F of the Massachusetts Law inapplicable to this Agreement and the
Merger and (ii) resolved to recommend that the holders of the shares of Company
Common Stock approve this Agreement and the transactions contemplated herein,
including the merger.
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(q) REQUIRED COMPANY VOTE. The Company Shareholder Approval, being the
affirmative vote of two-thirds of the outstanding shares of the Company Common
Stock, is the only vote of the holders of any class or series of the Company's
securities necessary to approve this Agreement, the Merger and the other
transactions contemplated hereby.
(r) INTELLECTUAL PROPERTY. (i) Section 3.01(r)(i) of the Company
Disclosure Schedule sets forth all Intellectual Property (as defined in Section
8.04), owned by the Company or its subsidiaries, which is registered or filed
with, or has been submitted to, any Governmental Entity, and all Intellectual
Property licensed from third parties by the Company or any of its subsidiaries,
and the nature of the Company's or its subsidiaries' rights therein.
(ii) The Company and its subsidiaries own or have the right to use all
Intellectual Property necessary for the Company and its subsidiaries to conduct
their business as it is currently conducted and consistent with past practice.
(iii) Except as set forth on Section 3.01(r)(iii) of the Company
Disclosure Schedule: (1) all of the Intellectual Property used by the Company or
any of its subsidiaries is subsisting and unexpired, free of all Liens, has not
been abandoned and, to the knowledge of the Company, does not infringe the
intellectual property rights of any third party; (2) none of the Intellectual
Property used by the Company or any of its subsidiaries is the subject of any
license, security interest or other agreement to which the Company is a party
granting rights therein to any third party; (3) no judgment, decree, injunction,
rule or order has been rendered by any U.S. federal or state or foreign
Governmental Entity which would limit, cancel or question the validity of, or
the Company's or its subsidiaries' rights in and to any Intellectual Property in
any respect that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect with respect to the Company; (4) the
Company has not received notice of any pending or threatened suit, action or
proceeding that seeks to limit, cancel or question the validity of, or the
Company's or its subsidiaries' rights in and to any Intellectual Property,
which, if adversely determined, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect with respect to the
Company; and (5) the Company and its subsidiaries take reasonable steps to
protect, maintain and safeguard their Intellectual Property, including any
Intellectual Property for which improper or unauthorized disclosure would impair
its value or validity, and have executed appropriate agreements and made
appropriate filings and registrations in connection with the foregoing.
(s) Except as set forth in the Company SEC Documents or by virtue of
the Merger, no event has occurred that would be required to be reported by the
Company as a Certain Relationship or Related Transaction pursuant to item 404 of
Regulation S-K promulgated by the SEC.
SECTION 3.02. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Except
as set forth in the disclosure schedule (referencing the same section as this
Agreement) delivered by the Parent and Sub to the Company at the time of
execution of this Agreement (the "PARENT DISCLOSURE SCHEDULE"), Parent and Sub
represent and warrant to the Company as follows:
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(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent, Sub and
each of Parent's "significant subsidiaries" (within the meaning of Rule 1-02 of
Regulation S-X of the SEC) (collectively, the "PARENT SUBSIDIARIES") is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of Parent, Sub
and each of the Parent Subsidiaries is duly qualified or licensed to do business
and is in good standing in each jurisdiction (domestic or foreign) in which the
nature of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed (individually or in the aggregate) would
not have a Material Adverse Effect with respect to Parent. Parent has made
available to the Company complete and correct copies of its articles of
incorporation and by-laws and the articles of organization and by-laws of Sub.
(b) CAPITAL STRUCTURE. As of the date of this Agreement, the authorized
capital stock of Parent consists of 1,000,000,000 shares of Parent Common Stock.
As of the close of business on July 30, 2001, there were: (i) 175,810,109 shares
of Parent Common Stock issued and outstanding; (ii) 25,360,824 shares of Parent
Common Stock held in the treasury of Parent; (iii) 6,166,970 shares of Parent
Common Stock reserved for issuance upon exercise of options available for grant
pursuant to Parent's stock option plans and Parent's employee stock purchase
plans (collectively, the "PARENT STOCK PLANS"); (iv) 20,207,363shares of Parent
Common Stock issuable upon exercise of awarded but unexercised stock options..
Except as set forth above, as of the close of business on July 30, 2001 there
were no shares of capital stock or other equity securities of Parent issued,
reserved for issuance or outstanding. All outstanding shares of capital stock of
Parent are, and all shares which may be issued as described above will be, when
issued, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. The shares of Parent Common Stock to be issued in
connection with the Merger will, when issued, be duly authorized, validly
issued, fully paid and nonassessable. As of the Effective Time of the Merger,
the Board of Directors of the Parent shall have reserved for issuance upon
exercise of options available for grant pursuant to the Company Stock Plans a
number of shares of Parent Common Stock equal to the number of shares of Company
Common Stock subject to Company Stock Options granted under the Company Stock
Plans multiplied by the Exchange Ratio. There is no outstanding Voting Debt of
Parent. Except as set forth above and as set forth in the Rights Agreement,
dated as of November 17, 2000, between Parent and the First National Bank of
Boston, there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Parent is a party or by which it is bound obligating Parent to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity or voting securities of Parent or obligating Parent to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or arrangements
of Parent to repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of Parent.
As of the date hereof, the authorized capital stock of Sub consists of
1,000 shares of common stock, par value $.01 per share, 100 of which have been
validly issued, are fully paid and nonassessable and are owned by Parent, free
and clear of any Lien, and as of the Closing
-21-
Date, all the issued and outstanding shares of the common stock of Sub will be
owned by Parent free and clear of any Lien.
(c) AUTHORITY; NONCONTRAVENTION. Parent and Sub have all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Sub and the consummation by Parent and Sub of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent and Sub. This Agreement has been duly executed and
delivered by each of Parent and Sub, as applicable, and (assuming due
authorization, execution and delivery by the Company) constitute valid and
binding obligations of Parent and Sub, as applicable, enforceable against them
in accordance with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing. The execution and delivery of this Agreement
does not, and the consummation by Parent and Sub of the transactions
contemplated by this Agreement and compliance by Sub with the provisions of this
Agreement will not, conflict with, or result in any breach or violation of, or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination, cancellation or acceleration of, or a "put" right
with respect to any obligation under, or to a loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or assets of
Parent, Sub or any of Parent's other subsidiaries under, (i) the articles of
organization or by-law of Parent, Sub or such other subsidiary, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent, Sub,
such other subsidiaries or any of their respective properties or assets or (iii)
subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to Parent, Sub any of Parent's other
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii), any such conflicts, breaches, violations, defaults,
rights, losses or Liens that individually or in the aggregate would not have a
Material Adverse Effect with respect to Parent or prevent or materially delay
the ability of Parent and Sub to consummate the transactions contemplated by
this Agreement or perform their respective obligations hereunder. No consent,
approval, order or authorization of, or registration, declaration or filing
with, or notice to, any Governmental Entity is required by or with respect to
Parent or Sub in connection with the execution and delivery of this Agreement by
Parent and Sub or the consummation by Parent and Sub of any of the transactions
contemplated hereby, except for (i) such filings may be required under the HSR
Act and the filing of applications by the Parent and Sub pursuant to antitrust
or similar laws in such foreign jurisdictions as necessary, (ii) the filing with
the SEC and the NYSE of (A) the Form S-4 and (B) such reports under the Exchange
Act as may be required in connection with this Agreement and the transactions
contemplated hereby, (iii) the filing of the Articles of Merger with the
Secretary of State of the Commonwealth of Massachusetts and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (iv) such other consents, approvals, orders,
authorizations, registrations, declarations, filings or notices as may be
required under the "takeover" or "blue sky" laws of various states and (v) such
other consents, approvals, orders, authorizations, registrations, declarations,
filings or notices the failure of which to make or obtain, individually or in
the aggregate, could not reasonably be
-22-
expected to (x) prevent or materially delay consummation of the merger or the
other transactions contemplated hereby or performance of Parent's and Sub's
obligations hereunder or (y) have a Material Adverse Effect with respect to
Parent.
