EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
INTEGRATED DEFENSE TECHNOLOGIES, INC.
T-S ACQUISITION CORP.
AND
TECH-SYM CORPORATION
DATED AS OF JUNE 27, 2000
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TABLE OF CONTENTS
ARTICLE I The Merger...........................................................1
Section 1.1 The Merger..................................................1
Section 1.2 Closing.....................................................1
Section 1.3 Effective Time..............................................2
Section 1.4 Effect of the Merger........................................2
Section 1.5 Articles of Incorporation and Bylaws........................2
Section 1.6 Directors and Officers......................................2
ARTICLE II Effect of the Merger on the Stock of the Constituent Corporations;
Exchange of Certificates.................................................2
Section 2.1 Effect on Stock.............................................2
Section 2.2 Exchange of Certificates....................................3
Section 2.3 Employee and Director Stock Options.........................4
ARTICLE III Shareholder Approval...............................................5
Section 3.1 Shareholder Approval........................................5
ARTICLE IV Representations and Warranties of Target............................5
Section 4.1 Organization, Qualification, Etc............................5
Section 4.2 Capitalization..............................................5
Section 4.3. Corporate Authority Relative to this Agreement;
No Violation................................................7
Section 4.4 Reports and Financial Statements............................7
Section 4.5 No Undisclosed Liabilities..................................8
Section 4.6 No Violation of Law.........................................8
Section 4.7 Environmental Laws and Regulations..........................8
Section 4.8 Employee Benefit Matters....................................8
Section 4.9 Absence of Certain Changes or Events.......................10
Section 4.10 Investigations; Litigation.................................11
Section 4.11 Proxy Statement............................................11
Section 4.12 Certain Business Practices.................................11
Section 4.13 Lack of Ownership of Acquiror Common Shares................12
Section 4.14 Tax Matters................................................12
Section 4.15 Opinion of Financial Advisor...............................13
Section 4.16 Required Vote of Target Stockholders.......................13
Section 4.17 Intellectual Property......................................13
Section 4.18 Severance Payments.........................................13
Section 4.19 Title to Properties........................................13
ARTICLE V Representations and Warranties of Acquiror and Sub..................14
Section 5.1 Organization, Qualification, Etc...........................14
Section 5.2 Corporate Authority Relative to this Agreement; No
Violation..................................................14
Section 5.3 Litigation.................................................15
Section 5.4 Proxy Statement............................................15
Section 5.5 Lack of Ownership of Target Common Stock...................15
Section 5.6 No Required Vote of Acquiror Shareholders..................15
Section 5.7 No Financing Necessary.....................................15
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ARTICLE VI Covenants and Agreements...........................................16
Section 6.1 Conduct of Business by Target..............................16
Section 6.2 Investigation..............................................17
Section 6.3 Cooperation................................................18
Section 6.4 Employee Benefit Plans.....................................18
Section 6.5 Filings; Other Action......................................18
Section 6.6 Further Assurances.........................................19
Section 6.7 Anti-takeover Statute......................................19
Section 6.8 No Solicitation by Target..................................19
Section 6.9 Public Announcements.......................................20
Section 6.10 Indemnification of Directors and Officers..................21
Section 6.11 Additional Reports.........................................22
Section 6.12 Accounting Treatment.......................................22
Section 6.13 Update Disclosure: Breaches................................22
ARTICLE VII Conditions to the Merger..........................................23
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger.....................................................23
Section 7.2 Conditions to Obligations of Target to Effect the Merger...23
Section 7.3 Conditions to Obligations of Acquiror to Effect the Merger.23
ARTICLE VIII Termination, Waiver, Amendment and Closing.......................24
Section 8.1 Termination or Abandonment.................................24
Section 8.2 Termination Fee............................................25
ARTICLE IX Miscellaneous......................................................25
Section 9.1 Non-Survival of Representations and Warranties.............25
Section 9.2 Expenses...................................................26
Section 9.3 Counterparts: Effectiveness................................26
Section 9.4 Governing Law..............................................26
Section 9.5 Notices....................................................26
Section 9.6. Assignment; Binding Effect.................................27
Section 9.7. Severability...............................................27
Section 9.8. Miscellaneous..............................................27
Section 9.9. Headings...................................................28
Section 9.10. Subsidiaries: Significant Subsidiaries; Affiliates........28
Section 9.11. Finders or Brokers........................................28
Section 9.12. Amendment.................................................28
Section 9.13. Waiver....................................................28
Section 9.14. Third Party Beneficiaries.................................30
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of June 27, 2000 (this "Agreement"),
is among INTEGRATED DEFENSE TECHNOLOGIES, INC. ("Acquiror"), T-S ACQUISITION
CORP. ("Sub"), and TECH-SYM CORPORATION ("Target").
WHEREAS, Target is a corporation duly organized and existing under the
laws of the State of Nevada, Acquiror is a corporation duly organized and
existing under the laws of Delaware and Sub is a corporation duly organized and
existing under the laws of the State of Nevada and is a wholly-owned subsidiary
of Acquiror;
WHEREAS, the Board of Directors of Target has established a special
committee of the Board of Directors (the "Special Committee") to consider
proposals to sell Target and to take any and all action to approve and
effectuate the sale of Target;
WHEREAS, the Boards of Directors of Acquiror and Sub and the Special
Committee of the Board of Directors of Target have approved and have declared
advisable the merger of Sub with and into Target (the "Merger"), upon the terms
and subject to the conditions set forth herein, whereby each issued and
outstanding share of the common stock, par value $0.01 per share, of Target
("Target Common Stock") not owned directly by Target or Acquiror will be
converted into the right to receive cash of $30.00;
WHEREAS, for financial accounting purposes, the parties acknowledge that
the Merger will be accounted for as a purchase;
WHEREAS, the parties desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger; and
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1. THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with Chapter 92A of the Nevada
Revised Statutes ("Nevada Law"), Sub shall be merged with and into Target at the
Effective Time (as defined in Section 1.3). Following the Effective Time, the
separate corporate existence of Sub shall cease and Target shall be the
surviving corporation (the "Surviving Corporation") and shall continue its
corporate existence under the laws of the State of Nevada.
Section 1.2. CLOSING. The closing of the Merger (the "Closing") will take
place at such time and date to be specified by the parties (the "Closing Date"),
which shall be no later than the second business day after satisfaction or
waiver of the conditions set forth in Article VII, unless another time or date
is agreed to by the parties hereto. The Closing will be held at the offices of
Target in the city of Houston, Texas or as otherwise agreed to by the parties
hereto.
Section 1.3. EFFECTIVE TIME. Subject to the provisions of this Agreement
and in accordance with Nevada Law, as soon as practicable on the Closing Date,
the parties shall file Articles of Merger (the "Articles of Merger") with the
Secretary of State of the State of Nevada, in such form as required by, and
executed and acknowledged in accordance with the relevant provisions of, Nevada
Law. The Merger shall become effective at the later of the date of filing of the
Articles of Merger or at such time within 90 days of the date of filing as is
specified in the Articles of Merger (the "Effective Time").
Section 1.4. EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Nevada Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the properties, rights,
privileges, powers and franchises of Sub and Target shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Sub and Target shall
become the debts, liabilities and duties of the Surviving Corporation.
Section 1.5. ARTICLES OF INCORPORATION AND BYLAWS. At the Effective Time:
(a) the articles of incorporation of the Surviving Corporation shall be
amended and restated to adopt the articles of incorporation of Sub, as in effect
immediately prior to the Effective Time until thereafter changed or amended as
provided therein or by applicable law.
(b) the bylaws of the Surviving Corporation shall be amended and restated
to adopt the bylaws of Sub, as in effect immediately prior to the Effective Time
until thereafter changed or amended as provided therein or by applicable law.
Section 1.6. DIRECTORS AND OFFICERS. The directors and officers of Sub
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation until their respective successors are duly elected and
qualified (or their earlier resignation or removal), as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.1. EFFECT ON STOCK. As of the Effective Time, by virtue of the
Merger and without any action on the part of Sub, Target or the holders of any
securities of Target or Sub:
(a) CANCELLATION OF TARGET-OWNED STOCK AND ACQUIROR-OWNED STOCK. Each
share of Target Common Stock that is owned directly by Target as treasury stock
or by Acquiror shall automatically be canceled and retired and shall cease to
exist, and no consideration shall be delivered in exchange therefor.
(b) CONVERSION OF TARGET COMMON STOCK. Subject to Section 2.2(f), each
share of Target Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares to be canceled in accordance with Section
2.1(a)) shall be converted into the right to receive $30.00 in cash (the "Merger
Consideration"). As of the Effective Time, all such shares of Target Common
Stock shall no longer be outstanding and shall automatically be canceled and
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retired and shall cease to exist, and each holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding Target Common Shares (the "Certificates") shall cease to have any
rights with respect thereto, except the right to receive cash in an amount equal
to the product that is obtained by multiplying (A) the Merger Consideration by
(B) the whole number of shares of Target Common Stock surrendered.
