Exhibit 2.1
Execution Copy
AGREEMENT AND PLAN OF MERGER
dated as of May 2, 2002
AMONG
GENERAL DYNAMICS CORPORATION,
ATHENA ACQUISITION I CORPORATION
AND
ADVANCED TECHNICAL PRODUCTS, INC.
TABLE OF CONTENTS
Description Page
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ARTICLE 1 THE MERGER..............................................................................................1
Section 1.1 The Merger.............................................................................1
Section 1.2 The Closing............................................................................1
Section 1.3 Effective Time.........................................................................2
Section 1.4 Effects of the Merger..................................................................2
Section 1.5 Certificate of Incorporation and Bylaws...............................................2
Section 1.6 Directors and Officers.................................................................2
Section 1.7 Conversion of Company Common Stock.....................................................2
Section 1.8 Company Options........................................................................4
Section 1.9 Conversion of Merger Subsidiary Common Stock...........................................4
ARTICLE 2 PAYMENT ................................................................................................4
Section 2.1 Surrender of Certificates..............................................................4
Section 2.2 Paying Agent; Certificate Surrender Procedures.........................................5
Section 2.3 Transfer Books.........................................................................5
Section 2.4 Termination of Payment Fund............................................................6
Section 2.5 Lost Certificates......................................................................6
Section 2.6 No Rights as Stockholder...............................................................6
Section 2.7 Withholding............................................................................6
Section 2.8 Further Action.........................................................................7
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................7
Section 3.1 Organization...........................................................................7
Section 3.2 Capitalization.........................................................................7
Section 3.3 Authorization of Transaction; Enforceability...........................................9
Section 3.4 Vote Required..........................................................................9
Section 3.5 Noncontravention; Consents............................................................10
Section 3.6 Company Filings; Proxy Statement......................................................10
Section 3.7 No Undisclosed Liabilities............................................................11
Section 3.8 Absence of Material Adverse Effect....................................................11
Section 3.9 Litigation and Legal Compliance.......................................................12
Section 3.10 Contract Matters......................................................................13
Section 3.11 Tax Matters...........................................................................16
Section 3.12 Employee Benefit Matters..............................................................20
Section 3.13 Environmental Matters.................................................................23
Section 3.14 Properties............................................................................25
Section 3.15 Intellectual Property Matters.........................................................25
Section 3.16 Labor Matters.........................................................................26
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Section 3.17 Rights Agreement......................................................................27
Section 3.18 Insurance Policies....................................................................27
Section 3.19 Brokers' Fees.........................................................................27
Section 3.20 Full Disclosure.......................................................................27
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER SUBSIDIARY.................................28
Section 4.1 Organization..........................................................................28
Section 4.2 Authorization of Transaction; Enforceability..........................................28
Section 4.3 Noncontravention; Consents............................................................28
Section 4.4 Brokers' Fees.........................................................................29
Section 4.5 No Capital Ownership in the Company...................................................29
Section 4.6 Adequate Cash Resources...............................................................29
ARTICLE 5 COVENANTS..............................................................................................29
Section 5.1 General ..............................................................................29
Section 5.2 Further Assurances....................................................................29
Section 5.3 Interim Conduct of the Company........................................................30
Section 5.4 Proxy Statement.......................................................................33
Section 5.5 Additional Reports....................................................................33
Section 5.6 Nonsolicitation of Acquisition Proposals..............................................34
Section 5.7 Indemnification.......................................................................36
Section 5.8 Public Announcements..................................................................38
Section 5.9 Full Access...........................................................................39
Section 5.10 Actions Regarding Antitakeover Statutes...............................................39
Section 5.11 Employee Benefit Matters..............................................................39
Section 5.12 Standstill Provisions.................................................................41
Section 5.13 Notice of Developments................................................................41
ARTICLE 6 CONDITIONS TO THE CONSUMMATION OF THE MERGER...........................................................41
Section 6.1 Conditions to the Obligations of Each Party...........................................41
Section 6.2 Conditions to the Obligation of the Company...........................................41
Section 6.3 Conditions to the Obligation of Parent and the Merger Subsidiary......................42
Section 6.4 Frustration of Closing Conditions.....................................................43
ARTICLE 7 TERMINATION............................................................................................43
Section 7.1 Termination...........................................................................43
Section 7.2 Effect of Termination.................................................................44
Section 7.3 Termination Fee.......................................................................44
Section 7.4 Other Termination Fee Matters.........................................................45
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ARTICLE 8 MISCELLANEOUS..........................................................................................46
Section 8.1 Nonsurvival of Representations........................................................46
Section 8.2 Specific Performance..................................................................46
Section 8.3 Successors and Assigns................................................................46
Section 8.4 Amendment.............................................................................46
Section 8.5 Extension of Time; Waiver.............................................................46
Section 8.6 Severability..........................................................................46
Section 8.7 Counterparts..........................................................................46
Section 8.8 Descriptive Headings..................................................................47
Section 8.9 Notices ..............................................................................47
Section 8.10 No Third Party Beneficiaries..........................................................48
Section 8.11 Entire Agreement......................................................................48
Section 8.12 Construction..........................................................................48
Section 8.13 Consent to Jurisdiction...............................................................48
Section 8.14 Governing Law.........................................................................48
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TABLE OF DEFINED TERMS
Acquisition Agreement Section 5.6
Acquisition Proposal Section 5.6
Affiliate Section 3.10
Affiliated Group Section 3.11
Agreement Preamble
Antitrust Laws Section 3.5
Certificate Section 2.1
Certificate of Merger Section 1.3
Closing Section 1.2
Closing Date Section 1.2
Code Section 3.11
Company Preamble
Company Common Stock Section 1.7
Company Disclosure Letter Article 3
Company Material Adverse Effect Section 3.1
Company Material Agreements Section 3.10
Company Plans Section 3.12
Company Preferred Stock Section 3.2
Company Representatives Section 5.6
Company SEC Documents Section 3.6
Company Stock Section 3.2
Company Stock Plans Section 1.8
Company Stockholders Approval Section 3.4
Company Stockholders Section 3.3
Company Stockholders Meeting Section 3.6
Confidentiality Agreement Section 5.9
Constituent Corporations Section 1.1
Deferred Compensation Plan Section 5.11
Delaware Act Preamble
Dissenting Shares Section 1.7
Effective Time Section 1.3
Employee Pension Benefit Plan Section 3.12
Employee Welfare Benefit Plan Section 3.12
Employees Section 5.11
Environmental Law Section 3.13
ERISA Section 3.12
ESPP Section 5.11
Exchange Act Section 3.5
GAAP Section 3.6
Government Contract Section 3.10
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Governmental Entity Section 3.5
Hazardous Materials Section 3.13
HSR Act Section 3.5
Indemnified Parties Section 5.7
Insurance Policies Section 3.18
Intellectual Property Section 3.15
Laws Section 3.9
Lien Section 3.2
Merger Preamble
Merger Consideration Section 1.7
Merger Subsidiary Preamble
Multiemployer Plan Section 3.12
Negotiation Period Section 5.6
Parent Preamble
Parent Material Adverse Effect Section 5.2
Paying Agent Section 2.2
Payment Fund Section 2.2
Permitted Liens Section 3.14
PGBC Section 3.12
Post-Closing Tax Period Section 3.11
Pre-Closing Tax Period Section 3.11
Proxy Statement Section 3.6
Rights Section 1.7
Rights Agreement Section 1.7
SEC Section 3.6
Securities Act Section 3.6
Stock Options Section 1.8
Subsidiary Section 1.7
Superior Proposal Section 5.6
Surviving Corporation Section 1.1
Tax Authority Section 3.11
Tax Returns Section 3.11
Taxes Section 3.11
Termination Fee Section 7.3
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Execution Copy
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of May 2, 2002 (the "Agreement")
among General Dynamics Corporation, a Delaware corporation (the "Parent"),
Athena Acquisition I Corporation, a Delaware corporation and wholly-owned
subsidiary of the Parent (the "Merger Subsidiary"), and Advanced Technical
Products, Inc., a Delaware corporation (the "Company").
WHEREAS, the Board of Directors of each of the Parent, the Merger
Subsidiary and the Company deem it advisable and in the best interests of their
respective companies and stockholders to consummate the merger of the Merger
Subsidiary with and into the Company, upon the terms and subject to the
conditions set forth herein (the "Merger"), and have adopted resolutions in
accordance with the General Corporation Law of the State of Delaware (as
amended, the "Delaware Act") approving this Agreement, the Merger and the other
transactions contemplated herein.
WHEREAS, pursuant to the Merger, shares of the Company's common stock will
be converted into the right to receive the Merger Consideration (as defined
below) in the manner set forth herein, and the Company will become a
wholly-owned subsidiary of the Parent.
NOW, THEREFORE, in consideration of the mutual agreements contained in this
Agreement, and for other good and valuable consideration, the value, receipt and
sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE 1
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.3) the Merger
Subsidiary will be merged with and into the Company in accordance with the
provisions of the Delaware Act. Following the Merger, the Company will continue
as the surviving corporation (the "Surviving Corporation") and the separate
corporate existence of the Merger Subsidiary will cease. The Merger Subsidiary
and the Company are sometimes referred to collectively as the "Constituent
Corporations."
Section 1.2 The Closing. Unless this Agreement has been terminated pursuant
to Section 7.1, the closing of the Merger (the "Closing") will take place at
10:00 a.m., local time, on a date to be specified by the parties that is no
later than the third business day following satisfaction or waiver of the
conditions set forth in Article 6 (the "Closing Date"), at the offices of Jenner
& Block, LLC, 000 00xx Xxxxxx X.X., Xxxxx 0000X, Xxxxxxxxxx, X.X., 00000, unless
another date, time or place is agreed to in writing by the parties.
Section 1.3 Effective Time. Upon the terms and conditions of this
Agreement, on the Closing Date (or on such other date as the parties may agree)
the Company will file with the Delaware Secretary of State an appropriate
certificate of merger (the "Certificate of Merger") in accordance with the
Delaware Act. The Merger will be consummated on the later of the date on which
the Certificate of Merger has been filed with the Delaware Secretary of State,
or such time as is agreed upon by the parties and specified in such Certificate
of Merger. The time the Merger becomes effective in accordance with the Delaware
Act is referred to in this Agreement as the "Effective Time."
Section 1.4 Effects of the Merger. The Merger will have the effects set
forth in this Agreement and Section 259 of the Delaware Act. Without limiting
the generality of the foregoing, as of the Effective Time, the Surviving
Corporation will succeed to all the properties, rights, privileges, powers,
franchises and assets of the Constituent Corporations, and all debts,
liabilities and duties of the Constituent Corporations will become debts,
liabilities and duties of the Surviving Corporation.
Section 1.5 Certificate of Incorporation and Bylaws. At the Effective Time,
the certificate of incorporation and bylaws of the Merger Subsidiary (as in
effect immediately prior to the Effective Time), will become the certificate of
incorporation and bylaws of the Surviving Corporation until thereafter amended
in accordance with their respective terms and the Delaware Act.
Section 1.6 Directors and Officers. The directors and the officers of the
Merger Subsidiary at the Effective Time will be the initial directors and
officers of the Surviving Corporation and will hold office from the Effective
Time in accordance with the certificate of incorporation and bylaws of the
Surviving Corporation until their respective successors are duly elected or
appointed and qualified.
Section 1.7 Conversion of Company Common Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holders of any
shares of Company Stock (as defined in Section 3.2):
(a) Each share of the Company's common stock, par value $0.01 per
share (the "Company Common Stock"), issued and outstanding immediately
prior to the Effective Time, (other than shares of Company Common Stock to
be canceled pursuant to (b) below and Dissenting Shares (as defined in (c)
below)) will, by virtue of the Merger, be converted into the right to
receive, upon the surrender of the certificate formerly representing such
share in accordance with this Agreement, $33.50 in cash, without interest
(the "Merger Consideration"). The Company Common Stock includes the
associated rights to purchase Series RP Preferred Stock of the Company (the
"Rights") issued pursuant to the Rights Agreement dated March 3, 2000,
between the Company and American Stock Transfer & Trust Company (as
amended, the "Rights
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Agreement"); all references herein to the Rights will include all benefits
that may inure to holders of the Rights pursuant to the Rights Agreement
and, unless the context otherwise requires, all references herein to
Company Common Stock will include the Rights. All shares of Company Common
Stock when converted, will no longer be outstanding and will automatically
be canceled and retired, and each holder of a certificate representing any
such shares will cease to have any rights with respect thereto, except the
right to receive such Merger Consideration. In the event that subsequent to
the date of this Agreement but prior to the Effective Time, the outstanding
shares of Company Common Stock are changed into a different number of
shares or a different class as a result of a stock split, reverse stock
split, stock dividend, subdivision, reclassification, combination,
exchange, recapitalization or similar transaction, the Merger Consideration
will be adjusted to reflect such change.
(b) Each share of Company Common Stock owned immediately prior to the
Effective Time by the Company, the Merger Subsidiary, the Parent, or any
Subsidiary (as defined in (d) below) of the Parent or the Company,
including without limitation, any such shares held as treasury stock of the
Company or any Subsidiary of the Company, will, by virtue of the Merger and
without any action on the part of the holder thereof, be canceled and
extinguished without any action on the part of the holder thereof. For
purposes of this section, shares of Company Common Stock owned beneficially
or held of record by any plan, program or arrangement sponsored or
maintained for the benefit of any current or former employee of the
Company, the Parent or any of their respective Subsidiaries, will not be
deemed to be held by the Company, the Parent or any such Subsidiary,
regardless of whether the Company, the Parent or any such Subsidiary has
the power, directly or indirectly, to vote or control the disposition of
such shares.
(c) Notwithstanding anything in this Agreement to the contrary, shares
of Company Common Stock outstanding immediately prior to the Effective Time
and held by a holder who has not voted in favor of the Merger or consented
thereto in writing and who has complied with all of the relevant provisions
of Section 262 of the Delaware Act regarding appraisal for such shares
("Dissenting Shares"), will not be converted into a right to receive the
Merger Consideration, unless such holder fails to perfect or withdraws or
otherwise loses their right to appraisal. The Company will give the Parent
prompt written notice of any and all demands for appraisal rights,
withdrawal of such demands and any other communications delivered to the
Company pursuant to Section 262 of the Delaware Act, and the Company will
give the Parent the opportunity, to the extent permitted by law, to
participate in all negotiations and proceedings with respect to such
demands. Except with the prior written consent of the Parent, the Company
will not voluntarily make any payment with respect to any demand for
appraisal rights and will not settle or offer to settle any such demand.
Each holder of Dissenting Shares who becomes entitled to payment for such
Dissenting Shares under the provisions of Section 262 of the Delaware Act,
will receive payment thereof from the Surviving Corporation
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and such shares of Company Common Stock will no longer be outstanding and
will automatically be canceled and retired and will cease to exist.