(d) PARENT SEC DOCUMENTS; UNDISCLOSED LIABILITIES. Parent has filed
with the SEC all reports, schedules, forms, statements and other documents
required pursuant to the Securities Act and the Exchange Act since January 1,
1998 (collectively, and in each case including all exhibits and schedules
thereto and documents incorporated by reference therein, the "PARENT SEC
DOCUMENTS"). Except as set forth in Section 3.02(d) of the PARENT DISCLOSURE
SCHEDULE (other than the Parent SEC Financial Statements (as defined below)), as
of their respective dates, the Parent SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Parent SEC Documents, and none of the Parent SEC Documents
(including any and all financial statements included therein) as of such dates
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. Except as set forth in Section 3.02(d) of the Parent Disclosure
Schedule, except to the extent that information contained in any Parent SEC
Document has been revised or superseded by a later filed Parent SEC Document,
none of the Parent SEC Documents (including any and all financial statements
included therein) contains any untrue statement of a material fact or omits to
state 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. The consolidated financial statements of Parent
included in all Parent SEC Documents filed since January 1, 1998 (the "PARENT
SEC FINANCIAL STATEMENTS") comply as to form in all material respects with
applicable published accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles (except, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of the SEC),
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of Parent and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited quarterly statements, to normal
recurring year-end audit adjustments). Except as disclosed in Section 3.02(d) of
the Parent Disclosure Schedule, neither Parent nor any of its subsidiaries has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by generally accepted accounting principles to
be recognized or disclosed on a consolidated balance sheet of Parent and its
subsidiaries or in the notes thereto, except (i) liabilities reflected in the
audited consolidated balance sheet of the Parent as of March 31, 2001 and (ii)
liabilities incurred since March 31, 2001, in the ordinary course of business
consistent with past practice.
(e) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Parent or Sub in writing for inclusion or incorporation by reference
in (i) the Form S-4 will, at the time the Form S-4 becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Proxy Statement will, at the date
it is first
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mailed to the Company's shareholders or at the time of the Shareholders meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they are made, not misleading. The
Form S-4 will comply as to form in all material respects with the requirements
of the Securities Act and the rules and regulations promulgated thereunder,
except that no representation is made by Parent or Sub with respect to
statements made or incorporated by reference therein based on information
supplied in writing by the Company specifically for inclusion or incorporation
by reference therein.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
Section 3.02(f) of the Parent Disclosure Schedule, since March 31, 2001, there
is not and has not been: (i) any Material Adverse Change with respect to Parent;
(ii) any condition, event or occurrence which, individually or in the aggregate,
would have a Material Adverse Effect or give rise to a Material Adverse Change
with respect to Parent; (iii) any condition, event or occurrence which,
individually or in the aggregate, could reasonably be expected to prevent or
materially delay the ability of Parent and Sub to consummate the transactions
contemplated by this Agreement or perform its obligations hereunder. On the date
of this Agreement, Parent is not engaged in any discussions nor does it have any
intention to engage in a transaction that would qualify as a Transaction
Proposal (as defined in Section 5.06 below) were such definition to apply to
Parent.
(g) LITIGATION; COMPLIANCE WITH LAWS. (i) Except as disclosed in
Section 3.02(g) of the Parent Disclosure Schedule, there is (1) no suit, action,
arbitration or proceeding pending before a Governmental Entity, and (2) to the
knowledge of Parent, no suit, action, arbitration or proceeding threatened
against or investigation pending with respect to Parent or any of its
subsidiaries that, individually or in the aggregate, would have a Material
Adverse Effect with respect to Parent or prevent or materially delay the ability
of Parent and Sub to consummate the transactions contemplated by this Agreement
or to perform their obligations hereunder, nor is there any judgment, decree,
citation, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against Parent or any of its subsidiaries which, individually or in
the aggregate, has or could reasonably be expected to have, any such effect.
(ii) Except as disclosed in Section 3.02(g)(ii) of the Parent
Disclosure Schedule, the businesses of Parent and its subsidiaries are not being
conducted in violation of any law (domestic or foreign), ordinance or regulation
of any Governmental Entity, except for possible violations which, individually
or in the aggregate, do not and would not have a Material Adverse Effect with
respect to Parent.
(h) INTERIM OPERATIONS OF SUB. Sub was formed on July 30, 2001 solely
for the purpose of engaging in the transactions contemplated hereby, has engaged
in no other business activities and has conducted its operations only as
contemplated hereby.
(i) REQUIRED VOTE. This Agreement has been approved by Parent, as the
sole shareholder of Sub. No other vote of holders of any class or series of
securities of Parent or Sub is necessary to approve this Agreement, the Merger
and the transactions contemplated hereby.
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(j) TAX MATTERS. As of the date hereof, neither Parent nor any of its
subsidiaries has taken any action that could reasonably be expected to cause the
Merger to fail to qualify as a "reorganization" within the meaning of Section
368 of the Code.
(k) BROKERS. No broker, investment banker, financial advisor or other
person, other than Xxxxxxx Xxxxx ("XXXXXXX XXXXX"), the fees and expenses of
which will be paid by the Parent, is entitled to any broker's finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent. Parent agrees to indemnify the Company and to hold the
Company harmless from and against any and all claims, liabilities or obligations
with respect to any other fee, commission or expense asserted by any person on
the basis of any act or statement alleged to have been made by Parent or its
affiliates.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS PRIOR TO MERGER
SECTION 4.01. CONDUCT OF BUSINESS BY THE COMPANY.