(c) CONVERSION OF COMMON STOCK OF SUB. Each issued and outstanding share
of common stock, par value $0.01 per share, of Sub shall be converted into one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
Section 2.2. EXCHANGE OF CERTIFICATES. (a) EXCHANGE AGENT. As of the
Effective Time, Acquiror shall deliver (or cause to be delivered) to Continental
Stock Transfer & Trust Company, or another bank or trust company designated by
it (the "Exchange Agent"), for the benefit of the holders of shares of Target
Common Stock for exchange in accordance with this Article II, funds sufficient
to make payment of the Merger Consideration payable pursuant to Section 2.1(b).
Such funds, referred to in the preceding sentence, are hereafter referred to as
the "Exchange Fund".
(b) NOTICE OF EXCHANGE. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of a
Certificate whose shares were converted into the Merger Consideration pursuant
to Section 2.1, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as Acquiror and Target may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration.
(c) EXCHANGE PROCEDURES. Upon surrender of a Certificate for cancellation
to the Exchange Agent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive in exchange therefor
a check payable to the order of such holder representing payment of the Merger
Consideration for each share of Target Common Stock evidenced by the Certificate
surrendered and the Certificate so surrendered shall forthwith be canceled. In
the event of a transfer of ownership of Target Common Stock which is not
registered in the transfer records of Target, cash may be paid to a person other
than the person in whose name the Certificate so surrendered is registered if
such Certificate shall be properly endorsed or otherwise be in proper form for
transfer. Until surrendered as contemplated by this Section 2.2, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive, upon such surrender, the Merger Consideration. No
interest will be paid or will accrue on any cash payable to holders of
Certificates pursuant to the provisions of this Article II.
(d) NO FURTHER OWNERSHIP RIGHTS IN TARGET COMMON STOCK. All Merger
Consideration paid upon the surrender for exchange of Certificates in accordance
with the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Target Common Stock
theretofore represented by such Certificates. There shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Target Common Stock which were outstanding
immediately prior to the Effective
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Time. If, after the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they shall be canceled and
exchanged as provided in this Article II, except as otherwise provided by law.
(e) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund which
remains undistributed to the holders of the Certificates for six months after
the Effective Time shall be delivered to Acquiror, upon demand, and any holders
of the Certificates who have not theretofore complied with this Article II shall
thereafter look only to Acquiror for payment of their claim for Merger
Consideration.
(f) NO LIABILITY. None of Acquiror, Target, Sub or the Exchange Agent
shall be liable to any person in respect of any cash from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificate shall not have been surrendered prior
to five years after the Effective Time (or immediately prior to such earlier
date on which any Merger Consideration, payable to the holder of such
Certificate would otherwise escheat to or become the property of any
governmental body or authority) any such Merger Consideration shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.
(g) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest the
Exchange Fund, as directed by Acquiror, on a daily basis. Any interest and other
income resulting from such investments shall be paid to Acquiror.
(h) LOST CERTIFICATES. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against Acquiror, Surviving Corporation or the Exchange Agent
with respect to such Certificate, the Exchange Agent will issue in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration pursuant to
this Agreement.
Section 2.3. EMPLOYEE AND DIRECTOR STOCK OPTIONS. At the Effective Time,
automatically and without any action on the part of the holder thereof, each
option (a "Target Plan Option") to purchase shares of Target Common Stock
granted under the Target Stock Option Plans (as defined in Section 4.2(c)) which
remains as of such time unexercised in whole or in part shall be cancelled, and
each holder of a Target Plan Option (whether or not such Target Plan Option is
then vested or exercisable) shall be entitled to receive from the Surviving
Corporation for each Target Plan Option an amount in cash, without interest,
equal to the amount determined by multiplying (A) the number of shares of Target
Common Stock subject to such Target Plan Option by (B) the positive difference,
if any, obtained by subtracting the option exercise price for such Target Plan
Option from the Merger Consideration. Promptly after the Effective Time, the
Surviving Corporation shall pay to such holder of a Target Plan Option an amount
determined in accordance with the preceding sentence.
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ARTICLE III
SHAREHOLDER APPROVAL
Section 3.1. SHAREHOLDER APPROVAL. Target shall call and hold a meeting of
its stockholders (the "Target Meeting") as promptly as practicable for the
purposes of obtaining the approval of the Merger and this Agreement by the
stockholders of Target required under Nevada Law (the "Target Stockholder
Approval").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TARGET
Target represents and warrants to Acquiror and Sub that:
Section 4.1. ORGANIZATION, QUALIFICATION, ETC. Target is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has the corporate power and authority to own its properties
and assets and to carry on its business as it is now being conducted and is duly
qualified to do business and is in good standing in each jurisdiction in which
the ownership of its properties or the conduct of its business requires such
qualification, except for jurisdictions in which such failure to be so qualified
or to be in good standing would not, individually or in the aggregate, have a
Material Adverse Effect (as hereinafter defined) on Target. As used in this
Agreement, any reference to any state of facts, event, change or effect having a
"Material Adverse Effect" on or with respect to Target means such state of
facts, event, change or effect that has had, or would reasonably be expected to
have, a material adverse effect on the financial condition of Target and its
Subsidiaries, taken as a whole, after taking into account any positive facts,
events, changes or effects that may occur after the date of this Agreement. A
Material Adverse Effect shall not be deemed to include (i) any material adverse
change affecting the United States economy generally or the results of
operations or business prospects of Target or its Subsidiaries after the date of
this Agreement, (ii) any failure to have accepted, or any delay in the expected
acceptance date of, any proposal or bid made by Target or any of its
Subsidiaries with respect to new business prospects or (iii) any change in the
market price of the Target Common Stock. The copies of Target's Articles of
Incorporation and Bylaws which have been delivered to Acquiror are complete and
correct and in full force and effect on the date hereof. Each of Target's
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation or organization,
has the power and authority to own its properties and to carry on its business
as it is now being conducted, and is duly qualified to do business and is in
good standing in each jurisdiction in which the ownership of its property or the
conduct of its business requires such qualification, except for jurisdictions in
which such failure to be so qualified or to be in good standing would not,
individually or in the aggregate, have a Material Adverse Effect on Target.
Section 4.2. CAPITALIZATION. (a) (a) The authorized stock of Target
consists of 20,000,000 shares of Target Common Stock and 2,000,000 shares of
preferred stock, par value $0.01 per share ("Target Preferred Stock"). As of
June 23, 2000, 5,796,451 shares of Target Common Stock, exclusive of 2,354,280
treasury shares, and no shares of Target Preferred Stock were issued and
outstanding. Except for the issuance of shares of Target Common Stock pursuant
to
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the Target Stock Option Plans, since March 31, 2000, no shares of Target Common
Stock or Target Preferred Stock have been issued. All the outstanding shares of
Target Common Stock have been validly issued and are fully paid and
non-assessable.
(b) Target is not a party to, nor is aware of, any voting agreement,
voting trust or similar agreement or arrangement relating to any class or series
of its capital stock, or any agreement or arrangement providing for registration
rights with respect to any capital stock or other securities of Target.
(c) As of the date hereof, there were outstanding options to purchase an
aggregate of 843,320 shares of Target Common Stock under the Target Corporation
1990 Stock Option Plan and 1998 Equity Incentive Plan (collectively, the "Target
Stock Option Plans"), all of which are set forth on Schedule 4.2(c). Other than
as set forth in this Section 4.2 and on Schedule 4.2(c), there are not now, and
at the Effective Time there will not be, any (i) shares of capital stock or
other equity securities of Target outstanding other than Target Common Stock
issuable pursuant to the exercise of the stock options described in this Section
4.2(c), (ii) other outstanding awards under the Target Stock Option Plans, or
(iii) outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any class of capital stock of
Target, or contracts, understandings or arrangements to which Target is a party,
or by which it is or may be bound, to issue additional shares of its capital
stock or options, warrants, scrip or rights to subscribe for, or securities or
rights convertible into or exchangeable for, any additional shares of its
capital stock.
(d) Except as set forth on Schedule 4.2(d)(i), all outstanding shares of
capital stock of Target's Subsidiaries (i) are owned by Target or a wholly owned
Subsidiary of Target, free and clear of all liens, charges, encumbrances,
adverse claims and options of any nature, (ii) were duly authorized and validly
issued and are fully paid and nonassessable, and (iii) have not been issued in
violation of any preemptive rights. Except as set forth on Schedule 4.2(d)(ii),
there are not now, and at the Effective Time there will not be, any outstanding
options, warrants, scrip, rights to subscribe for, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any class of capital stock of any Subsidiary of
Target, or contracts, understandings or arrangements to which Target or any
Subsidiary of Target is a party, or by which any of them is or may be bound, to
issue additional shares of its capital stock or options, warrants, scrip or
rights to subscribe for, or securities or rights convertible into or
exchangeable for, any additional shares of capital stock of any Subsidiary of
Target. There are not now, and at the Effective Time there will not be, any
outstanding contractual obligations of Target or any Subsidiary of Target to
repurchase, redeem or otherwise acquire any outstanding shares of capital stock
or other ownership interests of any such Subsidiary or to provide funds to or
make any investment (in the form of a loan, capital contribution or otherwise)
in any such Subsidiary or any other entity.
