Exhibit 10.25
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FINAL EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
APPLIED DIGITAL SOLUTIONS, INC.,
DIGITAL ANGEL CORPORATION,
MEDICAL ADVISORY SYSTEMS, INC. AND
ACQUISITION SUBSIDIARY, INC.
DATED AS OF NOVEMBER 1, 2001
TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER
ARTICLE I. THE MERGER; THE CONTRIBUTION; CLOSING............................................2
1.1. The Merger and Contribution............................................................2
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1.2. Directors and Officers.................................................................3
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1.3. Articles of Incorporation and Bylaws...................................................3
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1.4. Certificate of MAS.....................................................................3
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ARTICLE II. EFFECT OF THE MERGER ON SECURITIES OF MAS AND DA................................3
2.1. MAS Common Stock.......................................................................3
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2.2. Conversion of DA Stock.................................................................3
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2.3. Options................................................................................4
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2.4. Conversion of Acquisition Subsidiary Stock.............................................4
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ARTICLE III. REPRESENTATIONS AND WARRANTIES OF MAS..........................................4
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3.1. Organization and Good Standing........................................................4
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3.2. Capitalization........................................................................5
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3.3. Subsidiaries..........................................................................5
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3.4. Authorization; Binding Agreement......................................................6
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3.5. Governmental Approvals................................................................6
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3.6. No Violations.........................................................................7
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3.7. Securities Filings and Litigation.....................................................7
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3.8. Financial Statements..................................................................8
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3.9. Absence of Certain Changes............................................................8
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3.10. Related Party Transactions............................................................9
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3.11. Compliance with Laws..................................................................9
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3.12. Permits...............................................................................9
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3.13. Finders and Investment Bankers........................................................9
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3.14. Material Contracts....................................................................9
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3.15. Employee Benefit Plans...............................................................10
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3.16. Taxes and Returns....................................................................11
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3.17. No Adverse Actions...................................................................12
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3.18. Fairness Opinion.....................................................................12
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3.19. HSR Act..............................................................................12
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3.20. Intellectual Property................................................................13
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3.21. Undisclosed Liabilities..............................................................13
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3.22. Environmental Matters................................................................13
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3.23. Corporate Records....................................................................14
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3.24. Real Property........................................................................14
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3.25. Title to and Condition of Personal Property..........................................14
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3.26. Labor Matters........................................................................15
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3.27. Insurance............................................................................15
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3.28. Disclosure...........................................................................15
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF ADSX.........................................15
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4.1. Organization and Good Standing.......................................................16
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4.2. Capitalization.......................................................................16
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4.3. Subsidiaries.........................................................................17
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4.4. Authorization; Binding Agreement.....................................................18
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4.5. Governmental Approvals...............................................................18
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4.6. No Violations........................................................................18
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4.7. Securities Filings and Litigation....................................................19
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4.8. Financial Statements.................................................................19
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4.9. Absence of Certain Changes or Events.................................................20
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4.10. Related Party Transactions...........................................................20
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4.11. Compliance with Laws.................................................................20
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4.12. Permits..............................................................................20
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4.13. Finders and Investment Bankers.......................................................21
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4.14. Material Contracts...................................................................21
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4.15. Employee Benefit Plans...............................................................21
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4.16. Taxes and Returns....................................................................22
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4.17. No Adverse Actions...................................................................23
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4.18. Investment Intent....................................................................24
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4.19. Intellectual Property................................................................24
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4.20. Undisclosed Liabilities..............................................................24
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4.21. Environmental Matters................................................................24
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4.22. Corporate Records....................................................................25
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4.23. Real Property........................................................................25
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4.24. Title to and Condition of Personal Property..........................................25
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4.25. Labor Matters........................................................................26
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4.26. Insurance............................................................................26
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4.27. Disclosure...........................................................................26
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ARTICLE V. ADDITIONAL COVENANTS OF MAS.....................................................27
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5.1. Conduct of Business of MAS and the MAS Subsidiaries..................................27
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5.2. Notification of Certain Matters......................................................29
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5.3. Access and Information...............................................................29
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5.4. Stockholder Approval.................................................................29
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5.5. Reasonable Best Efforts..............................................................30
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5.6. Public Announcements.................................................................30
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5.7. Compliance...........................................................................30
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5.8. Tax Treatment........................................................................30
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5.9. MAS Benefit Plans....................................................................30
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5.10. No Solicitation of Acquisition Proposal..............................................31
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5.11. SEC and Stockholder Filings..........................................................32
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5.12. Takeover Statutes....................................................................32
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5.13. Comfort Letters......................................................................32
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5.14. MAS Charter Amendment................................................................32
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ARTICLE VI ADDITIONAL COVENANTS OF ADSX....................................................33
6.1. Conduct of Business of DA, the DA Subsidiaries and the Other Subsidiaries............33
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6.2. Notification of Certain Matters......................................................35
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6.3. Access and Information...............................................................35
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6.4. Reasonable Best Efforts..............................................................36
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6.5. Public Announcements.................................................................36
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6.6. Compliance...........................................................................36
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6.7. Tax Treatment........................................................................36
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6.8. DA Benefit Plans.....................................................................36
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6.9. No Solicitation of Acquisition Proposal..............................................37
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6.11. SEC and Stockholder Filings..........................................................38
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6.12. Takeover Statutes....................................................................38
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6.13. Comfort Letters......................................................................38
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6.14. Indemnification......................................................................38
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ARTICLE VII. PROXY STATEMENT...............................................................39
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ARTICLE VIII. CONDITIONS...................................................................40
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8.1. Conditions to Each Party's Obligations................................................40
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8.1.1. MAS Stockholder Approval..........................................................40
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8.1.2. No Injunction or Action...........................................................40
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8.1.3. Governmental Approvals............................................................40
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8.1.4. Required Consents.................................................................40
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8.1.5. Tax Opinion.......................................................................41
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8.2. Conditions to Obligations of MAS and Acquisition Subsidiary...........................41
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8.2.1. ADSX Representation and Warranties................................................41
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8.2.2. Performance by ADSX and DA........................................................41
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8.2.3. Absence of Certain Liens..........................................................41
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8.2.4. No Material Adverse Change........................................................41
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8.2.5. Certificates and other Deliveries.................................................41
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8.2.6. Opinion of ADSX Counsel...........................................................42
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8.2.7. Financial Opinion.................................................................42
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8.3. Conditions to Obligations of ADSX and DA..............................................42
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8.3.1. MAS Representations and Warranties................................................42
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8.3.2. Performance by MAS and Acquisition Subsidiary.....................................42
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8.3.3. No Material Adverse Change........................................................42
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8.3.4. Certificates and Other Deliveries.................................................42
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8.3.5. Opinion of MAS Counsel............................................................43
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8.3.6. Registration Rights Agreement.....................................................43
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8.3.7. AMEX Listing......................................................................43
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ARTICLE IX. TERMINATION AND ABANDONMENT....................................................43
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9.1. Termination...........................................................................43
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9.2. Effect of Termination.................................................................44
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ARTICLE X. MISCELLANEOUS...................................................................44
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10.1. Confidentiality.....................................................................44
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10.2. Amendment and Modification..........................................................45
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10.3. Waiver of Compliance; Consents......................................................45
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10.4. Survival of Representations and Warranties..........................................45
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10.5. Notices.............................................................................46
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10.6. Binding Effect; Assignment..........................................................47
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10.7. Expenses............................................................................47
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10.8. Governing Law.......................................................................47
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10.9. Counterparts........................................................................47
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10.10. Interpretation......................................................................47
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10.11. Entire Agreement....................................................................48
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10.12. Specific Performance................................................................48
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10.13. Third Parties.......................................................................48
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Exhibit A Other Subsidiaries
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Exhibit B Interested Stockholders
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Exhibit C Consent of IBM Credit Corporation
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Exhibit D Registration Rights Agreement
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and
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entered into as of November 1, 2001, by and among Applied Digital Solutions,
Inc., a Missouri corporation ("ADSX"), Digital Angel Corporation, a
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Delaware corporation and wholly owned subsidiary of ADSX ("DA"), Medical
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Advisory Systems, Inc., a Delaware corporation ("MAS"), and Acquisition
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Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of MAS
("Acquisition Subsidiary").
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Recitals
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A. ADSX currently owns approximately 16.5% of the issued and
outstanding capital stock of MAS and is now the single largest stockholder
in MAS. ADSX currently controls two of the seven board seats of the Board of
Directors of MAS. ADSX and MAS have discussed and considered the benefits to
their respective stockholders of the transactions contemplated by this
Agreement. The Board of Directors of MAS has appointed a Special Committee
of Directors for purposes of considering the transactions contemplated by
this Agreement.
B. The Board of Directors of MAS and the Board of Directors of ADSX
have analyzed and determined that the value of DA and the Other Subsidiaries
(herein defined) is approximately $150,000,000, which equates to a value of
each share of the issued and outstanding capital stock of MAS of $8, prior
to the effect of outstanding DA Options (herein defined), notwithstanding
the current market price of such stock.
C. The Board of Directors of MAS has approved and deems it advisable
and in the best interests of MAS and its stockholders to consummate (i) the
merger of Acquisition Subsidiary with and into DA provided for herein (the
"Merger"), pursuant to which the issued and outstanding shares of DA owned
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by ADSX will be converted into 18,750,000 shares of MAS common stock, and
(ii) the contribution by ADSX of its ownership interest in the common stock
of certain subsidiaries of ADSX, as set forth in Exhibit A hereto and
incorporated herein by reference (collectively the "Other Subsidiaries"), to
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MAS (the "Contribution") (the Merger and the Contribution, collectively, the
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"Transaction"), upon the terms and subject to the conditions set forth
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herein. The Boards of Directors of Acquisition Subsidiary, ADSX and DA have
approved and deem it advisable and in the best interests of their respective
companies and their respective stockholders to consummate the Merger and the
Contribution upon the terms and subject to the conditions set forth herein.
The Special Committee of the Board of Directors of MAS has determined that
the Transaction and the Transaction Consideration (as defined below) are
fair to the stockholders of MAS excluding the stockholders set forth on
Exhibit B (the "Interested Stockholders") (the stockholders of MAS excluding
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the Interested Stockholders are referred to herein as the "Public
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Stockholders").
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D. For federal income tax purposes, it is intended that the Merger be
treated as a reorganization under Section 368 of the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated thereunder
(the "Code") and that the Contribution be treated as a tax free contribution
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under Section 351 of the Code.
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E. ADSX, DA, MAS and Acquisition Subsidiary desire to make certain
representations, warranties, covenants and agreements in connection with the
Transaction.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I.
THE MERGER; THE CONTRIBUTION; CLOSING
1.1. The Merger and Contribution. Upon the terms and subject to the
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conditions set forth in this Agreement:
(a) At the Effective Time (defined below) of the Merger, Acquisition
Subsidiary shall be merged with and into DA in accordance with the
applicable provisions of the Delaware General Corporation Law (the "DGCL").
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DA shall be the surviving corporation in the Merger (the "Surviving
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Corporation") and shall continue its corporate existence under the laws of
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the State of Delaware. After the Effective Time of the merger, the separate
corporate existence of Acquisition Subsidiary shall cease. The Merger shall
have the effects as set forth in the DGCL.
(b) Immediately after the Effective Time of the Merger, to effect the
Contribution, ADSX shall deliver to MAS certificates, duly endorsed or
accompanied by duly executed stock powers, evidencing ADSX's ownership
interest in the common stock of the Other Subsidiaries as set forth in
Exhibit A attached hereto and incorporated herein by reference
(collectively, the "Other Subsidiaries Common Stock"), free and clear of all
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security interests, claims and restrictions. As a result, the Other
Subsidiaries shall become subsidiaries of MAS.
(c) The closing of the Transaction (the "Closing") shall take place
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(a) at the offices of Xxxxx Xxxx LLP, One Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000,
Xx. Xxxxx, Xxxxxxxx, at 10:00 a.m. local time, on the fifth business day
following the day on which the last of the conditions set forth in Article
VIII (excluding conditions that, by their terms, cannot be satisfied until
the Closing Date, but subject to the fulfillment or waiver of such
conditions) shall be fulfilled or waived in accordance herewith, or (b) at
such other time, date or place as ADSX and MAS may agree. The date on which
the Closing occurs is hereinafter referred to as the "Closing Date."
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(d) As soon as practicable following the Closing, the parties shall
(i) file with the Secretary of State of Delaware a certificate of merger
with respect to the Merger (the "Certificate of Merger") in such form as is
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required by and executed in accordance with the DGCL and (ii) make all other
filings or recordings required under the laws of Delaware in order to effect
the purposes of this Agreement. The Merger shall become effective at the
date and time of the filing of the Certificate of Merger (or such other date
and time as may be agreed to by ADSX and MAS and specified in the
Certificate of Merger as may be permitted by the DGCL). The consummation of
the Contribution shall be conditioned on the consummation of the Merger. The
time at which the Merger becomes effective is referred to in this Agreement
as the "Effective Time."
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(e) As soon as practicable following the Effective Time of the Merger
and the consummation of the Contribution, the parties shall cooperate to
change the name of the Surviving Corporation to "Digital Angel Acquisition
Corp." and the name of MAS to "Digital Angel Corporation."
1.2. Directors and Officers. The directors of DA immediately prior to
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the Effective Time shall be the directors of the Surviving Corporation as of
the Effective Time and until their successors are duly appointed or elected
in accordance with the laws of Delaware or until their earlier death,
resignation or removal. The officers of DA immediately prior to the
Effective Time shall continue as the officers of the Surviving Corporation
and after the Effective Time until such time as their successors shall be
duly elected or appointed in accordance with the laws of Delaware or until
their earlier death, resignation or removal.
1.3. Articles of Incorporation and Bylaws. The articles of
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incorporation and bylaws of DA immediately prior to the Effective Time shall
be the articles of incorporation and bylaws of the Surviving Corporation as
of the Effective Time.
1.4. Certificate of MAS. Immediately prior to or at the Effective Time,
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and subject to the terms and conditions of this Agreement and the DGCL, MAS
shall cause the Amended and Restated Certificate of Incorporation of MAS to
be amended and restated to change the name of MAS to "Digital Angel
Corporation" and to increase the number of authorized shares of common stock
to 95,000,000 shares by filing appropriate documentation (the "MAS Charter
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Amendment") with the Secretary of State of the State of Delaware.
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ARTICLE II.
EFFECT OF THE MERGER ON SECURITIES OF MAS
AND DA
2.1. MAS Common Stock. Each share of the common stock of MAS
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outstanding immediately prior to the Effective Time shall be unaffected by
the Merger.
2.2. Conversion of DA Stock. (a) Subject to the provisions of this
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Agreement, pursuant to the Merger, at the Effective Time each issued and
outstanding share of common stock, par value $.00005 per share, of DA
("DA Common Stock"), shall be immediately converted into 0.9375 fully paid,
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nonassessable and newly issued shares of MAS common stock, $0.005 par value
("MAS Common Stock"), or an aggregate of 18,750,000 shares of MAS Common
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Stock (assuming no exercise of DA Options prior to the Closing), free and
clear of all security interests, claims and restrictions. The shares of MAS
Common Stock to be issued to ADSX in the Merger shall be referred to as the
"Transaction Consideration." As a result of the issuance of Transaction
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Consideration, MAS shall become a majority owned subsidiary of ADSX and the
Surviving Corporation and the Other Subsidiaries shall become subsidiaries
of MAS and second-tier subsidiaries, of ADSX.
(b) Notwithstanding anything contained in this section to the contrary,
each share of DA Common Stock issued and held in DA's treasury or by any of
DA's subsidiaries immediately
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prior to the Effective Time shall, by virtue of the Merger, cease to be
outstanding and shall be canceled and retired without payment of any
consideration therefor.
2.3. Options. At the Effective Time, each option granted by DA to
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purchase shares of DA Common Stock (the "DA Options") which is outstanding
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and unexercised immediately prior to the Effective Time shall either be
assumed by MAS or converted into an option ("New MAS Options") to purchase
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shares of MAS Common Stock having the same terms and conditions as are in
effect immediately prior to the Effective Time (including such terms and
conditions as may be incorporated by reference into the agreements
evidencing DA Options pursuant to the plans or arrangements pursuant to
which such DA Options were granted and taking into account the provisions of
Section 6.8 hereof) except that the exercise price and number of shares
issuable upon exercise shall be divided and multiplied, respectively by
0.9375.