(a) During the period from the date of this Agreement to the Effective
Time of the Merger (except as otherwise expressly contemplated by the terms of
this Agreement, agreed to in writing by Parent, or as set forth on Section 4.01
of the Company Disclosure Schedule), the Company shall, and shall cause its
subsidiaries to, act and carry on their respective businesses in the ordinary
course of business consistent with past practice and use its and their
respective reasonable best efforts to preserve substantially intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
supplies, licensors, licensees, advertisers, distributors and others having
significant business dealings with them. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time of the Merger, except as otherwise expressly contemplated by the terms of
this Agreement, agreed to in writing by Parent, or as set forth on Section 4.01
of the Company Disclosure Schedule, the Company shall not, and shall not permit
any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends on,
or make any other distributions in respect of, any of its capital
stock, other than dividends and distributions by a direct or indirect
wholly-owned domestic subsidiary of the Company to its parent, (y)
split, combine or reclassify any capital stock of the Company or any
subsidiary or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of capital
stock of the Company or any subsidiary, or (z) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of
its subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(ii) authorize for issuance, issue, deliver, sell,
pledge or otherwise encumber any such shares of its capital stock or
the capital stock of any of its
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subsidiaries, any other voting securities or any securities convertible
into, or any rights, warrants or options to acquire, any shares, voting
securities or convertible securities or any other securities or equity
equivalents (including without limitation stock appreciation rights),
other than the issuance of Company Common Stock upon the exercise of
Company Stock Options awarded but unexercised on the date of this
Agreement in accordance with their present terms;
(iii) amend the Articles of Organization, By-laws or
other comparable charter or organizational documents of the Company or
any subsidiary;
(iv) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial portion of the stock
or assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization
or division thereof;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its
properties or assets, except sales of inventory and receivables in the
ordinary course of business consistent with past practice;
(vi) (A) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person or amend, terminate
or seek a waiver with respect to any existing agreement of the Company
evidencing indebtedness of the Company, issue or sell any debt
securities or warrants or other rights to acquire any debt securities
of the Company or any of its subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other
agreement to maintain any financial statement condition of another
person or enter to any arrangement having the economic effect of any of
the foregoing, except for intercompany indebtedness between the Company
and its wholly-owned subsidiaries or between such wholly-owned
subsidiaries, or (B) make any loans, advances or capital contributions
to, or investments in, any other person, other than to the Company or
any direct or indirect wholly-owned subsidiary of the Company;
(vii) acquire or agree to acquire any assets, other
than inventory in the ordinary course of business consistent with past
practice, or make or agree to make any capital expenditures except
capital expenditures which, individually or in the aggregate, do not
exceed the amount budgeted therefor in the Company's applicable annual
capital expenditures budgets previously provided to Parent;
(viii) pay, discharge or satisfy any claims
(including claims of shareholders), liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise),
except for the payment, discharge or satisfaction of (x) liabilities or
obligations in the ordinary course of business consistent with past
practice or in accordance with their terms as in effect on the date
hereof or (y) claims settled or compromised to the extent permitted by
Section 4.01(a)(xii), or waive, release, grant, or transfer any rights
of material value or modify or change in any material respect any
existing material license, lease, contract or other document, other
than in the ordinary course of business consistent with past practice;
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(ix) adopt a plan of complete or partial liquidation
or resolutions providing for or authorizing such a liquidation or a
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization;
(x) enter into or amend any collective bargaining
agreement;
(xi) change any material accounting principle used by
it, except as required by generally accepted accounting principles;
(xii) settle or compromise any litigation (whether or
not commenced prior to the date of this Agreement), other than
settlements or compromises of litigation that do not provide for
injunctive or similar relief and where the amount paid (after giving
effect to insurance proceeds actually received) in settlement or
compromise does not exceed $250,000, provided that the aggregate amount
paid in connection with the settlement or compromise of all such
litigation matters shall not exceed $500,000;
(xiii) engage in any transaction with, or enter into
any agreement, arrangement, or understanding with, directly or
indirectly, any of the Company's affiliates (other than subsidiaries of
the Company), including, without limitation, any transactions,
agreements, arrangements or understandings with any affiliate or other
Person covered under Item 404 of SEC Regulation S-K that would be
required to be disclosed under such Item 404, other than such
transactions of the same general nature, scope and magnitude as are
disclosed in the Company SEC Documents;
(xiv) transfer to any person or entity any rights to
its Intellectual Property other than in the ordinary course of business
consistent with past practice;
(xv) enter into or amend any agreement pursuant to
which any other party is granted exclusive marketing or other exclusive
rights of any type or scope with respect to any of its products or
technology; or
(xvi) authorize, or commit or agree to take, any of
the foregoing actions.
(xvii) except in the ordinary course of business and
consistent with past practice, make any tax election or settle or
compromise any material federal, state, local or foreign tax liability.
(b) CHANGES IN EMPLOYMENT ARRANGEMENTS. Except as otherwise agreed to
in writing by Parent, or as set forth on Section 4.01 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries shall adopt or amend
(except as may be required by law) any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation, employment or other
employment benefit plan, agreement, trust, fund or other arrangement for the
benefit or welfare of any employee, director or former director or employee or
increase the compensation or fringe benefits of any director, employee or former
director or employee or pay any benefit not required by any existing plan,
arrangement or agreement.
-27-
(c) SEVERANCE. Neither the Company nor any of its subsidiaries shall
grant any new or modified severance or termination arrangement or increase or
accelerate any benefits payable under its severance or termination pay policies
in effect on the date hereof.
(d) WARN. Neither the Company nor any of its subsidiaries shall
effectuate a "plant closing" or "mass layoff," as those terms are defined in
WARN, affecting in whole or in part any site of employment, facility, operating
unit or employee of the Company or any subsidiary, without notifying Sub or its
affiliates in advance and without complying with the notice requirements and
other provisions of WARN and any similar state or local law.
(e) TAX-FREE REORGANIZATION TREATMENT. Neither Company nor Parent
shall, and shall not permit any of their respective subsidiaries to,
intentionally take or cause to be taken any action not otherwise consistent with
the transactions contemplated by this Agreement which would reasonably be
expected to disqualify the Merger as a "reorganization" within the meaning of
Section 368(a) of the Code.
(f) OTHER ACTIONS. Neither the Company nor Parent shall, or shall
permit any of its subsidiaries to, intentionally take any action that would, or
reasonably might be expected to, result in any of its representations and
warranties set forth in this Agreement being or becoming untrue in any material
respect, or in any of the conditions to the Merger set forth in Article VI not
being satisfied; provided that the Company and its Board of Directors shall not
be required to take or be prohibited from taking any action to the extent that
such action is not required to be taken or is permitted, as applicable, pursuant
to Section 5.06 of this Agreement. The Company and Parent shall promptly advise
the other party orally and in writing of (i) any representation or warranty
becoming untrue in any material respect, (ii) the failure by such party to
comply with any covenant, condition or agreement hereunder and (iii) any event
which could reasonably be expected to cause the conditions set forth in Article
VI not being satisfied; PROVIDED, HOWEVER, that no such notice shall affect the
representations, warranties, covenants and agreement of the parties or the
conditions to their obligations hereunder.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. PREPARATION OF FORM S-4 AND PROXY STATEMENT; SHAREHOLDER
MEETING. (a) Promptly following the date of this Agreement, the Company shall
prepare the Proxy Statement, and Parent shall prepare and file with the SEC the
Form S-4, in which the Proxy Statement will be included. Each party will notify
the other party promptly upon the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff or any government officials for
amendments or supplements to the Form S-4, the Proxy Statement, or for any other
filing or for additional information and will supply the other party with copies
of all correspondence between such party or any of its representatives, on the
one hand, and the SEC, or its staff or any other government officials, on the
other hand, with respect to the Form S-4, the
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Proxy Statement, the Merger or any other filing. If the SEC requires a Tax
opinion in connection with the filing of the Form S-4, Company shall cause
Xxxxxx, XxXxxxxxx & Fish, LLP, counsel to Company, to provide such opinion in
the form required by the SEC. The issuance of such opinion shall be conditioned
upon the receipt by Xxxxxx, XxXxxxxxx & Fish, LLP, of customary representation
letters from each of Company, Parent and Sub in a form previously agreed to by
the parties. Parent and the Company shall each use its reasonable best efforts
to have the Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. The Company will use its reasonable best efforts
to cause the Proxy Statement to be mailed to the Company's shareholders as
promptly as practicable after the Form S-4 is declared effective under the
Securities Act. Parent shall also take any action (other than qualifying to do
business in any state in which it is not now so qualified or filing a general
consent to service of process) required to be taken under any applicable state
securities laws in connection with the registration and qualification of the
Parent Common Stock to be issued in the Merger, and the Company shall furnish
all information relating to the Company and its shareholders as may be
reasonably requested in connection with any such action.