(e) Except for the Subsidiaries of Target set forth on Schedule 4.2(e)
hereto, Target does not, directly or indirectly, own of record or beneficially,
or have the right or obligation to acquire, any outstanding securities or other
interest in any corporation, partnership, joint venture or other entity.
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Section 4.3. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT; NO VIOLATION.
Target has the corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the Special Committee of Target and, except for
the approval and adoption of this Agreement and the Merger by the stockholders
of Target, no other corporate proceedings on the part of Target are necessary to
authorize this Agreement and the transactions contemplated hereby. The Special
Committee of Target has determined that the transactions contemplated by this
Agreement are in the best interest of Target and its stockholders. This
Agreement has been duly and validly executed and delivered by Target and,
assuming this Agreement constitutes a valid and binding agreement of the other
parties hereto, this Agreement constitutes a valid and binding agreement of
Target, enforceable against Target in accordance with its terms (except insofar
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable remedies).
Except as set forth on Schedule 4.3, Target is not subject to or obligated under
any charter, bylaw or contract provision or any licenses, franchise or permit,
or subject to any order or decree, which would be breached or violated by its
executing or carrying out this Agreement. Other than in connection with or in
compliance with the provisions of Nevada Law, the Securities Act of 1933, as
amended (the "Securities Act"), the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act") (collectively, the "Target Required
Approvals"), no authorization, consent or approval of, or filing with, any
governmental body or authority is necessary for the consummation by Target of
the transactions contemplated by this Agreement.
Section 4.4. REPORTS AND FINANCIAL STATEMENTS. Target has timely filed all
reports, registration statements and other filings, together with any amendments
required to be made with respect thereto, that it has been required to file with
the SEC under the Securities Act and the Exchange Act since January 1, 1997. All
reports, registration statements and other filings (including all notes,
exhibits and schedules thereto and documents incorporated by reference therein)
filed by Target with the Securities and Exchange Commission (the "SEC") since
January 1, 1997 through the date of this Agreement, together with any amendments
thereto, are collectively referred to as the "Target SEC Reports." As of the
respective dates of their filing with the SEC, the Target SEC Reports complied
in all material respects with the Securities Act, the Exchange Act and the rules
and regulations of the SEC thereunder, 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 to make the statements made therein, in light of the
circumstances under which they were made, not misleading. Each of the
consolidated financial statements (including any related notes or schedules)
included in the Target SEC Reports was prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis (except as
may be noted therein or in the notes or schedules thereto) and complied with the
rules and regulations of the SEC, and such consolidated financial statements
fairly present the consolidated financial position of Target and its
Subsidiaries as of the dates thereof and the results of operations, cash flows
and changes in stockholders' equity for the periods then ended (subject, in the
case of the unaudited interim financial statements, to normal year-end audit
adjustments on a basis consistent with past periods).
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Section 4.5. NO UNDISCLOSED LIABILITIES. Except as set forth on Schedule
4.5, neither Target nor any of its Subsidiaries has any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise,
except (a) liabilities or obligations reflected in any of the Target SEC
Reports, (b) liabilities incurred after March 31, 2000 in the ordinary course of
business consistent with past practices, (c) the obligation to pay fees and
expenses of Target's attorneys and accountants and of Quarterdeck Investment
Partners, Inc. relating to the transactions contemplated by this Agreement and
(d) liabilities or obligations which would not have, or would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Target.
Section 4.6. NO VIOLATION OF LAW. The businesses of Target and its
Subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any governmental body or authority (provided that no
representation or warranty is made in this Section 4.6 with respect to
Environmental Laws (as hereinafter defined)) except (a) as described in any of
the Target SEC Reports and (b) for violations or possible violations which would
not have, or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Target and its Subsidiaries.
Section 4.7. ENVIRONMENTAL LAWS AND REGULATIONS. Except as set forth on
Schedule 4.7 or as, in the aggregate, have not had or would not reasonably be
expected to have a Material Adverse Effect on Target and its Subsidiaries, (i)
have obtained all applicable permits, licenses and other authorizations which
are required under foreign, federal, state or local laws relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants, or
hazardous or toxic materials or wastes into ambient air, surface water, ground
water or land or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage disposal, transport or handling of
pollutants, contaminants or hazardous or toxic materials or wastes by Target or
its Subsidiaries (or their respective agents); (ii) are in compliance with all
terms and conditions of such required permits, licenses and authorizations, and
also are in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirement, obligations, schedules and timetables
contained in such laws or contained in any regulation, code, plan, order,
decree, judgment, notice or demand letter issued, entered, promulgated or
approved thereunder; and (iii) as of the date hereof, are not aware of nor have
received written notice of any event, condition, circumstance, activity,
practice, incident, action or plan which is reasonably likely to interfere with
or prevent continued compliance with or which would give rise to any common law
or statutory liability, or otherwise form the basis of any claim, action, suit
or proceeding, based on or resulting from Target's or any of its Subsidiaries'
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling or the emission, discharge or release into the
environment, of any pollutant, contaminant, or hazardous or toxic material or
waste.
Section 4.8. EMPLOYEE BENEFIT MATTERS. (a) (a) Target has made available
to Acquiror copies of each of the following (individually, a "Target Benefit
Plan," and collectively, the "Target Benefit Plans") which is sponsored,
maintained or contributed to by Target or any of its Subsidiaries for the
benefit of the employees of Target or any of its Subsidiaries, or has been so
sponsored, maintained or contributed to within six years prior to the date of
this Agreement:
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(i) each "employee benefit plan," as such term is defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
(including, but not limited to, employee benefit plans which are not subject to
the provisions of ERISA);
(ii) each personnel policy, stock option plan, collective bargaining
agreement, bonus plan or arrangement, incentive award plan or arrangement,
vacation policy, severance pay plan, policy, or agreement, deferred compensation
agreement or arrangement, executive compensation or supplemental income
arrangement, consulting agreement, employment agreement, and each other employee
benefit plan, agreement, arrangement, program, practice, or understanding which
is not described in Section 4.8(a)(i).
(b) There has been furnished to Acquiror, with respect to each Target
Benefit Plan required to file such report and description, the most recent
report on Form 5500 and the summary plan description.
(c) Neither Target nor its Subsidiaries contribute to or have an
obligation to contribute to, and have not at any time within six years prior to
the date of this Agreement contributed to or had an obligation to contribute to,
any employee benefit plan that is subject to Section 302 of ERISA, Section 412
of the Code, or Title IV of ERISA (including, without limitation, a multi
employer plan within the meaning of Section 3(37) of ERISA).
(d) Except as otherwise set forth on Schedule 4.8 or as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Target (excluding for purposes of applying the foregoing
standard of materiality the representation in clause (vii) which shall not be
subject to any standard of materiality):
(i) Target and its Subsidiaries have substantially performed all
obligations, whether arising by operation of law or by contract, required to be
performed by them in connection with the Target Benefit Plans, and, to the
knowledge of the officers and directors of Target, there have been no defaults
or violations by any other party to the Target Benefit Plans;
(ii) Each Target Benefit Plan has been administered and operated in
substantial compliance with its governing documents and applicable law,
including, where applicable, ERISA and the Code;
(iii) Each Target Benefit Plan intended to be qualified under
Section 401 of the Code (A) satisfies in form the requirements of such Section
except to the extent amendments are not required by law to be made until a date
after the Closing Date, (B) has received a favorable determination letter from
the Internal Revenue Service regarding such qualified status, (C) has not, since
receipt of the most recent favorable determination letter, been amended, except
for amendments for which the period for requesting a favorable determination
letter has not expired, and (D) has not been operated in a way that would
adversely affect its qualified status;
(iv) There are no actions, suits, or claims pending (other than
routine claims for benefits) or, to the knowledge of the officers and directors
of Target, threatened against, or with respect to, any of the Target Benefit
Plans or their assets;
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(v) No act, omission or transaction has occurred which would result
in imposition on Target or any of its Subsidiaries of (A) breach of fiduciary
duty liability damages under Section 409 of ERISA, (B) a civil penalty assessed
pursuant to subsections (c), (i) or (1) of Section 502 of ERISA, or (C) a tax
imposed pursuant to Chapter 43 of Subtitle D of the Code;
(vi) There is no matter pending (other than routine qualification
determination filings) with respect to any of the Target Benefit Plans before
any governmental authority;
(vii) With respect to any employee benefit plan within the meaning
of Section 3(3) of ERISA, which is not a Target Benefit Plan but which is
sponsored, maintained, or contributed to, or has been sponsored, maintained, or
contributed to within six years prior to the date of this Agreement, by Target
or any corporation, trade, business, or entity under common control with Target,
within the meaning of Section 414(b), (c), (m), or (o) of the Code or Section
4001 of ERISA ("Target Commonly Controlled Entity"), (A) no withdrawal
liability, within the meaning of Section 4201 of ERISA, has been incurred, which
withdrawal liability has not been satisfied, (B) no liability to the Pension
Benefit Guaranty Corporation has been incurred by any Target Commonly Controlled
Entity, which liability has not been satisfied, (C) no accumulated funding
deficiency, whether or not waived, within the meaning of Section 302 of ERISA or
Section 412 of the Code has been incurred, and (D) all contributions (including
installments) to such plan required by Section 302 of ERISA and Section 412 of
the Code have been timely made; and
(viii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not (A) require Target
or any of its Subsidiaries to make a larger contribution to, or pay greater
benefits or provide other rights under, any Target Benefit Plan than it
otherwise would, whether or not some other subsequent action or event would be
required to cause such payment or provision to be triggered, or (B) except as
provided in Section 6.4, create or give rise to any additional vested rights or
service credits under any Target Benefit Plan.