2.4. Conversion of Acquisition Subsidiary Stock. At the Effective Time,
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by virtue of the Merger and without any action on the part of any of the
parties, each share of the common stock of Acquisition Subsidiary
outstanding immediately prior to the Effective Time shall become one share
of common stock of the Surviving Corporation of the Merger.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF MAS
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MAS represents and warrants to ADSX that the statements contained in
this Article III are true and correct, except as set forth in the disclosure
schedule delivered by MAS to ADSX and attached hereto and incorporated
herein by reference (the "MAS Disclosure Schedule") or as otherwise
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expressly contemplated by this Agreement.
3.1. Organization and Good Standing. MAS is a corporation duly
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organized, validly existing and in good standing under the laws of the State
of Delaware. Each of the subsidiaries of MAS, including Acquisition
Subsidiary (each an "MAS Subsidiary" and collectively, the "MAS
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Subsidiaries"), is a corporation duly organized, validly existing and in
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good standing under the laws of the jurisdiction of its incorporation. Each
of MAS and the MAS Subsidiaries is qualified to do business as a foreign
corporation in each jurisdiction in which the failure to be so qualified
would have an MAS Material Adverse Effect. For purposes of this Agreement,
"MAS Material Adverse Effect" shall mean a material adverse effect on
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(i) the business, assets, condition (financial or otherwise), properties,
liabilities, or the results of operations of MAS and the MAS Subsidiaries,
taken as a whole, provided, however, that no change or effect arising out of
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or in connection with or resulting from any of the following shall be deemed
by it or by themselves, either alone or in combination, to constitute or
contribute to an MAS Material Adverse Effect: (A) general economic
conditions or changes therein, (B) financial market conditions or
fluctuations, or (C) any action, change, effect, circumstances or condition
expressly required by this Agreement or directly and demonstrably
attributable to the execution, performance or announcement of this Agreement
or the transactions contemplated hereby; (ii) the ability of MAS or
Acquisition Subsidiary to perform its obligations set forth in this
Agreement; or (iii) the ability of MAS or Acquisition Subsidiary to timely
consummate the transactions contemplated by this Agreement. MAS and the MAS
Subsidiaries have all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on their
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respective businesses as now being conducted and necessary to own, operate
and lease their properties and assets except where the failure to have such
power, licenses, authorizations, consents and approvals would not have an
MAS Material Adverse Effect.
3.2. Capitalization. As of the date hereof, the authorized capital
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stock of MAS consists of 10,000,000 shares of MAS Common Stock and 1,000,000
shares of preferred stock, par value $1.75 per share. Of such authorized
shares, as of the date hereof, there are issued and outstanding 5,121,230
shares of MAS Common Stock, 50,000 shares of MAS Common Stock are issued and
held in the treasury of MAS, no shares of preferred stock have been
designated or issued, or are outstanding and no other capital stock of MAS
is issued or outstanding. As of the date hereof, the authorized capital
stock of Acquisition Subsidiary consists of 100 shares of common stock,
1.00 par value ("Acquisition Subsidiary Common Stock"), and no shares of
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preferred stock. Of such authorized shares, as of the date hereof, there are
issued and outstanding 10 shares of Acquisition Subsidiary Common Stock, no
shares of Acquisition Subsidiary Common Stock are issued and held in the
treasury of MAS and no other capital stock of Acquisition Subsidiary is
issued or outstanding. All issued and outstanding shares of MAS Common Stock
and Acquisition Subsidiary Common Stock are duly authorized, validly issued
and outstanding, fully paid and nonassessable and were issued free of
preemptive rights in compliance with applicable corporate and securities
Laws (as hereinafter defined). Except as set forth in the MAS Disclosure
Schedule, as of the date hereof there are no outstanding rights, including
stock appreciation rights, subscriptions, warrants, puts, calls, unsatisfied
preemptive rights, options or other agreements of any kind relating to, or
the value of which is tied to the value of, any of the outstanding,
authorized but not issued, unauthorized or treasury shares of the capital
stock or any other security of MAS or Acquisition Subsidiary, and there is
no authorized or outstanding security of any kind convertible into or
exchangeable for any such capital stock or other security. All of the
outstanding rights, including stock appreciation rights, subscriptions,
warrants, puts, calls, unsatisfied preemptive rights, options or other
agreements of any kind relating to, or the value of which is tied to the
value of, any of the outstanding, authorized but not issued, unauthorized or
treasury shares of the capital stock or any other security of MAS or
Acquisition Subsidiary have been duly authorized and issued in accordance
with all applicable Law. Except as set forth in the MAS Disclosure Schedule,
there are no security interests, claims or restrictions upon the transfer of
or otherwise pertaining to the securities (including, but not limited to,
the ability to pay dividends thereon) of MAS and the MAS Subsidiaries or the
ownership thereof other than those imposed by the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "Securities Act"),
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the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), applicable state securities
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Laws or applicable corporate Law.
3.3. Subsidiaries. Each MAS Subsidiary is wholly owned by MAS and all
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of the capital stock and other interests of the MAS Subsidiaries so held by
MAS are directly or indirectly owned by it, free and clear of any claim,
lien, encumbrance, security interest or agreement with respect thereto. All
of the outstanding shares of capital stock in each of the MAS Subsidiaries
directly or indirectly held by MAS are duly authorized, validly issued and
outstanding, fully paid and nonassessable and were issued free of preemptive
rights in compliance with applicable corporate and securities Laws. There
are no irrevocable proxies or similar obligations with respect to such
capital stock of the MAS Subsidiaries held by MAS and
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no equity securities or other interests of any of the MAS Subsidiaries are
or may become required to be issued or purchased by reason of any options,
warrants, rights to subscribe to, puts, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any capital stock of any MAS Subsidiary, and
there are no contracts, commitments, understandings or arrangements by which
any MAS Subsidiary is bound to issue additional shares of its capital stock,
or options, warrants or rights to purchase or acquire any additional shares
of its capital stock or securities convertible into or exchangeable for such
shares. Acquisition Subsidiary is directly and wholly owned by MAS and was
recently organized under Delaware law solely for purposes of the
Transaction. Acquisition Subsidiary has no assets or liabilities and has not
engaged in any business or activities other than as contemplated by this
Agreement.
3.4. Authorization; Binding Agreement. (a) MAS and Acquisition
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Subsidiary each have all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, including, but not limited to, the
Merger and the MAS Charter Amendment, have been duly and validly authorized
by the Board of Directors of MAS and the Board of Directors of Acquisition
Subsidiary and by MAS as the sole stockholder of Acquisition Subsidiary, and
no other corporate proceedings on the part of MAS or any MAS Subsidiary are
necessary to authorize the execution and delivery of this Agreement or to
consummate the transactions contemplated hereby (other than the approval and
adoption of the MAS Charter Amendment and this Agreement and the
transactions contemplated hereby including the Merger by the stockholders of
MAS in accordance with the DGCL and the Amended and Restated Certificate of
Incorporation and Bylaws of MAS). This Agreement has been duly and validly
executed and delivered by MAS and Acquisition Subsidiary and constitutes the
legal, valid and binding agreements of MAS and Acquisition Subsidiary,
enforceable against each of MAS and Acquisition Subsidiary in accordance
with its terms, except to the extent that enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and by
principles of equity ("Enforceability Exceptions").
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(b) The only vote of any class or series of capital stock of MAS
necessary to adopt or approve the Charter Amendment is a majority of the
outstanding shares of MAS Common Stock. The only vote of any class or series
of capital stock of MAS necessary to adopt or approve the Merger, this
Agreement and the transactions contemplated by this Agreement is at least
66 2/3% of the outstanding shares of MAS Common Stock which are not owned
by the Interested Stockholders.
3.5. Governmental Approvals. No consent, approval, waiver or
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authorization of, notice to or declaration or filing with ("Consent") any
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nation or government, any state or other political subdivision thereof, any
person, authority or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government
including, without limitation, any governmental or regulatory authority,
agency, department, board, commission or instrumentality, any court,
tribunal or arbitrator and any self-regulatory organization ("Governmental
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Authority") on the part of MAS or any of the MAS Subsidiaries is required in
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connection with the execution or delivery by MAS of this Agreement or the
consummation of the
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transactions contemplated hereby other than (i) the filing of the
Certificate of Merger and the MAS Charter Amendment with the Secretary of
State of the State of Delaware in accordance with the DGCL, (ii) the filing
of the definitive Proxy Statement (as defined herein) with the Securities
and Exchange Commission ("SEC"), and (iii) such other Consents the failure
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of which to obtain will not have an MAS Material Adverse Effect.
3.6. No Violations. The execution and delivery of this Agreement, the
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consummation of the transactions contemplated hereby and compliance by MAS
with any of the provisions hereof will not (i) conflict with or result in
any breach of any provision of the Articles and/or Certificate of
Incorporation or Bylaws or other governing instruments of MAS or any of the
MAS Subsidiaries, (ii) require any Consent under or result in a violation or
breach of, or constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination, cancellation or
acceleration or augment the performance required) under any of the terms,
conditions or provisions of any MAS Material Contract (as hereinafter
defined) or other material obligation to which MAS or any MAS Subsidiary
is a party or by which any of them or any of their properties or assets
may be bound, (iii) result in the creation or imposition of any lien or
encumbrance of any kind upon any of the assets of MAS or any MAS Subsidiary,
or (iv) subject to obtaining the Consents from Governmental Authorities
referred to in Section 3.5, above, contravene any applicable provision of
any constitution, treaty, statute, law, code, rule, regulation, ordinance,
policy or order of any Governmental Authority or other matters having the
force of law including, but not limited to, any orders, decisions,
injunctions, judgments, awards and decrees of or agreements with any court
or other Governmental Authority ("Law") currently in effect to which MAS or
---
any MAS Subsidiary or its or any of their respective assets or properties
are subject, except in the case of clauses (ii), (iii) and (iv) above, for
any deviations from the foregoing which do not or would not reasonably be
expected to have an MAS Material Adverse Effect.
3.7. Securities Filings and Litigation. (a) MAS has made available to
---------------------------------
ADSX true and complete copies of (i) its Annual Reports on Form 10-K or
Form 10-KSB, as amended, for the years ended October 31, 1998, 1999 and 2000,
as filed with the SEC, (ii) its proxy statements relating to all of the
meetings of stockholders (whether annual or special) of MAS since
October 31, 1998, as filed with the SEC, and (iii) all other reports,
statements and registration statements and amendments thereto (including,
without limitation, Quarterly Reports on Form 10-Q or Form 10-QSB and
Current Reports on Form 8-K, as amended) filed by MAS with the SEC since
October 31, 1998. The reports and statements set forth in clauses (i) through
(iii), above, and those subsequently provided or required to be provided
pursuant to this section, are referred to collectively herein as the
"MAS Securities Filings." As of their respective dates, or as of the date of
----------------------
the last amendment thereof, if amended after filing, none of the MAS
Securities Filings (including all schedules thereto and disclosure documents
incorporated by reference therein), contained or, as to MAS Securities
Filings subsequent to the date hereof, will contain any untrue statement of
a material fact or omitted or, as to MAS Securities Filings subsequent to
the date hereof, will omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the MAS
Securities Filings was filed in a timely manner and at the time of filing or
as of the date of the last amendment thereof, if amended after filing,
complied or, as to MAS
7
Securities Filings subsequent to the date hereof, will comply in all
material respects with the Exchange Act or the Securities Act, as
applicable.
(b) There is no action, cause of action, claim, demand, suit,
proceeding, citation, summons, subpoena, inquiry or investigation of any
nature, civil, criminal, regulatory or otherwise, in law or in equity, by or
before any court, tribunal, arbitrator or other Governmental Authority
("Litigation") pending or, to the knowledge of MAS, threatened against MAS
----------
or any of its subsidiaries, any officer, director, employee or agent
thereof, in his or her capacity as such, or as a fiduciary with respect to
any Benefit Plan (as defined herein) of MAS or any of its subsidiaries or
otherwise relating to MAS or any of its subsidiaries or the securities of
any of them, or any properties or rights of MAS or any of its subsidiaries
or any Benefit Plan of MAS or any of its subsidiaries which is required to
be described in any MAS Securities Filing that is not so described. No event
has occurred as a consequence of which MAS would be required to file a
Current Report on Form 8-K pursuant to the requirements of the Exchange Act
as to which such a report has not been timely filed with the SEC. Any
reports, statements and registration statements and amendments thereof
(including, without limitation, Annual Reports on Form 10-K or Form 10-KSB,
Quarterly Reports on Form 10-Q or Form 10-QSB and Current Reports on Form
8-K, as amended) filed by MAS with the SEC after the date hereof shall be
provided to ADSX on or prior to the date of such filing.
3.8. Financial Statements. The audited consolidated financial
--------------------
statements and unaudited interim financial statements of MAS included in the
MAS Securities Filings (the "MAS Financial Statements") have been prepared
------------------------
in accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes
thereto) and present fairly, in all material respects, the financial
position of MAS and the MAS Subsidiaries as at the dates thereof and the
results of their operations and cash flows for the periods then ended
subject, in the case of the unaudited interim financial statements, to
normal year-end audit adjustments, any other adjustments described therein
and the fact that certain information and notes have been condensed or
omitted in accordance with the Exchange Act.
3.9. Absence of Certain Changes. Except as set forth in the MAS
--------------------------
Securities Filings filed by MAS prior to the date of this Agreement, since
October 31, 2000, there has not been: (i) any event, occurrence, fact,
condition, change, development or effect ("Event") (except for those caused
-----
by the pendency or announcement of this Agreement, or the transactions
contemplated hereby) that has had or would reasonably be expected to have an
MAS Material Adverse Effect; (ii) any declaration, payment or setting aside
for payment of any dividend (except to MAS or any MAS Subsidiary wholly
owned by MAS) or other distribution or any redemption, purchase or other
acquisition of any shares of capital stock or securities of MAS or any MAS
Subsidiary; (iii) any return of any capital or other distribution of assets
to stockholders of MAS or any MAS Subsidiary (except to MAS or any MAS
Subsidiary wholly owned by MAS); (iv) any acquisition (by merger,
consolidation, acquisition of stock or assets or otherwise) of any person or
business by MAS or any MAS Subsidiary; or (v) any other action or agreement
or undertaking by MAS or any MAS Subsidiary that, if taken or done on or
after the date hereof without ADSX's consent, would result in a breach of
Section 5.1, below.
8
3.10. Related Party Transactions. Except as set forth in the MAS
--------------------------
Securities Filings filed by MAS prior to the date of this Agreement, since
October 31, 2000, MAS has not and none of the MAS Subsidiaries have entered
into any relationship or transaction of a sort that would be required to be
disclosed pursuant to Item 404 of Regulation S-K by MAS in a proxy statement
in connection with an annual meeting of stockholders.
3.11. Compliance with Laws. The business of MAS and each MAS Subsidiary
--------------------
has been operated in compliance with all Laws applicable thereto, except for
any instances of noncompliance which do not and would not reasonably be
expected to have an MAS Material Adverse Effect. Without limiting the
generality of the foregoing, neither MAS nor any MAS Subsidiary has
conducted its business in violation of applicable Laws, tariffs, rules and
regulations in any jurisdiction, foreign or domestic, which violation has
had or would reasonably be expected to have an MAS Material Adverse Effect.
3.12. Permits. MAS and the MAS Subsidiaries have all material permits,
-------
certificates, licenses, approvals, tariffs and other authorizations required
in connection with the operation of their respective businesses, and neither
MAS nor any MAS Subsidiary is in violation of any such permit, certificate,
license, approval, tariff or other authorization, and no proceedings are
pending or, to the knowledge of MAS, threatened, to revoke or limit any such
permit, certificate, license, approval, tariff or other authorization,
except any such violation or proceeding which does not and would not
reasonably be expected to have an MAS Material Adverse Effect.
3.13. Finders and Investment Bankers. Neither MAS, any MAS
------------------------------
Subsidiaries, nor any of the officers or directors of any of them has
employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated hereby.