(b) Until such time as the Board of Directors of the Company takes any
of the actions with respect to a Transaction Proposal permitted pursuant to
Section 5.06 of this Agreement, all mailings to the Company's shareholders in
connection with the Merger, including the Proxy Statement, shall be subject to
the prior review, comment and approval of Parent (such approval not to be
unreasonably withheld or delayed).
(c) The Company will, as promptly as practicable following the date of
this Agreement and in consultation with Parent, duly call, give notice of,
convene and hold a meeting of its shareholders (the "SHAREHOLDERS MEETING") for
the purpose of approving this Agreement and the transactions contemplated by
this Agreement to the extent required by Massachusetts Law. The Company will,
through its Board of Directors, recommend to its shareholders approval of the
foregoing matters, as set forth in Section 3.01(p); PROVIDED, HOWEVER, that the
Board of Directors of the Company may fail to make or withdraw or modify such
recommendation, but only to the extent that the Board of Directors of the
Company shall have concluded in good faith on the basis of advice from outside
counsel that such action is required in order to satisfy its fiduciary duties to
the shareholders of the Company under applicable law. Any such recommendation,
together with a copy of the opinion referred to in Section 3.01(o) shall be
included in the Proxy Statement. The Company will use its reasonable best
efforts to hold such meeting as soon as practicable after the Form S-4 shall
have been declared effective.
SECTION 5.02. ACCESS TO INFORMATION; CONFIDENTIALITY. (a) Each of the
Company and Parent shall, and shall cause its subsidiaries, officers, employees,
counsel, financial advisors and other representatives to, afford to the other
party and its representatives reasonable access during normal business hours,
during the period prior to the Effective Time of the Merger to its properties,
books, contracts, commitments, personnel and records, and, during such period,
each of the Company and Parent shall, and shall cause its subsidiaries,
officers, employees and representatives to, furnish promptly to the other
documents filed by it during such period pursuant to the requirements of Federal
or state securities laws and (ii) all other information concerning its business,
properties, financial condition, operations and personnel as such other party
may from time to time reasonably request. Each of the Company and Parent will
hold, and
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will cause its respective directors, officers, employees, accountants, counsel,
financial advisors and other representatives and affiliates to hold, any
nonpublic information in confidence to the extent required by, and in accordance
with, the provisions of the confidentiality agreement, dated June 25, 2001
between Parent and the Company (the "CONFIDENTIALITY AGREEMENT").
(b) No investigation pursuant to this Section 5.02 shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
SECTION 5.03. REASONABLE BEST EFFORTS. (a) Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including (i) obtaining all consents, approvals, waivers, licenses,
permits or authorizations as are required to be obtained (or, which if not
obtained, would result in an event of default, termination or acceleration of
any agreement or any put right under any agreement) under any applicable law or
regulation or from any Governmental Entities or third parties in connection with
the transactions contemplated by this Agreement, (ii) defending any lawsuits or
other proceedings challenging this Agreement and (iii) accepting and delivering
additional instruments necessary to consummate the transaction contemplated by
this Agreement and (iv) satisfying the conditions to closing set forth under
Article VI hereof.
(b) In furtherance of the foregoing, Parent and the Company agree to
file with the Antitrust Division of the United States Department of Justice and
the Federal Trade Commission a Notification and Report Form in accordance with
the notification requirements of the HSR Act, and to use their reasonable best
efforts to achieve the prompt termination or expiration of the waiting period or
any extension thereof provided for under the HSR Act as a prerequisite to the
consummation of the transactions provided for herein. Nothing in this paragraph
shall be construed as requiring any party to this Agreement or its affiliates to
(i) sell or otherwise dispose of any of its assets or voting securities other
than as otherwise contemplated by this Agreement or (ii) take any action which
either would result in a Material Adverse Change in any such party.
SECTION 5.04. INDEMNIFICATION. (a) From and after the Effective Time of
the Merger, Parent and the Surviving Corporation shall each indemnify, defend
and hold harmless each person who is now, or has been at any time prior to the
date hereof or who becomes prior to the Effective Time of the Merger eligible
for indemnification pursuant to the Articles of Organization and By-laws (or
comparable organizational documents) of the Company and its subsidiaries (the
"INDEMNIFIED PARTIES") against (i) all losses, claims, damages, costs, expenses,
liabilities or judgments, or amounts that are paid in settlement of or in
connection with any claim, action, suit, proceeding or investigation based in
whole or in part on or arising in whole or in part out of the fact that such
person is or was a director, officer or employee of the Company, pertaining to
any matter existing or occurring at or prior to the Effective Time of the
Merger, whether asserted or claimed prior to, or at or after, the Effective Time
of the merger ("INDEMNIFIED LIABILITIES") and (ii) all Indemnified Liabilities
based in whole or in part on, or arising in whole or in part out of, or
pertaining to this Agreement or the transaction contemplated
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hereby, in each case to the extent the Company or its subsidiaries would have
been permitted under its Articles of Organization and By-laws (or comparable
organizational documents) to indemnify such person. In the event any such claim,
action, suit, proceeding or investigation is brought against any Indemnified
Parties (whether arising before or after the Effective Time of the Merger), (i)
any counsel retained by the Indemnified Parties for any period after the
Effective Time of the Merger shall be reasonably satisfactory to the Parent;
(ii) after the Effective Time of the Merger, the Parent or Surviving Corporation
shall pay all reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received; and (iii) after the
Effective Time of the Merger, the Parent and Surviving Corporation will
cooperate in the defense of any such matter, provided that neither the Parent
not the Surviving Corporation shall be liable for any settlement of any claim
effected without its written consent, which consent, however, shall not be
unreasonably withheld. Any Indemnified Party wishing to claim indemnification
under this Section 5.04, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify the Parent and the Surviving
Corporation (but the failure so to notify the Surviving Corporation shall not
relieve it from any liability which it may have under this Section 5.04 except
to the extent such failure materially prejudices the Parent and Surviving
Corporation), and shall deliver to the Surviving Corporation the undertaking, if
any, required by Section 67 of Chapter 156B of the Massachusetts Law. The Parent
and the Surviving Corporation shall be liable for the fees and expenses
hereunder with respect to only one law firm to represent the Indemnified Parties
as a group with respect to each such matter unless there is, under applicable
standards of professional conduct, a conflict between the positions of any two
or more Indemnified Parties that would preclude or render inadvisable joint or
multiple representation of such parties.
(b) The Surviving Corporation shall maintain in effect for six years
from the Effective Time of the Merger directors' and officers' liability
insurance coverage covering persons who are directors and officers of the
Company on the date of this Agreement, with respect to matters occurring prior
to the Effective Time of the Merger, and containing terms and conditions which
are not less advantageous to such persons that the policies of the Company in
effect on the date hereof (the "COMPANY INSURANCE"); PROVIDED that the Surviving
Corporation shall not be required to spend in excess of 150% of the annual
premium for the Company Insurance paid by the Company as of the date of this
Agreement (the "CURRENT PREMIUM"); PROVIDED, FURTHER, that if the Surviving
Corporation would be required to spend in excess of 150% of the Current Premium
to obtain insurance having terms not less advantageous than the Company
Insurance, the Surviving Corporation will be required to spend up to such amount
to maintain or procure as much insurance coverage as can be procured for such
premium.