(d) The term "Subsidiary" as used in this Agreement means any
corporation, partnership, limited liability company or other business
entity 50% or more of the outstanding voting equity securities of which are
owned, directly or indirectly, by the Company or the Parent, as applicable.
Section 1.8 Stock Options. The Company will cause each option, warrant or
other right to purchase shares of Company Common Stock (collectively, the "Stock
Options") under any option plan, program, agreement or other arrangement of the
Company or any of its Subsidiaries, including the 2000 Advanced Technical
Products, Inc. Stock Option Plan, the 2000 Advanced Technical Products, Inc.
Non-Employee Directors Stock Option Plan, the Advanced Technical Products, Inc.
Subsidiary Key Management Stock Option Plan (1996), the 1997 Advanced Technical
Products, Inc. Stock Option Plan and the Advanced Technical Products, Inc.
Non-Employee Directors Stock Option Plan (collectively, the "Company Stock
Plans") that is outstanding and unexercised, whether vested or unvested,
immediately prior to the Effective Time, to be canceled as of the Effective Time
and to be converted at the Effective Time into the right to receive, in full
satisfaction of such Stock Options, cash from the Company in an amount equal to
the product of (X) the excess, if any, of the Merger Consideration over the per
share exercise price of such Company Option immediately prior to the Effective
Time (subject to adjustment pursuant to the last sentence of Section 1.7(a)) and
(Y) the number of shares of Company Common Stock issuable pursuant to such
Company Option as of the Effective Time (in each case assuming such Company
Option had been fully vested and fully exercisable immediately prior to the
Effective Time), which cash payment will be made promptly following the
Effective Time, and will be paid net of any applicable federal or state
withholding taxes.
Section 1.9 Conversion of Merger Subsidiary Common Stock. Each share of the
common stock, par value $0.01 per share, of the Merger Subsidiary issued and
outstanding immediately prior to the Effective Time will, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into one validly issued, fully paid and nonassessable share of the common stock,
par value $0.01 per share, of the Surviving Corporation, and the Surviving
Corporation will be a wholly-owned subsidiary of the Parent.
ARTICLE 2
PAYMENT
Section 2.1 Surrender of Certificates. From and after the Effective Time,
each holder of a certificate that immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (a "Certificate") will be
entitled to receive in exchange therefor, upon surrender thereof to the Paying
Agent (as defined below), the Merger Consideration into which
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the shares of Company Common Stock evidenced by such Certificate were converted
pursuant to the Merger. No interest will be payable on the Merger Consideration
to be paid to any holder of a Certificate irrespective of the time at which such
Certificate is surrendered for exchange.
Section 2.2 Paying Agent; Certificate Surrender Procedures.
(a) Prior to the Effective Time, the Parent will designate (with
the approval of the Company, not to be unreasonably withheld) and
enter into an agreement with an institution or trust company to act as
paying agent for the Merger Consideration (the "Paying Agent"). As
soon as reasonably practical after the Effective Time, the Parent will
deposit with the Paying Agent an amount in cash sufficient to provide
all funds necessary for the Paying Agent to make payment of the Merger
Consideration pursuant to this Agreement (the "Payment Fund"). Pending
payment of such funds to the holders of Certificates, such funds will
be held and may be invested by the Paying Agent as the Parent directs
(so long as such directions do not impair the rights of holders of
Company Stock) in the direct obligations of the United States,
obligations for which the full faith and credit of the United States
is pledged to provide for the payment of principal and interest, or
commercial paper rated of the highest quality by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation. Any net profit
resulting from, or interest or income produced by, such investments
will be payable to the Parent or its designee, in the Parent's sole
discretion. The Parent will promptly replace any funds lost through
any investment made pursuant to this section.
(b) As soon as reasonably practicable after the Effective Time,
the Parent will instruct the Paying Agent to mail to each record
holder of a Certificate (i) a letter of transmittal (which will
specify that delivery will be effected, and risk of loss and title to
such Certificates will pass, only upon delivery of the Certificate to
the Paying Agent and will be in such form and have such other
provisions as the Parent will reasonably specify) and (ii)
instructions for use in effecting the surrender of Certificates for
the Merger Consideration. Upon the surrender to the Paying Agent of
such Certificate or Certificates together with a duly executed and
completed letter of transmittal and all other documents and other
materials required by the Paying Agent to be delivered in connection
therewith, the holder will be entitled to receive the Merger
Consideration into which the Certificate or Certificates so
surrendered have been converted in accordance with the provisions of
this Agreement. Until so surrendered, each outstanding Certificate
will be deemed from and after the Effective Time, for all corporate
purposes, to evidence the right to receive the Merger Consideration
into which the shares of Company Common Stock represented by such
Certificate have been converted in accordance with the provisions of
this Agreement.
Section 2.3 Transfer Books. The stock transfer books of the Company will be
closed at the Effective Time, and no transfer of any shares of Company Common
Stock will thereafter be recorded on any of the stock transfer books. In the
event of a transfer of ownership of any
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Company Common Stock prior to the Effective Time that is not registered in the
stock transfer records of the Company at the Effective Time, the Merger
Consideration into which such Company Common Stock has been converted in the
Merger will be paid to the transferee in accordance with the provisions of
Section 2.2(b) only if the Certificate is surrendered as provided in Section 2.2
and accompanied by all documents required to evidence and effect such transfer
(including evidence of payment of any applicable stock transfer taxes).
Section 2.4 Termination of Payment Fund. Any portion of the Payment Fund
which remains undistributed one hundred eighty (180) days after the Effective
Time will be delivered to the Parent upon demand, and each holder of Company
Common Stock who has not previously surrendered Certificates in accordance with
the provisions of this Article 2 will thereafter look only to the Parent for
satisfaction of any claims for the Merger Consideration such holder may have.
Notwithstanding the foregoing, neither the Parent, the Merger Subsidiary nor the
Surviving Corporation will be liable to any former holder of Company Common
Stock for any portion of the Merger Consideration delivered to any public
official pursuant to any applicable abandoned property, escheat or similar law.
Section 2.5 Lost Certificates. If any Certificate has been lost, stolen or
destroyed, upon the making of an affidavit (in form and substance acceptable to
the Parent) of that fact by the person making such a claim, and, if required by
the Parent, the posting by such person of a bond in such reasonable amount as
the Parent may direct as indemnity against any claim that may be made against
with respect to such Certificate, the Paying Agent will deliver in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration pursuant to
Section 2.2(b).
Section 2.6 No Rights as Stockholder. From and after the Effective Time,
the holders of Certificates will cease to have any rights as a stockholder of
the Surviving Corporation except as otherwise expressly provided in this
Agreement or by applicable Laws, and the Parent will be entitled to treat each
Certificate that has not yet been surrendered for exchange solely as evidence of
the right to receive the Merger Consideration into which the shares of Company
Common Stock evidenced by such Certificate have been converted pursuant to the
Merger, provided, however, that each holder of a Certificate that has become
entitled to any dividend declared but unpaid as of the Effective Time will
continue to be entitled to such dividend following the Effective Time, and the
Surviving Corporation will pay such dividend to such holder in the amount and on
the date specified therefor by the Board of Directors of the Company at the time
of declaration thereof.
Section 2.7 Withholding. The Parent will be entitled to deduct and withhold
from the Merger Consideration otherwise payable to any former holder of Company
Common Stock all amounts required by law to be deducted or withheld therefrom.
To the extent that amounts are so withheld by the Parent or the Merger
Subsidiary, such withheld amounts will be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Company Common
Stock in respect of which such deduction and withholding was made by the Parent
or the Merger Subsidiary.
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Section 2.8 Further Action. If, at any time after the Effective Time, any
further action is determined by the Parent to be necessary or desirable to carry
out the purposes of this Agreement or to vest the Surviving Corporation with
full right, title and possession of and to all rights and property of the
Constituent Corporations, the officers and directors of the Surviving
Corporation and the Parent shall be fully authorized (in the name of the Merger
Subsidiary, in the name of the Company and otherwise) to take such action.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and the Merger Subsidiary
that, except as disclosed in (i) the Company SEC Documents (as defined in
Section 3.6) filed with the SEC (as defined in Section 3.6) subsequent to May
13, 2001 but prior to the date hereof, or (ii) the letter dated as of the date
of this Agreement from the Company to the Parent (the "Company Disclosure
Letter"):
Section 3.1 Organization. The Company and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has all requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its business as presently being conducted. The Company and each of its
Subsidiaries is duly qualified or licensed to conduct business as a foreign
corporation in each jurisdiction where such qualification or licensing is
necessary, except where the failure to be so qualified would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. The term "Company Material Adverse Effect" means any event,
circumstance, condition, change, development or effect that, either individually
or in the aggregate with all other events, circumstances, conditions, changes,
developments or effects, would have a material adverse effect on the business,
condition (financial or otherwise), assets, liabilities, operations or results
of operations of the Company and its Subsidiaries taken as a whole (but not
taking into account any change or effect primarily caused by conditions
affecting the United States economy or securities markets in general as a whole,
or the Company's industry and not specifically relating to the Company and its
Subsidiaries), or the ability of the Company to consummate the Merger and to
perform its obligations under this Agreement. The Company has delivered to the
Parent correct and complete copies of the certificate of incorporation and
bylaws currently in effect for the Company and each of its Subsidiaries.
Section 3.2 Capitalization.
(a) The authorized capital stock of the Company consists of 30,000,000
shares of Company Common Stock and 2,000,000 shares of preferred stock, par
value $1.00 per
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share, of which 600,000 shares have been designated as Series RP Preferred
Stock, (the "Company Preferred Stock," together with the Company Common
Stock, the "Company Stock"). As of the close of business on April 30, 2002,
(i) 5,890,064 shares of Company Common Stock were issued and outstanding,
no shares were held by the Company as treasury shares and 1,000,000 shares
were reserved for issuance pursuant to the Company Stock Plans; and (ii)
600,000 shares of Company Preferred Stock were reserved for issuance
pursuant to the Rights Agreement. Since April 30, 2002, no additional
shares of capital stock have been issued except shares issued upon the
exercise of Stock Options issued pursuant to the Company Stock Plans. All
of the issued and outstanding shares of capital stock of the Company have
been duly authorized and are validly issued, fully paid, nonassessable and
free of preemptive rights. No shares of Company Preferred Stock have been
issued or are outstanding.
(b) Other than the Stock Options to acquire an aggregate of not more
than 604,914 shares of Company Common Stock and the Rights, there are no
outstanding or authorized options, calls, warrants, subscription rights,
convertible securities, conversion rights, exchange rights or other
contracts, agreements or commitments that could require the Company or any
of its Subsidiaries to issue, transfer, sell or otherwise cause to become
outstanding any of its capital stock. There are no outstanding stock
appreciation, phantom stock, profit participation or similar rights with
respect to the Company or any of its Subsidiaries or other equity interest
in the Company or any of its Subsidiaries, or securities convertible into
or exchangeable for such shares or equity interests. As of the date hereof,
the Company Disclosure Letter sets forth a list of all outstanding Stock
Options and stock appreciation rights, as well as the respective exercise
prices, dates of grant and vesting schedules thereof. The Company is not
party to or bound by any obligation to accelerate the vesting of any Stock
Options.
(c) Neither the Company nor any of its Subsidiaries is a party to any
voting trust, proxy or other agreement or understanding with respect to the
voting of any capital stock of the Company or any of its Subsidiaries.
(d) The Board of Directors of the Company has not declared any
dividend or distribution with respect to the Company Common Stock the
record or payment date for which is on or after the date of this Agreement.
(e) All of the outstanding shares of capital stock of each of the
Company's Subsidiaries have been duly authorized and are validly issued,
fully paid, nonassessable and free of preemptive rights, and are owned by
the Company or one of its Subsidiaries, free and clear of any and all
liens, encumbrances, security interests, charges, pledges or other claims
("Liens"). Neither the Company nor any of its Subsidiaries own or control
directly or indirectly, or have any direct or indirect equity participation
in, any corporation, partnership, limited liability company, joint venture
or other entity.
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(f) As of the date hereof, (i) no bonds, debentures, notes or other
indebtedness of the Company having the right to vote are issued or
outstanding, and (ii) there are no outstanding contractual obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of its
Subsidiaries.
(g) The Company Common Stock is traded on the Nasdaq National Market.
No other securities of the Company or any of its Subsidiaries are listed or
quoted for trading on any United States domestic or foreign securities
exchange.
Section 3.3 Authorization of Transaction; Enforceability. Subject to
obtaining the Company Stockholders Approval (as defined in Section 3.4), the
Company has full corporate power and authority and has taken all requisite
corporate action to enable it to execute and deliver this Agreement, to
consummate the Merger and the other transactions contemplated hereby and to
perform its obligations hereunder. The Board of Directors of the Company has
unanimously adopted resolutions approving this Agreement, the Merger and the
other transactions contemplated hereby, determining that the foregoing are fair
to, and in the best interests of, the Company and its stockholders (the "Company
Stockholders"), and recommending that the Company's Stockholders approve this
Agreement and the Merger. The foregoing resolutions of the Board of Directors of
the Company have not been modified, supplemented or rescinded and remain in full
force and effect. In connection with its adoption of the foregoing resolutions,
the Board of Directors of the Company received the written opinion of Xxxxxxxx
Xxxxx Xxxxxx & Xxxxx, financial advisor to the Board of Directors of the
Company, to the effect that as of the date of this Agreement, the Merger
Consideration is fair to the Company Stockholders from a financial point of
view. The foregoing opinion has not been modified, supplemented or rescinded on
or prior to the date of this Agreement. The Company has delivered to the Parent
correct and complete copies of the foregoing resolutions and opinion. This
Agreement constitutes the valid and legally binding obligation of the Company,
enforceable in accordance with its terms and conditions (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles). The action taken by the Board of Directors of the Company
constitutes approval of the Merger by the Board of Directors of the Company
under the provisions of Section 203 of the Delaware Act, and no other fair
price, moratorium, control share acquisition or other form of state takeover
statute, rule or regulation is applicable to the Merger or consummation of the
transactions contemplated hereby.
Section 3.4 Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock (the "Company
Stockholders Approval") is the only vote of the holders of any class or series
of the Company's capital stock necessary to approve the Merger and the
consummation of the transactions contemplated hereby.