3.14. Material Contracts. MAS has made available to ADSX true and
------------------
accurate copies of the MAS Material Contracts, a true, complete and accurate
list of which is set forth in the MAS Disclosure Schedule. For purposes of
this Agreement, "MAS Material Contract" means any note, bond, mortgage,
---------------------
indenture, contract, lease, license, agreement, understanding, instrument,
bid or proposal, whether written or oral (each a "Contract"), entered into
--------
by MAS or any MAS Subsidiary (i) that is required to be described in or
filed as an exhibit to any MAS Securities Filing; (ii) that was entered into
outside the ordinary course of business; (iii) that is material to the
business of MAS; (iv) pursuant to which MAS is or will be liable for an
amount in excess of $25,000; or (v) which may not be terminated, without
additional liability, within six months. Neither MAS nor any MAS Subsidiary
is a party or is subject to any Contract required to be described in or
filed as an exhibit to any MAS Securities Filing that is not so described in
or filed as required by the Securities Act or the Exchange Act, as the case
may be. All such MAS Material Contracts are valid and binding and are in
full force and effect and enforceable against MAS or such subsidiary in
accordance with their respective terms, subject to the Enforceability
Exceptions. Except as referenced in Section 3.6 above, (i) no Consent of any
person is needed in order that each such MAS Material Contract shall
continue in full force and effect in accordance with its terms without
penalty, acceleration or rights of early termination by reason of the
consummation of the transactions contemplated by this Agreement, except for
Consents the absence of which would not have an MAS Material Adverse Effect,
and (ii) neither MAS nor any
9
of its subsidiaries is in violation or breach of or default under any such
MAS Material Contract; nor to the knowledge of MAS is any other party to any
such MAS Material Contract in violation or breach of or default under any
such MAS Material Contract in each case where such violation or breach would
have an MAS Material Adverse Effect. Neither MAS nor any MAS Subsidiary is a
party to or is subject to any Contract that limits the ability of MAS or any
MAS Subsidiary, or would limit the ability of ADSX or any subsidiary of ADSX
after the Effective Time, to compete in or conduct any line of business or
compete with any person or in any geographic area or during any period.
Except as contemplated by this Agreement, Acquisition Subsidiary is not a
party to any Contract.
3.15. Employee Benefit Plans. (a) There are no Benefit Plans (as
----------------------
defined below) maintained or contributed to by MAS or an MAS Subsidiary
under which MAS or an MAS Subsidiary could incur any material liability. A
"Benefit Plan" shall include (i) an employee benefit plan as defined in
------------
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended, together with all regulations thereunder ("ERISA"), even if,
-----
because of some other provision of ERISA, such plan is not subject to any or
all of ERISA's provisions, and (ii) whether or not described in the
preceding clause, (a) any pension, profit sharing, stock bonus, deferred or
supplemental compensation, retirement, thrift, stock purchase, stock
appreciation or stock option plan, or any other compensation, welfare,
fringe benefit or retirement plan, program, policy, course of conduct,
understanding or arrangement of any kind whatsoever, whether formal or
informal, oral or written, providing for benefits for or the welfare of any
or all of the current or former employees or agents of a specified person or
their beneficiaries or dependents, (b) a multiemployer plan as defined in
Section 3(37) of ERISA (a "Multi-Employer Plan"), or (c) a multiple employer
-------------------
plan as defined in Section 413 of the Code.
(b) With respect to each Benefit Plan (where applicable): MAS has made
available to ADSX complete and accurate copies of (i) all plan and trust
texts and agreements, insurance contracts and other funding arrangements;
(ii) the most recent annual report on the Form 5500 series; (iii) the most
recent financial statement and/or annual and periodic accounting of plan
assets; (iv) the most recent determination letter received from the Internal
Revenue Service; and (v) the most recent summary plan description as defined
in ERISA.
(c) With respect to each Benefit Plan while maintained or contributed
to by MAS or any MAS Subsidiary: (i) if intended to qualify under Code
Sections 401(a) or 403(a), such Benefit Plan has received a favorable
determination letter from the IRS that it so qualifies, and its trust is
exempt from taxation under Code Section 501(a) and, to the knowledge of MAS,
nothing has since occurred to cause the loss of the Benefit Plan's
qualification; (ii) except for payment of benefits made in the ordinary
course of the plan administration, no event has occurred and, to the
knowledge of MAS, there exists no circumstance under which MAS or any MAS
Subsidiary could reasonably be expected to incur liability under ERISA, the
Code or otherwise; (iii) no accumulated funding deficiency as defined in
Code Section 412 has occurred or exists, (iv) no non-exempt prohibited
transaction as defined under ERISA and the Code has occurred; (v) no
reportable event as defined in Section 4043 of ERISA has occurred or will by
virtue of the consummation of the transactions contemplated by this
Agreement (other than events as to which the 30-day notice period is waived
pursuant to Section 4043 of ERISA); (vi) all contributions and premiums due
have fully been made and paid on a timely basis; (vii) all contributions
made or
10
required to be made under any Benefit Plan meet the requirements for
deductibility under the Code, and all contributions accrued prior to the
Effective Time which have not been made have been properly recorded on the
MAS Financial Statements in a manner satisfying the requirements of
Financial Accounting Standards 87 and 88; (viii) the present value of all
"benefit liabilities" (as defined in ERISA Section 4001(a)(16) and
determined based on the actuarial assumptions and methods used under such
Benefit Plan for the most recent Benefit Plan actuarial valuation and
assuming for such purposes that all benefits provided under the Benefit Plan
are fully vested) under each such Benefit Plan did not exceed as of the most
recent Benefit Plan actuarial valuation date, and will not exceed as of the
Closing Date, the then current value of the assets of such Benefit Plan as
determined pursuant to Code Section 412, and (ix) neither MAS nor any MAS
Subsidiary has completely or partially withdrawn from a Plan that is a
Multi-employer Plan, and MAS would not become subject to liability under
ERISA if MAS were to withdraw completely from all multi-employer plans in
which it currently participates, except, in each case, for any deviations
from the foregoing which do not and would not reasonably be expected to have
an MAS Material Adverse Effect.
(d) Except as provided in Section 5.9 below, the consummation of the
Merger will not, either alone or in conjunction with another event under the
terms of any Benefit Plan: (i) entitle any individual to severance pay,
(ii) accelerate the time of payment or vesting of benefits or increase the
amount of compensation due to any individual; or (iii) give rise to the
payment of any amount that would not be deductible pursuant to Section 280G
of the Code.
3.16. Taxes and Returns. (a) MAS and each of the MAS Subsidiaries have
-----------------
timely filed or caused to be filed all material Tax Returns required to be
filed by it, and all material Tax Returns filed by MAS and the MAS
Subsidiaries are true, complete and correct in all material respects.
(b) MAS and the MAS Subsidiaries have each timely paid, collected or
withheld, or caused to be timely paid, collected or withheld, all material
amounts of Taxes required to be paid, collected or withheld, other than such
Taxes for which adequate reserves in the MAS Financial Statements have been
established.
(c) There are no claims or assessments pending against MAS or any of
the MAS Subsidiaries for any alleged deficiency in any Tax, and neither MAS
nor any of the MAS Subsidiaries has been notified in writing of any proposed
Tax claims or assessments against MAS or any of the MAS Subsidiaries (other
than in each case, claims or assessments for which adequate reserves in the
MAS Financial Statements have been established.
(d) There are no material federal, state, local or foreign audits or
administrative proceedings pending with regard to any material amounts of
Tax or Tax Return of MAS or the MAS Subsidiaries and none of them has
received a written notice of any proposed material audit or proceeding.
(e) Neither MAS nor any of the MAS Subsidiaries has any waivers or
extensions of any applicable statute of limitations to assess any material
amount of Taxes.
11
(f) There are no outstanding requests by MAS or any of the MAS
Subsidiaries for any extension of time within which to file any material Tax
Return or within which to pay any material amounts of Taxes shown to be due
on any return.
(g) There are no liens for material amounts of Taxes on the assets of
MAS or any of the MAS Subsidiaries except for statutory liens for current
Taxes not yet due and payable.
(h) Neither MAS nor any MAS Subsidiary is a party to any agreement,
contract, arrangement, or plan that has resulted or would result,
individually or in the aggregate, in connection with this Agreement or any
change of control of MAS or any of the MAS Subsidiaries in the payment of
any "excess parachute payments" within the meaning of Section 280G of the
Code.
(i) For purposes of this Agreement, the term "Tax" shall mean any
---
federal, state, local, foreign or provincial income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
alternative or added minimum, ad valorem, withholding, estimated, transfer
or excise tax, or any other tax, custom, duty, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest
or penalty imposed by any Governmental Authority. The term "Tax Return"
----------
shall mean a report, return or other information (including any attached
schedules or any amendments to such report, return or other information)
required to be supplied to or filed with a Governmental Authority with
respect to any Tax, including an information return, claim for refund,
amended return or declaration of estimated Tax.
3.17. No Adverse Actions. There is no existing, pending or, to the
------------------
knowledge of MAS, threatened termination, cancellation, limitation,
modification or change in the business relationship of MAS or any of the MAS
Subsidiaries, with any supplier, customer or other person except such as
would not reasonably be expected to have an MAS Material Adverse Effect.
None of MAS, any MAS Subsidiary or, to the knowledge of MAS, any director,
officer, agent, employee or other person acting on behalf of any of the
foregoing has used any corporate funds for unlawful contributions, payments,
gifts or entertainment or for the payment of other unlawful expenses
relating to political activity, or made any direct or indirect unlawful
payments to governmental or regulatory officials or others, which would
reasonably be expected to have an MAS Material Adverse Effect.
3.18. Fairness Opinion. The Board of Directors of MAS, the Special
----------------
Committee of the Board of Directors of MAS and the Board of Directors of
Acquisition Subsidiary have received from Xxxxxx & Xxxxxx an opinion to the
effect that as of the date of this Agreement the Transaction Consideration
is fair to the Public Stockholders of MAS from a financial point of view.
3.19. HSR Act. MAS together with all the entities it controls, has less
-------
than $10 million in assets, calculated in accordance with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations promulgated thereunder. MAS is not engaged in
"manufacturing" within the meaning of that Act.
12
3.20. Intellectual Property. For purposes of this Agreement,
---------------------
"Intellectual Property" shall mean all patents, trademarks, service marks,
---------------------
trade names, domain names, trade secrets, copyrights, franchises, know-how
and similar rights of or used by a person, all applications for any of the
foregoing and all permits, grants and licenses or other rights running to or
from such person relating to any of the foregoing. MAS or one of the MAS
Subsidiaries owns, or is licensed to or otherwise has the right to use, all
material Intellectual Property currently used in its or their respective
businesses. The rights of MAS and the MAS Subsidiaries in such Intellectual
Property are, subject to the rights of any licensor thereof, free and clear
of any liens or other encumbrances and restrictions and neither MAS nor any
of the MAS Subsidiaries has received, as of the date of this Agreement,
notice of any adversely-held Intellectual Property of any other person, or
notice of any charge or claim of infringement or breach from any person
relating to such Intellectual Property or any material process or
confidential information ("IP Claim Notice") of MAS or any MAS Subsidiary
---------------
and does not know of any basis for any such charge or claim. Neither MAS,
the MAS Subsidiaries nor their respective predecessors, if any, has
conducted business at any time prior to the date hereof under any corporate,
trade or fictitious names other than their current corporate names. MAS
shall promptly notify, and shall cause the MAS Subsidiaries to promptly
notify, ADSX of any IP Claim Notice received by MAS or a MAS Subsidiary
after the date of this Agreement.
3.21. Undisclosed Liabilities. MAS and the MAS Subsidiaries do not have
-----------------------
any liabilities or obligations whatsoever, whether accrued, contingent or
otherwise, and MAS knows of no basis for any claim against MAS or any MAS
Subsidiary for any liability or obligation, except (i) to the extent set
forth or reflected in the MAS Financial Statements, (ii) to the extent
expressly set forth on the MAS Disclosure Schedule, or (iii) liabilities or
obligations incurred in the normal and ordinary course of business since
October 31, 2000, and except, in each case, for any deviations from the
foregoing which individually or in the aggregate do not and would not
reasonably be expected to have an MAS Material Adverse Effect.
3.22. Environmental Matters. Except, in each case, for any deviations
---------------------
which do not and would not reasonably be expected to have an MAS Material
Adverse Effect, as of the date of this Agreement, (i) each of MAS and the
MAS Subsidiaries is in compliance with all applicable Environmental Laws (as
hereinafter defined), (ii) each of MAS and the MAS Subsidiaries has
obtained, and is in compliance with, all permits and other authorizations of
Governmental Authorities necessary under applicable Environmental Laws for
the construction of its facilities and the conduct of its operations, as
applicable, (collectively, the "Environmental Permits"), (iii) there is no
---------------------
civil, criminal or administrative judgment, action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding, notice or demand
letter pending or, to the knowledge of MAS, threatened against MAS, an MAS
Subsidiary or any of their respective properties alleging a violation of, or
liability under, any Environmental Laws and (iv) there are no past or
present Events which reasonably may be expected to prevent compliance with,
or which have given rise to or will give rise to liability on the part of
MAS or an MAS Subsidiary under, Environmental Laws. The MAS Disclosure
Schedule lists all environmental reports in the possession of MAS or an MAS
Subsidiary relating to any of their respective past or present properties.
For purposes of this Agreement, the term "Environmental Laws" shall mean
------------------
Laws regulating asbestos, polychlorinated biphenyls, radioactive materials
and wastes, petroleum and
13
petroleum products, contaminants, pollutants, hazardous or toxic wastes or
substances, and Laws relating to protection of the environment, pollution,
waste control and human health and safety as it relates to the environment.
3.23. Corporate Records. The respective corporate record books of or
-----------------
relating to MAS and each of the MAS Subsidiaries made available to ADSX by
MAS contain accurate and complete records of (i) all corporate actions of
the stockholders and directors (and committees thereof) of MAS and each MAS
Subsidiary, (ii) the Certificate and/or Articles of Incorporation, Bylaws
and/or other governing instruments, as amended, of MAS and the MAS
Subsidiaries, and (iii) the issuance and transfer of stock of MAS and each
of the MAS Subsidiaries. Neither MAS nor any MAS Subsidiary has any of its
material records or information recorded, stored, maintained or held off the
premises of MAS and the MAS Subsidiaries.
3.24. Real Property. (a) The MAS Disclosure Schedule sets forth a true,
-------------
correct and complete schedule as of the date of this Agreement of all real
property owned by MAS or any of the MAS Subsidiaries. MAS or one of the MAS
Subsidiaries, as indicated thereon, is the owner of fee title to the real
property described on the MAS Disclosure Schedule and to all of the
buildings, structures and other improvements located thereon free and clear
of any material mortgage, deed of trust, lien, pledge, security interest,
claim, lease, charge, option, right of first refusal, easement, restrictive
covenant, encroachment or other survey defect, encumbrance or other
restriction or limitation except for the matters listed on the MAS
Disclosure Schedule and, except for any exceptions, easements, restrictive
covenants, encroachments or other survey defects, encumbrances, restrictions
or limitations which, individually or in the aggregate, do not and would not
reasonably be expected to have an MAS Material Adverse Effect or to
interfere in any material respect with the present use and enjoyment of such
real property.
(b) The MAS Disclosure Schedule sets forth a true, correct and complete
schedule as of the date of this Agreement of all material leases, subleases,
easements, rights-of-way, licenses or other agreements under which MAS or
any of the MAS Subsidiaries uses or occupies, or has the right to use or
occupy any material real property or improvements thereon. Except for the
matters listed on the MAS Disclosure Schedule, MAS or an MAS Subsidiary, as
indicated thereon, holds the leasehold estate under or other interest in
each such lease, sublease, easement, right-of-way, license or other
agreement free and clear of all liens, encumbrances and other rights of
occupancy other than statutory landlords' or mechanics' liens which have not
been executed upon, and except for liens, encumbrances and rights that do
not and would not reasonably be expected to have an MAS Material Adverse
Effect or to interfere in any material respect with the present use and
enjoyment of such leasehold estate or interest.
3.25. Title to and Condition of Personal Property. MAS and each of the
-------------------------------------------
MAS Subsidiaries have good and marketable title to, or a valid leasehold
interest in, all material items of any personal property currently used in
the operation of their respective businesses, and such property or leasehold
interests are free and clear of all liens, claims, charges, security
interests, options, or other title defects or encumbrances that have had or
would reasonably be expected to have an MAS Material Adverse Effect or to
interfere in any material respect with the present use and enjoyment of such
property or interests. As of the date of this Agreement, all such personal
14
property is in reasonably good operating condition and repair as required
for use in the businesses of MAS and the MAS Subsidiaries (ordinary wear and
tear excepted), is reasonably suitable for the use to which the same is
customarily put by MAS or any MAS Subsidiary and is free from defects except
where there would not be an MAS Material Adverse Effect.