SECTION 5.05. PUBLIC ANNOUNCEMENTS. Neither Parent and Sub, on the one
hand, nor the Company, on the other hand, will issue any press release or public
statement with respect to the transactions contemplated by this Agreement,
including the Merger, without the other party's prior consent (such consent not
to be unreasonably withheld or delayed), except as may be required by applicable
law, court process or by obligations pursuant to any agreement with any
securities exchange or quotation system on which securities of the disclosing
party are listed or quoted. In addition to the foregoing, Parent, Sub and the
Company will consult with each other before issuing, and provide each other the
opportunity to review and comment upon, any such press release or other public
statements with respect to such transactions. The parties agree that
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the initial press release or releases to be issued with respect to the
transactions contemplated by this Agreement shall be mutually agreed upon prior
to the issuance thereof.
SECTION 5.06. NO SOLICITATION. Neither the Company nor any of its
subsidiaries shall (whether directly or indirectly through advisors, agents or
other intermediaries), nor shall the Company or any of its subsidiaries
authorize or permit any of its or their officers, directors, agents,
representatives, advisors or subsidiaries to, (a) solicit, initiate or take any
action knowingly to facilitate the submission of inquiries, proposals or offers
from any person (other than Sub or Parent) relating to (i) any acquisition or
purchase of 10% or more of the consolidated assets of the Company and its
subsidiaries or of over 10% of any class of equity securities of the Company or
any of its subsidiaries, (ii) any tender offer (including a self tender offer)
or exchange offer that if consummated would result in any Person (as defined in
Section 8.02) beneficially owning 10% or more of any class of equity securities
of the Company or any of its subsidiaries, (iii) any merger, consolidation,
business combination, sale of substantially all assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its subsidiaries whose assets, individually or in the aggregate, constitute more
than 10% of the consolidated assets of the Company other than the transactions
contemplated by this Agreement, or (iv) any other transaction the consummation
of which would or could reasonably be expected to impede, interfere with,
prevent or materially delay the Merger (collectively, "TRANSACTION PROPOSALS"),
or agree to or endorse any Transaction Proposal, or (b) enter into or
participate in any discussions or negotiations regarding any of the forgoing, or
furnish to any other person any information with respect to its business,
properties or assets or any of the foregoing, or otherwise cooperate in any way
with, or knowingly assist or participate in, facilitate or encourage, any effort
or attempt by any other person (other than Sub or Parent) to do or seek any of
the foregoing; PROVIDED, HOWEVER, that the foregoing shall not prohibit the
Company (either directly or indirectly through advisors, agents or other
intermediaries) from (i) furnishing information pursuant to an appropriate
confidentiality letter (which letter shall not be less favorable to the Company
in any material respect than the Confidentiality Agreement between the Company
and Parent, and a copy of which shall be provided for informational purposes
only to Parent) concerning the Company and its businesses, properties or assets
to a third party who has made a bona fide Transaction Proposal, (ii) engaging in
discussions or negotiations with such a third party who has made a bona fide
Transaction Proposal, (iii) following receipt of a bona fide Transaction
Proposal, taking and disclosing to its shareholders a position contemplated by
Rule 14d-9 or Rule 14e-2(a) under the Exchange Act or otherwise making
disclosure to its shareholders, (iv) following receipt of a bona fide
Transaction Proposal, failing to make or withdrawing or modifying its
recommendation referred to in Section 3.01(p), and/or (v) taking any action
required to be taken by the Company pursuant to a non-appealable, final order by
any court of competent jurisdiction, but in each case referred to in the
foregoing clauses (i) through (iv) only to the extent that the Board of
Directors of the Company shall have concluded in good faith on the basis of
advice from outside counsel that such action is required in order to satisfy its
fiduciary duties to the shareholders of the Company under applicable law;
PROVIDED, FURTHER, that the Board of Directors of the Company shall not take any
of the foregoing actions referred to in clauses (i) through (iv) until after
prompt advance notice to Parent (which notice shall in no event be given less
than two (2) business day prior to furnishing such information or entering into
such discussions) with respect to such action and that such Board of Directors
shall, to the extent consistent with its fiduciary duties, continue to advise
Parent after
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taking such action and, in addition, if the Board of Directors of the Company
receives a Transaction Proposal, then the Company shall promptly inform Parent
of the terms and conditions of such proposal and the identity of the person
making it. The Company will immediately cease and cause its advisors, agents and
other intermediaries to cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing, and shall use its reasonable best efforts to cause any such parties
in possession of confidential information about the Company that was furnished
by or on behalf of the Company to return or destroy all such information in the
possession of any such party or in the possession of any agent or advisor of any
such party. Notwithstanding anything to the contrary contained in this
Agreement, nothing herein shall be construed to prohibit or restrict in any way
the Company's ability to negotiate (and consummate) the sale of its Advanced
Diagnostics Solutions division and all subsidiaries and assets associated
therewith consistent with Section 4.01 of the Company Disclosure Schedule.
SECTION 5.07. STOCK EXCHANGE LISTING. Parent shall use all reasonable
efforts to cause the shares of Parent Common Stock to be issued in the Merger
and the shares of Parent Common Stock to be reserved for issuance upon exercise
of Company Stock Options to be approved for listing on the NYSE, subject to
official notice of issuance.
SECTION 5.08. LETTERS OF THE COMPANY'S ACCOUNTANTS. The Company shall
use its reasonable best efforts to cause to be delivered to Parent a letter of
PricewaterhouseCoopers LLP, the Company's independent public accountants, dated
a date within two business days before the Form S-4 shall become effective and a
letter of PricewaterhouseCoopers LLP dated a date within two business days
before the Closing Date, each addressed to Parent, for letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
SECTION 5.09. LETTERS OF PARENT'S ACCOUNTANTS. Parent shall use its
reasonable best efforts to cause to be delivered to the Company a letter of
PricewaterhouseCoopers LLP, Parent's independent public accountants, dated a
date within two business days before the Form S-4 shall become effective and a
letter of PricewaterhouseCoopers LLP dated a date within two business days
before the Closing Date, each addressed to the Company, in form and substance
reasonably satisfactory to the Company and customary in scope and substance for
letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
SECTION 5.10. EMPLOYEE BENEFIT PLANS. Parent intends to include Company
employees in Parent's welfare plans (within the meaning of Section 3(1) of
ERISA) and fringe benefit plans (the "Parent Plans") on the same basis and terms
as Parent employees not later than two years following the Effective Time and,
in any event, with respect to particular welfare plans of Parent, upon the
termination of the equivalent Company welfare plans; and until such time of
inclusion, Parent intends to cause the Surviving Corporation to maintain in
effect, on terms not materially less favorable to employees of the Company as
were in effect at the Effective Time of the Merger, all Company Plans which are
welfare plans or fringe benefits, other than employer stock option or stock
purchase plans. With respect to employees of the Company or its subsidiaries who
remain as employees of Parent or any of its subsidiaries, Parent shall take into
account for
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purposes of eligibility and vesting under such Parent Plans the service of such
employees with the Company or any subsidiary thereof as if such service were
with Parent or its subsidiaries, to the same extent to which such service would
have been credited under the applicable Parent plan and to the extent not
prohibited under such Parent Plan and consistent with Parent's policies. In
addition, from and after the Effective Time of the Merger, Parent intends that
Company employees be eligible to participate in Parent's stock option and stock
purchase plans on the same basis and terms as Parent employees are eligible to
participate in such plans. Notwithstanding the foregoing, Parent may at any time
terminate or modify the terms of any such Company Plans if the cost of
maintaining any such Company Plan has increased by a material amount or if, in
the good faith judgment of Parent, continuing to maintain any such Company Plan
conflicts in any material respect with Parent's overall compensation policies
then in effect. Nothing in this Section 5.10 will require that Parent permit
Company employees to participate in its defined benefit pension plan, which
Company and Parent understand is frozen to new accruals.