9
Section 3.5 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
thereunder, the "Exchange Act") and the "blue sky" laws and regulations of
various states, (b) filings pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and any other applicable
competition, merger control, antitrust or similar laws or regulations set forth
in the Company Disclosure Letter (collectively with the HSR Act, the "Antitrust
Laws"), (c) approval of the Merger by the Company's Stockholders and the filing
of the Certificate of Merger pursuant to the Delaware Act, and any similar
certificates or filings to be made pursuant to the corporation laws of other
jurisdictions in which the Company or any of its Subsidiaries is qualified to do
business, and (d) any filings required under the rules and regulations of The
Nasdaq Stock Market, neither the execution and delivery of this Agreement by the
Company, nor the consummation by the Company of the transactions contemplated
hereby, will (i) violate or conflict with any provision of the certificate of
incorporation or bylaws of the Company or any of its Subsidiaries, (ii) result
in a violation or breach of, be in conflict with, or constitute or create (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any Company Material Agreement (as defined in
Section 3.10), (iii) violate any order, writ, judgment, injunction, decree, law,
statute, rule, order or regulation applicable to the Company, any of its
Subsidiaries or any of their properties or assets, (iv) require any filing or
registration with, notification to, or authorization, consent or approval of,
any government or any agency, bureau, board, commission, court, department,
official, political subdivision, tribunal or other instrumentality of any
government, whether federal, state or local, domestic or foreign (each a
"Governmental Entity") or (v) result in the creation or imposition of any Lien
on any of the property or assets of the Company or any of its Subsidiaries;
except in the case of clauses (ii), (iii) (iv) and (v) for such violations,
breaches or defaults that, or filings, registrations, notifications,
authorizations, consents or approvals the failure of which to obtain would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
Section 3.6 Company Filings; Proxy Statement.
(a) The Company has filed on a timely basis all registration
statements, proxy statements and other statements, reports, schedules,
forms and other documents required to be filed by the Company with the
Securities and Exchange Commission (the "SEC") since December 31, 1997, and
all exhibits and amendments thereto (collectively, the "Company SEC
Documents"). Each of the Company SEC Documents, as of its filing date (or
if amended, as of the date of its last amendment), complied with the
applicable requirements of the Securities Act of 1933, as amended (together
with the rules and regulations thereunder, the "Securities Act") and the
Exchange Act (as the case may be), and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. No Subsidiary
of the
10
Company is required to file any statements, reports, schedules, forms or
other documents pursuant to the Securities Act or the Exchange Act.
(b) Each of the consolidated balance sheets included in the Company
SEC Documents fairly presents in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates thereof, and the other related consolidated financial statements
(including related notes) included therein fairly present in all material
respects the results of operations and cash flows of the Company and its
Subsidiaries for the respective periods or as of the respective dates set
forth therein. Each of the consolidated financial statements (including
related notes) included in the Company SEC Documents comply with the
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, and has been prepared in accordance with
accounting principles generally accepted in the United States ("GAAP")
applied on a consistent basis during the periods or as of the respective
dates involved, except as otherwise noted therein and subject, in the case
of unaudited interim financial statements, to normal year-end adjustments.
There are no material off-balance sheet assets or liabilities of the
Company or any of its Subsidiaries except as disclosed in the Company SEC
Documents.
(c) The definitive proxy statement materials (as amended or
supplemented, the "Proxy Statement") to be sent to the Company's
Stockholders in connection with the meeting of the stockholders to consider
the Merger (the "Company Stockholders Meeting") will not, on the date the
Proxy Statement is first mailed to the Stockholders, at the time of the
Company Stockholders Meeting or at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not false or
misleading. The Proxy Statement will comply in all material respects with
the applicable provisions of the Exchange Act.
Section 3.7 No Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations (whether accrued or unaccrued,
absolute or contingent, liquidated or unliquidated, or due or to become due)
except for (a) liabilities and obligations referenced (whether by value or
otherwise) or reflected in the Company SEC Documents, (b) liabilities and
obligations incurred in the ordinary course of business, consistent with past
practice, since December 31, 2001, and (c) other liabilities and obligations
which would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.
Section 3.8 Absence of Material Adverse Effect. Since December 31, 2001,
there has not been: (i) a Company Material Adverse Effect, nor does there exist
or has there occurred any event, change, circumstance, condition, development or
effect which would, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect; (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash,
11
stock, or property) with respect to any capital stock of the Company or any of
its Subsidiaries or any purchase, redemption or other acquisition for value by
the Company or any of its Subsidiaries of any capital stock of the Company or
any of its Subsidiaries except in the ordinary course of business, consistent
with past practice; (iii) any split, combination or reclassification of any
capital stock of the Company or any of its Subsidiaries or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of capital stock of the Company or any of its
Subsidiaries; (iv) (A) any granting by the Company or any of its Subsidiaries to
any director or executive officer of the Company or any of its Subsidiaries of
any increase in compensation, except in the ordinary course of business
consistent with prior practice or as was required under employment agreement in
effect as of December 31, 2001, (B) any granting by the Company or any of its
Subsidiaries to any such director or executive officer of any increase in
severance or termination pay, except as was required under any employment,
severance or termination agreement in effect as of December 31, 2001, or (C) any
entry by the Company or any of its Subsidiaries into any employment, severance
or termination agreement with any such director or executive officer; (v) any
change in accounting methods, principles or practices by the Company or any of
its Subsidiaries materially affecting the assets, liabilities or results of
operations of the Company or any of its Subsidiaries, other than such changes
required by GAAP; or (vi) any material elections with respect to Taxes (as
defined below) by the Company or any of its Subsidiaries (other than those
elections reflected on Tax Returns (as defined below) filed as of the date
hereof) or settlement or compromise by the Company or any of its Subsidiaries of
any material Tax liability or refund.
Section 3.9 Litigation and Legal Compliance.
(a) As of the date hereof, there are no claims, actions, suits,
proceedings or investigations pending or to the Company's knowledge,
threatened by or against the Company or any of its Subsidiaries which
would, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is subject to any outstanding judgment, injunction, order or
decree of any Governmental Entity which would, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect. There are no judicial or administrative actions, proceedings or
investigations pending, or to the Company's knowledge, threatened that
question the validity of this Agreement or any action taken or to be taken
by the Company in connection with this Agreement.
(b) Except for instances of noncompliance that would not, individually
or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect, the Company and its Subsidiaries are in compliance with
each federal, state, local and foreign law, statute, rule, regulation,
ordinance, permit, order, writ, injunction, judgment or decree
(collectively "Laws") to which the Company, any of its Subsidiaries, or any
of their respective assets or properties may be subject. The Company and
its Subsidiaries have all material permits, licenses, approvals,
authorizations of and registrations with and
12
under all Laws, and from all Governmental Entities, required by the Company
and its Subsidiaries to carry on their respective businesses as currently
conducted. Neither the Company nor any of its Subsidiaries nor any of their
respective directors, officers, agents or employees (i) used any corporate
or other funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (ii) made or accepted any
unlawful payment to foreign or domestic government officials or employees
or to foreign or domestic political parties or campaigns or violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or
(iii) made or accepted any other unlawful payment, contribution,
expenditure or gift.
Section 3.10 Contract Matters.
(a) The Company has provided the Parent with true and accurate copies
of each of the following that are in effect or otherwise binding on the
Company or any of its Subsidiaries or their respective properties or assets
(collectively, the "Company Material Agreements"): (i) any credit
agreement, note, bond, guarantee, mortgage, indenture, lease, or other
instrument or obligation pursuant to which any "indebtedness" (as defined
below) of the Company or any of its Subsidiaries is outstanding or may be
incurred; (ii) any agreement, contract or binding commitment which has
been, or was required to be, filed as an exhibit to the Company SEC
Documents; and (iii) any (A) collective bargaining agreement; (B)
employment or consulting agreement, contract or binding commitment
providing for compensation or payments in excess of $100,000 in the current
or any future year; (C) agreement, contract or commitment of
indemnification or guaranty not entered into in the ordinary course of
business providing for indemnification which would reasonably be expected
to exceed $50,000, as well as any agreement, contract or commitment of
indemnification or guaranty between the Company or any of its Subsidiaries
and any of their respective officers or directors, irrespective of the
amount; (D) agreement, contract or binding commitment containing any
covenant directly or indirectly limiting the freedom of the Company or any
of its Subsidiaries to engage in any line of business, compete with any
person, or sell any product, or which, following the consummation of the
Merger, would so limit the Parent or the Surviving Corporation; (E)
agreement, contract or binding commitment that will result in the payment
by, or the creation of any commitment or obligation (absolute or
contingent) to pay on behalf of the Company or any of its Subsidiaries any
severance, termination, "golden parachute," or other similar payments to
any employee following termination of employment or otherwise as a result
of the consummation of the transactions contemplated by this Agreement; (F)
agreement, contract or binding commitment by the Company or any of its
Subsidiaries relating to the disposition or acquisition of material assets
not in the ordinary course of business or any ownership interest in any
corporation, partnership, joint venture or other business enterprise; (G)
other agreement, contract or binding commitment which involves payment by
the Company or any of its Subsidiaries of $500,000 or more in any twelve
(12) month period, or $1,000,000 in the aggregate and which is not
terminable on thirty (30) days notice without liability; or (H) other
13
agreement, contract or binding commitment which is material to the
operation, or which is outside the ordinary course, of the Company's and
its Subsidiaries' businesses. The numerical thresholds set forth in this
section shall not be deemed in any respect to define materiality for other
purposes of this Agreement. The Company Disclosure Letter sets forth a
complete and accurate list of the Company Material Agreements. For purposes
of this section, "indebtedness" shall mean, with respect to any person,
without duplication, (1) all obligations of such person for borrowed money,
(2) 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, (3) all letters of credit issued for the account
of such person (excluding letters of credit issued for the benefit of
suppliers to support accounts payable to suppliers incurred in the ordinary
course of business) and (4) all obligations, the principal component of
which are obligations under leases that are, or should be pursuant to GAAP,
classified as capital leases.
(b) Neither the Company nor any of its Subsidiaries has breached, is
in default under, or has received written notice of any breach of or
default under (or, would be in default, breach or violation with notice or
lapse of time, or both), any Company Material Agreement, except for any
such breach or default, that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. To the
knowledge of the Company, no other party to any of the Company Material
Agreements has breached or is in default of any of its obligations
thereunder. Each of the Company Material Agreements is in full force and
effect, and will continue to be in full force and effect following
consummation of the transactions contemplated hereby, except in any such
case for breaches, defaults or failures that would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Each of the Company Material Agreements constitutes the valid and
legally binding obligation of the Company or the appropriate Subsidiary
that is a party thereto (except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles). Neither the Company nor
any of its Subsidiaries has received any notice of termination,
cancellation or non-renewal with respect to any Company Material Agreement,
and to the Company's knowledge, no other party to a Company Material
Agreement plans to terminate, cancel or not renew any such agreement.
(c) With respect to each contract, agreement, bid or proposal between
the Company or any of its Subsidiaries and any (i) Governmental Entity,
including any facilities contract for the use of government-owned
facilities or (ii) third party relating to a contract between such third
party and any domestic or foreign government or governmental agency (each a
"Government Contract"), (A) the Company and each of its Subsidiaries have
complied in all material respects with all terms and conditions of such
Government Contract, including all clauses, provisions and requirements
incorporated expressly by reference, or by operation of law therein, (B)
the Company and each of its
14
Subsidiaries have complied in all material respects with all requirements
of all Laws, or agreements pertaining to such Government Contract,
including where applicable the "Cost Accounting Standards" disclosure
statement of the Company or such Subsidiary, (C) all representations and
certifications executed, acknowledged or set forth in or pertaining to such
Government Contract were complete and correct as of their effective dates
and the Company and its Subsidiaries have complied with all such
representations and certifications, (D) neither the United States
government nor any prime contractor, subcontractor or other person or
entity has notified the Company or any of its Subsidiaries, in writing or
orally, that the Company or any of its Subsidiaries has breached or
violated any Law, certification, representation, clause, provision or
requirement pertaining to such Government Contract, (E) neither the Company
nor any of its Subsidiaries has received any notice of termination for
convenience, notice of termination for default, cure notice or show cause
notice pertaining to such Government Contract, (F) other than in the
ordinary course of business, no cost incurred by the Company or any of its
Subsidiaries pertaining to such Government Contract has been questioned or
challenged, is the subject of any audit or investigation or has been
disallowed by any Governmental Entity, and (G) no payments due to the
Company or any of its Subsidiaries pertaining to such Government Contract
have been withheld or set off, nor has any claim been made to withhold or
set off money, and the Company and its Subsidiaries are entitled to all
progress or other payments received with respect thereto, except for any
such failure, noncompliance, inaccuracy, breach, violation, termination,
cost, investigation, disallowance or payment that would not, individually
or in the aggregate, reasonably be expected to have a Company Material
Adverse Effect.
(d) To the Company's knowledge, neither the Company nor any of its
Subsidiaries or any of their respective directors, officers, employees,
consultants or agents is or since December 31, 1997 has been under any
administrative, civil or criminal investigation, indictment or audit by any
Governmental Entity or under investigation by the Company or any of its
Subsidiaries with respect to any alleged improper act or omission arising
under or relating to any Government Contract.
(e) There exist (i) no material outstanding claims against the Company
or any of its Subsidiaries, either by any Governmental Entity or by any
prime contractor, subcontractor, vendor or other person or entity, arising
under or relating to any Government Contract, and (ii) no material disputes
between the Company or any of its Subsidiaries and the United States
government under the Contract Disputes Act, as amended, or any other
federal statute, or between the Company or any of its Subsidiaries and any
prime contractor, subcontractor or vendor arising under or relating to any
Government Contract. Neither the Company nor any of its Subsidiaries has
(i) any interest in any pending claim against any prime contractor,
subcontractor or vendor arising under or relating to any Government
Contract, which, if adversely determined against the Company would,
individually or in the aggregate, reasonably be expected to
15
have a Company Material Adverse Effect, or (ii) any interest in any pending
or potential material claim against any Governmental Entity.
(f) Since December 31, 1997, neither the Company nor any of its
Subsidiaries has been debarred or suspended from participation in the award
of contracts with the United States government or any other Governmental
Entity (excluding for this purpose ineligibility to bid on certain
contracts due to generally applicable bidding requirements). To the
Company's knowledge, there exist no facts or circumstances that would
warrant the institution of suspension or debarment proceedings or the
finding of nonresponsibility or ineligibility on the part of the Company,
any of its Subsidiaries or any of their respective directors, officers or
employees. No payment has been made by or on behalf of the Company or any
of its Subsidiaries in connection with any Government Contract in violation
of applicable procurement laws, rules and regulations or in violation of,
or requiring disclosure pursuant to, the Foreign Corrupt Practices Act of
1977, as amended.