3.26. Labor Matters. Neither MAS nor any of the MAS Subsidiaries has
-------------
any material obligations, contingent or otherwise, under any employment,
severance or consulting agreement, any collective bargaining agreement or
any other contract with a labor union or other labor or employee group. To
the knowledge of MAS, as of the date of this Agreement, there are no
negotiations, demands or proposals which are presently pending or overtly
threatened by or on behalf of any labor union with respect to the unionizing
of employees of MAS or any MAS Subsidiary. As of the date of this Agreement,
there is no unfair labor practice complaint against MAS or any MAS
Subsidiary pending or, to the knowledge of MAS, threatened before the
National Labor Relations Board or comparable agency, no unresolved grievance
against MAS or any MAS Subsidiary, no collective bargaining agreement which
is currently being negotiated by MAS or any MAS Subsidiary, and neither MAS
nor any MAS Subsidiary is experiencing any work stoppage, strike, slowdown
or other labor difficulty which, in each case, would reasonably be expected
to have an MAS Material Adverse Effect. As of the date of this Agreement, no
employee has informed MAS or any MAS Subsidiary of his or her intention to
terminate his or her employment with MAS or any MAS Subsidiary as a result
of any announcement or consummation of the transactions contemplated by this
Agreement. MAS shall promptly notify, and shall cause the MAS Subsidiaries
to promptly notify, ADSX upon knowledge by MAS or an MAS Subsidiary of the
occurrence after the date hereof of any matter referenced in this Section
3.26.
3.27. Insurance. The MAS Disclosure Schedule lists each policy of
---------
insurance which MAS and each of the MAS Subsidiaries has obtained and
maintains. As of the date of this Agreement, neither MAS nor any of the MAS
Subsidiaries has received notice of default under, or intended cancellation
or nonrenewal of, any of such policies of insurance. Neither MAS nor any MAS
Subsidiary has been refused any insurance for any material coverage by an
insurance carrier to which it has applied for such insurance coverage.
3.28. Disclosure. No representation or warranty of MAS herein and no
----------
information contained or referenced in the MAS Disclosure Schedule or in any
other document subsequently delivered by MAS to ADSX pursuant hereto
contains or will contain, when such statement was made or when such
information or document was delivered, any untrue statement of a material
fact or omits or will omit to state a material fact necessary in order to
make any statement contained herein or therein, when such statement was made
or when such information or document was delivered, not misleading.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ADSX
--------------------------------------
ADSX represents and warrants to MAS that the statements contained in
this Article IV
15
are true and correct, except as set forth in the disclosure schedule
delivered by ADSX to MAS and attached hereto and incorporated herein by
reference (the "DA Disclosure Schedule") or as otherwise expressly
----------------------
contemplated by this Agreement.
4.1. Organization and Good Standing. ADSX is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State
of Missouri. DA is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of the
subsidiaries of DA (the "DA Subsidiaries") and the Other Subsidiaries is a
---------------
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. Each of DA, the DA
Subsidiaries and the Other Subsidiaries is qualified to do business as a
foreign corporation in each jurisdiction in which the failure to be so
qualified would have a DA Xxxxx Xxxxxxxx Adverse Effect. For purposes of
this Agreement, "DA Xxxxx Xxxxxxxx Adverse Effect" shall mean a material
--------------------------------
adverse effect on (i) the business, assets, condition (financial or
otherwise), properties, liabilities or the results of operations of DA, the
DA Subsidiaries and the Other Subsidiaries, taken as a whole, provided,
--------
however, that no change or effect arising out of or in connection with or
-------
resulting from any of the following shall be deemed by it or by themselves,
either alone or in combination, to constitute or contribute to a DA Xxxxx
Xxxxxxxx Adverse Effect: (A) general economic conditions or changes therein,
(B) financial market conditions or fluctuations, or (C) any action, change,
effect, circumstances or condition expressly required by this Agreement or
directly and demonstrably attributable to the execution, performance or
announcement of this Agreement or the transactions contemplated hereby;
(ii) the ability of ADSX or DA to perform its obligations set forth in this
Agreement, or (iii) the ability of ADSX or DA to timely consummate the
transactions contemplated by this Agreement. ADSX, DA, the DA Subsidiaries
and the Other Subsidiaries have all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on their
respective businesses as now being conducted and necessary to own, operate
and lease their properties and assets except where the failure to have such
power, licenses, authorizations, consents and approvals would not have an
MAS Material Adverse Effect.
4.2. Capitalization.
--------------
(a) As of the date hereof, the authorized capital stock of DA consists
of 50,000,000 shares of DA Common Stock. Of such authorized shares, as of
the date hereof, there are issued and outstanding 20,000,000 shares of DA
Common Stock, all of which are owned by ADSX, no shares of DA Common Stock
are issued and held in the treasury of DA and no other capital stock of DA
is issued or outstanding.
(b) As of the date hereof, the number of authorized shares, the number
of issued and outstanding shares and the number of treasury shares of the
capital stock of the Other Subsidiaries consists of the number of shares of
common stock and preferred stock set forth in Exhibit A attached hereto and
incorporated herein by reference, at the par values set forth therein. No
other capital stock of any of the Other Subsidiaries is issued or
outstanding.
(c) All issued and outstanding shares of DA Common Stock and the Other
Subsidiaries Common Stock are duly authorized, validly issued and
outstanding, fully paid and nonassessable and were issued free of preemptive
rights in compliance with applicable corporate and securities
16
Laws. Except as set forth in the DA Disclosure Schedule, as of the date
hereof there are no outstanding rights, subscriptions, warrants, puts,
calls, unsatisfied preemptive rights, options or other agreements of any
kind relating to any of the outstanding, authorized but not issued,
unauthorized or treasury shares of the capital stock or any other security
of DA or the Other Subsidiaries, and there is no authorized or outstanding
security of any kind convertible into or exchangeable for any such capital
stock or other security. All of the outstanding rights, subscriptions,
warrants, puts, calls, unsatisfied preemptive rights, options or other
agreements of any kind relating to any of the outstanding, authorized but
not issued, unauthorized or treasury shares of the capital stock or any
other security of DA or the Other Subsidiaries have been duly authorized and
issued in accordance with all applicable Law. Except as disclosed in the DA
Disclosure Schedule, there are no security interests, claims or restrictions
upon the transfer of or otherwise pertaining to the securities (including,
but not limited to, the ability to pay dividends thereon) of DA, the DA
Subsidiaries or the Other Subsidiaries or the ownership thereof other than
those imposed by the Securities Act, the Securities Exchange Act, applicable
state securities Laws or applicable corporate Law.
4.3. Subsidiaries.
------------
(a) Each DA Subsidiary is wholly owned by DA and all of the capital
stock and other interests of the DA Subsidiaries so held by DA are directly
or indirectly owned by it, free and clear of any claim, lien, encumbrance,
security interest or agreement with respect thereto. All of the outstanding
shares of capital stock in each of the DA Subsidiaries directly or
indirectly held by DA are duly authorized, validly issued and outstanding,
fully paid and nonassessable and were issued free of preemptive rights in
compliance with applicable corporate and securities Laws. There are no
irrevocable proxies or similar obligations with respect to such capital
stock of the DA Subsidiaries held by DA and no equity securities or other
interests of any of the DA Subsidiaries are or may become required to be
issued or purchased by reason of any options, warrants, rights to subscribe
to, puts, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of any
capital stock of any DA Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any DA Subsidiary is bound to issue
additional shares of its capital stock, or options, warrants or rights to
purchase or acquire any additional shares of its capital stock or securities
convertible into or exchangeable for such shares.
(b) Except as set forth in Exhibit A, each of the Other Subsidiaries is
wholly owned by ADSX and all of the capital stock and other interests of the
Other Subsidiaries so held by ADSX are directly or indirectly owned by it,
free and clear of any claim, lien, encumbrance, security interest or
agreement with respect thereto. All of the outstanding shares of capital
stock in each of the Other Subsidiaries directly or indirectly held by ADSX
are duly authorized, validly issued and outstanding, fully paid and
nonassessable and were issued free of preemptive rights in compliance with
applicable corporate and securities Laws. There are no irrevocable proxies
or similar obligations with respect to such capital stock of the Other
Subsidiaries held by ADSX and no equity securities or other interests of any
of the Other Subsidiaries are or may become required to be issued or
purchased by reason of any options, warrants, rights to subscribe to, puts,
calls or commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of any capital stock
of any Other Subsidiary, and there are no
17
contracts, commitments, understandings or arrangements by which any Other
Subsidiary is bound to issue additional shares of its capital stock, or
options, warrants or rights to purchase or acquire any additional shares of
its capital stock or securities convertible into or exchangeable for such
shares.
4.4. Authorization; Binding Agreement. ADSX and DA each have all
--------------------------------
requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This
Agreement and the consummation of the transactions contemplated hereby,
including, but not limited to, the Merger, have been duly and validly
authorized by DA's Board of Directors and by ADSX's Board of Directors, and
no other corporate proceedings on the part of ADSX, DA, any DA Subsidiary or
any of the Other Subsidiaries are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
ADSX and DA and constitutes, and upon execution and delivery thereof as
contemplated by this Agreement, the legal, valid and binding agreements of
ADSX and DA, enforceable against ADSX and DA in accordance with its and
their respective terms, subject to the Enforceability Exceptions.
4.5. Governmental Approvals. No Consent from or with any Governmental
----------------------
Authority on the part of ADSX, DA, any of the DA Subsidiaries or any of the
Other Subsidiaries is required in connection with the execution or delivery
by ADSX and DA of this Agreement or the consummation by ADSX and DA of the
transactions contemplated hereby other than (i) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
in accordance with the DGCL and (ii) such other Consents the failure of
which to obtain will not have an MAS Material Adverse Effect.
4.6. No Violations. The execution and delivery of this Agreement, the
-------------
consummation of the transactions contemplated hereby and compliance by ADSX
and DA with any of the provisions hereof or thereof will not (i) conflict
with or result in any breach of any provision of the Articles and/or
Certificate of Incorporation or Bylaws or other governing instruments of
ADSX, DA, any of the DA Subsidiaries or any of the Other Subsidiaries,
(ii) except for the Consent set forth in Exhibit C attached hereto relating
to the Second Amended and Restated Term and Revolving Credit Agreement dated
October 17, 2000, by and among IBM Credit Corporation, IBM Financing, ADSX
and Ground Effects, Ltd., as amended by Acknowledgment, Waiver and Amendment
No. 1 dated March 30, 2001 and except as set forth in the DA Disclosure
Schedule, require any Consent under or result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or
acceleration or augment the performance required) under any of the terms,
conditions or provisions of any DA Xxxxx Xxxxxxxx Contract (as hereinafter
defined) or other material obligation to which ADSX, DA, any DA Subsidiary
or any Other Subsidiary is a party or by which any of them or any of their
properties or assets may be bound, (iii) result in the creation or
imposition of any lien or encumbrance of any kind upon any of the assets of
ADSX, DA, any DA Subsidiary or any Other Subsidiary, or (iv) subject to
obtaining the Consents from Governmental Authorities referred to in Section
4.5, above, contravene any Law currently in effect to which ADSX, DA, any DA
Subsidiary or any Other Subsidiary or its or any of their respective assets
or properties are subject, except in the case of clauses (ii), (iii) and
(iv) above,
18
for any deviations from the foregoing which do not or would not reasonably
be expected to have a DA Xxxxx Xxxxxxxx Adverse Effect.
4.7. Securities Filings and Litigation. (a) ADSX has made available to
---------------------------------
MAS true and complete copies of (i) ADSX's Annual Reports on Form 10-K, as
amended, for the years ended December 31, 1998, 1999 and 2000, as filed with
the SEC, (ii) ADSX's proxy statements relating to all of the meetings of
stockholders (whether annual or special) of ADSX since December 31, 1998, as
filed with the SEC, and (iii) all other reports, statements and registration
statements and amendments thereto (including, without limitation, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, as amended) filed by
ADSX with the SEC since December 31, 1998. The reports and statements set
forth in clauses (i) through (iii), above, and those subsequently provided
or required to be provided pursuant to this Section, are referred to
collectively herein as the "ADSX Securities Filings." As of their respective
-----------------------
dates, or as of the date of the last amendment thereof, if amended after
filing, none of the ADSX Securities Filings (including all schedules thereto
and disclosure documents incorporated by reference therein), to the extent
they relate to or reflect the assets, liabilities or operations of DA or the
Other Subsidiaries, contained or, as to ADSX Securities Filings subsequent
to the date hereof, will contain any untrue statement of a material fact or
omitted or, as to ADSX Securities Filings subsequent to the date hereof,
will omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. Each of the ADSX Securities
Filings, to the extent they relate to or reflect the assets, liabilities or
operations of DA or the Other Subsidiaries, was filed in a timely manner and
at the time of filing or as of the date of the last amendment thereof, if
amended after filing, complied or, as to ADSX Securities Filings subsequent
to the date hereof, will comply in all material respects with the Securities
Exchange Act or the Securities Act, as applicable.
(b) There is no Litigation pending or, to the knowledge of ADSX,
threatened against DA, any of its subsidiaries or any of the Other
Subsidiaries, any officer, director, employee or agent thereof, in his or
her capacity as such, or as a fiduciary with respect to any DA Group Benefit
Plan, as hereinafter defined, or otherwise relating to DA, any of its
subsidiaries or any of the Other Subsidiaries or the securities of any of
them, or any properties or rights of DA, any of its subsidiaries or any of
the Other Subsidiaries or any DA Group Benefit Plan which is required to be
described in any ADSX Securities Filing that is not so described. No event
relating to or affecting the assets, liabilities or operations of DA or the
Other Subsidiaries has occurred as a consequence of which ADSX would be
required to file a Current Report on Form 8-K pursuant to the requirements
of the Securities Exchange Act as to which such a report has not been timely
filed with the SEC. Any reports, statements and registration statements and
amendments thereof (including, without limitation, Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as amended)
filed by ADSX with the SEC after the date hereof shall be provided to MAS on
or prior to the date of such filing.
4.8. Financial Statements. The audited consolidated financial statements
--------------------
and unaudited interim financial statements of DA and the Other Subsidiaries
(the "DA Group Financial Statements"), as described on Schedule 4.8, have
-----------------------------
been provided to MAS. The DA Group Financial Statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis (except as indicated therein or in the notes
19
thereto) and present fairly, in all material respects, the financial
position of DA and the Other Subsidiaries as at the dates thereof and the
results of their operations and cash flows for the periods then ended
subject, in the case of the unaudited interim financial statements, to
normal year-end audit adjustments, any other adjustments described therein.
4.9. Absence of Certain Changes or Events. Except as set forth in the
------------------------------------
ADSX Securities Filings or in the DA Disclosure Schedule, since December 31,
2000, there has not been: (i) any Event (except for those Events caused by
the pendency or announcement of this Agreement, or the transactions
contemplated hereby) that has had or would reasonably be expected to have a
DA Xxxxx Xxxxxxxx Adverse Effect; (ii) any declaration, payment or setting
aside for payment of any dividend (except to DA, a DA Subsidiary wholly
owned by DA or the Other Subsidiaries) or other distribution or any
redemption, purchase or other acquisition of any shares of capital stock or
securities of DA, any DA Subsidiary or any Other Subsidiary; (iii) any
return of any capital or other distribution of assets to stockholders of DA,
any DA Subsidiary or any Other Subsidiary (except to DA, a DA Subsidiary
wholly owned by DA or any Other Subsidiary); (iv) any acquisition (by
merger, consolidation, acquisition of stock or assets or otherwise) of any
person or business by DA, a DA Subsidiary or any Other Subsidiary; or
(v) any other action or agreement or undertaking by DA, any DA Subsidiary or
any Other Subsidiary that, if taken or done on or after the date hereof
without the consent of MAS, would result in a breach of Section 6.1, below.
4.10. Related Party Transactions. Except as set forth in the ADSX
--------------------------
Securities Filings or the DA Disclosure Schedule, since December 31, 2000,
DA and the Other Subsidiaries have not entered into any relationship or
transaction of a sort that would be required to be disclosed pursuant to
Item 404 of Regulation S-K by ADSX, or by DA or any Other Subsidiary if it
were subject to such reporting requirements, in a proxy statement in
connection with an annual meeting of stockholders.