(e) Except as otherwise set forth in Schedule 4.8 or as will be provided
to Acquiror prior to the Closing Date, neither Target nor any of its
Subsidiaries is a party to any agreement, nor has any such entity established
any policy or practice, requiring it to make a payment or provide any other form
of compensation or benefit to any person performing services for such entity
upon termination of such services which would not be payable or provided in the
absence of the consummation of the transactions contemplated by this Agreement.
(f) In connection with the consummation of the transactions contemplated
by this Agreement, no payments of money or other property, acceleration of
benefits, or provisions of other rights have or will be made hereunder, under
any agreement contemplated herein, or under the Target Benefit Plans that would
be reasonably likely to result in imposition of the sanctions imposed under
Sections 2806 and 4999 of the Code, whether or not some other subsequent action
or event would be required to cause such payment, acceleration, or provision to
be triggered.
Section 4.9. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 2000,
except as contemplated by this Agreement, except as disclosed in the Target SEC
Reports or as set forth in
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Schedule 4.9 and except as permitted pursuant to Section 6.1, Target and its
Subsidiaries have conducted their business only in the ordinary and usual
course, and there has not been (i) any Material Adverse Effect on Target; (ii)
any material change by Target in its accounting methods, principles or
practices; (iii) any revaluation by Target or any of its Subsidiaries of any of
their respective assets, including, without limitation, writing down the value
of inventory or writing off notes or accounts receivable other than in the
ordinary course of business; (iv) any entry by Target or any of its Subsidiaries
into any commitment or transaction material to Target and its Subsidiaries,
taken as a whole; (v) any declaration, setting aside or payment of any dividends
or distributions in respect of Target Common Stock or any redemption, purchase
or other acquisition of any of its securities or any securities of any of its
Subsidiaries; (vi) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or business of Target
and its Subsidiaries, taken as a whole; (vii) any increase in indebtedness for
borrowed money other than an increase as a result of borrowings incurred in the
ordinary course of business; (viii) any granting of a security interest in or
lien on any material property or assets of Target and its Subsidiaries, taken as
a whole; or (ix) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan or any other increase in the
compensation payable or to become payable to any officers or key employees of
Target or any of its Subsidiaries other than those that are required under
existing contractual arrangements.
Section 4.10. INVESTIGATIONS; LITIGATION. Except as described in any of
the Target SEC Reports or as set forth in Schedule 4.10, and except as would
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect on Target:
(a) no investigation or review by any governmental body or authority with
respect to Target or any of its Subsidiaries is pending nor has any governmental
body or authority notified Target in writing of an intention to conduct the
same; and
(b) there are no actions, suits or proceedings pending (or, to the
knowledge of Target's officers and directors, threatened) against or affecting
Target or its Subsidiaries, or any of their respective properties at law or in
equity, or before any federal, state, local or foreign governmental body or
authority.
Section 4.11. PROXY STATEMENT. None of the information with respect to
Target or its Subsidiaries to be included in the proxy statement (the "Proxy
Statement") to be furnished in connection with the Target Meeting (as defined in
Section 3.1), at the time of the mailing of the Proxy Statement or any
amendments or supplements thereto, 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, except that no representation is
made by Target with respect to information supplied in writing by Acquiror or
any affiliate of Acquiror specifically for inclusion in the Proxy Statement.
Section 4.12. CERTAIN BUSINESS PRACTICES. None of Target, or any of its
Subsidiaries or any director, officer or employee of Target, or any of its
Subsidiaries has, in furtherance of any
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business of Target: (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political activity or (ii)
made any unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political party or campaign or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended (the
"FCPA").
Section 4.13. LACK OF OWNERSHIP OF ACQUIROR COMMON SHARES. None of Target
nor any of its Subsidiaries own any Acquiror Common Shares or other securities
convertible into Acquiror Common Shares.
Section 4.14. TAX MATTERS. Except as set forth in Section 4.14, (a) all
federal, state, local and foreign Tax Returns required to be filed by or on
behalf of Target, each of its Subsidiaries, and each affiliated, combined,
consolidated or unitary group of which Target or any of its Subsidiaries (i) is
a member (a "Current Target Group") or (ii) has been a member within six years
prior to the date hereof but is not currently a member, but only insofar as any
such Tax Return relates to a taxable period which includes Target or any of its
Subsidiaries and which ends on a date within the last six years (a "Past Target
Group", together with Current Target Groups, an "Target Affiliated Group") have
been timely filed, and all such Tax Returns filed are complete and accurate
except to the extent any failure to file or any inaccuracies in such filed Tax
Returns would not, individually or in the aggregate, have a Material Adverse
Effect on Target. All Taxes due and owing by Target, any Subsidiary of Target or
any Target Affiliated Group have been paid, or adequately reserved for, except
to the extent any failure to pay or reserve would not, individually or in the
aggregate, have a Material Adverse Effect on Target. There is no audit
examination, deficiency, refund litigation, proposed adjustment or matter in
controversy with respect to any Taxes due and owing by Target, any Subsidiary of
Target or any Target Affiliated Group which would, individually or in the
aggregate, have a Material Adverse Effect on Target. All assessments for Taxes
due and owing by Target, any Subsidiary of Target or any Target Affiliated Group
with respect to completed and settled examinations or concluded litigation have
been paid. As soon as practicable after the public announcement of this
Agreement, Target will provide Acquiror with written schedules of (i) the
taxable years of Target for which the statutes of limitations with respect to
federal income Taxes, have not expired, and (ii) with respect to federal income
Taxes those years for which examinations have been completed, those years for
which examinations are presently being conducted, and those years for which
examinations have not yet been initiated. Target and each of its Subsidiaries
has complied with all rules and regulations relating to the withholding of
Taxes, except to the extent any such failure to comply would not, individually
or in the aggregate, have a Material Adverse Effect on Target.
For purposes of this Agreement: (i) "Taxes" means any and all federal,
state, local, foreign or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without limitation,
taxes or other charges on or with respect to income, franchises, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth, and taxes or other charges in the nature of excise, withholding,
ad valorem or value added, and (ii) "Tax Return" means any return, report or
similar statement (including the attached schedules) required to be filed with
respect to any Tax, including, without limitation, any information return, claim
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for refund, amended return or declaration of estimated Tax.
Section 4.15. OPINION OF FINANCIAL ADVISOR. The Special Committee of
Target has received the opinion of Quarterdeck Investment Partners, Inc., dated
the date of this Agreement, a copy of which will be provided to Acquiror prior
to the Closing Date, to the effect that, as of the date of this Agreement, the
Merger Consideration is fair to Target's stockholders from a financial point of
view.
Section 4.16. REQUIRED VOTE OF TARGET STOCKHOLDERS. The affirmative vote
of the holders of a majority of the Target Common Stock present in person or by
proxy at a duly called meeting of stockholders at which a quorum is present is
the only vote of the holders of any class or series of capital stock of Target
required to approve the Merger and this Agreement. No other vote of the
stockholders or directors of Target is required by law, the Articles of
Incorporation or Bylaws of Target or otherwise in order for Target to consummate
the Merger and the transactions contemplated hereby.
Section 4.17. INTELLECTUAL PROPERTY. Target and its Subsidiaries own, or
hold licenses under or otherwise have the right to use or sublicense, all
foreign and domestic patents, trademarks (common law and registered), trademark
registration applications, service marks (common law and registered), service
xxxx registration applications, trade names and copyrights, copyright
applications, trade secrets, know-how and other proprietary information as
Target reasonably believes are necessary for the conduct of the business of
Target and its Subsidiaries as currently conducted. Neither Target nor any of
its Subsidiaries is currently in receipt of any notice of infringement or notice
of conflict with the asserted rights of others in any patents, trademarks,
service marks, trade names, trade secrets and copyrights owned or held by other
persons, except, in each case, for matters that could not reasonably be expected
to have a Material Adverse Effect on Target. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated hereby
will violate or breach the terms of or cause any cancellation of any material
license held by Target or any of its Subsidiaries under, any patent, trademark,
service xxxx, trade name, trade secret or copyright.
Section 4.18. SEVERANCE PAYMENTS. Except as set forth in Schedule 4.18,
none of Target nor any of its Subsidiaries will owe a severance payment or
similar obligation to any of their respective employees, officers or directors
as a result of the Merger or the transactions contemplated by this Agreement,
nor will any of such persons be entitled to severance payments or other benefits
as a result of the Merger or the transactions contemplated by this Agreement in
the event of the subsequent termination of their employment.