(g) Neither the Company nor any of its Subsidiaries is (or has been
since December 31, 2001) a party to a material transaction with an
Affiliate (as defined below), nor are there any commitments to do so in the
future. The assets of the Company and its Subsidiaries do not include any
receivable or other obligation or commitment from an Affiliate, and the
liabilities of the Company and its Subsidiaries do not include any payable
or other obligation or commitment to any Affiliate. No Affiliate is a party
to any contract with any customer or supplier of the Company or any of its
Subsidiaries, except that with respect to any Affiliate that is an
Affiliate solely based on its ownership of 5% or more of the voting
securities of the Company, such representation is made to the knowledge of
the Company. For purposes of this Agreement, "Affiliate" shall mean any
individual, corporation, partnership, limited liability company, joint
venture, association, unincorporated organization, or other entity that (i)
owns 5% or more of the voting securities of the Company or any of its
Subsidiaries, (ii) is a director, executive or officer employed by the
Company or any of its Subsidiaries, or (iii) directly or indirectly
controls, is controlled by or is under common control with the Company or
any of its Subsidiaries.
Section 3.11 Tax Matters.
(a) (i) The Company and each of its Subsidiaries have timely filed all
required returns, declarations, reports, claims for refund, information
returns or other documents (including any related or supporting schedules,
statements or information) (collectively, "Tax Returns") relating to any
federal, state, local or foreign income, gross receipts, franchise,
estimated, alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax,
of any kind whatsoever, including any
16
interest, penalties or additions to tax or additional amounts in respect to
the foregoing, including any transferee or secondary liability for a tax
and any liability assumed by agreement or arising as a result of being or
ceasing to be a member of any affiliated group, or being included or
required to be included in any Tax Return relating thereto (collectively
"Taxes"), and all such Tax Returns are correct and complete in all material
respects. As of the time of filing, the foregoing Tax Returns correctly
reflected the facts regarding the income, business, assets, operations,
activities, status, or other matters of the Company and any of its
Subsidiaries, or any other information required to be shown thereon; (ii)
the foregoing Tax Returns are not subject to penalties under Section 6662
of the Internal Revenue Code of 1986, as amended (together with the rules
and regulation thereunder, the "Code"), relating to accuracy-related
penalties (or any corresponding provision of the state, local or foreign
Tax law) or any predecessor provision of Law; (iii) an extension of time
within which to file any Tax Return that has not been filed, requested or
granted; (iv) no material claim has been made within the past five (5)
years or, to the Company's knowledge, is expected to be made by any U.S.,
foreign, state or local governmental authority having the power to
regulate, impose or collect Taxes ("Tax Authority") in a jurisdiction where
the Company or any of its Subsidiaries does not file Tax Returns that it is
or may be subject to taxation by that jurisdiction; (v) there are no liens
for Taxes other than for current Taxes not yet due and payable on the
assets of the Company or any of its Subsidiaries; (vi) the Company and each
of its Subsidiaries have withheld, deducted or collected all Taxes required
to have been withheld, deducted or collected in connection with amounts
paid or owing to any employee, independent contractor, creditor,
stockholder or other party, and, to the extent required, all such amounts
have been paid to the proper Tax Authority or other person; and (vii) the
Company or any of its Subsidiaries have not waived any statute of
limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(b) The Company and each of its Subsidiaries have complied with all
applicable Tax Laws and agreements (including under Tax allocation
agreements), and all amounts required to be paid by the Company or any of
its Subsidiaries to Tax Authorities or others have been paid or adequately
reserved for in accordance with GAAP in the financial statements of the
Company.
(c) The unpaid Taxes of the Company or any of its Subsidiaries as of
the most recent financial statement contained in the Company SEC Documents
(i) did not exceed the accrued Tax liability (rather than any reserve for
deferred Taxes established to reflect differences between book and Tax
income) set forth either on the face of the Company consolidated balance
sheet, or in the notes thereto; and (ii) will not exceed that accrued Tax
liability as adjusted for operations and transactions through the Closing
Date in accordance with the past practice of the Company in filing its Tax
Returns or in preparing its consolidated financial statements.
17
(d) The Company does not expect any Tax Authority to assess any
additional Tax against the Company or any of its Subsidiaries for any
period for which Tax Returns have been filed. There is no dispute or claim
concerning any Tax liability of the Company or any of its Subsidiaries
either claimed or raised by any Tax Authority in writing, or to the
knowledge of the Company, based upon personal contact of any officer,
employee or agent of the Company with any agent of such Tax Authority. The
Company Disclosure Letter sets forth (i) the taxable years of the Company
or any of its Subsidiaries as to which the respective statutes of
limitations with respect to Taxes has not yet expired; and (ii) with
respect to such taxable years, those years for which (A) examinations have
been completed; (B) examinations are presently being conducted; (C)
examinations have not been initiated; and (D) required Tax Returns have not
yet been filed. All deficiencies asserted or assessments made as a result
of any examinations have been fully paid or otherwise discharged.
(e) Neither the Company nor any of its Subsidiaries has any liability
for the Taxes of any other person (other than the Company or a Subsidiary)
under the provisions of Treasury Regulation Section 1.1502-6 (or similar
provisions of state, local or foreign Tax law) as a transferee or successor
by contract or otherwise.
(f) The Company Disclosure Letter sets forth the net operating loss
carryovers and any Tax attribute carryovers of the Company (including net
capital losses, excess foreign tax credits, excess general business credits
and alternative minimum tax payments) as of the date hereof. Except as may
result from the Merger, there are no limitations pursuant to Sections 382,
383 or 384 of the Code or the SRLY limitations of Treasury Regulation
Sections 1.1502-21 or 1.1502-22 on the ability of the Company to use such
carryovers.
(g) The Company (i) does not have any excess loss account (as defined
in Treasury Regulation Section 1.1502-19) with respect to the stock of any
Subsidiary; and (ii) is not required to include in taxable income for a
taxable period or portion of period ending on or after the Closing Date
("Post-Closing Tax Period") any item of income or gain reported for
financial purposes in any tax period or portion of period ending on or
before the Closing Date ("Pre-Closing Tax Period").
(h) (i) Neither the Company nor any affiliated group of corporations
within the meaning of Section 1504(a) of the Code ("Affiliated Group") in
which the Company is or was a member has filed a consent pursuant to the
collapsible corporation provision of Section 341(f) of the Code (or any
corresponding provision of state, local, or foreign income Tax law) or
agreed to have Section 341(f)(2) of the Code (or any corresponding
provision of state, local, or foreign income Tax law) apply to any
disposition of any asset owned by the Company; (ii) none of the assets of
the Company is property that the Company is required to treat as being
owned by any other person pursuant to the "safe harbor lease" provisions of
former Section 168(f)(8) of the Code; (iii) none of the assets
18
of the Company are required to be or are being depreciated under the
alternative depreciation system under Section 168(g)(2) of the Code; (iv)
none of the assets of the Company are "tax-exempt use property" within the
meaning of Section 168(h) of the Code; (v) the Company has not made and
will not make a consent dividend election under Section 565 of the Code;
(vi) the Company has not agreed to make nor is it required to make any
adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise; (vii) the Company has not been a member of
an Affiliated Group that has filed an election to discontinue filing
consolidated returns pursuant to Rev. Proc. 91-11; (viii) neither the
Company nor any of its Subsidiaries has made or is bound by any election
under Section 197 of the Code; and (ix) the Company or any of its
Subsidiaries are not a party to any agreement, contract, arrangement, or
plan that has resulted or would result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of
Section 280G of the Code, or any payment that would otherwise not be
deductible or that provides for any gross-up payments in the event that
Section 280G of the Code applies.
(i) The Company does not have or has not had any disqualified interest
expense within the meaning of Section 163(j) of the Code.
(j) Neither the Company nor any Affiliated Group of which the Company
is or has been a member has participated in an international boycott within
the meaning of Section 999 of the Code.
(k) The Company has made available to the Parent correct and complete
copies of all Tax Returns filed by the Company or any of its Subsidiaries
or by any other entity on behalf of the Company or any of its Subsidiaries
for all taxable periods beginning on or after January 1, 1997.
(l) Neither the Company nor any of its Subsidiaries is a party to any
Tax indemnity, Tax sharing, Tax allocation or similar agreement or
arrangement. Any liability or obligation of the Company or any of its
Subsidiaries to any third party under such agreements will terminate as of
the Closing Date and be of no further force or effect. Any payments
pursuant to such agreements that were not reflected in the most recent
financial statements contained in the Company SEC Documents are set forth
in the Company Disclosure Letter.
(m) No amount payable by either the Company or any of its Subsidiaries
will be subject to disallowance under Section 162(m) of the Code.
(n) There are no outstanding rulings of, or requests for rulings with,
any Tax Authority expressly addressed to the Company or any of its
Subsidiaries that are, or if issued would be, binding upon the Company or
any of its Subsidiaries for any Post-Closing Tax Period.
19
(o) Neither the Company nor any of its Subsidiaries is a party to any
joint venture, partnership, or other arrangement or contract that could be
treated as a partnership for federal income tax purposes.
(p) The Company does not have any Code Section 367 gain recognition
agreements.
(q) The Company is not a foreign-owned corporation within the meaning
of Section 6038A(c) of the Code.
(r) Neither the Company nor any of its Subsidiaries has engaged in any
"reportable transaction," including but not limited to any "listed
transaction," within the meaning of Section 6011 of the Code or any other
applicable federal law including but not limited to any Internal Revenue
Service ruling, procedure, notice or other pronouncement.
Section 3.12 Employee Benefit Matters.
(a) The Company Disclosure Letter lists each plan, fund, program,
policy, contract or commitment, whether qualified or not qualified for
federal income tax purposes, whether for the benefit of a single individual
or more than one individual whether or not subject to the Employee
Retirement Income Security Act of 1974, as amended (together with the rules
and regulations thereunder, "ERISA"), whether written or oral which is (i)
an employee pension benefit plan as defined in Section 3(2) of ERISA
("Employee Pension Benefit Plan"), (ii) an employee welfare benefit plan as
defined in Section 3(1) of ERISA ("Employee Welfare Benefit Plan") or (iii)
an incentive, voluntary employees' beneficiary association as defined in
Section 501(c)(9) of the Code, bonus, employment, stock or other equity,
retention, non-competition, deferred compensation, executive, severance,
change in control or ownership or other benefit or compensatory plan, fund,
program, policy, agreement, contract or commitment for the Company or any
Subsidiary employees, former employees, directors, independent contractors,
former independent contractors or their dependents or their beneficiaries
(collectively, all of the foregoing, the "Company Plans"). With respect to
each Company Plan:
(i) such Company Plan (and each related trust, insurance contract
or fund) has been administered in a manner consistent in all material
respects with its written terms and complies in form and operation
with the applicable requirements of ERISA and the Code, all
regulations, and other applicable Laws, including without limitation,
all tax rules for which favorable tax treatment is intended, except
for any such violation that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.
20
(ii) all required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, PBGC-1's and Summary Plan
Descriptions) have been timely filed or distributed appropriately with
respect to such Company Plan, except for any such violation that would
not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect.
(iii) the requirements of Part 6 of Subtitle B of Title I of
ERISA and Section 4980B of the Code have been met with respect to each
such Company Plan which is an Employee Welfare Benefit Plan, except
for any such violation that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse
Effect.
(iv) all material contributions, premiums and other payments
(including all employer contributions and employee salary reduction
contributions) that are required to be made under the terms of any
Company Plan or applicable collective bargaining agreement have been
timely made or have been adequately and properly provided for in the
financial statements contained in the most recent Company SEC
Documents;
(v) each such Company Plan which is an Employee Pension Benefit
Plan and intended to be a "qualified plan" under Section 401(a) of the
Code has received a favorable determination letter from the Internal
Revenue Service, and, to the Company's knowledge, no event has
occurred which could reasonably be expected to cause the loss,
revocation or denial of any such favorable determination letter other
than legally required amendments the time for the making of which has
not yet expired;
(vi) the Company has made available and will continue to make
available to the Parent, upon its request, correct and complete copies
of the plan documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue Service, the
most recent Form 5500 Annual Report, the most recent actuarial report,
the most recent audited financial statements, and all related trust
agreements, insurance contracts and other funding agreements that
implement a Company Plan. The valuation summaries provided by the
Company reasonably represent the assets and liabilities attributable
to Company Plans calculated in accordance with the Company's past
practices;
(vii) no Company Plan that is an Employee Pension Benefit Plan
has been amended in any manner which would require the posting of
security under Section 401(a)(29) of the Code or Section 307 of ERISA;
(viii) neither the Company nor any of its Subsidiaries has any
legally binding plan or commitment to create any additional employee
benefit plan or to
21
materially modify or change any Company Plan affecting any employee or
terminated employee of the Company or any of its Subsidiaries other
than as may be required in accordance with this Agreement.
(ix) the Company Disclosure Letter includes (A) a workers'
compensation paid loss summary for the last three years on an accident
year basis, which summary and listing are true and correct in all
material respects; and (B) a recent listing of all open workers'
compensation claims showing claimant name, claim number, description,
paid loss and case reserve which summary and listing are true and
correct in all material respects;
(x) the Company has never been, nor is it a party to or otherwise
bound by any advance agreement or similar arrangement with any
Governmental Entity, relating to the allowability, allocation or
reimbursement of benefit costs or other matters in connection with any
Company Plan; and
(xi) all Company Plans are by their terms able to be amended or
terminated by the Company.
(b) With respect to each Company Plan that the Company or any of its
Subsidiaries maintains or has maintained within the past six years, or to
which any of them contributes, ever has contributed or ever has been
required to contribute in the past six years:
(i) no such Company Plan that is an Employee Pension Benefit Plan
subject to Title IV of ERISA (other than any multiemployer plan as
defined in Section 37(A) of ERISA ("Multiemployer Plan")) has been
completely or partially terminated (other than any termination which,
individually or in the aggregate, could not reasonably be expected to
have a material liability), no reportable event (as defined in Section
4043 of ERISA) as to which notices would be required to be filed with
the Pension Benefit Guaranty Corporation (the "PBGC") has occurred but
has not yet been so reported, and no proceeding by the PBGC to
terminate such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been instituted;
(ii) there have been no non-exempt prohibited transactions (as
defined in Section 406 of ERISA and Section 4975 of the Code) with
respect to such plan, no fiduciary has any material liability for
breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of such
plan, and no action, suit, proceeding, hearing or investigation with
respect to the administration or the investment of the assets of such
plan (other than routine claims for benefits) is pending or, to the
Company's knowledge, threatened;
22
(iii) other than routine claims for benefits, neither the Company
nor any of its Subsidiaries has incurred, and the Company has no
reason to expect that the Company or any of its Subsidiaries will
incur, any material liability under Title IV of ERISA or under the
Code with respect to any Company Plan that is an Employee Pension
Benefit Plan; and
(iv) neither the Company nor any of its Subsidiaries has incurred
any outstanding liability under Section 4062 of ERISA to the PBGC, to
a trust established under Section 4041 or 4042 of ERISA, or to a
trustee appointed under Section 4042 of ERISA.