4.11. Compliance with Laws. The businesses of DA, each DA Subsidiary
--------------------
and the Other Subsidiaries have been operated in compliance with all Laws
applicable thereto, except for any instances of non-compliance which do not
and would not reasonably be expected to have a DA Xxxxx Xxxxxxxx Adverse
Effect. Without limiting the generality of the foregoing, neither DA, any DA
Subsidiary nor any of the Other Subsidiaries has conducted its business in
violation of applicable Laws, tariffs, rules and regulations in any
jurisdiction, foreign or domestic, which violation has had or would
reasonably be expected to have a DA Xxxxx Xxxxxxxx Adverse Effect.
4.12. Permits. DA, the DA Subsidiaries and the Other Subsidiaries have
-------
all material permits, certificates, licenses, approvals, tariffs and other
authorizations required in connection with the operation of their respective
businesses and none of DA, any DA Subsidiary, or any of the Other
Subsidiaries is in violation of any such permit, certificate, license,
approval, tariff or other authorization, and no proceedings are pending or,
to the knowledge of ADSX, threatened, to revoke or limit any such permit,
certificate, license, approval, tariff or other authorization, except any
such violation or proceeding which does not and would not reasonably be
expected to have a DA Xxxxx Xxxxxxxx Adverse Effect.
20
4.13. Finders and Investment Bankers. Neither ADSX, DA nor any of the
------------------------------
officers or directors of any of them has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finders' fees
in connection with the transactions contemplated hereby.
4.14. Material Contracts. ADSX has made available to MAS true and accurate
------------------
copies of the DA Xxxxx Xxxxxxxx Contracts, a true, complete and accurate
list of which is set forth in the DA Disclosure Schedule. For purposes of
this Agreement, "DA Xxxxx Xxxxxxxx Contract" means any Contract entered into
--------------------------
by DA, any DA Subsidiary or any Other Subsidiary (i) that is required to be
described in or filed as an exhibit to any ADSX Securities Filing, or if DA,
any DA Subsidiary or any Other Subsidiary were subject to similar reporting
requirements would be required to be so described; (ii) that was entered
into outside the ordinary course of business; (iii) that is material to the
business of DA or the Other Subsidiaries, taken as a whole; (iv) pursuant to
which DA, any DA Subsidiary or any Other Subsidiary is or will be liable for
an amount in excess of $50,000; or (v) which may not be terminated, without
additional liability, within six months. None of DA, any DA Subsidiary or
any Other Subsidiary is a party or is subject to any Contract required to be
described in or filed as an exhibit to any ADSX Securities Filing that is
not so described in or filed as required by the Securities Act or the
Exchange Act, as the case may be. All such DA Xxxxx Xxxxxxxx Contracts are
valid and binding and are in full force and effect and enforceable against
DA, any DA Subsidiary or Other Subsidiary in accordance with their
respective terms, subject to the Enforceability Exceptions. Except as
referenced in Section 4.6 above, (i) no Consent of any person is needed in
order that each such DA Xxxxx Xxxxxxxx Contract shall continue in full force
and effect in accordance with its terms without penalty, acceleration or
rights of early termination by reason of the consummation of the
transactions contemplated by this Agreement, except for Consents the absence
of which would not have a DA Xxxxx Xxxxxxxx Adverse Effect, and (ii) none of
DA, the DA Subsidiaries or the Other Subsidiaries is in violation or breach
of or default under any such DA Xxxxx Xxxxxxxx Contract; nor to the
knowledge of ADSX is any other party to any such DA Xxxxx Xxxxxxxx Contract
in violation or breach of or default under any such DA Xxxxx Xxxxxxxx
Contract in each case where such violation or breach would have a DA Xxxxx
Xxxxxxxx Adverse Effect. Except as set forth in the DA Disclosure Schedule,
neither DA nor any of the Other Subsidiaries is a party to or is subject to
any Contract that limits the ability of DA or any of the Other Subsidiaries,
or would limit the ability of MAS or any subsidiary of MAS after the
Effective Time, to compete in or conduct any line of business or compete
with any person or in any geographic area or during any period.
4.15. Employee Benefit Plans. (a) There are no Benefit Plans maintained or
----------------------
contributed to by DA, a DA Subsidiary or any Other Subsidiary under which DA,
a DA Subsidiary, any of the Other Subsidiaries or the Surviving Corporation
could incur any material liability.
(b) With respect to each such Benefit Plan (where applicable): ADSX has
made available to MAS complete and accurate copies of (i) all plan and trust
texts and agreements, insurance contracts and other funding arrangements;
(ii) the most recent annual report on the Form 5500 series; (iii) the most
recent financial statement and/or annual and periodic accounting
21
of plan assets; (iv) the most recent determination letter received from the
Internal Revenue Service; and (v) the most recent summary plan description
as defined in ERISA.
(c) With respect to each such Benefit Plan while maintained or
contributed to by DA, a DA Subsidiary or any Other Subsidiary: (i) if intended
to qualify under Code Sections 401(a) or 403(a), such Benefit Plan has
received a favorable determination letter from the IRS that it so qualifies,
and its trust is exempt from taxation under Code Section 501(a) and, to the
knowledge of ADSX, nothing has since occurred to cause the loss of the
Benefit Plan's qualification; (ii) except for payment of benefits made in
the ordinary course of the plan administration, no event has occurred and,
to the knowledge of ADSX, there exists no circumstance under which DA, a DA
Subsidiary or any Other Subsidiary could reasonably be expected to incur
liability under ERISA, the Code or otherwise; (iii) no accumulated funding
deficiency as defined in Code Section 412 has occurred or exists, whether or
not waived; (iv) no non-exempt prohibited transaction as defined under ERISA
and the Code has occurred; (v) no reportable event as defined in Section
4043 of ERISA has occurred or will occur by virtue of consummation of the
transaction contemplated by this Agreement (other than events as to which
the 30-day notice period is waived pursuant to Section 4043 of ERISA);
(vi) all contributions and premiums due have fully been made and paid on a
timely basis; (vii) all contributions made or required to be made under any
Benefit Plan meet the requirements for deductibility under the Code, and all
contributions accrued prior to the Effective Time which have not been made
have been properly recorded on the DA Group Financial Statements in a manner
satisfying the requirements of Financial Accounting Standards 87 and 88;
(viii) the present value of all "benefit liabilities" (as defined in ERISA
Section 4001(a)(16) and determined based on the actuarial assumptions and
methods used under such Benefit Plan for the most recent Benefit Plan
actuarial valuation and assuming for such purposes that all benefits
provided under the Benefit Plan are fully vested) under each such Benefit
Plan did not exceed as of the most recent Benefit Plan actuarial valuation
date, and will not exceed as of the Closing Date, the then current value of
the assets of such Benefit Plan as determined pursuant to Code Section 412,
and (ix) none of DA, any DA Subsidiary or any Other Subsidiary has
completely or partially withdrawn from a Plan that is a Multi-employer Plan,
and DA would not become subject to liability under ERISA if DA were to
withdraw completely from all multi-employer plans in which it currently
participates, except, in each case, for any deviations from the foregoing
which do not and would not reasonably be expected to have a DA Xxxxx
Xxxxxxxx Adverse Effect.
(d) Except as provided in Section 6.8 below, the consummation of the
Merger will not, either alone or in conjunction with another event under the
terms of any Benefit Plan: (i) entitle any individual to severance pay,
(ii) accelerate the time of payment or vesting of benefits or increase the
amount of compensation due to any individual; or (iii) give rise to the payment
of any amount that would not be deductible pursuant to Section 280G of the
Code.
4.16. Taxes and Returns. (a) DA, each of the DA Subsidiaries and each
-----------------
of the Other Subsidiaries has timely filed or caused to be filed all
material Tax Returns required to be filed by it, and all material Tax
Returns filed by DA, the DA Subsidiaries and the Other Subsidiaries are
true, complete and correct in all material respects.
22
(b) DA, the DA Subsidiaries and the Other Subsidiaries have each timely
paid, collected or withheld, or caused to be timely paid, collected or withheld,
all material amounts of Taxes required to be paid, collected or withheld,
other than such Taxes for which adequate reserves in the DA Group Financial
Statements have been established.
(c) There are no claims or assessments pending against DA, any of the DA
Subsidiaries or any of the Other Subsidiaries for any alleged deficiency in
any Tax, and none of ADSX, DA, the DA Subsidiaries or the Other Subsidiaries
have been notified in writing of any proposed Tax claims or assessments
against DA, any of the DA Subsidiaries or any of the Other Subsidiaries
(other than in each case, claims or assessments for which adequate reserves
in the DA Group Financial Statements have been established).
(d) There are no material federal, state, local or foreign audits or
administrative proceedings pending with regard to any material amounts of
Tax or Tax Returns of DA, the DA Subsidiaries or any of the Other
Subsidiaries and none of them has received a written notice of any proposed
material audit or proceeding.
(e) None of DA, any of the DA Subsidiaries nor any of the Other
Subsidiaries has any waivers or extensions of any applicable statute of
limitations to assess any material amount of Taxes.
(f) There are no outstanding requests by DA, any of DA Subsidiaries or
the Other Subsidiaries for any extension of time within which to file any
material Tax Return or within which to pay any material amounts of Taxes
shown to be due on any return.
(g) There are no liens for material amounts of Taxes on the assets
of DA, any of DA Subsidiaries or any of the Other Subsidiaries except for
statutory liens for current Taxes not yet due and payable.
(h) None of DA, any DA Subsidiary or any of the Other Subsidiaries is a
party to any agreement, contract, arrangement, or plan that has resulted or
would result, individually or in the aggregate, in connection with this
Agreement or any change of control of DA, any of DA Subsidiaries or any of
the Other Subsidiaries in the payment of any "excess parachute payments"
within the meaning of Section 280G of the Code.
4.17. No Adverse Actions. There is no existing, pending or, to the
------------------
knowledge of ADSX, overtly threatened termination, cancellation, limitation,
modification or change in the business relationship of DA, any of the DA
Subsidiaries or any of the Other Subsidiaries, with any supplier, customer
or other person except such as would not reasonably be expected to have a DA
Xxxxx Xxxxxxxx Adverse Effect. None of DA, any DA Subsidiary, any Other
Subsidiary or, to the knowledge of DA, any director, officer, agent,
employee or other person acting on behalf of any of the foregoing has used
any corporate funds for unlawful contributions, payments, gifts or
entertainment or for the payment of other unlawful expenses relating to
political activity, or made any direct or indirect unlawful payments to
governmental or regulatory officials or others, which would reasonably be
expected to have a DA Xxxxx Xxxxxxxx Adverse Effect.
23
4.18. Investment Intent. ADSX is acquiring the shares of MAS Common Stock
-----------------
as set forth in this Agreement for its own account and not with a view to their
distribution within the meaning of Section 2(11) of the Securities Act.
4.19. Intellectual Property. Except as set forth in the DA Disclosure
---------------------
Schedule, (i) DA, the DA Subsidiaries or one of the Other Subsidiaries, or a
subsidiary of one of the Other Subsidiaries owns, or is licensed to or
otherwise has the right to use, all material Intellectual Property currently
used in its or their respective businesses, (ii) the rights of DA, the DA
Subsidiaries and the Other Subsidiaries in such Intellectual Property are,
subject to the rights of any licensor thereof, free and clear of any liens
or other encumbrances and restrictions and none of DA, any of the DA
Subsidiaries or any of the Other Subsidiaries has received, as of the date
of this Agreement, any IP Claim Notice and does not know of any basis for
any such charge or claim, and (iii) none of DA, the DA Subsidiaries or any
of the Other Subsidiaries nor their respective predecessors, if any, has
conducted business at any time prior to the date hereof under any corporate,
trade or fictitious names other than their current corporate names. ADSX
shall promptly notify, and shall cause DA, the DA Subsidiaries and the Other
Subsidiaries to promptly notify, MAS of any IP Claim Notice received by
ADSX, DA, a DA Subsidiary or any of the Other Subsidiaries after the date of
this Agreement.
4.20. Undisclosed Liabilities. DA, the DA Subsidiaries and the Other
-----------------------
Subsidiaries do not have any liabilities or obligations whatsoever, whether
accrued, contingent or otherwise, and ADSX knows of no basis for any claim
against DA, and DA Subsidiary or any Other Subsidiary for any liability or
obligation, except (i) to the extent set forth or reflected in the DA Group
Financial Statements, (ii) to the extent expressly set forth on the DA
Disclosure Schedule, or (iii) liabilities or obligations incurred in the
normal and ordinary course of business since December 31, 2000, and except,
in each case, for any deviations from the foregoing which individually or in
the aggregate do not and would not reasonably be expected to have a DA Xxxxx
Xxxxxxxx Adverse Effect.
4.21. Environmental Matters. Except as set forth on DA Disclosure
---------------------
Schedule, and except, in each case, for any deviations which do not and
would not reasonably be expected to have a DA Xxxxx Xxxxxxxx Adverse Effect,
as of the date of this Agreement, (i) each of DA, the DA Subsidiaries and
the Other Subsidiaries is in compliance with all applicable Environmental
Laws, (ii) each of DA, the DA Subsidiaries and the Other Subsidiaries has
obtained, and is in compliance with, all Environmental Permits, (iii) there
is no civil, criminal or administrative judgment, action, suit, demand,
claim, hearing, notice of violation, investigation, proceeding, notice or
demand letter pending or, to the knowledge of ADSX, threatened against DA, a
DA Subsidiary or any Other Subsidiary or any of their respective properties
alleging a violation of, or liability under, any Environmental Laws and
(iv) there are no past or present Events which reasonably may be expected to
prevent compliance with, or which have given rise to or will give rise to
liability on the part of DA, a DA Subsidiary or an Other Subsidiary under,
Environmental Laws. The DA Disclosure Schedule lists all environmental
reports in the possession of DA, a DA Subsidiary or an Other Subsidiary
relating to any of their respective past or present properties.
24
4.22. Corporate Records. The respective corporate record books of or
-----------------
relating to DA, the DA Subsidiaries and each of the Other Subsidiaries made
available to MAS by ADSX contain accurate and complete records of (i) all
corporate actions of the stockholders and directors (and committees thereof)
of DA, each DA Subsidiary and each Other Subsidiary, (ii) the Certificate
and/or Articles of Incorporation, Bylaws and/or other governing instruments,
as amended, of DA, the DA Subsidiaries and the Other Subsidiaries, and
(iii) the issuance and transfer of stock of DA, each DA Subsidiary and each
of the Other Subsidiaries. Except as set forth on the DA Disclosure Schedule,
none of DA, the DA Subsidiaries or any Other Subsidiary has any of its material
records or information recorded, stored, maintained or held off the premises
of DA, the DA Subsidiaries and the Other Subsidiaries.
4.23. Real Property. (a) The DA Disclosure Schedule sets forth a true,
-------------
correct and complete schedule as of the date of this Agreement of all real
property owned by DA, any DA Subsidiary or any of the DA Subsidiaries. DA,
the DA Subsidiaries and the Other Subsidiaries, as indicated thereon, is the
owner of fee title to the real property described on the DA Disclosure
Schedule and to all of the buildings, structures and other improvements
located thereon free and clear of any material mortgage, deed of trust,
lien, pledge, security interest, claim, lease, charge, option, right of
first refusal, easement, restrictive covenant, encroachment or other survey
defect, encumbrance or other restriction or limitation except for the
matters listed on the DA Disclosure Schedule and, except for any exceptions,
easements, restrictive covenants, encroachments or other survey defects,
encumbrances, restrictions or limitations which, individually or in the
aggregate, do not and would not reasonably be expected to have a DA Xxxxx
Xxxxxxxx Adverse Effect or to interfere in any material respect with the
present use and enjoyment of such real property.
(b) The DA Disclosure Schedule sets forth a true, correct and complete
schedule as of the date of this Agreement of all material leases, subleases,
easements, rights-of-way, licenses or other agreements under which DA, the
DA Subsidiaries or any of the DA Subsidiaries uses or occupies, or has the
right to use or occupy any material real property or improvements thereon.
Except for the matters listed on the DA Disclosure Schedule, DA, a DA
Subsidiary or an Other Subsidiary, as indicated thereon, holds the leasehold
estate under or other interest in each such lease, sublease, easement,
right-of-way, license or other agreement free and clear of all liens,
encumbrances and other rights of occupancy other than statutory landlords'
or mechanics' liens which have not been executed upon, and except for liens,
encumbrances and rights that do not and would not reasonably be expected to
have a DA Xxxxx Xxxxxxxx Adverse Effect or to interfere in any material
respect with the present use and enjoyment of such leasehold estate or
interest.