Section 4.19. TITLE TO PROPERTIES. Target and its Subsidiaries,
individually or together, have good and marketable title to all of the
properties reflected in Target's consolidated balance sheet as of March 31, 2000
(the "Consolidated Balance Sheet"), other than any properties reflected in
Target's Consolidated Balance Sheet that (i) have been sold or otherwise
disposed of since the date of Target's Consolidated Balance Sheet in the
ordinary course of business consistent with past practice or (ii) are not,
individually or in the aggregate, material to Target and its Subsidiaries, taken
as a whole, free and clear of security interests or liens, other than liens the
existence of which is set forth in Schedule 4.19 or is reflected in Target's
Consolidated Financial Statements, other than mechanics' and materialmen's liens
and other liens and
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encumbrances that would not significantly interfere with the current use of such
properties or that would not materially detract from their value. Target and its
Subsidiaries, individually or together, hold under valid lease agreements all
real and personal properties reflected in Target's Consolidated Balance Sheet as
being held under capitalized leases, and all real and personal property that is
subject to operating leases, and enjoy peaceful and undisturbed possession of
such properties under such leases, other than (i) any properties as to which
such leases have expired in accordance with their terms without any liability of
any party thereto since the date of Target's Consolidated Balance Sheet and (ii)
any properties that, individually or in the aggregate, are not material to
Target and its Subsidiaries, taken as a whole. Neither Target nor any of its
Subsidiaries has received any written notice of any adverse claim to the title
to any properties owned by them or with respect to any lease under which any
properties are held by them, other than any claims that, individually or in the
aggregate, would not have a Material Adverse Effect on Target.
Section 4.20. BOARD RECOMMENDATION. As of the date of this Agreement, the
Special Committee has recommended that the stockholders of Target vote for the
adoption of this Agreement, subject to Section 6.8.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND SUB
Acquiror and Sub represent and warrant to Target that:
Section 5.1. ORGANIZATION, QUALIFICATION, ETC. Acquiror is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and Sub is a corporation duly organized, validly existing and
in good standing under the laws of the state of Nevada and each has the
corporate power and authority to own its properties and assets and to carry on
its business as it is now being conducted and is duly qualified to do business
and is in good standing in each jurisdiction in which the ownership of its
properties or the conduct of its business requires such qualification, except
for jurisdictions in which such failure to be so qualified or to be in good
standing would not, individually or in the aggregate, have a Material Adverse
Effect on Acquiror. The copies of Acquiror's Certificate of Incorporation and
Bylaws and Sub's Articles of Incorporation and Bylaws, which have been delivered
to Target, are complete and correct and in full force and effect on the date
hereof.
Section 5.2. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT; NO VIOLATION.
Each of Acquiror and Sub has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of Directors of
Acquiror and the Board of Directors of Sub and no other corporate proceedings on
the part of Acquiror or Sub are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Acquiror and Sub and, assuming this Agreement
constitutes a valid and binding Agreement of the other parties hereto, this
Agreement constitutes a valid and binding agreement of Acquiror and Sub,
enforceable against each of them in accordance with its terms (except insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization,
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moratorium or similar laws affecting creditors' rights generally, or by
principles governing the availability of equitable remedies). Neither Acquiror
nor Sub is subject to or obligated under any charter, by-law or contract
provision or any license, franchise or permit, or subject to any order or
decree, which would be breached or violated by its execution or performance of
this Agreement, except for any breaches or violations which would not,
individually or in the aggregate, have a Material Adverse Effect on Acquiror.
Other than in connection with or in compliance with the provisions of Nevada
Law, the Exchange Act, the HSR Act and the securities or blue sky laws of the
various states (collectively, the "Acquiror Required Approvals"), no
authorization, consent or approval of, or filing with, any governmental body or
authority is necessary for the consummation by Acquiror of the transactions
contemplated by this Agreement.
Section 5.3. LITIGATION. There are no claims, suits, actions or
proceedings pending or, to the knowledge of Acquiror threatened against,
relating to or affecting Acquiror or any of its subsidiaries before any court,
governmental department, commission, agency, instrumentality or authority or any
arbitrator that seek to restrain or enjoin the consummation of the Merger.
Neither Acquiror nor any of its subsidiaries is subject to any judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or authority, or any arbitrator, which prohibits or
restricts the consummation of the transactions contemplated by this Agreement.
Section 5.4. PROXY STATEMENT. None of the information with respect to
Acquiror or its Subsidiaries to be included in the Proxy Statement will at the
time of the mailing of the Proxy Statement or any amendments or supplements
thereto, 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, except that no representation is made by Acquiror with respect
to information supplied in writing by Target or any affiliate of Target
specifically for inclusion in the Proxy Statement.
Section 5.5. LACK OF OWNERSHIP OF TARGET COMMON STOCK. Neither Acquiror
nor any of its Subsidiaries owns any shares of Target Common Stock or other
securities convertible into shares of Target Common Stock.
Section 5.6. NO REQUIRED VOTE OF ACQUIROR SHAREHOLDERS. No vote of the
shareholders of Acquiror is required by law or the Certificate of Incorporation
of Acquiror or otherwise in order for Acquiror to consummate the Merger and the
transactions contemplated hereby.
Section 5.7. NO FINANCING NECESSARY. Acquiror has sufficient funds
available to it under existing credit arrangements or otherwise to pay the
Merger Consideration pursuant to this Agreement without obtaining any consent,
waiver or amendment of any agreement or instrument to which it is a party or is
bound.
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ARTICLE VI
COVENANTS AND AGREEMENTS
It is further agreed as follows:
Section 6.1. CONDUCT OF BUSINESS BY TARGET. During the period from the
date of this Agreement and continuing until the earlier of the Effective Time or
the date, if any, on which this Agreement is earlier terminated pursuant to
Section 8.1 (the "Termination Date"), and except as may be agreed to by the
other parties hereto in writing or as may be expressly permitted pursuant to
this Agreement, Target:
(i) shall, and shall cause each of its Subsidiaries to, conduct its
operations according to their ordinary and usual course of business in
substantially the same manner as heretofore conducted;
(ii) shall use commercially reasonable efforts to preserve, and
shall cause each of its Subsidiaries to use commercially reasonable efforts to
preserve, intact its business organizations and goodwill, keep available the
services of its officers and employees as a group, subject to changes in the
ordinary course, and maintain satisfactory relationships with suppliers,
distributors, customers and others having business relationships with them;
(iii) shall confer at such times as Acquiror may reasonably request
with one or more representatives of Acquiror to report operational matters and
the status of ongoing operations;
(iv) shall notify Acquiror of any emergency or other change in the
normal course of its or its Subsidiaries' respective businesses or in the
operation of its or its Subsidiaries' respective properties and of any
complaints, investigations or hearings (or communications indicating that the
same may be contemplated) of any governmental body or authority if such
emergency, change, complaint, investigation or hearing would have a Material
Adverse Effect on Target;
(v) shall not authorize or pay any dividends on or make any
distribution with respect to its outstanding shares of stock;
(vi) shall not, and shall not permit any of its Subsidiaries to,
enter into or amend any employment, severance or similar agreements or
arrangements with any of their respective directors or executive officers;
(vii) except as set forth on Schedule 6.1(vii), shall not, and shall
not permit any of its Subsidiaries to, authorize, propose or announce an
intention to authorize or propose, or enter into an agreement with respect to,
any merger, consolidation or business combination (other than the Merger), or,
other than in the ordinary course of business and in any case subject to (iii)
above, any acquisition of any assets or securities, any disposition of any
amount of assets or securities or any release or relinquishment of any contract
rights;
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(viii) shall not propose or adopt any amendments to its Articles of
Incorporation or Bylaws;
(ix) except as set forth on Schedule 6.1(ix), shall not, and shall
not permit any of its Subsidiaries to, issue any shares of their capital stock,
or effect any stock split or otherwise change its capitalization as it existed
on March 31, 2000, except as contemplated herein and except for the issuance of
Target Common Stock with respect to the exercise of options outstanding on March
31, 2000 under the Target Stock Option Plans in accordance with the terms on the
date thereof;
(x) except as set forth on Schedule 6.1(x), shall not, and shall not
permit any of its Subsidiaries to, grant, confer or award (A) any options,
warrants, conversion rights or other rights, not existing on the date hereof, to
acquire any shares of its capital stock or (B) any other awards under the Target
Stock Option Plans except for annual automatic grants to non-employee directors
in connection with Target's 2000 annual stockholders meeting;
(xi) shall not, and shall not permit any of its Subsidiaries to,
purchase or redeem any shares of its stock;
(xii) except as set forth on Schedule 6.1(xii), shall not, and shall
not permit any of its Subsidiaries to, amend the terms of their respective
employee benefit plans, programs or arrangements or any severance or similar
agreements or arrangements in existence on the date hereof, or adopt any new
employee benefit plans, programs or arrangements or any severance or similar
agreements or arrangements except as contemplated by this Section 6.1 or Section
6.5;
(xiii) shall not, and shall not permit any of its Subsidiaries to,
enter into any loan agreement except for letters of credit in the ordinary
course of business;
(xiv) shall not, and shall not permit any of its Subsidiaries to,
make any Tax election or settle or compromise any Tax liability; and
(xv) shall not, and shall not permit any of its Subsidiaries to,
agree, in writing or otherwise, to take any of the foregoing actions or take any
action which would make any representation or warranty in Article IV hereof
untrue or incorrect; and
(xvi) except as set forth on Schedule 6.1(xvi), shall not, and shall
not permit any of its Subsidiaries to, settle, compromise or otherwise terminate
any litigation, claim or other settlement negotiation.