(c) Neither the Company nor any of its Subsidiaries contributes to,
contributed to, or has ever been obligated to contribute to, a
Multiemployer Plan. None of the transactions contemplated by this Agreement
will trigger any withdrawal or termination liability under any
Multiemployer Plan set forth in the Company Disclosure Letter.
(d) Other than pursuant to a Company Plan that is disclosed on the
Company Disclosure Letter, neither the Company nor any of its Subsidiaries
has any obligation to provide medical, health, life insurance or other
welfare benefits for current or future retired or terminated employees,
their spouses or their dependents (other than in accordance with Section
4980B of the Code).
(e) No Company Plan contains any provision that would prohibit the
transactions contemplated by this Agreement or would give rise to any
severance, termination, payment, acceleration or increase in benefits
provided by any Company Plan as a result of the transactions contemplated
by this Agreement (alone or together with the occurrence of any other
event). Every executive of the Company that is covered by a Company Plan
that is an employment, severance or change of control agreement has
consented to the transactions contemplated by this Agreement.
(f) No individual classified as a non-employee for purposes of
receiving employee benefits (such an independent contractor, leased
employee, consultant or special consultant), regardless of treatment for
other purposes, is eligible to participate in or receive benefits under any
Company Plan that does not specifically provide for their participation.
Section 3.13 Environmental Matters.
(a) Since December 31, 2001, (i) the Company and its Subsidiaries have
been in compliance in all material respects with all Environmental Laws (as
defined below) with respect to all real property owned, leased (whether as
lessor or lessee), or otherwise used in connection with any of their
operations, (ii) neither the Company nor any of its Subsidiaries has any
material liability, whether contingent or otherwise, under, or for any
23
violations of, any Environmental Law, (iii) no notices of any material
violation or alleged violation of, non-compliance or alleged noncompliance
with or any liability under, any Environmental Law have been received by
the Company or any of its Subsidiaries that are currently outstanding and
unresolved as of the date of this Agreement, (iv) there are no material
administrative, civil or criminal writs, injunctions, decrees, orders or
judgments outstanding or any administrative, civil or criminal actions,
suits, claims, proceedings or investigations pending or, to the Company's
knowledge, threatened, relating to compliance with or liability under any
Environmental Law affecting the Company or any of its Subsidiaries, (v) the
Company and its Subsidiaries possess all material environmental permits
required by applicable Environmental Laws with respect to all real property
owned, leased (whether as lessor or lessee), or otherwise used in
connection with any of their operations, and (vi) to the knowledge of the
Company, no material changes or alterations in the practices or operations
of the Company or any of its Subsidiaries as presently conducted are
anticipated to be required in the future in order to permit the Company and
its Subsidiaries to continue to comply in all material respects with all
applicable Environmental Laws. The Company Disclosure Letter sets forth the
amount reserved as of the date of this Agreement by the Company for
management of any liability arising from, or for compliance with, all
Environmental Laws.
(b) The term "Environmental Law" as used in this Agreement means any
Law, with respect to the preservation of the environment or the promotion
of worker health and safety, including any Law, relating to Hazardous
Materials (as defined in Section 3.13(c) below). Without limiting the
generality of the foregoing, the term encompasses each of the following
statutes and the regulations promulgated thereunder, and any similar
applicable state, local or foreign Law, each as amended: (i) the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, (ii) the Solid Waste Disposal Act, (iii) the Hazardous Materials
Transportation Act, (iv) the Toxic Substances Control Act, (v) the Clean
Water Act, (vi) the Clean Air Act, (vii) the Safe Drinking Water Act,
(viii) the National Environmental Policy Act of 1969, (ix) the Superfund
Amendments and Reauthorization Act of 1986, (x) Emergency Planning and
Community Right to Know Act, (xi) the Federal Insecticide, Fungicide and
Rodenticide Act and (xii) the Occupational Safety and Health Act of 1970.
(c) The term "Hazardous Materials" as used in this Agreement means
each and every element, compound, chemical mixture, contaminant, pollutant,
material, waste or other substance (i) that is defined, determined or
identified as hazardous or toxic under any Environmental Law or (ii) the
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, storing, escaping, leaching, dumping, discarding, burying,
abandoning or disposing into the environment of which is prohibited under
any Environmental Law. Without limiting the generality of the foregoing,
the term includes (i) "hazardous substances" as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, and regulations promulgated thereunder, each as amended, (ii)
"extremely hazardous substance" as defined in the Emergency Planning and
Community Right to Know Act and regulations promulgated thereunder, each as
24
amended, (iii) "hazardous waste" as defined in the Solid Waste Disposal Act
and regulations promulgated thereunder, each as amended, (iv) "hazardous
materials" as defined in the Hazardous Materials Transportation Act and the
regulations promulgated thereunder, each as amended, (v) "chemical
substance or mixture" as defined in the Toxic Substances Control Act and
regulations promulgated thereunder, each as amended, (vi) petroleum and
petroleum products and byproducts and (vii) asbestos.
Section 3.14 Properties. The Company and its Subsidiaries have good and, in
the case of real property, marketable title to all the properties and assets
purported to be owned by them, free and clear of all Liens except (a) Liens for
current Taxes or assessments that are not yet delinquent, (b) builder, mechanic,
warehousemen, materialmen, contractor, workmen, repairmen, carrier or other
similar Liens arising and continuing in the ordinary course of business for
obligations that are not yet delinquent, (c) the rights, if any, of vendors
having possession of tooling of the Company and its Subsidiaries, (d) liens
arising from the receipt by the Company and its Subsidiaries of progress
payments by the United States government, (e) Liens securing rental payments
under capital lease arrangements and (f) other Liens that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect (all of which are herein collectively called "Permitted
Liens"). Such assets, together with all assets held or used by the Company and
its Subsidiaries under leases, include all tangible and intangible assets,
contracts and rights necessary or required for the operation of the businesses
of the Company and its Subsidiaries as presently conducted and as presently
proposed to be conducted by the Company and its Subsidiaries. All machinery,
equipment and other tangible assets currently being used by the Company or its
Subsidiaries which are owned or leased by the Company or its Subsidiaries are
reasonably adequate and suitable for the uses to which they are currently being
employed and are in good operating condition and repair (ordinary wear and tear
excepted).
Section 3.15 Intellectual Property Matters.
(a) The Company and its Subsidiaries own or have the right to use
pursuant to valid license, sublicense, agreement or permission all items of
Intellectual Property (as defined below) necessary or required for their
business or operations as presently conducted and as presently proposed to
be conducted. Neither the Company nor any of its Subsidiaries has received
any charge, complaint, claim, demand or notice alleging any interference,
infringement, misappropriation or violation of the Intellectual Property
rights of any third party. Since December 31, 1997, to the Company's
knowledge, no third party has interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Intellectual
Property rights of the Company or any of its Subsidiaries. The conduct of
the business and operations of the Company and its Subsidiaries do not
infringe upon, misappropriate, or misuse any patent, trademark, copyright,
trade secret, or other intellectual property or proprietary right of any
third party. All of the Intellectual Property is free and clear of any and
all Liens. There has been no abandonment of any trademark or service xxxx
included in any Intellectual Property used in the conduct of the business
and operations of the Company and its Subsidiaries. All material
third-party
25
licenses in Intellectual Property used or held for use in the conduct of
the business and operations of the Company and its Subsidiaries are
described in the Company Disclosure Letter and, except for the foregoing
third-party licenses, no third party has rights in or otherwise has the
right to restrict the conduct of the business and operations of the Company
and its Subsidiaries. To the Company's knowledge, there is no material
defect, virus, timer, clock, counter, back door, time bomb, or other
limiting feature incorporated into any computer software used or held for
use in the conduct of the business and operations of the Company and its
Subsidiaries that would erase data or programming, create a likelihood for
a breach of security or confidentiality, or otherwise inhibit the proper
operation of the computer software and the ability or right of the Company
or any of its Subsidiaries to conduct its business and operations as
presently conducted and as presently proposed to be conducted.
(b) The term "Intellectual Property" as used in this Agreement means,
collectively, U.S. and foreign patents and patent applications, patent
disclosures, trademarks, service marks, logos, trade names, copyrights,
copyrightable materials, and mask works, and all registrations,
applications, reissuances, continuations, continuations-in-part, revisions,
extensions, reexaminations and associated good will with respect to each of
the foregoing, computer software (including source and object codes),
computer programs, computer data bases and related documentation and
materials, data, documentation, trade secrets, confidential business
information (including ideas, formulas, compositions, inventions, know-how,
manufacturing and production processes and techniques, research and
development information, drawings, designs, plans, proposals and technical
data, financial, marketing and business data and pricing and cost
information) and all other intellectual property rights (in whatever form
or medium). The Company Disclosure Letter includes a list of all registered
patents, patent applications, trademarks and service marks owned by the
Company or any of its Subsidiaries.
Section 3.16 Labor Matters. The Company Disclosure Letter sets forth a list
of all collective bargaining agreements, memoranda of understanding, settlements
or other labor agreements with any union or labor organization. There are no
disputes or controversies pending or, to the Company's knowledge, threatened
between the Company or any of its Subsidiaries and any of their current or
former employees or any labor or other collective bargaining unit representing
any such employee that would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, or to result in a material
labor strike, dispute, slow-down or work stoppage. To the Company's knowledge,
there is no organizational effort presently being made or threatened by or on
behalf of any labor union with respect to employees of the Company or any of its
Subsidiaries. To the Company's knowledge, no executive, key employee or group of
employees of the Company or any of its Subsidiaries has any plan to terminate
employment with the Company or its Subsidiaries. There are no current Department
of Labor, Office of Federal Contract Compliance Programs or Equal Employment
Opportunity Commission audits pending with respect to the Company or any of its
Subsidiaries. As of the date of this Agreement, there are no Office of Federal
Contract Compliance Programs conciliation agreements in effect with respect to
the Company or any of its Subsidiaries. There
26
are no material liabilities or obligations relating to any individual's current
or former employment with the Company or its Subsidiaries or related entities
arising in connection with any violation of any applicable law.
Section 3.17 Rights Agreement. The Company and its Board of Directors have
taken all action necessary to ensure that (a) the execution and delivery of this
Agreement, and the consummation of the Merger and the other transactions
contemplated hereby, will not cause (i) the Parent or the Merger Subsidiary to
become an "Acquiring Person" (as defined in the Rights Agreement), (ii) a
"Shares Acquisition Date" (as defined in the Rights Agreement) or a
"Distribution Date" (as defined in the Rights Agreement) to occur, or (iii) the
Rights to become exercisable; and (b) neither of the Company, the Parent, the
Merger Subsidiary, nor the Surviving Corporation, nor any of their respective
affiliates, shall have any obligations pursuant to the Rights Agreement or to
any holder (or former holder) of Rights as of and following the Effective Time.
Section 3.18 Insurance Policies. The Company's Disclosure Letter sets forth
the insurance policies maintained by the Company and its Subsidiaries (the
"Insurance Policies") and their respective coverage and renewal dates. All of
such Insurance Policies are in full force and effect and neither the Company nor
any of its Subsidiaries is in material default with respect to its obligations
under any of such insurance policies. No notice of cancellation or termination
or rejection of any claim has been received by the Company or any of its
Subsidiaries with respect to any such Insurance Policy in the last year. During
the past five years, (i) the Company and its Subsidiaries has been covered by
insurance in scope and amount customary and reasonable for the businesses in
which it has been engaged during such period, and (ii) neither the Company nor
any of its Subsidiaries has been denied insurance, or been offered insurance
only at a commercially prohibitive premium.
Section 3.19 Brokers' Fees. Except for the fees and expenses payable by the
Company to Xxxxxxxx Xxxxx Xxxxxx & Xxxxx pursuant to a letter agreement dated
April 9, 2002, neither the Company nor any of its Subsidiaries has any liability
or obligation to pay any fees or commissions to any financial advisor, broker,
finder or agent with respect to the transactions contemplated by this Agreement.
Section 3.20 Full Disclosure. No representation or warranty in this
Agreement, and no statement contained in any document or certificate
contemplated by this Agreement contains or will contain any untrue statement of
a material fact, or omits or will omit to state any material fact, necessary, in
light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.
27
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE MERGER SUBSIDIARY
Each of the Parent and the Merger Subsidiary, as the case may be,
represents and warrants to the Company that:
Section 4.1 Organization. Each of the Parent and the Merger Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own, lease and operate its properties and assets and to carry on its business as
presently being conducted. All of the issued outstanding shares of capital stock
of the Merger Subsidiary have been duly authorized and are validly issued, fully
paid, nonassessable and free of preemptive rights and are owned by the Parent
free and clear of any Lien.
Section 4.2 Authorization of Transaction; Enforceability. Each of the
Parent and the Merger Subsidiary has full corporate power and authority and has
taken all requisite corporate action to enable it to execute and deliver this
Agreement, to consummate the Merger and the other transactions contemplated
hereby, and to perform its obligations hereunder. Each of the Board of Directors
of the Parent and the Board of Directors of the Merger Subsidiary has
unanimously adopted resolutions approving this Agreement, the Merger and the
other transactions contemplated hereby, determining that the foregoing are fair
to, and in the best interests of, the Parent and its stockholders and the Merger
Subsidiary and its sole stockholder, as the case may be. The foregoing
resolutions of each such Board of Directors have not been modified, supplemented
or rescinded and remain in full force and effect. This Agreement constitutes the
valid and legally binding obligation of each of the Parent and the Merger
Subsidiary, enforceable against the Parent and the Merger Subsidiary in
accordance with its terms and conditions (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws of general applicability relating to or
affecting creditors' rights or by general equity principles).
Section 4.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Exchange
Act and the "blue sky" laws and regulations of various states, (b) filings
pursuant to the Antitrust Laws, (c) the filing of the Certificate of Merger
pursuant to the Delaware Act, and (d) any filings required under the rules and
regulations of the New York Stock Exchange, neither the execution and delivery
of this Agreement by the Parent or the Merger Subsidiary, nor the consummation
by the Parent or the Merger Subsidiary of the transactions contemplated hereby,
will (i) violate or conflict with any provision of the certificate of
incorporation or bylaws of the Parent or the Merger Subsidiary, (ii) violate or
conflict with any order, writ, judgment, injunction, decree, law, statute, rule,
order or regulation applicable to the Parent or the Merger Subsidiary or any of
their properties or assets, or (iii) require Parent or any of its Subsidiaries
to make any filing or registration with, notification to, or obtain the
authorization, consent or approval of, any Governmental Entity,
28
except in the case of clauses (ii) and (iii) for such violations or filings,
registrations, notifications, authorizations, consents or approvals the failure
of which to obtain would not, individually or in the aggregate, affect the
ability of the Parent or the Merger Subsidiary to consummate the Merger and to
perform its respective obligations under this Agreement.