4.24. Title to and Condition of Personal Property. DA, each of the DA
-------------------------------------------
Subsidiaries and each of the Other Subsidiaries have good and marketable
title to, or a valid leasehold interest in, all material items of any
personal property currently used in the operation of their respective
businesses, and such property or leasehold interests are free and clear of
all liens, claims, charges, security interests, options, or other title
defects or encumbrances that have had or would reasonably be expected to
have a DA Xxxxx Xxxxxxxx Adverse Effect or to interfere in any material
respect with the present use and enjoyment of such property or interests.
As of the date
25
of this Agreement, all such personal property is in reasonably good
operating condition and repair as required for use in the businesses of DA,
the DA Subsidiaries and the Other Subsidiaries (ordinary wear and tear
excepted), is reasonably suitable for the use to which the same is
customarily put by DA, any DA Subsidiary or any Other Subsidiary and is free
from defects except where there would not be an MAS Material Adverse Effect.
4.25. Labor Matters. Except as set forth on the DA Disclosure Schedule,
-------------
none of DA, any DA Subsidiary or any of the Other Subsidiaries has any material
obligations, contingent or otherwise, under any employment, severance or
consulting agreement, any collective bargaining agreement or any other
contract with a labor union or other labor or employee group. To the
knowledge of ADSX, as of the date of this Agreement, there are no
negotiations, demands or proposals which are presently pending or overtly
threatened by or on behalf of any labor union with respect to the unionizing
of employees of DA, any DA Subsidiary or any Other Subsidiary. As of the
date of this Agreement, there is no unfair labor practice complaint against
DA, any DA Subsidiary or any Other Subsidiary pending or, to the knowledge
of ADSX, threatened before the National Labor Relations Board or comparable
agency, no unresolved grievance against DA, any DA Subsidiary or any Other
Subsidiary, no collective bargaining agreement which is currently being
negotiated by DA, any DA Subsidiary or any Other Subsidiary, and none of DA,
any DA Subsidiary or any Other Subsidiary is experiencing any work stoppage,
strike, slowdown or other labor difficulty which, in each case, would
reasonably be expected to have a DA Xxxxx Xxxxxxxx Adverse Effect. As of the
date of this Agreement, no employee has informed ADSX, DA, any DA Subsidiary
or any Other Subsidiary of his or her intention to terminate his or her
employment with DA, any DA Subsidiary or any Other Subsidiary as a result of
any announcement or consummation of the transactions contemplated by this
Agreement. ADSX shall promptly notify, and shall cause DA, the DA
Subsidiaries and the Other Subsidiaries to promptly notify, MAS upon
knowledge by ADSX, DA, the DA Subsidiaries or the Other Subsidiaries of the
occurrence after the date hereof of any matter referenced in this Section
4.25.
4.26. Insurance. The DA Disclosure Schedule lists each policy of
---------
insurance which DA, each of the DA Subsidiaries and each of the Other
Subsidiaries has obtained and maintains. As of the date of this Agreement,
none of DA, any DA Subsidiary or any or the Other Subsidiaries has received
notice of default under, or intended cancellation or nonrenewal of, any of
such policies of insurance. None of DA, any DA Subsidiary or any Other
Subsidiary has been refused any insurance for any material coverage by an
insurance carrier to which it has applied for such insurance coverage.
4.27. Disclosure. No representation or warranty of ADSX herein and no
----------
information contained or referenced in the DA Disclosure Schedule or in any
other document subsequently delivered by ADSX to MAS pursuant hereto, to the
extent it relates to reflects the assets, liabilities or operations of DA or
the Other Subsidiaries, contains or will contain, when such statement was
made or when such information or document was delivered, any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make any statement contained herein or therein, when
such statement was made or when such information or document was delivered,
not misleading.
26
ARTICLE V.
ADDITIONAL COVENANTS OF MAS
---------------------------
MAS covenants and agrees as follows:
5.1. Conduct of Business of MAS and the MAS Subsidiaries. Except as
---------------------------------------------------
expressly contemplated by this Agreement, disclosed in the MAS Securities
Filings filed as of the date hereof or set forth in the MAS Disclosure
Schedule, during the period from the date of this Agreement to the Effective
Time, MAS shall conduct, and it shall cause the MAS Subsidiaries to conduct,
its or their respective businesses in the ordinary course and consistent
with past practice, subject to the limitations contained in this Agreement,
and MAS shall, and it shall cause the MAS Subsidiaries to, use its or their
respective reasonable best efforts to preserve intact its or their
respective business organizations, to keep available the services of its or
their respective officers, agents and employees and to maintain satisfactory
relationships with all persons with whom any of them does business. Without
limiting the generality of the foregoing, and except as otherwise expressly
provided in this Agreement, after the date of this Agreement and prior to
the Effective Time, neither MAS nor any MAS Subsidiary will, without the
prior written consent of ADSX:
(i) amend or propose to amend its Articles or Certificate of
Incorporation or Bylaws (or comparable governing instruments) in any
material respect;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose of
or propose to issue, grant, sell, pledge or dispose of any shares of, or
any options, warrants, commitments, subscriptions or rights of any kind
to acquire or sell any shares of, the capital stock or other securities
of MAS or any MAS Subsidiary including, but not limited to, any
securities convertible into or exchangeable for shares of capital stock
of any class of MAS or any MAS Subsidiary, except for the issuance of
shares of MAS Common Stock pursuant to the exercise of MAS Options
outstanding on the date of this Agreement in accordance with their
present terms and except for the granting of options pursuant to
Section 5.9;
(iii) split, combine or reclassify any shares of its capital stock
or declare, pay or set aside any dividend or other distribution (whether
in cash, stock or property or any combination thereof) in respect of
its capital stock, or redeem, purchase or otherwise acquire or offer to
acquire any shares of its capital stock or other securities;
(iv) other than in the ordinary course of business consistent with
past practice, (a) create, incur or assume any debt or obligations in
respect of capital leases, except refinancings of existing obligations
on terms and conditions prevailing in the market; (b) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, indirectly, contingently or otherwise) for the obligations of
any person; (c) make any capital expenditures or make any loans,
advances or capital contributions to, or investments in, any other
person (other than customary travel, relocation or business advances to
employees); (d) acquire the stock or assets of, or merge or consolidate
with, any other person; (e) voluntarily incur any material liability or
obligation (absolute,
27
accrued, contingent or otherwise); or (f) sell, transfer, mortgage,
pledge or otherwise dispose of, or encumber, or agree to sell, transfer,
mortgage, pledge or otherwise dispose of or encumber, any assets or
properties, real, personal or mixed material to MAS and the MAS
Subsidiaries taken as a whole other than to secure debt permitted under
(a) of this clause (iv), and except for transfers made for fair and
adequate consideration;
(v) increase in any manner the compensation of any of its officers
or employees or enter into, establish, amend or terminate any employment,
consulting, retention, change in control, collective bargaining, bonus
or other incentive compensation, profit sharing, health or other
welfare, stock option or other equity, pension, retirement, vacation,
severance, deferred compensation or other compensation or benefit plan,
policy, agreement, trust, fund or arrangement with, for or in respect
of, any stockholder, officer, director, other employee, agent,
consultant or affiliate other than (a) as required pursuant to the
terms of agreements in effect on the date of this Agreement or (b) with
respect to non-officer employees, such as are in the ordinary course of
business consistent with past practice.
(vi) enter into any lease or amend any lease of real property other
than in the ordinary course of business consistent with past practice;
(vii) make or rescind any express or deemed election relating to
Taxes of MAS, unless required to do so by applicable Law;
(viii) settle or compromise any Tax liability of MAS or agree to an
extension of a statute of limitations with respect to the assessment or
determination of Taxes;
(ix) file or cause to be filed any amended Tax Return with respect
to MAS or any MAS Subsidiaries or file or cause to be filed any claim
for refund of Taxes paid by or on behalf of MAS or any MAS Subsidiaries;
(x) prepare or file any Tax Return of MAS inconsistent with past
practice in preparing or filing similar Tax Returns in prior periods
or, on any such Tax Return, take any position, make any election, or
adopt any method that is inconsistent with positions taken, elections
made or methods used in preparing or filing similar Tax Returns in
prior periods, in each case except to the extent required by Law; or
(xi) enter into any Contract, arrangement or transaction or take
any action other than in the ordinary course of business or as otherwise
set forth above in (i) - (x) of this section 5.1, which results in an
obligation to pay or in the creation of a liability for an amount in
excess of $25,000 or which may not be terminated, without additional
liability, within six months.
Furthermore, MAS covenants that from and after the date of this
Agreement, unless ADSX shall otherwise expressly consent in writing, MAS
shall, and MAS shall cause each of the MAS Subsidiaries to, use its or
their reasonable business efforts to comply in all material respects
with all Laws applicable to it or any of its properties, assets or
28
business and maintain in full force and effect all material permits,
certificates, licenses, approvals, tariffs and other authorizations
necessary for, or otherwise material to, such business.
5.2. Notification of Certain Matters. MAS shall give prompt notice to
-------------------------------
ADSX if any of the following occurs after the date of this Agreement:
(i) any notice of, or other communication relating to, a material default or
Event which, with notice or lapse of time or both, would become a material
default under any MAS Material Contract; (ii) receipt of any notice or other
communication in writing from any third party alleging that the Consent of
such third party is or may be required in connection with the transactions
contemplated by this Agreement, other than a Consent disclosed pursuant to
Section 3.5 or 3.6 above or not required to be disclosed pursuant to the
terms thereof; (iii) receipt of any material notice or other communication
from the AMEX or any Governmental Authority (including, but not limited to,
SEC) in connection with the transactions contemplated by this Agreement;
(iv) the occurrence of an Event which would reasonably be expected to have
an MAS Material Adverse Effect; and (v) the commencement or threat of any
Litigation involving or affecting MAS or any MAS Subsidiary, or any of their
respective properties or assets, or, to its knowledge, any employee, agent,
director or officer of MAS or any MAS Subsidiary, in his or her capacity as
such or as a fiduciary under a Benefit Plan of MAS, which, if pending on the
date hereof, would have been required to have been disclosed in or pursuant
to this Agreement or which relates to the consummation of the Merger, or any
material development in connection with any Litigation disclosed by MAS in
or pursuant to this Agreement or the MAS Securities Filings.
5.3. Access and Information. Between the date of this Agreement and the
----------------------
Effective Time, MAS will give, and will cause each of the MAS Subsidiaries
to give, and shall direct its financial advisors, accountants and legal
counsel to give, upon reasonable notice, ADSX, its lenders, financial
advisors, accountants and legal counsel and their respective authorized
representatives at all reasonable times access to all offices and other
facilities and to all contracts, agreements, commitments, books and records
of or pertaining to MAS and the MAS Subsidiaries, will permit the foregoing
to make such reasonable inspections as they may require and will cause its
officers promptly to furnish ADSX with (a) such financial and operating data
and other information with respect to the business and properties of MAS and
the MAS Subsidiaries as ADSX may from time to time reasonably request,
including, but not limited to, data and information required for ADSX
securities law filings, and (b) a copy of each material report, schedule and
other document filed or received by MAS or any of the MAS Subsidiaries
pursuant to the requirements of applicable securities laws or the AMEX.
5.4. Stockholder Approval. As soon as practicable, MAS, as the sole
--------------------
stockholder of Acquisition Subsidiary, will approve the MAS Charter
Amendment, this Agreement and the transactions contemplated hereby including
the Merger, and duly call, give notice of, convene and hold a meeting of MAS
stockholders (the "MAS Stockholders Meeting") for the purpose of voting on
------------------------
the MAS Charter Amendment and this Agreement and the transactions
contemplated hereby including the Merger (the "MAS Proposals"). Except as
-------------
otherwise contemplated by this Agreement and subject to the exercise of its
fiduciary duties, the Board of Directors of MAS (i) will recommend to the
stockholders of MAS that they approve the MAS Proposals, and
29
(ii) will use its reasonable best efforts to solicit proxies to obtain such
approval in accordance with the terms hereof.
5.5. Reasonable Best Efforts. Subject to the terms and conditions herein
-----------------------
provided, each of MAS and Acquisition Subsidiary agree to use its reasonable
best efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the Merger, the Contribution and the
other transactions contemplated by this Agreement including, but not limited
to (i) obtaining any third party Consent required in connection with the
execution and delivery by MAS of this Agreement or the consummation by MAS
of the transactions contemplated hereby and (ii) obtaining all Consents from
Governmental Authorities required for the consummation of the Merger and the
transactions contemplated hereby. Upon the terms and subject to the
conditions hereof, MAS agrees to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions of the Closing set forth herein.
5.6. Public Announcements. So long as this Agreement is in effect, MAS
--------------------
shall not, and shall cause the MAS Subsidiaries and affiliates not to, issue
or cause the publication of any press release or any other announcement with
respect to the MAS Proposals, or the transactions contemplated by this
Agreement without the consent of ADSX which shall not be unreasonably
withheld, conditioned or delayed, except when such release or announcement
is required by applicable Law or any applicable listing agreement with, or
rules or regulations of, the AMEX or SEC, in which case MAS, to the extent
practicable, prior to making such announcement, shall consult with ADSX
regarding the same.
5.7. Compliance. In consummating the Merger, the Contribution and the
----------
transactions contemplated hereby, MAS shall comply, and/or cause the MAS
Subsidiaries to comply or to be in compliance, in all material respects,
with all applicable Laws.
5.8. Tax Treatment. MAS shall use its reasonable best efforts to cause
-------------
the Merger to qualify as, and will not take any action which to its
knowledge could reasonably be expected to prevent the Merger from qualifying
as a reorganization under Section 368(a) of the Code and to cause the
Contribution to qualify as, and will not take any action which to its
knowledge could reasonably be expected to prevent the Contribution from
qualifying under Section 351(a) of the Code. Prior to the Effective Time,
MAS shall provide tax counsel to MAS and ADSX rendering an opinion under
Section 8.1.6 below with such certificates concerning such factual matters
as such counsel identifies are relevant to its opinion and will use its
reasonable best efforts to obtain such a certificate from any stockholder of
MAS identified by such counsel.
5.9. MAS Benefit Plans. Between the date of this Agreement and through
-----------------
the Effective Time, no discretionary award or grant under any Benefit Plan of
MAS or an MAS Subsidiary shall be made without the consent of ADSX, except
options for shares of MAS Common Stock (with exercise prices at or above the
fair market value of the underlying shares of MAS Common Stock on the date
of grant and as disclosed in writing to ADSX) granted to employees of MAS
hired on or after the date of this Agreement in the ordinary course of
business consistent with past practice as heretofore disclosed to ADSX; nor
shall MAS or any MAS
30
Subsidiary take any action or permit any action to be taken to accelerate
the vesting of any warrants or options previously granted pursuant to any
such Benefit Plan except as specifically required pursuant to the terms
thereof as in effect on the date of this Agreement. Neither MAS nor any MAS
Subsidiary shall make any amendment to any Benefit Plan or any awards
thereunder without the consent of ADSX, which consent shall not be
unreasonably withheld, conditioned or delayed.
5.10. No Solicitation of Acquisition Proposal. (a) MAS and Acquisition
---------------------------------------
Subsidiary shall not, directly or indirectly, take any action to
(1) encourage (including by way of furnishing nonpublic information),
solicit, initiate or facilitate any MAS Acquisition Proposal (as defined in
subsection (c) hereof), (2) enter into any agreement with respect to any MAS
Acquisition Proposal or (3) participate in any way in discussions or
negotiations with, or furnish any information to, any person in connection
with, or take any other action to facilitate any inquiries or the making of
any proposal that constitutes, or could reasonably be expected to lead to,
any MAS Acquisition Proposal; provided, however, that if the Board of
Directors of MAS determines in good faith, after consultation with outside
counsel, that it is necessary to do so to discharge properly its fiduciary
duties to stockholders, MAS may, in response to an MAS Acquisition Proposal
that such Board determines in good faith is reasonably likely to result in
an MAS Superior Proposal (as defined in subsection (c) hereof), and subject
to such party's compliance with subsection (b) hereof, (A) furnish
information with respect to MAS to the person making such MAS Acquisition
Proposal pursuant to a customary confidentiality agreement the terms of
which are no more favorable to the other party to such confidentiality
agreement than those in place with ADSX and (B) participate in discussions
with respect to such MAS Acquisition Proposal. It is expressly understood
and agreed that with respect to the foregoing proviso, the legal and
financial advisors of MAS shall be able to make inquiries, and engage in
discussions, with any party that has made an MAS Acquisition Proposal (and
such party's legal and financial advisors) in order to elicit information to
allow the Board of Directors of MAS to determine in good faith if such MAS
Acquisition Proposal is reasonably likely to result in an MAS Superior
Proposal.