Section 6.2. INVESTIGATION. Target shall afford to Acquiror and to
Acquiror's officers, employees, accountants, counsel and other authorized
representatives full and complete access during normal business hours,
throughout the period prior to the earlier of the Effective Time or the date of
termination of this Agreement, to its and its Subsidiaries' plants, properties,
contracts, commitments, books, and records (including but not limited to tax
returns) and any report, schedule or other document filed or received by it
pursuant to the requirements of federal or state securities laws and shall use
their reasonable best efforts to cause their respective representatives to
furnish promptly to one another such additional financial and operating data and
other
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information as to its and its Subsidiaries' respective businesses and
properties as the other or its duly authorized representatives may from time to
time reasonably request.
Section 6.3. COOPERATION. Target and Acquiror shall together, or pursuant
to an allocation of responsibility to be agreed upon between them:
(a) prepare and file with the SEC as soon as is reasonably practicable the
Proxy Statement, and shall use their reasonable best efforts to have the Proxy
Statement cleared by the SEC under the Exchange Act;
(b) as soon as is reasonably practicable take all such action as may be
required under state blue sky or federal or state securities laws in connection
with the transactions contemplated by this Agreement; and
(c) cooperate with one another in order to lift any injunctions or remove
any other impediment to the consummation of the transactions contemplated
herein.
Section 6.4. EMPLOYEE BENEFIT PLANS.
(a) The Board of Directors of Target (or a duly appointed committee
thereof responsible for the administration of the Target Stock Option Plans in
accordance with the terms of such plans) shall, prior to or as of the Effective
Time, take all necessary actions, pursuant to and in accordance with the terms
of the Target Stock Option Plans and the instruments evidencing the Target Plan
Options, to provide (1) for the cancellation of the Target Plan Options upon the
terms set forth in Section 2.3 and (2) that no consent of the holders of the
Target Plan Options is required in connection with such cancellation.
(b) To the extent permitted by applicable law, Acquiror shall cause
employees of Target and its Subsidiaries to receive credit for purposes of
eligibility to participate, vesting, and eligibility to receive benefits (but
not benefit accrual) under any employee benefit plan, program or arrangement
established or maintained by the Acquiror or the Surviving Corporation for
service accrued or deemed accrued prior to the Effective Time with Target or any
of its Subsidiaries, as the case may be; PROVIDED, HOWEVER, that such crediting
of service shall not operate to duplicate any benefit or the funding of any such
benefit.
Section 6.5. FILINGS; OTHER ACTION. Subject to the terms and conditions
herein provided, Target and Acquiror shall (i) promptly make their respective
filings and thereafter make any other required submissions under the HSR Act,
(ii) use reasonable efforts to cooperate with one another in (A) determining
whether any filings are required to be made with, or consents, permits,
authorizations or approvals are required to be obtained from, any third party,
the United States government or any agencies, departments or instrumentalities
thereof or other governmental or regulatory bodies or authorities of federal,
state, local and foreign jurisdictions in connection with the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and thereby and (B) timely making all such filings and timely seeking all
such consents, permits, authorizations or approvals, and (iii) use reasonable
efforts to take, or cause to be taken, all other actions and do, or cause to be
done, all other things necessary, proper or advisable to consummate and make
effective the transactions contemplated hereby, including, without limitation,
taking all such further action as reasonably may be
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necessary to resolve such objections, if any, as the Federal Trade Commission,
the Antitrust Division of the Department of Justice, state antitrust enforcement
authorities or competition authorities of any other nation or other jurisdiction
or any other person may assert under relevant antitrust or competition laws with
respect to the transactions contemplated hereby.
Section 6.6. FURTHER ASSURANCES. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers of Target and Acquiror shall take all such
necessary action.
Section 6.7. ANTI-TAKEOVER STATUTE. If any "fair price", "moratorium",
"control share acquisition" or other form of anti-takeover statute or regulation
shall become applicable to the transactions contemplated hereby, each of Target
and Acquiror and the members of their respective Boards of Directors shall grant
such approvals and take such actions as are reasonably necessary so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and otherwise act to eliminate or minimize the
effects of such statute or regulation on the transactions contemplated hereby.
Section 6.8. NO SOLICITATION BY TARGET. (a) Target shall not, nor shall it
permit any of its subsidiaries to, nor shall it authorize or permit any of its
directors, officers or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
subsidiaries to, directly or indirectly through another person, (i) solicit,
initiate or encourage (including by way of furnishing information), or take any
other action designed to facilitate, any inquiries or the making of any proposal
which constitutes any Target Takeover Proposal (as defined below) or (ii)
participate in any discussions or negotiations regarding any Target Takeover
Proposal; provided, however, that if, at any time prior to the publicly
announced date of the Target Meeting (the "Target Applicable Period"), the Board
of Directors of Target determines in good faith, after consultation with outside
counsel, that it is necessary to do so in order to comply with its fiduciary
duties to Target's stockholders under applicable law, Target may, in response to
a Target Superior Proposal (as defined in Section 6.8(b)) which did not result
from a breach of this Section 6.8(a), and subject to providing prior written
notice of its decision to take such action to Acquiror (the "Target Notice") and
compliance with Section 6.8(c), for a period of ten business days following
delivery of the Target Notice (x) furnish information with respect to Target and
its subsidiaries to any person making a Target Superior Proposal pursuant to a
customary confidentiality agreement (as determined by Target after consultation
with its outside counsel) and (y) participate in discussions or negotiations
regarding such Target Superior Proposal. For purposes of this Agreement, "Target
Takeover Proposal" means any inquiry, proposal or offer from any person relating
to any direct or indirect acquisition or purchase of a business that constitutes
15% or more of the net revenues, net income or the assets of Target and its
subsidiaries, taken as a whole, or 15% or more of any class of equity securities
of Target or any of its subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 15% or more of any
class of equity securities of Target or any of its subsidiaries, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving Target or any of its subsidiaries, other than
the transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 6.8, neither the Board
of Directors of Target nor any committee thereof shall (i) withdraw or modify,
or propose publicly to
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withdraw or modify, in a manner adverse to Acquiror, 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 Target Takeover Proposal, or (iii) cause Target to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, a "TARGET ACQUISITION AGREEMENT") related to any Target
Takeover Proposal. Notwithstanding the foregoing, in the event that during the
Target Applicable Period the Board of Directors of Target determines in good
faith that there is a substantial probability that the Target Stockholder
Approval will not be obtained due to the existence of a Target Superior
Proposal, the Board of Directors of Target may (subject to this and the
following sentences) terminate this Agreement (and concurrently with or after
such termination, if it so chooses, cause Target to enter into any Target
Acquisition Agreement with respect to any Target Superior Proposal), but only at
a time that is during the Target Applicable Period and is after the third
business day following Acquiror's receipt of written notice advising Acquiror
that the Board of Directors of Target is prepared to accept a Target Superior
Proposal, specifying the material terms and conditions of such Target Superior
Proposal and identifying the person making such Target Superior Proposal. For
purposes of this Agreement, a "TARGET SUPERIOR PROPOSAL" means any proposal made
by a third party (i) to acquire, directly or indirectly, including pursuant to a
tender offer, exchange offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction, for
consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the shares of Target Common Stock then outstanding or
all or substantially all of the assets of Target, (ii) that is otherwise on
terms which the Board of Directors of Target determines in its good faith
judgment (based on the advice of a financial advisor of nationally recognized
reputation) to be more favorable to Target's stockholders than the Merger, (iii)
for which financing, to the extent required, is then committed or which, in the
good faith judgment of the Board of Directors of Target, is reasonably capable
of being obtained by such third party and (iv) for which, in the good faith
judgment of the Board of Directors of Target, no regulatory approvals are
required, including antitrust approvals, that could not reasonably be expected
to be obtained.
(c) In addition to the obligations of Target set forth in paragraphs (a)
and (b) of this Section 6.9, Target shall promptly advise Acquiror orally and in
writing of any request for information or of any Target Takeover Proposal, the
material terms and conditions of such request or Target Takeover Proposal and
the identity of the person making such request or Target Takeover Proposal.
Target will keep Acquiror reasonably informed of the status and details
(including amendments or proposed amendments) of any such request or Target
Takeover Proposal on a daily basis or more frequently as may be reasonably
requested by Acquiror.
(d) Nothing contained in this Section 6.8 shall prohibit Target from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to
Target's stockholders if, in the good faith judgment of the Board of Directors
of Target, after consultation with outside counsel, failure so to disclose would
be inconsistent with its fiduciary obligations under applicable law.