SECTION 5.11. COMPANY SENIOR CREDIT FACILITY. On or before the fifth
business day following the Closing Date, Parent shall, or shall cause the
Surviving Corporation to, satisfy the Company's outstanding obligations under
the Revolving Credit and Term Loan Agreement dated as of March 24, 2000, as
amended to date, with Fleet National Bank et al (the "Credit Facility
Agreement"); provided, however, that in no event shall Parent's obligation
hereunder exceed the sum of (a) with respect to the term loans outstanding under
the Credit Facility Agreement, an aggregate amount not to exceed the amount
included in the 2001 Balance Sheet less any scheduled payments made prior to the
Closing Date as set forth on Schedule 5.11 and (b) with respect to the revolving
credit facility under the Credit Facility Agreement, an aggregate amount not to
exceed the amount set forth on Section 4.01 of the Company Disclosure Schedule.
SECTION 5.12. INFORMATION SUPPLIED. The Company shall use its best
efforts to provide to Parent no later than September 3, 2001 all information
reasonably requested by Parent for Parent to determine (i) whether any payment
resulting from any agreement, contract, plan or other arrangement (separately or
in the aggregate) to which either the Company or any of its subsidiaries is a
party would be an "excess parachute payment" within the meaning of Section 280G
of the Code (without regard to the exceptions set forth in Sections 280G(b)(4)
and 280G(b)(5) of the Code) as a result of any of the transactions contemplated
by this Agreement, and (ii) the amount of such excess parachute payments, if
any.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) COMPANY SHAREHOLDER APPROVAL. The Company Shareholder Approval
shall have been obtained.
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(b) HSR ACT. The waiting period (and any extension thereof) applicable
to the Merger under the HSR Act shall have been terminated or shall have
expired.
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; PROVIDED, HOWEVER, that the
parties hereto shall use their best efforts to have any such injunction, order,
restraint or prohibition vacated.
(d) FORM S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order, and any material "blue sky" and other state securities
laws applicable to the registration and qualification of the Parent Common Stock
issuable or required to be reserved for issuance pursuant to this Agreement
shall have been complied with.
(e) STOCK EXCHANGE LISTING. The shares of Parent Common Stock issuable
to Company shareholders pursuant to this Agreement and such other shares of
Parent Common Stock required to be reserved for issuance in connection with the
Merger shall have been authorized for listing on the NYSE upon official notice
of issuance.
(f) TERMINATION OF EMPLOYMENT AND SEVERANCE AGREEMENT. The Chief
Executive Officer of the Company shall have entered into a termination agreement
providing for the termination of his employment and/or severance agreements with
the Company.
SECTION 6.02. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The
obligations of Parent and Sub to effect the Merger are further subject to the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in this Agreement shall be true and correct in each
case as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or "Material Adverse Effect" set
forth therein) would not individually or in the aggregate have a Material
Adverse Effect. Parent shall have received a certificate dated as of the Closing
Date signed on behalf of the Company by the chief executive officer, the
president, and the chief financial officer of the Company to the effect set
forth in this paragraph.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date. Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer, the president, and the chief financial officer of the Company to the
effect set forth in this paragraph.
(c) CONSENTS, ETC. Parent and Sub shall have received evidence, in form
and substance reasonably satisfactory to it, that such licenses, permits,
consents, approvals,
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authorizations, qualifications, and orders of governmental authorities and other
third parties as are necessary in connection with the transactions contemplated
hereby have been obtained, except where the failure to obtain such licenses,
permits, consents, approvals, authorizations, qualifications, and orders would
not, individually or in the aggregate with all other failures, have a Material
Adverse Effect with respect to the Company.
(d) NO LITIGATION. There shall not be pending by any Governmental
Entity or any other person or solely with respect to any Governmental Entity,
threatened y any suit, action, or proceeding, (i) challenging or seeking to
restrain or prohibit the consummation of the Merger or any of the other
transactions contemplated by this Agreement or seeking to obtain from the
Company, Parent, Sub, or any of their affiliates any damages that are material
in relation to the Company and its subsidiaries taken as a whole; (ii) seeking
to prohibit or limit the ownership or operation by the Company, Parent, or any
of their respective subsidiaries of any material portion of the business or
assets of the Company and its subsidiaries taken as a whole or to dispose of or
hold separate any material portion of the business or assets of the Company and
its subsidiaries taken as a whole, as a result of the Merger or any of the other
transactions contemplated by this Agreement; (iii) seeking to impose limitations
on the ability of Parent to acquire or hold, or exercise full rights of
ownership of, any shares of the common stock of the Surviving Corporation,
including, without limitation, the right to vote such common stock on all
matters properly presented to the shareholders of the Surviving Corporation; or
(iv) seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect the business or operations of the Company
and its subsidiaries taken as a whole.
(e) LOAN AGREEMENT. The banks who are parties to the Credit Facility
Agreement shall not, following a default, either now or hereafter existing, have
initiated proceedings to take possession of (within the meaning of the
applicable Uniform Commercial Code) or foreclose upon any collateral in which
they have a security interest under the Credit Facility Agreement or exercised
any right of "set-off" or exercised any other similar remedy against or with
respect to any property or asset of the Company.
SECTION 6.03. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation
of the Company to effect the Merger is further subject to the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Parent and Sub set forth in this Agreement shall be true and correct, in each
case as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or "material adverse effect" set
forth therein) would not individually or in the aggregate have a Material
Adverse Effect with respect to Parent. The Company shall have received a
certificate signed on behalf of Parent and Sub by an authorized officer of
Parent and Sub to the effect set forth in this paragraph.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND SUB. Parent and Sub shall
have performed in all material respects all obligations required to be performed
by each of them under this Agreement at or prior to the Closing Date. The
Company shall have received a certificate
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signed on behalf of Parent and Sub by an authorized officer of Parent and Sub to
the effect set forth in this paragraph.
ARTICLE VII
TERMINATION, AMENDMENT, AND WAIVER
SECTION 7.01. TERMINATION. This Agreement may be terminated and
abandoned at any time prior to the Effective Time of the Merger, whether before
or after the Company Shareholder Approval:
(a) by mutual written consent of Parent and the Company; or
(b) by either Parent or the Company if any Governmental Entity shall
have issued an order, decree, or ruling or taken any other action permanently
enjoining, restraining, or otherwise prohibiting the Merger and such order,
decree, ruling, or other action shall have become final and nonappealable; or
(c) by either Parent or the Company if the Merger shall not have been
consummated on or before May 1, 2002 (other than due to the failure of the party
seeking to terminate this Agreement to perform in any material respect its
obligations under this Agreement required to be performed at or prior to the
Effective Time of the Merger); or
(d) by either Parent or the Company if at the duly held meeting of the
shareholders of the Company (including any adjournment thereof) held for the
purpose of voting on this Agreement, the holders of two-thirds of the
outstanding shares of Company Common Stock shall not have approved this
Agreement; or
(e) by Parent, if the Company or its Board of Directors shall have (1)
withdrawn, modified, or amended in any respect adverse to Parent its approval or
recommendation of this Agreement or any of the transactions contemplated herein;
(2) failed as promptly as reasonably practicable after the Form S-4 is declared
effective to mail the Proxy Statement to its shareholders or failed to include
in such statement such recommendation; (3) recommended any Transaction Proposal
from a person other than Parent or any of its affiliates; (4) resolved to do any
of the foregoing; or (5) in response to the commencement of any tender offer or
exchange offer for more than 10% of the outstanding shares of Company Common
Stock, not recommended rejection of such tender offer or exchange offer at the
time of filing of the requisite Schedule 14d-9 with the SEC; or
(f) by the Company, if, pursuant to and in compliance with Section 5.06
hereof, the Board of Directors of the Company concludes in good faith, based on
advice from outside counsel, that in order to satisfy its fiduciary duties to
the shareholders of the Company under the Massachusetts Law, the Board of
Directors must not make or must withdraw or modify its recommendation referred
to in Section 3.01(p), and the Board of Directors does not make or withdraws or
modifies such recommendation.