(b) MAS and Acquisition Subsidiary will as promptly as practicable
communicate to ADSX any inquiry received by it relating to any potential MAS
Acquisition Proposal and the material terms of any proposal or inquiry,
including the identity of the person and its affiliates making the same,
that it may receive in respect of any such transaction, or of any such
information requested from it or of any such negotiations or discussions
being sought to be initiated with it.
(c) "MAS Acquisition Proposal" means any offer or proposal concerning
------------------------
any (1) merger, consolidation, business combination, or similar transaction
involving MAS, (2) sale, lease or other disposition of assets of MAS
representing 20% or more of the consolidated assets of MAS and the MAS
Subsidiaries, (3) issuance, sale, or other disposition of (including by way
of merger, consolidation, business combination, share exchange, joint
venture, or any similar transaction) securities (or options, rights or
warrants to purchase, or securities convertible into or exchangeable for,
such securities) representing 20% or more of the voting power of MAS or
(4) transaction in which any person shall acquire beneficial ownership (as
such term is defined in Rule 13d-3 under the Exchange Act), or the right to
acquire beneficial ownership or any "group" (as such term is defined under
the Exchange Act) that shall have been formed which beneficially
31
owns or has the right to acquire beneficial ownership of, 20% or more of the
outstanding voting capital stock of MAS. "MAS Superior Proposal" means a
---------------------
bona fide MAS Acquisition Proposal made by a third party which was not
solicited by MAS, its subsidiaries, representatives or other affiliates and
which, in the good faith judgment of the Board of Directors of MAS, taking
into account, to the extent deemed appropriate by the Board of Directors of
MAS, the various legal, financial and regulatory aspects of the proposal and
the person making such proposal (A) if accepted, is reasonably likely to be
consummated, and (B) if consummated, is reasonably likely to result in a
transaction that is more favorable to the stockholders of MAS, from a
financial point of view, than the transactions contemplated by this
Agreement.
(d) If the MAS Board of Directors is prepared to accept an MAS
Superior Proposal, then MAS shall give ADSX 48 hours notice that MAS is
prepared to accept the MAS Superior Proposal, provided that MAS may not
definitively accept an MAS Superior Proposal unless MAS concurrently
therewith terminates this Agreement pursuant to Section 9.1(f).
5.11. SEC and Stockholder Filings. MAS shall, within a reasonable time,
---------------------------
send to ADSX a copy of all public reports sent to its stockholders, the SEC
or any state or foreign securities commission.
5.12. Takeover Statutes. If any "business combination," "fair price,"
-----------------
"moratorium," "capital share acquisition" or similar takeover statute or
regulation under applicable law (each a "Takeover Statute") is or may become
----------------
applicable to this Agreement and the transactions contemplated by this
Agreement, including the Merger and the Contribution, MAS and its Board of
Directors will, to the extent consistent with its fiduciary duties, grant
such approvals and will take such other actions as are necessary so that the
Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated hereby and
will otherwise act to eliminate or minimize the effects of any Takeover
Statute on the Merger and any of the transactions contemplated hereby.
5.13. Comfort Letters. Upon the request of ADSX, MAS shall use its
---------------
reasonable best efforts to provide to ADSX on or prior to the Closing Date
"comfort letters" from the independent certified public accountants for MAS
dated the Closing Date, addressed to the Board of Directors of each of MAS
and ADSX, covering such matters as ADSX shall reasonably request with
respect to facts concerning the financial condition of MAS and the MAS
Subsidiaries as are customary for certified public accountants to deliver in
connection with a transaction similar to the Merger.
5.14. MAS Charter Amendment. Immediately prior to or at the Effective
---------------------
Time, MAS shall file the MAS Charter Amendment with the Secretary of State
of the State of Delaware. As of the Effective Time MAS, shall have reserved,
free from preemptive rights, out of its authorized but unissued shares of MAS
Common Stock, for the purpose of effecting the conversion of the issued and
outstanding shares of DA Common Stock into the Transaction Consideration
pursuant to this Agreement, sufficient shares of MAS Common Stock to provide
for such conversion and for the exercise of all New MAS Options issued
pursuant to this Agreement.
32
ARTICLE VI
ADDITIONAL COVENANTS OF ADSX
ADSX covenants and agrees as follows:
6.1. Conduct of Business of DA, the DA Subsidiaries and the Other
------------------------------------------------------------
Subsidiaries. Except as expressly contemplated by this Agreement, disclosed
------------
in the ADSX Securities Filings filed as of the date hereof or set forth in
the DA Disclosure Schedule, during the period from the date of this
Agreement to the Effective Time, DA shall conduct, and it shall cause the DA
Subsidiaries to conduct, the Other Subsidiaries shall conduct, and ADSX
shall cause each of them to conduct, its or their respective businesses in
the ordinary course and consistent with past practice, subject to the
limitations contained in this Agreement, and DA shall, and it shall cause
the DA Subsidiaries to, the Other Subsidiaries shall, and ADSX shall cause
all of them to, use its or their respective reasonable best efforts to
preserve intact its or their respective business organizations, to keep
available the services of its or their respective officers, agents and
employees and to maintain satisfactory relationships with all persons with
whom any of them does business. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement,
after the date of this Agreement and prior to the Effective Time, none of
DA, any DA Subsidiary or any Other Subsidiary will, without the prior
written consent of MAS:
(i) amend or propose to amend its Articles or Certificate of
Incorporation or Bylaws (or comparable governing instruments) in any
material respect;
(ii) authorize for issuance, issue, grant, sell, pledge, dispose
of or propose to issue, grant, sell, pledge or dispose of any shares of,
or any options, warrants, commitments, subscriptions or rights of any
kind to acquire or sell any shares of, the capital stock or other
securities of DA, any DA Subsidiary or any Other Subsidiary including,
but not limited to, any securities convertible into or exchangeable for
shares of capital stock of any class of DA, any DA Subsidiary or any
Other Subsidiary, except for the issuance of shares of DA Common Stock
or Other Subsidiaries Common Stock pursuant to the exercise of DA
Options or options to acquire any of the Other Subsidiaries Common
Stock outstanding on the date of this Agreement in accordance with
their present terms and except for the grant of options pursuant to
Section 6.8;
(iii) split, combine or reclassify any shares of its capital stock
or declare, pay or set aside any dividend or other distribution (whether
in cash, stock or property or any combination thereof) in respect of
its capital stock, other than dividends or distributions to DA, a DA
Subsidiary wholly owned by DA, or any of the Other Subsidiaries or
redeem, purchase or otherwise acquire or offer to acquire any shares of
its capital stock or other securities;
(iv) other than in the ordinary course of business consistent with
past practice, (a) create, incur or assume any debt or obligations in
respect of capital leases, except refinancings of existing obligations
on terms and conditions prevailing in the market; (b) assume,
guarantee, endorse or otherwise become liable or responsible (whether
33
directly, indirectly, contingently or otherwise) for the obligations of
any person; (c) make any capital expenditures or make any loans, advances
or capital contributions to, or investments in, any other person (other
than to a DA Subsidiary or any Other Subsidiary and customary travel,
relocation or business advances to employees); (d) acquire the stock or
assets of, or merge or consolidate with, any other person;
(e) voluntarily incur any material liability or obligation (absolute,
accrued, contingent or otherwise); or (f) sell, transfer, mortgage,
pledge or otherwise dispose of, or encumber, or agree to sell,
transfer, mortgage, pledge or otherwise dispose of or encumber, any
assets or properties, real, personal or mixed material to DA and the DA
Subsidiaries and Other Subsidiaries taken as a whole other than to
secure debt permitted under (a) of this clause (iv), and except for
transfers made for fair and adequate consideration;
(v) increase in any manner the compensation of any of its
officers or employees or enter into, establish, amend or terminate any
employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit sharing,
health or other welfare, stock option or other equity, pension,
retirement, vacation, severance, deferred compensation or other
compensation or benefit plan, policy, agreement, trust, fund or
arrangement with, for or in respect of, any stockholder, officer,
director, other employee, agent, consultant or affiliate other than
(a) as required pursuant to the terms of agreements in effect on the date
of this Agreement, (b) with respect to non-officer employees, such as
are in the ordinary course of business consistent with past practice,
or (c) in connection with the acquisition by DA or any of the Other
Subsidiaries of another company or business.
(vi) enter into any lease or amend any lease of real property
other than in the ordinary course of business consistent with past
practice;
(vii) make or rescind any express or deemed election relating to
Taxes of DA or any of the Other Subsidiaries, unless required to do
so by applicable Law;
(viii) settle or compromise any Tax liability of DA or the Other
Subsidiaries or agree to an extension of a statute of limitations with
respect to the assessment or determination of Taxes;
(ix) file or cause to be filed any amended Tax Return with respect
to DA or any of the DA Subsidiaries or any of the Other Subsidiaries
or file or cause to be filed any claim for refund of Taxes paid by or
on behalf of DA, any of the DA Subsidiaries or any of the Other
Subsidiaries;
(x) prepare or file any Tax Return of DA, any DA Subsidiary or any
Other Subsidiary inconsistent with past practice in preparing or filing
similar Tax Returns in prior periods or, on any such Tax Return, take any
position, make any election, or adopt any method that is inconsistent
with positions taken, elections made or methods used in preparing or
filing similar Tax Returns in prior periods, in each case except to the
extent required by Law; or
34
(xi) enter into any Contract, arrangement or transaction or take any
action other than in the ordinary course of business or as otherwise
set forth above in (i) - (x) of this section 6.1, which results in an
obligation to pay or in the creation of a liability for an amount in
excess of $50,000 or which may not be terminated, without additional
liability, within six months.
Furthermore, ADSX covenants that from and after the date of this
Agreement, unless MAS shall otherwise expressly consent in writing, DA
shall, and DA shall cause each of the DA Subsidiaries to, the Other
Subsidiaries shall, and ADSX shall cause each of the them to, use its
or their reasonable business efforts to comply in all material respects
with all Laws applicable to it or any of its properties, assets or
business and maintain in full force and effect all material permits,
certificates, licenses, approvals, tariffs and other authorizations
necessary for, or otherwise material to, such business.
6.2. Notification of Certain Matters. ADSX shall give prompt notice to
-------------------------------
MAS if any of the following occurs after the date of this Agreement: (i) any
notice of, or other communication relating to, a material default or Event
which, with notice or lapse of time or both, would become a material default
under any DA Xxxxx Xxxxxxxx Contract; (ii) receipt of any notice or other
communication in writing from any third party alleging that the Consent of
such third party is or may be required in connection with the transactions
contemplated by this Agreement, other than a Consent disclosed pursuant to
Section 5.5 or 5.6 above or not required to be disclosed pursuant to the
terms thereof; (iii) receipt of any material notice or other communication
from the National Association of Securities Dealers or any Governmental
Authority (including, but not limited to, the SEC) in connection with the
transactions contemplated by this Agreement; (iv) the occurrence of an Event
which would reasonably be expected to have a DA Xxxxx Xxxxxxxx Adverse
Effect; and (v) the commencement or threat of any Litigation involving or
affecting DA, any DA Subsidiary or any Other Subsidiary, or any of their
respective properties or assets, or, to the knowledge of ADSX, any employee,
agent, director or officer of DA, any DA Subsidiary or any Other Subsidiary,
in his or her capacity as such or as a fiduciary under such Benefit Plan,
which, if pending on the date hereof, would have been required to have been
disclosed in or pursuant to this Agreement or which relates to the
consummation of the Merger and the Contribution, or any material development
in connection with any Litigation relating to DA, the DA Subsidiaries or any
of the Other Subsidiaries disclosed by ADSX or DA in or pursuant to this
Agreement or the ADSX Securities Filings.
6.3. Access and Information. Between the date of this Agreement and the
----------------------
Effective Time, ADSX will give, and will cause each of DA, the DA
Subsidiaries and the Other Subsidiaries to give, and shall direct its
financial advisors, accountants and legal counsel to give, upon reasonable
notice, MAS, its lenders, financial advisors, accountants and legal counsel
and their respective authorized representatives at all reasonable times
access to all offices and other facilities and to all contracts, agreements,
commitments, books and records of or pertaining to DA, the DA Subsidiaries
and the Other Subsidiaries, will permit the foregoing to make such
reasonable inspections as they may require and will cause its officers
promptly to furnish DA with (a) such financial and operating data and other
information with respect to the business and properties of DA, the DA
Subsidiaries and the Other Subsidiaries as MAS may from time to time
reasonably request, and (b) a copy of each material report, schedule and
other document filed or
35
received by DA, any of the DA Subsidiaries or any Other Subsidiary pursuant
to the requirements of applicable securities laws. The foregoing access will
be subject to restrictions contained in confidentiality agreements to which
DA, DA's Subsidiaries and the Other Subsidiaries are subject; provided that
they shall use reasonable best efforts to obtain waivers of such
restrictions.
6.4. Reasonable Best Efforts. Subject to the terms and conditions herein
-----------------------
provided, each of ADSX and DA agree to use its reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the Merger and the other transactions contemplated
by this Agreement including, but not limited to (i) obtaining any third
party Consent required in connection with the execution and delivery by DA
of this Agreement or the consummation by DA of the transactions contemplated
hereby and (ii) obtaining all Consents from Governmental Authorities
required for the consummation of the Merger and the transactions
contemplated hereby. Upon the terms and subject to the conditions hereof,
ADSX and DA agree to use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary to
satisfy the other conditions of the Closing set forth herein.
6.5. Public Announcements. So long as this Agreement is in effect,
--------------------
ADSX and DA shall not, and shall cause their affiliates not to, issue or
cause the publication of any press release or any other announcement with
respect to the MAS Proposals or the transactions contemplated by this
Agreement without the consent of MAS which shall not be unreasonably
withheld, conditioned or delayed, except when such release or announcement
is required by applicable Law or any applicable listing agreement with, or
rules or regulations of, the NASD or the SEC, in which case ADSX, to the
extent practicable, prior to making such announcement, shall consult with
MAS regarding the same.
6.6. Compliance. In consummating the Merger and the transactions
----------
contemplated hereby, ADSX shall comply and/or cause DA, the DA Subsidiaries
and the Other Subsidiaries to comply or to be in compliance, in all material
respects, with all applicable Laws.
6.7. Tax Treatment. ADSX shall use its reasonable best efforts to cause
-------------
the Merger to qualify as, and will not take any action which to its
knowledge could reasonably be expected to prevent the Merger from qualifying
as a reorganization under Section 368(a) of the Code and to cause the
Contribution to qualify as, and will not take any action which to its
knowledge could reasonably be expected to prevent the Contribution from
qualifying under Section 351(a) of the Code. Prior to the Effective Time,
ADSX shall provide tax counsel to MAS and ADSX rendering an opinion under
Section 8.1.6 below with such certificates concerning such factual matters
as such counsel identifies are relevant to its opinion and will use its
reasonable best efforts to obtain such a certificate from any stockholder of
ADSX identified by such counsel.
6.8. DA Benefit Plans. Between the date of this Agreement and through
----------------
the Effective Time, no discretionary award or grant under any Benefit Plan
of DA, a DA Subsidiary or any Other Subsidiary shall be made without the
consent of MAS, except options for shares of DA Common Stock or the Other
Subsidiaries Common Stock (with exercise prices at or above the fair market
value of the underlying shares on the date of grant and as disclosed to MAS
in writing) granted to employees of DA or the Other Subsidiary hired on or
after the date of this
36
Agreement in the ordinary course of business consistent with past practice
as heretofore disclosed to MAS; nor shall DA, a DA Subsidiary or any of the
Other Subsidiaries take any action or permit any action to be taken to
accelerate the vesting of any warrants or options previously granted
pursuant to any such Benefit Plan except as specifically required pursuant
to the terms thereof as in effect on the date of this Agreement. Neither DA,
any DA Subsidiary nor any of the Other Subsidiaries shall make any amendment
to any Benefit Plan or any awards thereunder without the consent of MAS,
which consent shall not be unreasonably withheld, conditioned or delayed.