Section 4.4 Brokers' Fees. Neither the Parent nor the Merger Subsidiary has
any liability or obligation to pay any fees or commissions to any financial
advisor, broker, finder or agent with respect to the transactions contemplated
by this Agreement.
Section 4.5 No Capital Ownership in the Company. Neither the Parent nor any
of its Subsidiaries owns any shares of Company Common Stock.
Section 4.6 Adequate Cash Resources. The Parent has or has available to it
the funds necessary to establish the Payment Fund.
ARTICLE 5
COVENANTS
Section 5.1 General. Subject to the terms and conditions of this Agreement,
each of the parties will take all actions and do all things necessary, proper or
advisable to perform its obligations under this Agreement which are required to
be performed on or prior to the Closing, and use its reasonable best efforts to
consummate and make effective the transactions contemplated by this Agreement as
promptly as reasonably practical.
Section 5.2 Further Assurances. Prior to the Closing Date, each of the
parties will (a) give all required notices to third parties and Governmental
Entities and will use its best efforts to obtain all third party and
governmental consents and approvals that it is required to obtain in connection
with this Agreement, the Merger and the other transactions contemplated hereby
and (b) use its best efforts to prevent any preliminary or permanent injunction
or other order by a Governmental Entity that seeks to modify, delay or prohibit
the consummation of the transactions contemplated by this Agreement, including
under the Antitrust Laws, and, if issued, to appeal any such injunction or order
through the appellate court or body for the relevant jurisdiction. Within ten
(10) business days following the execution of this Agreement, each of the
parties will file a Notification and Report Form and related material with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the HSR Act, will use its respective best efforts to
obtain early termination of the applicable waiting period under all Antitrust
Laws and will take all further actions and make all further filings pursuant to
the Antitrust Laws that may be necessary, proper or advisable. Nothing contained
in this Agreement will be deemed to require the Parent to enter into any
agreement, consent decree or other commitment requiring the Parent or any of its
Subsidiaries to (x) divest or hold separate any assets of the Company or its
Subsidiaries, or the Parent or its Subsidiaries, (y) litigate, pursue or defend
any action or proceeding challenging any of the transactions contemplated hereby
as violative of any Antitrust Laws, or (z) take any other action that would,
individually or
29
in the aggregate, reasonably be expected to have a Parent Material Adverse
Effect. The term "Parent Material Adverse Effect" means any event, circumstance,
condition, change, development or effect that, either individually or in the
aggregate with all other events, circumstances, conditions, changes,
developments or effects, would have a material adverse effect on the business,
condition (financial or otherwise), assets, liabilities, operations or results
of operations of the Parent and its Subsidiaries taken as a whole, or the
ability of the Parent to consummate its obligations under this Agreement. In
connection with the foregoing, each party (i) will promptly notify the other
party in writing of any communication received by that party or its Affiliates
from any Governmental Entity, and subject to applicable Law, provide the other
party with a copy of any such written communication (or written summary of any
oral communication), and (ii) not participate in any substantive meeting or
discussion with any Governmental Entity in respect of any filing, investigation
or inquiry concerning the transactions contemplated by this Agreement unless it
consults with the other party in advance, and to the extent permitted by such
Governmental Entity, give the other party the opportunity to attend and
participate thereat.
Section 5.3 Interim Conduct of the Company.
(a) Except as expressly permitted by this Agreement, the Company
Disclosure Letter or pursuant to the Parent's prior written consent, from
and after the date of this Agreement through the Closing, the Company will,
and will cause each of its Subsidiaries, (i) to conduct its operations in
accordance with its ordinary course of business, consistent with past
practice, and (ii) to the extent consistent therewith, use its best efforts
to preserve intact its business organizations, keep available the services
of its current officers and employees, preserve the goodwill of those
having business relationships with the Company and its Subsidiaries,
preserve its relationships with customers, creditors and suppliers,
maintain its books, accounts and records and comply in all material
respects with applicable Laws.
(b) Notwithstanding the foregoing, the Company will not, and will not
cause or permit any of its Subsidiaries to, take any of the following
actions without the prior written consent of the Parent:
(i) amend its certificate (or articles) of incorporation or
bylaws or file any certificate of designation or similar instrument
with respect to any shares of its authorized but unissued capital
stock;
(ii) authorize or effect any stock split or combination or
reclassification of shares of its capital stock;
(iii) declare or pay any dividend or distribution with respect to
its capital stock (other than dividends payable by a wholly-owned
Subsidiary of the Company to the Company or another wholly-owned
Subsidiary), authorize for issuance or issue, sell, pledge or deliver
any shares of its capital stock (other than
30
in connection with the exercise of currently outstanding Stock Options
listed in the Company Disclosure Letter), options, warrants,
commitments, subscriptions, other rights to purchase any shares of
capital stock, or any other securities exercisable or exchangeable for
or convertible into shares of its capital stock, or repurchase, redeem
or otherwise acquire for value any shares of its capital stock or any
other securities exercisable or exchangeable for or convertible into
shares of its capital stock;
(iv) merge or consolidate with any entity;
(v) sell, lease, license, encumber or otherwise dispose of any
assets or any interests therein that are material, individually or in
the aggregate, to the Company and its Subsidiaries taken as a whole,
including any shares of the capital stock of any of its Subsidiaries,
other than assets used, consumed, replaced or sold in the ordinary
course of business, consistent with past practice;
(vi) liquidate, dissolve or effect any recapitalization or
reorganization in any form;
(vii) acquire any interest in any business (whether by purchase
of assets, purchase of stock, merger or otherwise) or enter into any
joint venture, partnership agreement, joint development agreement,
strategic alliance agreement or other similar agreement;
(viii) create, incur, endorse, assume, otherwise become liable
for or suffer to exist any indebtedness for borrowed money (including
capital lease obligations) or guarantee any such indebtedness or issue
or sell any debt securities or warrants or rights to acquire any debt
securities of the Company or its Subsidiaries, or guarantee any debt
securities of others, other than indebtedness existing as of the date
of this Agreement, borrowings under existing credit lines in the
ordinary course of business, consistent with past practice, and
intercompany indebtedness among the Company and its Subsidiaries
arising in the ordinary course of business, consistent with past
practice;
(ix) create, incur, assume or suffer to exist any Lien affecting
any of its material assets or properties (other than Permitted Liens);
(x) except as required as the result of changes in GAAP, change
any of the accounting principles or practices used by it as of
December 31, 2001, or revalue in any material respect any of its
assets or properties, other than write-downs of inventory or accounts
receivable in the ordinary course of business, consistent with past
practice, or manage its working capital other than in the ordinary
course of business, consistent with past practice;
31
(xi) except as required under the terms of any collective
bargaining agreement or consulting, executive or employment agreement
in effect on the date of this Agreement and except as set forth in the
Company Disclosure Letter, increase the compensation payable or to
become payable to officers and salaried employees whose annual base
salary exceeds $75,000 or increase any bonus, insurance, pension or
other benefit plan, payment or arrangement made to, for or with any
such officers or salaried employees, or grant any severance or
termination pay (A) to any executive officer or director, or (B) to
any other employee except payments made in connection with the
termination of employees who are not executive officers in amounts
consistent with its policies and past practice or pursuant to written
agreements in effect;
(xii) enter into any contract or commitment or engage in any
transaction with any Affiliate (other than the Company or its
Subsidiaries) or enter into any contract or commitment or engage in
any transaction with any unaffiliated person or entity or make any
capital expenditure, capital commitment, additions to property, plant
or equipment if the aggregate dollar value would be in excess of
$500,000 or would have a term of greater than one year;
(xiii) make or change any material Tax election, settle or
compromise any material Tax liability, change in any material respect
any accounting method in respect of Taxes, file any amendment to a
material Tax Return, enter into any closing agreement, settle any
material claim or material assessment in respect of Taxes, or consent
to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes, except in the ordinary course
of business;
(xiv) engage in any "reportable transaction," including any
"listed transaction," within the meaning of Section 6011 of the Code
or any other applicable federal law including any Internal Revenue
Service ruling, procedure, notice or other pronouncement;
(xv) except as set forth in the Company Disclosure Letter, pay,
discharge or satisfy any material claims, liabilities or obligations
other than the payment, discharge and satisfaction in the ordinary
course of business of liabilities reflected on or reserved for in the
consolidated financial statements of the Company or otherwise incurred
in the ordinary course of business, consistent with past practice;
(xvi) settle or compromise any material pending or threatened
suit, action or proceeding;
32
(xvii) hold any meeting of its stockholders except the Company
Stockholders Meeting or to the extent required by the request of the
stockholders entitled to call a meeting under the Company's bylaws or
the Delaware Act;
(xviii) take, or omit to take, any action that would reasonably
be expected to result in a material violation of Law or cause a
termination of or material breach of or default under any Company
Material Agreement;
(xix) undertake any office closing or employee layoffs, other
than the ordinary course of business consistent with past practice;
(xx) amend, suspend or terminate the Rights Agreement or redeem
the Rights; or
(xxi) agree, resolve or commit to do any of the foregoing or any
other action that could cause or could be reasonably likely to cause
any of the conditions to the Merger to not be satisfied.
Section 5.4 Proxy Statement. As promptly as practicable after the date of
this Agreement, the Company will (a) duly call, set a record date for, give
notice of, convene and hold the Company Stockholders Meeting solely to approve
the Merger and the consummation of the transactions contemplated by this
Agreement, (b) prepare and file with the SEC a preliminary proxy statement which
will include all information pertaining to the transactions contemplated hereby
or as otherwise required by the Exchange Act for inclusion or incorporation by
reference therein, (c) promptly respond to any comments from the SEC with
respect to the preliminary proxy statement, and (d) cause the Proxy Statement to
be mailed to the Company Stockholders. The Proxy Statement will not, at the date
mailed to the Company Stockholders, at the time of the Company Stockholder's
Meeting, or at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. If before the Effective Time, any
matter is discovered by the Company that should be set forth in an amendment or
a supplement to the Proxy Statement, the Company will promptly inform the Parent
in writing and prepare and distribute appropriate amendments or supplements to
the Proxy Statement. Except as permitted by Section 5.6(c), the Board of
Directors of the Company will at all times prior to and during the Company
Stockholders Meeting, recommend to the Company Stockholders the adoption of this
Agreement, the Merger and the transactions contemplated hereby and will use its
best efforts to solicit such approval by the Company Stockholders. Without
limiting the generality of the foregoing, the Company's obligation pursuant to
the first sentence of this section will not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
Acquisition Proposal or Superior Proposal (each as defined in Section 5.6).
Section 5.5 Additional Reports. The Company will furnish to the Parent
copies of any Company SEC Documents that it files with the SEC on or after the
date hereof, and the
33
Company represents and warrants that as of the respective dates thereof, such
reports will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. Any unaudited consolidated interim financial statements
included in such reports (including any related notes and schedules) will fairly
present, in all material respects, the financial position of the Company and its
Subsidiaries as of the dates thereof and the results of its operations and its
cash flows or other information included therein for the periods or as of the
dates then ended, subject to normal year-end adjustments, in each case in
accordance with past practice and with GAAP consistently applied.
Section 5.6 Nonsolicitation of Acquisition Proposals.
(a) The Company, each of its Subsidiaries, and each of their
respective directors, officers, employees, agents and representatives
(collectively, the "Company Representatives"), will immediately cease any
discussions or negotiations presently being conducted with respect to any
Acquisition Proposal (as defined in (f) below), and will not (i) initiate,
encourage, induce, facilitate or solicit, directly or indirectly, any
inquiries with respect to, or the making of, any Acquisition Proposal, or
(ii) engage in or continue any negotiations or discussions with, furnish
any information or data to, or enter into any letter of intent, agreement
in principle, acquisition agreement or similar agreement, arrangement or
understanding with any party relating to any Acquisition Proposal (each an
"Acquisition Agreement"); provided, however, that prior to obtaining the
Company Stockholders Approval, the Board of Directors of the Company may,
in response to a bona fide, unsolicited Acquisition Proposal that it
determines in good faith (after consulting with an independent financial
advisor) is reasonably likely to result in or lead to a Superior Proposal
(as defined in (g) below), (A) furnish information with respect to the
Company and its Subsidiaries to the person making such Superior Proposal
pursuant to a confidentiality agreement containing provisions at least as
restrictive with respect to such person as the restrictions on the Parent
contained in the Confidentiality Agreement (as defined in Section 5.9), and
(B) participate in discussions or negotiations with the person making such
Superior Proposal, if and only to the extent that, in each case referred to
in (A) and (B), the Board of Directors of the Company determines in good
faith (after consultation with outside legal counsel) that such action
would be legally required in order to comply with their fiduciary duties to
the Company Stockholders under applicable Laws. The Company will be
responsible for any breach of the provisions of this section by any of its
Subsidiaries or any of the Company Representatives.
(b) Within 24 hours after its receipt of any Acquisition Proposal, the
Company will provide the Parent with a copy of such Acquisition Proposal
or, in connection with any non-written Acquisition Proposal, a written
statement setting forth in reasonable detail the terms and conditions of
such Acquisition Proposal, including the identity of the acquiring party.
The Company will promptly inform the Parent of the status and content of
any discussions or negotiations involving any Acquisition Proposal and will
promptly furnish to the Parent any non-public information furnished in
34
connection therewith. Within 24 hours after any determination by the Board
of Directors of the Company that an Acquisition Proposal may be a Superior
Proposal, the Company will notify the Parent of such determination.
(c) Except as expressly permitted by this section, neither the Board
of Directors of the Company nor any committee thereof will (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
the Parent, the approval or recommendation by such Board of Directors or
such committee of the Merger or this Agreement, (ii) approve or recommend,
or propose publicly to approve or recommend, any Acquisition Proposal,
(iii) cause the Company to enter into any Acquisition Agreement or (iv)
redeem or otherwise render inapplicable the Rights Agreement, or the Rights
granted thereunder in response to any Acquisition Proposal, unless prior to
obtaining the Company Stockholders Approval, the Board of Directors of the
Company (x) receives a Superior Proposal that is not subject to any
financing condition, and (y) determines in good faith (after consultation
with outside legal counsel) that such action would be legally required in
order for its directors to comply with their respective fiduciary duties to
the Company Stockholders under applicable Laws; provided, that the Company
shall immediately inform the Parent orally and in writing of the material
terms and conditions of such Superior Proposal and the identity of the
Person making it, or such other circumstances, and if any Superior Proposal
is in writing, the Company shall immediately deliver a copy thereof to the
Parent. Any withdrawal or modification of the recommendation of the Board
of Directors of the Company or other action taken pursuant to this
subsection (c) shall not change the approval of the Board of Directors of
the Company for purposes of causing any state takeover statute or other
state law to be inapplicable to the transactions contemplated hereby,
including the Merger.