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(g) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company shall have become untrue, in either
case such that the conditions set forth in Section 6.02(a) or Section 6.02(b)
(other than with respect to the delivery of the officers' certificates required
thereunder) would not be satisfied at the time of such breach or as of the time
such representation or warranty shall have become untrue; provided that if such
inaccuracy in the Company's representations and warranties or breach by the
Company is curable by the Company through the exercise of its commercially
reasonable efforts within fifteen (15) days of the time such representation or
warranty shall have become untrue or such breach, the Parent may not terminate
this Agreement under this Section 7.01(g) during such fifteen-day period
provided Company continues to exercise such commercially reasonable efforts.
(h) by the Company, upon a breach of any representation, warranty,
covenant or agreement on the part of the Parent or Sub set forth in this
Agreement, or if any representation or warranty of Parent shall have become
untrue, in either case such that the conditions set forth in Section 6.03(a) or
Section 6.03(b) (other than with respect to the delivery of the officers'
certificates required thereunder) would not be satisfied at the time of such
breach or as of the time such representation or warranty shall have become
untrue; provided that if such inaccuracy in the Parent's representations and
warranties or breach by the Parent is curable by the Parent through the exercise
of its commercially reasonable efforts within fifteen (15) days of the time such
representation or warranty shall have become untrue or such breach, the Company
may not terminate this Agreement under this Section 7.01(h) during such
fifteen-day period provided Parent continues to exercise such commercially
reasonable effort.
SECTION 7.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 7.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub, or the Company, other than the
provisions of Section 3.01(n), Section 3.02(k), the last sentence of Section
5.02(a), this Section 7.02, Section 8.02, and Section 8.07. Nothing contained in
this Section shall relieve any party for any breach of the representations,
warranties, covenants, or agreements set forth in this Agreement or the
Confidentiality Agreement.
SECTION 7.03. AMENDMENT. This Agreement may be amended by the parties
at any time before or after any required approval of matters presented in
connection with the Merger by the shareholders of the Company; provided,
however, that after any such approval, there shall be made no amendment that by
law requires further approval by such shareholders without the further approval
of such shareholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
SECTION 7.04. EXTENSION; WAIVER. At any time prior to the Effective
Time of the Merger, the parties may (a) extend the time for the performance of
any of the obligations or other acts of the other parties; (b) waive any
inaccuracies in the representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement; or (c) subject to the
provisions of Section 7.03, waive compliance with any of the agreements or
conditions contained in this Agreement. Any agreement on the part of a party to
any such
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extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION 7.05. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION, OR
WAIVER. A termination of this Agreement pursuant to Section 7.01, an amendment
of this Agreement pursuant to Section 7.03 or an extension or waiver pursuant to
Section 7.04 shall, in order to be effective, require in the case of Parent,
Sub, or the Company, action by its Board of Directors or a duly-authorized
designee of its Board of Directors.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01. NONSURVIVAL OF REPRESENTATION AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time of the Merger and
all such representations and warranties will be extinguished on consummation of
the Merger and neither the Company, the Parent, Sub, or any officer, director or
employee or shareholder of any of them shall be under any liability whatsoever
with respect to any such representation or warranty after such time. This
Section 8.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after Effective Time of the Merger.
SECTION 8.02. FEES AND EXPENSES. (a) (i) If this Agreement shall have
been terminated in accordance with its terms (except pursuant to Sections
7.01(a), 7.01(b) or 7.01(h) and either of the following shall have occurred: (A)
prior to such termination, any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person, other entity or "group" (as
referred to in Section 13(d)(3) of the Exchange Act) (collectively, "PERSONS")
other than Parent or any of its affiliates or any Person who is a member of such
a group with the Parent or its affiliates shall have become the beneficial owner
of 10% of the outstanding shares of Company Common Stock; or (B) (x) prior to
such termination, any Person, shall have made, or proposed, communicated or
disclosed in a manner which is or otherwise becomes public (including being
known by shareholders of the Company owning of record or beneficially in the
aggregate 10% or more of the outstanding shares of Company Common Stock) a bona
fide intention to make a Transaction Proposal (including by making such a
Transaction Proposal) and (y) on or prior to August 1, 2002, the Company either
consummates with a Person a transaction the proposal of which would otherwise
qualify as a Transaction Proposal under Section 5.06 or enters into a definitive
agreement with a Person with respect to a transaction the proposal of which
would otherwise qualify as a Transaction Proposal under Section 5.06 (whether or
not such Person is the Person referred to in clause (x) above) other than a
transaction pursuant to which the Company or any of its affiliates issue
equity-related securities or Voting Debt to a Person in an aggregate amount of
less than 50% of the outstanding capital stock of the Company on the date hereof
for the sole purpose of financing its business operations; or
(ii) if this Agreement is terminated pursuant to Section 7.01(e) or
Section 7.01(f);
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then the Company shall, (1) in the case of clauses (a)(i)(A) and (a)(ii) above,
promptly, but in no event later than one business day after the termination of
this Agreement and (2) in the case of clause (a)(i)(B) above, promptly, but in
no event later than one business day after an event specified in subclause (y)
thereof shall have occurred, pay Parent a fee of ten million dollars
($10,000,000) in cash, which amount shall be payable in same day funds. No
termination of this Agreement shall affect any payment of fees or expenses due
and payable pursuant to this Agreement.
(b) In addition to the other provisions of this Section 8.02, in the
event (i) a fee is or becomes payable pursuant to Section 8.02(a) hereof or (ii)
this Agreement is terminated pursuant to Section 7.01(g) hereof, the Company
agrees promptly, but in no event later than two business days following written
notice thereof, together with related bills or receipts, to reimburse Parent and
Sub for all reasonable out-of-pocket costs, fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of
investment bankers and counsel and the expenses of litigation incurred in
connection with collecting the fee pursuant to paragraph (a) of this Section as
a result of any breach by the Company of its obligations under this Section
8.02; provided, however, that in the event the Company is obligated to reimburse
Parent pursuant to (b)(i) hereof, the Company's obligation to reimburse Parent
for all reasonable out-of-pocket costs, fees and expenses shall not exceed an
aggregate of $750,000.
(c) In the event this Agreement is terminated pursuant to Section
7.01(h) hereof, the Parent agrees promptly, but in no event later than two
business days following written notice thereof, together with related bills or
receipts, to reimburse the Company for all reasonable out-of-pocket costs, fees
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including, without limitation, the reasonable fees and
disbursements of investment bankers and counsel.
(d) Except as provided otherwise in paragraph (a), (b) and (c) above,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except that the cost of filing, printing and distributing the Proxy
Statement and the Form S-4 shall be borne equally by Parent and the Company.