Section 6.9. PUBLIC ANNOUNCEMENTS. Except as may be required by applicable
law, no party hereto shall make any public announcements or otherwise
communicate with any news media or any other party, with respect to this
Agreement or any of the transactions contemplated hereby without prior
consultation with the other parties as to the timing and contents of any such
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announcement or communications; PROVIDED, HOWEVER, that nothing contained herein
shall prevent any party from (i) promptly making all filings with governmental
authorities or disclosures by the stock exchange on which such party's capital
stock is listed, as may, in its judgment, be required or advisable in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby or (ii) disclosing the terms of this Agreement
to such party's legal counsel, financial advisors or accountants in furtherance
of the transactions contemplated by this Agreement.
Section 6.10. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) Acquiror and
the Surviving Corporation agree that the indemnification obligations set forth
in Target's Articles of Incorporation and By-laws, in each case as of the date
of this Agreement, shall survive the Merger (and, prior to the Effective Time,
Acquiror shall cause the Certificate of Incorporation and By-laws of Sub to
reflect such provisions) and shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of the individuals who on or prior
to the Effective Time were directors, officers, employees or agents of Target or
its subsidiaries.
(b) For six years from the Effective Time, Acquiror and the Surviving
Corporation shall use their best efforts to provide to the directors and
officers of Target as of the date of this Agreement liability insurance
protection of the same kind and scope as that provided by Acquiror's directors'
and officers' liability insurance policies (copies of which have been made
available to Target), with respect to claims arising from facts or events that
occurred prior to the Effective Time; PROVIDED, HOWEVER, that in no event shall
Acquiror be required to expend more than 150% of the amount currently expended
by Acquiror (the "INSURANCE AMOUNT") to maintain or procure its current
directors and offices liability insurance coverage; PROVIDED, FURTHER, that if
Acquiror is unable to maintain or obtain the insurance called for by this
Section 6.10, Acquiror shall use its best efforts to obtain as much comparable
insurance as available for the Insurance Amount.
(c) For six years after the Effective Time, Acquiror shall, to the fullest
extent permitted under applicable Law, indemnify and hold harmless, each present
and former director, officer, trustee, fiduciary, employee or agent of Target
and each Subsidiary of Target and each such person who served at the request of
Target or any Subsidiary of Target as a director, officer, trustee, partner,
fiduciary, employee or agent of another corporation, partnership, joint venture,
trust, pension or other employee benefit plan or enterprise (collectively, the
"INDEMNIFIED PARTIES") against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, administrative or investigative, arising out of or pertaining to any
action or omission in their capacity as an officer or director, in each case
occurring before the Effective Time (including the transactions contemplated by
this Agreement). Without limiting the foregoing, in the event of any such claim,
action, suit, proceeding or investigation, (i) Acquiror shall pay the fees and
expenses of counsel selected by any Indemnified Party, which counsel shall be
reasonably satisfactory to Acquiror promptly after statements therefor are
received (unless Acquiror shall elect to defend such action) and (ii) Acquiror
shall cooperate in the defense of any such matter.
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(d) In the event Acquiror or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
person or shall not be the continuing or surviving corporation or entity in such
consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any person, then, and in each case, proper provision
shall be made so that the successors and assigns of Acquiror or the Surviving
Corporation, as the case may be, honor the indemnification obligations set forth
in this Section 6.10.
(e) The obligations of Acquiror and the Surviving Corporation under this
Section 6.10 shall not be terminated or modified in such a manner as to
adversely affect any director, officer, employee, agent or other person to whom
this Section 6.10 applies without the consent of such affected director,
officer, employees, agents or other persons (it being expressly agreed that each
such director, officer, employee, agent or other person to whom this Section
6.10 applies shall be third-party beneficiaries of this Section 6.10).
Section 6.11. ADDITIONAL REPORTS. Target shall furnish to Acquiror copies
of any reports of the type referred to in Sections 4.4 which it files with the
SEC on or after the date hereof. Target 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 a material fact required to be stated therein
or necessary to make the statement 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 the financial position of Target and its
consolidated Subsidiaries as of the dates thereof and the results of operations
and changes in financial position or other information included therein for the
periods or as of the date then ended (subject, where appropriate, to normal
year-end adjustments), in each case in accordance with past practice and GAAP
consistently applied during the periods involved (except as otherwise disclosed
in the notes thereto).
Section 6.12. ACCOUNTING TREATMENT. The parties acknowledge that, for
financial accounting purposes, the Merger shall be accounted for as a purchase
transaction.
Section 6.13. UPDATE DISCLOSURE: BREACHES. From and after the date of this
Agreement until the Effective Time, each party hereto shall promptly notify the
other party hereto in writing of (i) the occurrence, or non-occurrence, of any
event that would be likely to cause any condition to the obligations of any
party to effect the Merger and the other transactions contemplated by this
Agreement not to be satisfied, or (ii) the failure of Target or Acquiror, as the
case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it pursuant to this Agreement which would be
likely to result in any condition to the obligations of any party to effect the
Merger and the other transactions contemplated by this Agreement not to be
satisfied; provided, however, that the delivery of any notice pursuant to this
Section 6.13 shall not cure any breach of any representations or warranty
requiring disclosure of such matter prior to the date of this Agreement or
otherwise limit or affect the remedies available hereunder to the party
receiving such notice.
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ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
court or other tribunal or governmental body or authority which prohibits the
consummation of the Merger substantially on the terms contemplated hereby. In
the event any order, decree or injunction shall have been issued, each party
shall use its reasonable efforts to remove any such order, decree or injunction;
and
(b) Any applicable waiting period under the HSR Act with respect to the
transactions contemplated by this Agreement shall have expired or been
terminated, Target shall have obtained stockholder approval of the Merger and
this Agreement as required by Nevada Law and any other Target Required Approvals
and Acquiror Required Approvals shall have been obtained, except where the
failure to obtain such other Target Required Approvals and Acquiror Required
Approvals would not have a Material Adverse Effect on Target or Acquiror, as the
case may be.
Section 7.2. CONDITIONS TO OBLIGATIONS OF TARGET TO EFFECT THE MERGER. The
obligation of Target to effect the Merger is further subject to the conditions
that (a) the representations and warranties of Acquiror contained herein shall
be true and correct as of the Effective Time with the same effect as though made
as of the Effective Time except (i) for changes specifically permitted by the
terms of this Agreement, (ii) that the accuracy of representations and
warranties that by their terms speak as of the date of this Agreement or some
other date will be determined as of such date and (iii) where any such failure
of the representations and warranties in the aggregate to be true and correct in
all respects would not have a Material Adverse Effect on Acquiror, (b) Acquiror
shall have performed in all material respects all obligations and complied with
all covenants required by this Agreement to be performed or complied with by it
prior to the Effective Time and (c) Acquiror shall have delivered to Target a
certificate, dated the Effective Time and signed by its Chairman of the Board
and Chief Executive Officer or a Senior Vice President, certifying to the
effects set forth in clauses (a) and (b) above.
Section 7.3. CONDITIONS TO OBLIGATIONS OF ACQUIROR TO EFFECT THE MERGER.
The obligation of Acquiror to effect the Merger is further subject to the
conditions that (a) the representations and warranties of Target contained
herein shall be true and correct as of the Effective Time with the same effect
as though made as of the Effective Time except (i) for changes specifically
permitted by the terms of this Agreement, (ii) that the accuracy of
representations and warranties that by their terms speak as of the date of this
Agreement or some other date will be determined as of such date and (iii) where
any such failure of the representations and warranties in the aggregate to be
true and correct in all respects would not have a Material Adverse Effect on
Target, (b) Target shall have performed in all material
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respects all obligations and complied with all covenants required by this
Agreement to be performed or complied with by them prior to the Effective Time
and, (c) Target shall have delivered to Acquiror a certificate, dated the
Effective Time and signed by its respective Chairman of the Board, Chief
Executive Officer and President or Senior Vice President, certifying to the
effects set forth in clauses (a) and (b) above.