(d) Notwithstanding any other provision of this Agreement, if, prior
to obtaining the Company Stockholders Approval, the Board of Directors of
the Company determines, in its good faith judgment, that an Acquisition
Proposal is a Superior Proposal, the Board of Directors of the Company may
terminate this Agreement (subject to the Company's obligations under
Article 7); provided, that (i) the Company provides at least five business
days prior written notice to the Parent of its intention to terminate this
Agreement, (ii) during such five business day period (or longer period if
extended by the Company and the Parent, the "Negotiation Period"), the
Company agrees to negotiate in good faith with the Parent regarding such
changes as the Parent may propose to the terms of this Agreement, with the
intent of enabling the Parent to agree to a modification of this Agreement
so that the transactions contemplated hereby may be consummated, (iii)
after expiration of the Negotiation Period, the Acquisition Proposal
remains a Superior Proposal (taking into account any modifications to the
terms thereof proposed by the Parent) and the Board of Directors of the
Company confirms its determination (after consultation with outside legal
counsel and an independent financial advisor) that it is a Superior
Proposal; and (iv) the Company pays to the Parent in immediately available
funds the Termination Fee (as defined in and in accordance with Section
7.3).
35
(e) Nothing in this section will prevent the Board of Directors of the
Company from taking, and disclosing to the Company Stockholders, a position
contemplated by Rules 14d-9(e) and 14e-2(a) promulgated under the Exchange
Act.
(f) The term "Acquisition Proposal" as used in this Agreement means
any inquiry, proposal or offer relating to a possible (i) merger,
consolidation or similar transaction involving the Company or any of its
Subsidiaries; (ii) sale, lease or other disposition, directly or
indirectly, (including by way of merger, consolidation, share exchange or
otherwise) of any assets of the Company or any of its Subsidiaries
representing, in the aggregate, 20% or more of those assets on a
consolidated basis; (iii) issuance, sale or other disposition of (including
by way of merger, consolidation, share exchange or otherwise) securities
(or options, rights or warrants to purchase or securities convertible into,
such securities) representing 20% or more of the votes attached to the
outstanding securities of the Company, (iv) transaction with the Company in
which any person would acquire "beneficial ownership" (as defined in Rule
13d-3 under the Exchange Act), or the right to acquire beneficial
ownership, or any "group" (as defined under the Exchange Act) will have
been formed which beneficially owns or has the right to acquire beneficial
ownership of, 20% or more of the outstanding securities of the Company, (v)
liquidation, dissolution, recapitalization or other similar type of
transaction with respect to the Company or any of its Subsidiaries, (vi)
transaction which is similar in form, substance or purpose to any of the
foregoing transactions or (vii) public announcement of an agreement,
proposal, plan or intent to do any of the foregoing; provided, however,
that the term "Acquisition Proposal" will not include the Merger and the
transactions contemplated hereby.
(g) The term "Superior Proposal" as used in this Agreement means any
Acquisition Proposal not solicited in violation of this Section 5.6 that is
on terms that the Board of Directors of the Company determines in good
faith (after consulting with outside legal counsel and an independent
financial advisor) would (i) result in a transaction that is more favorable
from a financial point of view to the Company Stockholders than the
transactions contemplated hereby if such Acquisition Proposal were to be
consummated and (ii) has a reasonable likelihood of being consummated.
Section 5.7 Indemnification.
(a) From and after the Closing Date, the Parent will cause the
Surviving Corporation to indemnify, defend and hold harmless each person
who is now, or has been at any time prior to the Effective Time, an officer
or director of the Company or any of its Subsidiaries (collectively, the
"Indemnified Parties") from and against all losses, claims, damages and
expenses (including reasonable attorney's fees and expenses) arising out of
or relating to actions or omissions, or alleged actions or omissions,
occurring at or prior to the Effective Time to the fullest extent permitted
from time to time by the Delaware Act, but excluding any of the foregoing
which relate to any violation or alleged violation of the Exchange Act with
respect to xxxxxxx xxxxxxx.
36
(b) Any initial determination required to be made with respect to
whether any Indemnified Party may be entitled to indemnification will, if
requested by such Indemnified Party, be made by independent legal counsel
selected by the Indemnified Party and reasonably satisfactory to the
Surviving Corporation.
(c) For a period of six (6) years after the Closing Date, the Parent
will use its best efforts to cause to be maintained in effect policies of
directors and officers liability insurance and fiduciary liability
insurance substantially equivalent in scope and amount of coverage to the
policies maintained by the Company as of the date hereof with respect to
claims arising from or relating to actions or omissions, or alleged actions
or omissions, occurring on or prior to the Effective Time. Notwithstanding
the provisions of this Section 5.7(c), the Parent will not be obligated to
make total premium payments with respect to such policies of insurance to
the extent such premiums exceed 200 percent of the last annual premium paid
by the Company prior to the date of this Agreement. If the annual premium
costs necessary to maintain such insurance coverage exceed the foregoing
amount, the Parent will use its best efforts to maintain the most
advantageous policies of directors and officers liability insurance and
fiduciary liability insurance reasonably obtainable for an annual premium
not exceeding the foregoing amount, provided that Indemnified Parties may
be required to make application and provide customary representations and
warranties to the insurance carrier for the purpose of obtaining such
insurance.
(d) Subject to the remainder of this section, to the fullest extent
permitted from time to time under the Delaware Act, the Parent will cause
the Surviving Corporation to pay on an as-incurred basis the reasonable
fees and expenses of each Indemnified Party (including reasonable fees and
expenses of counsel) in advance of the final disposition of any action,
suit, proceeding or investigation that is the subject of the right to
indemnification, subject to reimbursement in the event such Indemnified
Party is not entitled to indemnification.
(e) The provisions providing for director and officer indemnification,
abrogation of liability and advancement of expenses set forth in the
certificate of incorporation and/or bylaws of the Company as in effect
immediately prior to the date hereof, will apply to each Indemnified Party
with respect to all matters occurring on or prior to the Effective Time.
The foregoing will not be deemed to restrict the right of the Surviving
Corporation to modify the provisions of its certificate of incorporation
relating to director and officer indemnification, abrogation of liability
or advancement of expenses with respect to events or occurrences after the
Closing Date but such modifications shall not adversely affect the rights
of the Indemnified Parties hereunder. The Parent shall cause the Surviving
Corporation to honor the provisions of this Section 5.7(e).
(f) Subject to any requirements pursuant to applicable insurance
policies that might conflict with the provisions of this subsection, in the
event any action, suit,
37
investigation or proceeding is brought against any Indemnified Parties and
under applicable standards of professional conduct there is a conflict of
interest on any significant issue between the position of the Parent (or
the Surviving Corporation) and an Indemnified Party, the Indemnified
Parties may retain counsel, which counsel shall be reasonably satisfactory
to the Parent, and the Parent shall cause the Surviving Corporation to pay
all reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received, provided, however
that (1) the Parent or the Surviving Corporation shall have the right to
assume the defense thereof (which right shall not affect the right of the
Indemnified Parties to be reimbursed for separate counsel as specified in
the preceding sentence), (2) the Parent and the Indemnified Parties will
cooperate in the defense of any such matter and (3) neither Parent nor the
Surviving Corporation shall be liable for any settlement effected without
its prior written consent. The Indemnified Parties as a group may not
retain more than one counsel to represent them with respect to each such
matter unless under applicable standards of professional conduct there is a
conflict of interest on any significant issue between the positions of two
or more Indemnified Parties.
(g) Upon learning of any loss, claim, damage or expense which may give
rise to a claim for indemnity hereunder, any Indemnified Party shall
promptly notify Parent thereof in writing, but any failure to give such
notice shall not affect the indemnification obligations of any party under
this Section 5.7 unless such failure jeopardizes or prejudices the Parent
or the Surviving Corporation in any material respect.
(h) The rights of each Indemnified Party hereunder will be in addition
to any other rights such Indemnified Party may have under the certificate
of incorporation or bylaws of the Surviving Corporation or any of their
respective Subsidiaries, under the Delaware Act or otherwise.
Notwithstanding anything to the contrary contained in this Agreement or
otherwise, the provisions of this Section 5.7 will survive the consummation
of the Merger, and each Indemnified Party will, for all purposes, be a
third party beneficiary of the covenants and agreements contained in this
Section 5.7 and, accordingly, will be treated as a party to this Agreement
for purposes of the rights and remedies relating to enforcement of such
covenants and agreements and will be entitled to enforce any such rights
and exercise any such remedies directly against the Parent and the
Surviving Corporation.
(i) Nothing in this Section 5.7 will diminish any rights or
entitlements available to any director or officer of the Company under the
Company's certificate of incorporation as in effect immediately prior to
the date hereof.
Section 5.8 Public Announcements. The initial press releases issued by each
party announcing the Merger and the transactions contemplated by this Agreement
will be in a form that is mutually acceptable to the Parent and the Company.
Thereafter, the Parent and the Company will consult with one another before
issuing any press releases or otherwise making any public announcements with
respect to the transactions contemplated by this Agreement, and
38
except as may be required by applicable law or by the rules and regulations of
the New York Stock Exchange or of The Nasdaq Stock Market, will not issue any
such press release or make any such announcement prior to such consultation.
Section 5.9 Full Access. The Company will, and will cause its Subsidiaries
and the Company Representatives to, afford the Parent and its officers,
employees, agents and representatives full access to all premises, properties,
employees, information, books, records, contracts and documents of or pertaining
to the Company and its Subsidiaries. Any information disclosed will be subject
to the provisions of the Confidentiality Agreement between the Parent and the
Company effective March 11, 2002 (the "Confidentiality Agreement").
Section 5.10 Actions Regarding Antitakeover Statutes. If Section 203 of the
Delaware Act or any other fair price, moratorium, control share acquisition or
other form of antitakeover statute, rule or regulation is or becomes applicable
to the transactions contemplated by this Agreement, the Board of Directors of
the Company will grant such approvals and take such other actions as may be
required so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms and conditions set forth in this Agreement.
Section 5.11 Employee Benefit Matters.
(a) Subject to applicable collective bargaining agreements, until (or
in respect of the period ending on) December 31, 2002, the Parent will
cause to be maintained for the employees and former employees of the
Company and its Subsidiaries (the "Employees"), benefits and benefit levels
which are, in the aggregate, substantially comparable to benefits and
benefit levels as provided by the Company and its Subsidiaries through any
Company Plan that is an Employee Pension Benefit Plan, or Employee Welfare
Benefit Plan, or a fringe benefit program providing for such matters as
sick pay and vacation pay, immediately prior to the Effective Time.
Notwithstanding the foregoing, this section will not apply to any bonus,
incentive, or equity-based plan or arrangement, including the Advanced
Technical Products, Inc. 1998 Employee Stock Purchase Plan (the "ESPP") or
the Advanced Technical Products, Inc. Deferred Compensation Plan (the
"Deferred Compensation Plan").
(b) Solely for purposes of eligibility and vesting under the employee
benefit plans of the Parent and its Subsidiaries (including the Surviving
Corporation) providing benefits to any Employees after the Effective Time,
each Employee will be credited with his or her years of service with the
Company and its Subsidiaries before the Effective Time, to the same extent
as such employee was entitled, before the Effective Time, to credit for
such service under any similar Company Plan. Following the Effective Time,
the Parent will, or will cause its Subsidiaries to, (i) waive any
pre-existing condition limitation under any Employee Welfare Benefit Plan
maintained by the Parent or any of its Subsidiaries in which Employees and
their eligible dependents participate (except to the extent that such
pre-existing condition limitation would have been applicable under the
comparable Company Employee Welfare Benefit Plans immediately prior to the
39
Effective Time), and (ii) provide each Employee with credit for any
co-payments and deductibles incurred prior to the Effective Time (or such
earlier or later transition date to new Employee Welfare Benefits Plans)
for the calendar year in which the Effective Time (or such earlier or later
transaction date) occurs, in satisfying any applicable deductible or
out-of-pocket requirements under any welfare plans that the Employees
participate in after the Effective Time.
(c) The Company agrees that an independent trustee, either a bank or a
trust company, will act with respect to the Merger on behalf of each
Company Plan (and its participants) that holds Company Common Stock in
accordance with the terms and conditions of such Company Plan.
(d) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee
administering the ESPP) will adopt such resolutions or take such other
actions (if any) as may be required to provide that (i) with respect to the
offering period under the ESPP under way immediately prior to the Effective
Time, the scheduled exercise date will be accelerated, and all unexercised
rights granted in respect of such offering period will be exercised not
later than immediately prior to the Effective Time, (ii) all holding
periods with respect to shares of Company Common Stock under the ESPP will
be waived immediately prior to the consummation of the Company Stockholders
Approval so as to permit the holders thereof to approve this Agreement, and
(iii) the ESPP will terminate at the Effective Time.
(e) No additional Stock Options, stock appreciation rights or other
equity-based awards or other rights to acquire Company Stock will be
granted pursuant to the Company Stock Plans or otherwise after the date of
this Agreement. The Company, its Board of Directors, or any committee
thereof, shall take all actions prior to the Effective Time necessary,
proper or advisable to effect the consummation of the actions contemplated
by the provisions of Section 1.8 herein, including but not limited to
making appropriate amendments to the Company Stock Plans and/or their
underlying agreements.
(f) Nothing contained in this section will create any rights in any
third party, including without limitation, any right to employment or right
to any particular benefit. Except as specifically provided, nothing
contained herein will be construed as prohibiting or restricting in any way
the right of the Parent or the Surviving Corporation (or any successor
thereto) to modify, amend or terminate any employee benefit plan, program
or arrangement in whole or in part at any time after the Effective Time.
(g) As soon as practicable following the date of this Agreement, the
Compensation Committee of the Board of Directors of the Company or the
Chief Executive Officer of the Company (or, if appropriate, any other
individual administering the Deferred Compensation Plan) will adopt such
resolutions or take such other actions (if any) as may be necessary, proper
or advisable to terminate the Deferred Compensation
40
Plan immediately prior to the Effective Time such that all account balances
thereunder will be distributed in accordance with the termination
provisions of said plan.
Section 5.12 Standstill Provisions. The restrictions on the Parent and the
Merger Subsidiary contained in Section 9 of the Confidentiality Agreement are
hereby waived by the Company to the extent reasonably necessary to permit the
Parent and the Merger Subsidiary to comply with their obligations or enforce
their rights under this Agreement.