Notwithstanding anything else in this Agreement, Parent shall pay all fees
relating to any filing required to be made in connection with the Merger under
the HSR Act or reasonably required to be made in connection with the Merger
under any similar law in any foreign jurisdiction; provided, however, that in
the event this Agreement is terminated pursuant to the terms of this Agreement,
the Company shall reimburse Parent for an aggregate of fifty percent (50%) of
all such fees paid no later than two business days following such termination.
SECTION 8.03. NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
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(a) if to Parent or Sub, to
Teradyne, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
(b) if to the Company, to
GenRad, Inc.
0 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
with copies to:
Xxxxxx, XxXxxxxxx & Fish, LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
SECTION 8.04. DEFINITIONS. For purposes of this Agreement:
(a) an "AFFILIATE" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "ENVIRONMENTAL CLAIM" means any written or oral notice, claims,
demand, action, suit, complaint, proceeding or other communication by any person
alleging liability or potential liability (including without limitation
liability or potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property damage, personal
injury, fines or penalties) arising out of, relating to, based on or resulting
from (A) the presence, discharge, emission, release or threatened release of any
Hazardous Materials at any location, whether or not owned, leased or operated by
the Company or any of its subsidiaries or (B) circumstances forming the basis of
any violation or alleged violation of any Environmental Law or Environmental
Permit or (C) otherwise relating to obligations or liabilities under any
Environmental Laws;
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(c) "ENVIRONMENTAL PERMITS" means all permits, licenses, registrations
and other governmental authorizations required under Environmental Laws for the
Company and its subsidiaries to conduct their operations and businesses on the
date hereof and consistent with past practices;
(d) "ENVIRONMENTAL LAWS" means all applicable federal, state and local
statutes, rules, regulations, ordinances, orders, decrees and common law
relating in any manner to contamination, pollution or protection of the
environment, including without limitation the Comprehensive Environmental
Response, Compensation and Liability Act, the Solid Waste Disposal Act, the
Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the
Occupational Safety and Health Act, the Emergency Planning and
Community-Right-to-Know Act, the Safe Drinking Water Act, all as amended, and
similar state laws;
(e) "HAZARDOUS MATERIALS" means all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any fraction
thereof) and petroleum products, friable asbestos and asbestos-containing
materials, pollutants, contaminants and all other materials, and substances
regulated pursuant to, or that could reasonably be expected to provide the basis
of liability under, any Environmental Law;
(f) "INDEBTEDNESS" means, with respect to any person, without
duplication, (A) all obligations of such person for borrowed money, (B) all
obligations of such person evidenced by bonds, debentures, notes or similar
instruments, (C) all obligations of such person under conditional sale or other
title retention agreements relating to property purchased by such person, (D)
all obligations of such person issued or assumed as the deferred purchase price
of property or services (excluding obligations of such person to creditors for
raw materials, inventory, services and supplies incurred in the ordinary course
of such person's business), (E) all capitalized lease obligations of such
person, (F) all obligations of others secured by any Lien on property or assets
owned or acquired by such person, whether or not the obligations secured thereby
have been assumed, (G) all obligations of such person under interest rate or
currency hedging transactions (valued at the termination value thereof), (H) all
letters of credit issued for the account of such person and (I) all guarantees
and arrangements having the economic effect of a guarantee of such person of any
indebtedness of any other person;
(g) "INTELLECTUAL PROPERTY" means all rights, privileges and priorities
provided under federal, state, foreign and multinational law relating to
intellectual property, including without limitation all (i)(a) inventions,
discoveries, processes, formulae, designs, methods, techniques, procedures,
concepts, developments, technology, new and useful improvements thereof and
know-how relating thereto, whether or not patented or eligible for patent
protection; (b) copyrights and copyrightable works, including computer
applications, programs, software, databases and related items (except for
off-the-shelf commercial software); (c) trademarks, service marks, trade names,
brand names, corporate names, logos and trade dress, the goodwill of any
business symbolized thereby, and all common-law rights relating thereto; (d)
trade secrets and other confidential information; and (ii) all registrations,
applications, recordings, and licenses or other similar agreements related to
the foregoing;
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(h) "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when
used in connection with the Company or Parent, any change, effect, event or
occurrence that either individually or in the aggregate with all other such
changes, effects, events and occurrences is materially adverse to the business,
properties, financial condition or results of operations of the Company or
Parent, as the case may be, and its subsidiaries taken as a whole, provided that
(i) with respect to Section 3.01(g)(i) and (ii) hereof, shall exclude any
material adverse change in the Company's results of operations for any fiscal
period prior to the Closing Date that is directly attributable to a disruption
in the conduct of the Company's business arising from the transactions
contemplated by this Agreement or the public announcement thereof and (ii) with
respect to Section 3.02(f)(i) and (ii) hereof, shall exclude any material
adverse change in Parent's results of operations for any fiscal period prior to
the Closing Date that is directly attributable to a disruption in the conduct of
Parent's business arising from the transactions contemplated by this Agreement
or the public announcement thereof; and PROVIDED, FURTHER, that Material Adverse
Effect and Material Adverse Change shall not be deemed to include the impact of
(a) any change in laws and regulations or interpretations thereof by courts or
governmental authorities generally applicable to the Company and Parent, (b) any
change in generally accepted accounting principles or regulatory accounting
principles generally applicable to the Company and Parent, (c) any change
arising or resulting from general industry, economic or capital market
conditions or conditions in markets relevant to the Company or Parent, as
applicable, that affects Parent or the Company, as applicable (or the markets in
which Parent or the Company, as applicable, compete) in a manner not
disproportionate to the manner in which such conditions affect comparable
companies in the industries or markets in which Company or Parent, as
applicable, compete, (d) any act or omission of the Company (or any of its
subsidiaries) taken with the prior written consent of Parent, (e) the expenses
reasonably incurred by the Company in entering into this Agreement and
consummating the transactions contemplated by this Agreement and the expenses
associated with the termination of any Company Plan as and to the extent
contemplated herein (f) the Company's results for the quarter ended June 30,
2001 provided such results do not differ materially from the results disclosed
to Parent as of the date hereof or (g) the matters set forth on Schedule 4.01 of
the Company Disclosure Schedule.
(i) "PERMITTED LIEN" means statutory Liens securing payments not yet
due and such Liens as do not materially affect the use of the properties or
assets subject thereto or affected thereby or otherwise materially impair
business operations at such properties.
(j) "PERSON" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity;
(k) a "SUBSIDIARY" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
SECTION 8.05. INTERPRETATION. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in
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this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
SECTION 8.06. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties. The delivery of a
signature page of this Agreement by one party to the other via facsimile
transmission shall constitute the execution and delivery of this Agreement by
the transmitting party.
SECTION 8.07. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. 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 the parties with respect to the subject matter of this
Agreement. This Agreement, other than Section 5.04, is not intended to confer
upon any person other than the parties any rights or remedies.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS.
SECTION 8.09. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, insure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
SECTION 8.10. ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
TERADYNE, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President, Chief Executive
Officer and Chairman
By: /s/ Xxxxxx X. Ossatin
-------------------------------------------
Name: Xxxxxx X. Ossatin
Title: Vice President and Treasurer
RADIO ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
By: /s/ Xxxxxx X. Ossatin
-------------------------------------------
Name: Xxxxxx X. Ossatin
Title: Vice President and Treasurer
GENRAD, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
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