ARTICLE VIII
TERMINATION, WAIVER, AMENDMENT AND CLOSING
Section 8.1. TERMINATION OR ABANDONMENT. Notwithstanding anything
contained in this Agreement to the contrary, this Agreement may be terminated
and abandoned at any time prior to the Effective Time, whether before or after
any approval of the matters presented in connection with the Merger by the
stockholders of Target:
(a) by the mutual written consent of Target and Acquiror;
(b) by either Target or Acquiror if the Effective Time shall not have
occurred on or before December 31, 2000; PROVIDED, that the party seeking to
terminate this Agreement pursuant to this clause 8.1(b) shall not have breached
in any material respect its obligations under this Agreement in any manner that
shall have proximately contributed to the failure to consummate the Merger on or
before such date;
(c) by either Target or Acquiror if (i) a statute, rule, regulation or
executive order shall have been enacted, entered or promulgated prohibiting the
consummation of the Merger substantially on the terms contemplated hereby or
(ii) an order, decree, ruling or injunction shall have been entered permanently
restraining, enjoining or otherwise prohibiting the consummation of the Merger
substantially on the terms contemplated hereby and such order, decree, ruling or
injunction shall have become final and non-appealable; PROVIDED, that the party
seeking to terminate this Agreement pursuant to this clause 8.1(c)(ii) shall
have used its reasonable best efforts to remove such injunction, order or
decree;
(d) by Acquiror if the Target Stockholder Approval shall not have been
obtained by reason of the failure to obtain the required vote or consent at the
Target Meeting;
(e) by Target in accordance with Section 6.8(b); PROVIDED that, in order
for the termination of this Agreement pursuant to this paragraph (e) to be
deemed effective, Target shall have complied with all provisions contained in
Section 6.8, including the notice provisions therein, and with applicable
requirements, including the payment of the Termination Fee, of Section 8.2;
(f) Target, if Acquiror shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Section 7.2(a) or
(b), and (ii) is incapable of being cured by Acquiror or is not cured within 30
days of notice of such breach or failure;
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(g) by Acquiror, if Target shall have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Section 7.3(a) or
(b), and (ii) is incapable of being cured by Target or is not cured within 30
days of notice of such breach or failure.
Except as provided in Sections 8.2 and 9.2 of this Agreement, in the event
of the termination of this Agreement pursuant to Section 8.1, this Agreement
shall forthwith become void, there shall be no liability on the part of
Acquiror, Sub or Target or any of their respective officers or directors to the
other and all rights and obligations of any party hereto shall cease, except
that nothing herein shall relieve any party from liability for any
misrepresentation or breach of any covenant or agreement under this Agreement.
Section 8.2. TERMINATION FEE. In the event that, after the execution of
this Agreement, a Target Takeover Proposal shall have been made known to Target
or any of its subsidiaries or has been made directly to its stockholders
generally or any person shall have publicly announced an intention (whether or
not conditional) to make a Target Takeover Proposal and thereafter this
Agreement is terminated by either Acquiror or Target pursuant to Section 8.1(b)
or 8.1(d) or by Acquiror pursuant to Section 8.1(g), then Target shall promptly,
but in no event later than two days after the date of such termination, pay
Acquiror a fee equal to $9.0 million (the "Termination Fee") payable by wire
transfer of same day funds; provided, however, that no Termination Fee shall be
payable to Acquiror pursuant to this Section 8.2 unless and until within 18
months of such termination Target or any of its Subsidiaries enters into any
Target Acquisition Agreement or consummates any Target Takeover Proposal (for
the purposes of the foregoing proviso the terms "Target Acquisition Agreement"
and "Target Takeover Proposal" shall have the meanings assigned to such terms in
Section 6.8 except that the references to 15% in the definition of "Target
Takeover Proposal" in Section 6.8(a) shall be deemed to be references to 35% and
"Target Takeover Proposal" shall only be deemed to refer to a transaction
involving Target, or with respect to assets (including the shares of any
subsidiary), of Target and its Subsidiaries, taken as a whole, and not any of
its Subsidiaries alone), in which event the Termination Fee shall be payable
upon the first to occur of such events. Target acknowledges that the agreements
contained in this Section 8.2 are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Acquiror
would not enter into this Agreement; accordingly, if Target fails promptly to
pay the amount due pursuant to this Section 8.2, and, in order to obtain such
payment, Acquiror commences a suit which results in a judgment against Target
for the fee set forth in this Section 8.2, Target shall pay to Acquiror its
costs and expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amount of the fee at the prime rate of
Citibank N.A. in effect on the date such payment was required to be made.
ARTICLE IX
MISCELLANEOUS
Section 9.1. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this
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Agreement shall survive the Effective Time. This Section 9.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after the Effective Time.
Section 9.2. EXPENSES. Whether or not the Merger is consummated, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby and thereby shall be paid by the party incurring such
expenses, except that (a)(i) the filing fees in connection with any HSR Act
filing and any SEC filings and (ii) the expenses incurred in connection with the
printing and mailing of the Proxy Statement, shall be shared equally by Target
and Acquiror and (b) all transfer taxes shall be paid by Target.
Section 9.3. COUNTERPARTS: EFFECTIVENESS. This Agreement may be executed
in two or more consecutive counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument, and shall become effective when one or more counterparts have been
signed by each of the parties and delivered (by telecopy or otherwise) to the
other parties.
Section 9.4. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the state of Texas without regard to
the principles of conflicts of laws thereof, except that Nevada law shall apply
to the Merger.
Section 9.5. NOTICES. All notices and other communications hereunder shall
be in writing (including telecopy or similar writing) and shall be effective (a)
if given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section 9.5 and the appropriate telecopy confirmation is
received or (b) if given by any other means, when delivered at the address
specified in this Section 9.5:
To Target:
Tech-Sym Corporation
00000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
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To Acquiror:
Integrated Defense Technologies, Inc.
c/o the Veritas Capital Fund, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 212/688-9411
Attention: Xxxxxx X. XxXxxx
with a copy (which shall not constitute notice) to:
Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 212/351-3131
Attention: Xxxxxxxx X. Xxxx, Esq.
Section 9.6. ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Acquiror may assign this
Agreement without the consent of Target (i) to any affiliate of Acquiror or (ii)
for collateral security purposes to any source of financing to Acquiror, Sub or
the Surviving Corporation. Any such assignment shall not reduce or eliminate any
obligation or liability of Acquiror under this Agreement. Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Section 9.7. SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, such provision shall be interpreted to be only so
broad as is enforceable.
Section 9.8. MISCELLANEOUS. This Agreement:
(a) and the exhibits and disclosure schedules to this Agreement and the
Confidentiality Agreement, dated June 27, 2000, between Target and Acquiror,
constitutes the entire agreement, and supersedes all other prior agreements and
understandings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof and thereof; and
(b) except for the provisions of Sections 6.5, 6.11 and 9.6 hereof, is not
intended to and shall not confer upon any Person other than the parties hereto
any rights or remedies hereunder.
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Section 9.9. HEADINGS. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
Section 9.10. SUBSIDIARIES: SIGNIFICANT SUBSIDIARIES; AFFILIATES.
References in this Agreement to "Subsidiaries" of Target or Acquiror shall mean
any corporation or other form of legal entity of which more than 50% of the
outstanding voting securities are on the date hereof directly or indirectly
owned by Target or Acquiror, as the case may be. References in this Agreement to
"Significant Subsidiaries" shall mean Subsidiaries (as defined above) which
constitute "significant subsidiaries" under Rule 405 promulgated by the SEC
under the Securities Act. References in this Agreement (except as specifically
otherwise defined) to "affiliates" shall mean, as to any person, any other
person which, directly or indirectly, controls, or is controlled by, or is under
common control with, such person. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and "under common
control with") shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management or policies of a Person, whether
through the ownership of securities or partnership of other ownership interests,
by contract or otherwise. References in the Agreement to "person" shall mean an
individual, a corporation, a partnership, an association, a trust or any other
entity or organization, including, without limitation, a governmental body or
authority.
Section 9.11. FINDERS OR BROKERS. Except for the engagement of Quarterdeck
Investment Partners, Inc. by Target pursuant to the amended and restated
engagement letter dated as of July 22, 1999, previously provided to Acquiror,
neither Target nor any of its Subsidiaries has employed any investment banker,
broker, finder or intermediary in connection with the transactions contemplated
hereby who might be entitled to any fee or any commission in connection with or
upon consummation of the Merger payable by Target or any of its Subsidiaries.
Section 9.12. AMENDMENT. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; PROVIDED, HOWEVER, that no amendment
may be made which would reduce the amount or change the type of consideration
into which each share of Target Common Stock shall be converted pursuant to this
Agreement upon consummation of the Merger. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
Section 9.13. WAIVER. At any time prior to the Effective Time, the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of any other party hereto, (b) waive any inaccuracies in the
representations and warranties of any other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by any other party
with any of the agreements or conditions contained herein; PROVIDED, HOWEVER,
that after the Target Stockholder Approval is obtained, there may not be,
without further approval of such stockholders, any extension or waiver of this
Agreement or any portion thereof which reduces the amount or changes the form of
the consideration to be delivered to the holders of Target Common Stock
hereunder other than as contemplated by this Agreement. Any such extension or
waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby, but such extension or waiver or
failure to insist on strict
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compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
Section 9.14. THIRD PARTY BENEFICIARIES. Nothing in this Agreement,
express or implied, is intended or shall be construed, to confer upon or give to
any person any rights or remedies under or by reason of this Agreement, or any
term, provision, condition, undertaking, warranty, representation, indemnity,
covenant or agreement contained herein, other than the parties hereto and their
permitted assigns and the persons intended to be provided benefits pursuant to
Section 6.4 and Section 6.10 hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
TECH-SYM CORPORATION
By: /s/ J. XXXXXXX XXXX
-------------------------------
Name: J. Xxxxxxx Xxxx
Title: Chairman of the Board and Chief
Executive Officer
INTEGRATED DEFENSE TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXXX
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Name: Xxxxxx X. XxXxxx
Title: Chairman
T-S ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXX
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Name: Xxxxxx X. XxXxxx
Title: President