Section 5.13 Notice of Developments. The Company will give prompt written
notice to the Parent of the occurrence of any event which would reasonably be
expected to result in a Company Material Adverse Effect. Each of the Company and
the Parent will give prompt written notice to the other of the occurrence or
failure to occur of an event that would, or, with the lapse of time would
reasonably be expected to cause any condition to the consummation of the Merger
not to be satisfied. No such written notice will be deemed to have amended any
of the disclosures set forth in the Company Disclosure Letter, to have qualified
the representations and warranties contained herein or to have cured any
misrepresentation or breach of a representation or warranty that otherwise might
have existed hereunder by reason of such material development.
ARTICLE 6
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 6.1 Conditions to the Obligations of Each Party. The respective
obligation of each party to consummate the Merger and the other transactions
contemplated hereby is subject to the satisfaction at or prior to the Closing
Date of each of the following conditions, any of which may be waived by the
written agreement of the parties:
(a) the Company will have obtained the Company Stockholders Approval;
(b) no order, decree, ruling, judgment or injunction will have been
enacted, entered, promulgated or enforced by any Governmental Entity of
competent jurisdiction that prohibits the Merger and the consummation of
the transactions contemplated by this Agreement substantially on the terms
contemplated hereby, and continue to be in effect; and
(c) all applicable waiting periods under any Antitrust Laws will have
expired or been terminated and all other approvals of any Governmental
Entity will have been obtained, except where the failure to obtain such
other approvals of any Governmental Entity would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse
Effect or a Parent Material Adverse Effect.
Section 6.2 Conditions to the Obligation of the Company. The obligations of
the Company to consummate the Merger and the other transactions contemplated
hereby, are subject
41
to the satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived by the Company:
(a) the representations and warranties of the Parent and the Merger
Subsidiary contained herein (which for purposes of this subparagraph shall
be read as though none of them contained any Parent Material Adverse Effect
or materiality qualification) shall be true and correct in all material
respects as of the Closing Date with the same effect as though made as of
the Closing Date (provided that any representations and warranties made as
of a specified date shall be required only to continue on the Closing Date
to be true and correct as of such specified date);
(b) each of the Parent and the Merger Subsidiary will have performed
or complied with in all material respects all covenants and obligations
required to be performed or complied with by it under this Agreement at or
prior to the Effective Time; and
(c) The Parent shall have delivered to the Company a certificate,
dated the Closing Date and signed by an executive officer, certifying the
satisfaction of the conditions set forth above.
Section 6.3 Conditions to the Obligation of the Parent and the Merger
Subsidiary. The obligations of the Parent and the Merger Subsidiary to
consummate the Merger and the other transactions contemplated hereby, are
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived by the Parent or the Merger
Subsidiary:
(a) the representations and warranties of the Company contained herein
(which for purposes of this subparagraph shall be read as though none of
them contained any Company Material Adverse Effect or materiality
qualification) shall be true and correct in all material respects as of the
Closing Date with the same effect as though made as of the Closing Date
(provided that any representations and warranties made as of a specified
date shall be required only to continue at the Closing Date to be true and
correct as of such specified date);
(b) the Company will have performed or complied with in all material
respects all obligations required to be performed or complied with by it
under this Agreement at or prior to the Effective Time;
(c) from the date of this Agreement to the Effective Time, there will
not have been any event or development that has, or would reasonably be
expected to have, a Company Material Adverse Effect;
(d) no more than 15% of the Company Common Stock will be Dissenting
Shares; and
42
(e) the Company shall have delivered to the Parent a certificate,
dated as of the Closing Date and signed by an executive officer, certifying
the satisfaction of the conditions set forth above.
Section 6.4 Frustration of Closing Conditions. None of the Company, the
Parent or the Merger Subsidiary may rely on the failure of any condition set
forth in Section 6.1, 6.2 or 6.3, as the case may be, to be satisfied if such
party's breach of this Agreement has been a principal reason that such condition
has not been satisfied.
ARTICLE 7
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the Merger
may be abandoned at any time prior to the Effective Time:
(a) by mutual written consent of the Parent and the Company;
(b) by either the Company or the Parent, if the Closing has not
occurred on or before June 30, 2002, provided that the party seeking to
terminate this Agreement pursuant to this clause has not breached in any
material respect its obligations under this Agreement in any manner that
has contributed to the failure to consummate the Merger on or before such
date;
(c) by either the Company or the Parent, if (i) an order, decree,
ruling, judgment or injunction has been entered by a Governmental Entity of
competent jurisdiction permanently restraining, enjoining or otherwise
prohibiting the consummation of the Merger and such order, decree, ruling,
judgment or injunction has become final and non-appealable, and (ii) the
party seeking to terminate this Agreement pursuant to this clause has used
all reasonable best efforts to remove such order, decree, ruling, judgment
or injunction;
(d) by either the Company or the Parent, if the Company Stockholders
Approval was not obtained at the Company Stockholders Meeting (or at any
adjournment, postponement or continuation thereof), unless such failure to
obtain the Company Stockholders Approval is the result of a material breach
of this Agreement by the party seeking to terminate this Agreement;
(e) by the Parent:
(i) if (A) the Board of Directors of the Company has withdrawn or
modified or changed in a manner adverse to the Parent or the Merger
Subsidiary, its approval or recommendation of this Agreement or the
Merger, or has recommended an Acquisition Proposal (or has publicly
proposed to take any such actions), (B) the Company accepts a written
offer for, or otherwise enters into an
43
agreement to consummate or consummates an Acquisition Proposal or
similar business combination with a person or entity other than the
Parent, the Merger Subsidiary or their affiliates, or (C) the Company
has failed to perform any of its obligations pursuant to, or otherwise
violated the terms of, Section 5.6, (or the Board of Directors of the
Company resolves to do any of the foregoing);
(ii) if the Company (A) breaches or fails to perform or comply
with any of its material covenants and agreements contained herein or
(B) breaches its representations and warranties in any material
respect such that the conditions set forth in Section 6.1 or Section
6.3 would not be satisfied and such breach is not cured within 20 days
after the date written notice of such breach is given by the Parent to
the Company; or
(f) by the Company:
(i) pursuant to the terms and conditions of Section 5.6(d);
(ii) if the Parent or the Merger Subsidiary (A) breaches or fails
to perform or comply with any of its material covenants and agreements
contained herein, or (B) breaches its representations and warranties
in any material respect such that the conditions set forth in Section
6.1 or Section 6.2 would not be satisfied, and such breach is not
cured within 20 days after the date written notice of such breach is
given by the Company to the Parent.
Section 7.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement will become void and will be
deemed to have terminated without liability or obligation to any party (except
for any liability of any party in willful breach of any covenant or agreement of
this Agreement prior to the termination hereof); provided that the provisions of
the Confidentiality Agreement and the last sentence of Section 5.9, this Section
7.2, Section 7.3, Section 7.4, and Article 8 (other than the exception clause in
Section 8.10) of this Agreement will continue in full force and effect
notwithstanding such termination and abandonment.
Section 7.3 Termination Fee. Notwithstanding any other provision of this
Agreement:
(a) if this Agreement is terminated pursuant to Section 7.1(e)(i) or
Section 7.1(f)(i), then the Company shall concurrently pay to the Parent a
fee of $5,500,000 (the "Termination Fee");
(b) if (i) this Agreement is terminated pursuant to Section 7.1(b) or
Section 7.1(e)(ii), (ii) prior to such termination there exists an
Acquisition Proposal (whether or not such offer or proposal has been
rejected or has been withdrawn prior to the time of such termination), and
(iii) within 12 months of such termination, the Company or any of its
Subsidiaries accepts a written offer for, or otherwise enters into an
agreement to
44
consummate or consummates, an Acquisition Proposal (which, solely for
purposes of this clause (iii) shall mean an "Acquisition Proposal" as
defined in Section 5.6(f), except that all references therein to "20%"
shall be deemed instead to be "50%"), then upon the signing of a definitive
agreement relating to such Acquisition Proposal, or, if no such agreement
is signed, then upon consummation of any such Acquisition Proposal, the
Company shall promptly pay to the Parent the Termination Fee;
(c) if (i) this Agreement is terminated pursuant to Section 7.1(d),
and (ii) within 12 months of such a termination the Company or any of its
Subsidiaries accepts a written offer for, or otherwise enters into an
agreement to consummate or consummates, an Acquisition Proposal, then upon
the signing of a definitive agreement relating to such Acquisition
Proposal, or, if no such agreement is signed, then upon consummation of any
such Acquisition Proposal, the Company shall promptly pay to the Parent the
Termination Fee;
Section 7.4 Other Termination Fee Matters. Except as specifically provided
in Section 7.3, each party will bear its own expenses incurred in connection
with the transactions contemplated by this Agreement, whether or not such
transactions are consummated. The obligation to pay the Termination Fee pursuant
to Section 7.3 shall be in addition to any other rights or remedies that may be
available to the Parent. The Company shall make all such payments required by
Section 7.3 promptly (and in any event within two business days of receipt by
the Company of written notice from the Parent) by wire transfer of immediately
available funds to an account designated by the Parent. The Company acknowledges
that the agreements regarding the Termination Fee contained in this Agreement
are an integral part of the transactions contemplated hereby, and that in the
absence of such agreements, the Parent and the Merger Subsidiary would not have
entered into this Agreement. The Company accordingly agrees that in the event
the Company fails to pay the Termination Fee promptly, the Company will in
addition to the payment of such amount, also pay to the Parent all of the
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Parent in the enforcement of its rights under Section
7.3, together with interest on such amount at a rate of 10% per annum from the
date upon which such payment was due, to and including the date of payment. If
the Company has not breached Section 5.6, payment of the Termination Fee will be
in full and complete satisfaction of, and will be the Parent's sole and
exclusive remedy for, any loss, liability, damage or claim arising out of or
related to any such termination of this Agreement.
45
ARTICLE 8
MISCELLANEOUS
Section 8.1 Nonsurvival of Representations. None of the representations and
warranties contained in this Agreement or in any certificate, instrument or
other writing delivered pursuant to this Agreement will survive the Merger or
the termination of this Agreement.
Section 8.2 Specific Performance. The parties agree that irreparable damage
would occur in the event any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties will be entitled to specific performance of the terms of this
Agreement, without posting a bond or other security, this being in addition to
any other remedy to which they are entitled at law or in equity.
Section 8.3 Successors and Assigns. Neither this Agreement nor any of the
rights, interests or obligations provided by this Agreement will be assigned by
any of the parties (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section 8.4 Amendment. This Agreement may be amended by the execution and
delivery of a written instrument by or on behalf of the Parent, the Merger
Subsidiary and the Company at any time before or after the Company Stockholders
Approval, provided that after the date of the Company Stockholders Approval, no
amendment to this Agreement will be made without the approval of the
stockholders of the Company if and to the extent such approval is required under
the Delaware Act.
Section 8.5 Extension of Time; Waiver. At any time prior to the Effective
Time, the parties may extend the time for performance of or waive compliance
with any of the covenants, agreements or conditions of the other parties to this
Agreement, and may waive any breach of the representations or warranties of such
other parties. No agreement extending or waiving any provision of this Agreement
will be valid or binding unless it is in writing and is executed and delivered
by or on behalf of the party against which it is sought to be enforced.
Section 8.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable Law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable Law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
Section 8.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all such
counterparts taken together will constitute one and the same Agreement.
46
Section 8.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and will not constitute a part of
this Agreement.
Section 8.9 Notices. All notices and other communications hereunder will be
in writing (including telecopy or similar writing) and will be effective (a) if
given by facsimile, when such facsimile is transmitted to the facsimile number
specified below and the appropriate facsimile confirmation is received or (b) if
given by any other means, when delivered at the address specified below:
If to the Parent
or the Merger Subsidiary: General Dynamics Corporation
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Senior Vice President and
General Counsel, Secretary
Facsimile No.: (000) 000-0000
With a copy (which will
not constitute notice) to: Jenner & Block, LLC
Xxx XXX Xxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Company: Advanced Technical Products, Inc.
000 Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
President and Chief Executive
Officer
Facsimile No.: (000) 000-0000
With a copy (which will
not constitute notice ) to: Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
or to such other address or to the attention of such other party that the
recipient party has specified by prior written notice to the sending party in
accordance with the preceding.
47
Section 8.10 No Third Party Beneficiaries. Except as provided pursuant to
Section 5.7, the terms and provisions of this Agreement will not confer
third-party beneficiary rights or remedies upon any person or entity other than
the parties hereto and their respective successors and permitted assigns.
Section 8.11 Entire Agreement. This Agreement, the Confidentiality
Agreement, the Company Disclosure Letter and the other documents referred to
herein collectively constitute the entire agreement among the parties and
supersede any prior and contemporaneous understandings, agreements or
representations by or among the parties, written or oral, that may have related
in any way to the subject matter hereof.
Section 8.12 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party. The use of
the word "including" in this Agreement means "including without limitation" and
is intended by the parties to be by way of example rather than limitation. As
used in this Agreement, the qualification "to the Company's knowledge" and
clauses of similar effect mean the actual knowledge after due inquiry of any
executive officer of the Company or of its Subsidiaries (or other officer or
manager of the Company or of its Subsidiaries if such officer or manager has
primary responsibility over the subject matter in question) of the existence or
absence of facts which would contradict a particular representation and warranty
of the Company.
Section 8.13 Consent to Jurisdiction. Each of the parties to this Agreement
consents to submit to the personal jurisdiction of any state or federal court
sitting in the State of Delaware, in any action or proceeding arising out of or
relating to this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees not to
bring any action or proceeding arising out of or relating to this Agreement in
any other court. Each of the parties to this Agreement agrees not to assert in
any action or proceeding arising out of relating to this Agreement that the
venue is improper, and waives any defense of inconvenient forum to the
maintenance of any action or proceeding so brought and waives any bond, surety
or other security that might be required of any other party with respect
thereto.
Section 8.14 Governing Law. THIS AGREEMENT AND THE COMPANY DISCLOSURE
LETTER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, without giving Effect to Any LAW OR RULE THAT WOULD CAUSE THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED.
Section 8.15 Disclosure. Notwithstanding anything to the contrary in this
Agreement or the Company Disclosure Letter, (i) the disclosure of information in
the Company SEC Documents will constitute disclosure for purposes of the
provisions of Article III only to the extent that the significance of such
information is apparent based solely on the disclosure contained in such Company
SEC Document, and (ii) information disclosed in a particular section of the
Company Disclosure Letter will not be deemed to have been disclosed for any
other
48
sections or purposes of this Agreement. The mere disclosure or listing of an
agreement, item, matter, circumstance, condition, property or individual will
not be sufficient to disclose a breach, violation, dispute, claim or any similar
condition or circumstance relating thereto.
* * * *
49
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first written above.
GENERAL DYNAMICS CORPORATION
By /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President
ATHENA ACQUISITION I CORPORATION
By /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
President
ADVANCED TECHNICAL PRODUCTS, INC.
By /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
50