6.9. No Solicitation of Acquisition Proposal.
---------------------------------------
(a) ADSX and DA shall not, directly or indirectly, take any action to
(1) encourage (including by way of furnishing nonpublic information), solicit,
initiate or facilitate any DA Acquisition Proposal (as defined in subsection
(c) of this Section), (2) enter into any agreement with respect to any DA
Acquisition Proposal or (3) participate in any way in discussions or
negotiations with, or furnish any information to, any person in connection
with, or take any other action to facilitate any inquiries or the making of
any proposal that constitutes, or could reasonably be expected to lead to,
any DA Acquisition Proposal; provided, however, that if the Board of
Directors of ADSX determines in good faith, after consultation with outside
counsel, that it is necessary to do so to discharge properly its fiduciary
duties to stockholders, ADSX or DA may, in response to a DA Acquisition
Proposal that such Board determines in good faith is reasonably likely to
result in a DA Superior Proposal (as defined in subsection (c) of this
Section), and subject to such party's compliance with subsection (b) of this
Section, (A) furnish information with respect to DA or any of the Other
Subsidiaries to the person making such DA Acquisition Proposal pursuant to a
customary confidentiality agreement the terms of which are no more favorable
to the other party to such confidentiality agreement than those in place
with MAS and (B) participate in discussions with respect to such DA
Acquisition Proposal. It is expressly understood and agreed that with
respect to the foregoing proviso, ADSX's and DA's legal and financial
advisors shall be able to make inquiries, and engage in discussions, with
any party that has made a DA Acquisition Proposal (and such party's legal
and financial advisors) in order to elicit information to allow the Board of
Directors of ADSX and DA to determine in good faith if such DA Acquisition
Proposal is reasonably likely to result in a DA Superior Proposal.
(b) ADSX will as promptly as practicable communicate to MAS any inquiry
received by it relating to any potential DA Acquisition Proposal and the
material terms of any proposal or inquiry, including the identity of the
person and its affiliates making the same, that it may receive in respect of
any such transaction, or of any such information requested from it or of any
such negotiations or discussions being sought to be initiated with it.
(c) "DA Acquisition Proposal" means any offer or proposal concerning
-----------------------
any (1) merger, consolidation, business combination, or similar transaction
involving DA or any Other Subsidiary, (2) sale, lease or other disposition
of assets of DA or any Other Subsidiary representing 20% or more of the
consolidated assets of DA, the DA Subsidiaries and the Other Subsidiaries,
taken as a whole, (3) issuance, sale, or other disposition of (including by
way of merger, consolidation, business combination, share exchange, joint
venture, or any similar
37
transaction) securities (or options, rights or warrants to purchase, or
securities convertible into or exchangeable for, such securities)
representing 20% or more of the voting power of DA, any DA Subsidiaries or
any Other Subsidiary or (4) transaction in which any person shall acquire
beneficial ownership (as such term is defined in Rule 13d-3 under the
Exchange Act), or the right to acquire beneficial ownership or any "group"
(as such term is defined under the Exchange Act) that shall have been formed
which beneficially owns or has the right to acquire beneficial ownership of,
20% or more of the outstanding voting capital stock of DA, any DA Subsidiary
or any Other Subsidiary. "DA Superior Proposal" means a bona fide DA
--------------------
Acquisition Proposal made by a third party which was not solicited by ADSX,
its subsidiaries, representatives or other affiliates and which, in the good
faith judgment of ADSX's Board of Directors, taking into account, to the
extent deemed appropriate by ADSX's Board of Directors, the various legal,
financial and regulatory aspects of the proposal and the person making such
proposal (A) if accepted, is reasonably likely to be consummated, and (B) if
consummated, is reasonably likely to result in a transaction that is more
favorable to the applicable stockholders, from a financial point of view,
than the transactions contemplated by this Agreement.
(d) If the ADSX Board of Directors is prepared to accept a DA Superior
Proposal, then ADSX shall give MAS 48 hours notice that ADSX is prepared to
accept the DA Superior Proposal, provided that ADSX may not definitively
accept a DA Superior Proposal unless ADSX concurrently therewith terminates
this Agreement pursuant to Section 9.1(f).
6.11. SEC and Stockholder Filings. ADSX shall, within a reasonable time,
---------------------------
send to MAS a copy of all public reports sent to its stockholders, the SEC
or any state or foreign securities commission.
6.12. Takeover Statutes. If any Takeover Statute is or may become
-----------------
applicable to this Agreement and the transactions contemplated by this
Agreement, including the Merger and the Contribution, ADSX and its Board of
Directors will, to the extent consistent with its fiduciary duties, grant
such approvals and will take such other actions as are necessary so that the
Merger, the Contribution and the other transactions contemplated by this
Agreement may be consummated as promptly as practicable on the terms
contemplated hereby and will otherwise act to eliminate or minimize the
effects of any Takeover Statute on the Merger and any of the transactions
contemplated hereby.
6.13. Comfort Letters. Upon the request of MAS, ADSX shall use its
---------------
reasonable best efforts to provide to MAS on or prior to the Closing Date
"comfort letters" from the independent certified public accountants for
ADSX, dated the Closing Date, addressed to the Board of Directors of each of
MAS and ADSX, covering such matters as MAS shall reasonably request with
respect to facts concerning the financial condition of DA, the DA
Subsidiaries and the Other Subsidiaries as are customary for certified
public accountants to deliver in connection with a transaction similar to
the Merger.
6.14. Indemnification. To the extent that ADSX controls MAS, ADSX shall
---------------
cause MAS to insure and guaranty that the provisions with respect to
indemnification by MAS now existing in favor of any present or former
director, officer, employee or agent (and their respective heirs and
assigns) of MAS (the "Indemnified Parties"), as set forth in its charter or
-------------------
38
bylaws or pursuant to other agreements (including any insurance policies),
shall survive the Merger, shall not be amended, repealed or modified in any
manner as to adversely affect the rights of such Indemnified Parties and
shall continue in full force and effect for a period of at least six years
from the Effective Time. This Section 6.14 shall survive the closing of any
of the transactions contemplated hereby, is intended to benefit the officers
and employees of MAS at the Effective Time and each of the Indemnified
Parties (each of which shall be entitled to enforce this Section against
ADSX as a third-party beneficiary of this Agreement), and shall be binding
on all successors and assigns of ADSX.
ARTICLE VII.
PROXY STATEMENT
---------------
ADSX and MAS shall cooperate and promptly prepare and MAS shall file with
the SEC as soon as practicable a proxy statement with respect to the MAS
Stockholders Meeting (the "Proxy Statement"). The parties will cause the
---------------
Proxy Statement to comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder. MAS shall use all reasonable efforts, and ADSX will cooperate
with MAS, to have the Proxy Statement cleared by the SEC as promptly as
practicable. MAS shall, as promptly as practicable, provide copies of any
written comments received from the SEC with respect to the Proxy Statement
to ADSX and advise ADSX of any material oral comments with respect to the
Proxy Statement received from the SEC. MAS agrees that the Proxy Statement
and each amendment or supplement thereto at the time of mailing thereof and
at the time of the MAS Stockholders Meeting will not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the foregoing shall not apply to the extent that any such untrue
statement of a material fact or omission to state a material fact was made
by MAS in reliance upon and in conformity with written information
concerning ADSX furnished to MAS by ADSX specifically for use in the Proxy
Statement. ADSX agrees that the written information provided by it for
inclusion in the Proxy Statement and each amendment or supplement thereto,
at the time of mailing thereof and at the time of the MAS Stockholders
Meeting, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. The Proxy Statement and any amendments or supplements
thereto shall be approved by ADSX, which such approval shall not be
unreasonably withheld, conditioned or delayed. ADSX shall assist MAS in the
preparation of any pro forma financial statements required to be included in
the Proxy Statement. MAS will advise ADSX promptly of any request by the SEC
for amendment of the Proxy Statement or comments thereon and responses
thereto or requests by the SEC for additional information. Whenever any
event or condition affecting MAS or ADSX occurs that is required to be set
forth in an amendment or supplement to the Proxy Statement, such party will
promptly inform the other of such occurrence and cooperate in filing with
the SEC or any other Governmental Authority, and in mailing to stockholders
of MAS, such amendment or supplement.
39
ARTICLE VIII.
CONDITIONS
----------
8.1. Conditions to Each Party's Obligations. The respective obligations
--------------------------------------
of each party to effect the Merger and the Contribution shall be subject to
the fulfillment or waiver on or prior to the Closing Date of the following
conditions:
8.1.1. MAS Stockholder Approval. The MAS Charter Amendment, this
------------------------
Agreement and the transactions contemplated hereby including the Merger
shall have been approved at or prior to the Effective Time by the requisite
vote of the stockholders of MAS in accordance with the DGCL, the Amended and
Restated Certificate of Incorporation of MAS.
8.1.2. No Injunction or Action. No order, statute, rule, regulation,
-----------------------
executive order, stay, decree, judgment or injunction shall have been
enacted, entered, promulgated or enforced by any court or other Governmental
Authority, which prohibits or prevents the consummation of the Transaction
which has not been vacated, dismissed or withdrawn by the Effective Time.
ADSX and MAS shall use their reasonable best efforts to have any of the
foregoing vacated, dismissed or withdrawn on or prior to the Effective Time.
8.1.3. Governmental Approvals. All Consents of any Governmental
----------------------
Authority required for the consummation of the Merger and the Contribution
and the transactions contemplated by this Agreement shall have been obtained
by Final Order (as hereafter defined), except those the failure of which to
obtain will have neither an MAS Material Adverse Effect nor a DA Xxxxx
Xxxxxxxx Adverse Effect. The term "Final Order" with respect to any Consent
-----------
of a Governmental Authority shall mean an action by the appropriate
Governmental Authority as to which: (i) no request for stay by such
Governmental Authority of the action is pending, no such stay is in effect,
and, if any deadline for filing any such request is designated by statute or
regulation, it has passed; (ii) no petition for rehearing or reconsideration
of the action is pending before such Governmental Authority, and no appeal
or comparable administrative remedy with such or any other Governmental
Authority is pending before such Governmental Authority, and the time for
filing any such petition, appeal or administrative remedy has passed;
(iii) such Governmental Authority does not have the action under
reconsideration on its own motion and the time for such reconsideration has
passed; and (iv) no appeal to a court, or request for stay by a court, of the
Governmental Authority action is pending or in effect, and if any deadline
for filing any such appeal or request is designated by statute or rule, it
has passed.
8.1.4. Required Consents. Any required Consents of any person to
-----------------
the Merger or the Contribution or the transactions contemplated hereby as
described in Sections 3.5, 3.6, 3.14, 4.5, 4.6 and 4.14 shall have been
obtained and be in full force and effect, including, but not limited to,
(i) the filing of the Certificate of Merger and the MAS Charter Amendment with
the Secretary of State of the State of Delaware in accordance with the DGCL,
(ii) the filing of the definitive Proxy Statement with the SEC, (iii) the
filing of all necessary notices and applications as may be required under
the rules of the AMEX and the National Association of Securities Dealers,
(iv) Consents from or with Governmental Authorities set forth on the MAS
Disclosure Schedule, (v) Consents from or with Governmental Authorities set
forth on the DA Disclosure Schedule, (vi) the Consent substantially in the
form set forth in Exhibit C attached hereto relating
40
to the Second Amended and Restated Term and Revolving Credit Agreement dated
October 17, 2000, by and among IBM Credit Corporation, IBM Financing, ADSX
and Ground Effects, Ltd., as amended by Acknowledgment, Waiver and Amendment
No. 1 dated March 30, 2001, and (vii) the Consents required pursuant to the
contracts set forth in Schedule 4.14 to the DA Disclosure Schedule.
8.1.5. Tax Opinion. ADSX shall have received an opinion from its
-----------
tax counsel, in form and substance reasonably satisfactory to ADSX and on the
basis of facts, representations and assumptions set forth in such opinion,
substantially to the effect that the Merger and the Contribution will
qualify either as or both a reorganization within the meaning of Section
368(a) of the Code or as a contribution under Section 351(a) of the Code,
and MAS shall have received an opinion from its tax counsel, in form and
substance reasonably satisfactory to MAS and on the basis of facts,
representations and assumptions set forth in such opinion, substantially to
the effect that the Merger and the Contribution will qualify either as or
both a reorganization within the meaning of Section 368(a) of the Code or as
a contribution under Section 351(a) of the Code.
8.2. Conditions to Obligations of MAS and Acquisition Subsidiary. The
-----------------------------------------------------------
obligations of MAS and Acquisition Subsidiary to effect the Merger and the
Contribution shall be subject to the fulfillment on or prior to the Closing
Date of the following additional conditions, any one or more of which may be
waived by MAS:
8.2.1. ADSX Representation and Warranties. As of the Closing Date,
----------------------------------
none of the representations or warranties of ADSX contained in this
Agreement, disregarding any qualifications herein regarding materiality or
DA Xxxxx Xxxxxxxx Adverse Effect, shall be untrue or incorrect as of the
Closing Date, except to the extent such representations and warranties speak
as of an earlier date, to the extent that such untrue or incorrect
representations or warranties, when taken together as a whole, have had or
would reasonably be expected to have a DA Xxxxx Xxxxxxxx Adverse Effect.
8.2.2. Performance by ADSX and DA. ADSX and DA shall have performed
--------------------------
and complied with all of the covenants and agreements in all material respects
and satisfied in all material respects all of the conditions required by
this Agreement to be performed or complied with or satisfied by ADSX or DA
on or prior to the Closing Date.
8.2.3. Absence of Certain Liens. There shall be no liens or other
------------------------
encumbrances on the outstanding shares of the Other Subsidiaries or any of
the assets of DA securing indebtedness for money borrowed, including any
existing or successor credit facilities of any kind to any party, including
the IBM facility referred to in Section 8.1.4 above.
8.2.4. No Material Adverse Change. There shall not have occurred
--------------------------
after the date hereof any Event that has had or reasonably would be expected
to have a DA Xxxxx Xxxxxxxx Adverse Effect.
8.2.5. Certificates and other Deliveries. ADSX shall have delivered
---------------------------------
to MAS (i) a certificate executed on its behalf by its Chief Executive
Officer or its president and attested by any secretary or assistant
secretary to the effect that the conditions set forth in Subsections 8.2.1,
41
8.2.2 and 8.2.3, above, have been satisfied (ii) a certificate of good
standing from the Secretary of State of the State of Delaware stating that
DA is a validly existing corporation in good standing; (iii) duly adopted
resolutions of the Board of Directors of ADSX and DA and of ADSX as the sole
stockholder of DA approving the execution, delivery and performance of this
Agreement and the instruments contemplated herein, certified by the
Secretary or an Assistant Secretary of ADSX and (iv) certificates evidencing
the Other Subsidiaries Common Stock referred to in Section 1.1(b).
8.2.6. Opinion of ADSX Counsel. MAS shall have received a customary
-----------------------
opinion of counsel to ADSX, in form and substance reasonably satisfactory to
MAS.
8.2.7. Financial Opinion. Xxxxxx & Xxxxxx shall not have withdrawn,
-----------------
modified or revised its fairness opinion to the Special Committee of the
Board of Directors of MAS.
8.3. Conditions to Obligations of ADSX and DA. The obligations of ADSX
----------------------------------------
and DA to effect the Merger and the Contribution shall be subject to the
fulfillment on or prior to the Closing Date of the following additional
conditions, any one or more of which may be waived by ADSX:
8.3.1. MAS Representations and Warranties. As of the Closing Date,
----------------------------------
none of the representations or warranties of MAS contained in this
Agreement, disregarding any qualifications herein regarding materiality or
MAS Material Adverse Effect shall be untrue or incorrect as of the Closing
Date, except to the extent such representations and warranties speak as of
an earlier date, to the extent that such untrue or incorrect representations
or warranties, when taken together as a whole, have had or would reasonably
be expected to have an MAS Material Adverse Effect.
8.3.2. Performance by MAS and Acquisition Subsidiary. MAS and
---------------------------------------------
Acquisition Subsidiary shall have performed and complied with all the
covenants and agreements in all material respects and satisfied in all
material respects all the conditions required by this Agreement to be
performed or complied with or satisfied by MAS or Acquisition Subsidiary on
or prior to the Closing Date.
8.3.3. No Material Adverse Change. There shall have not occurred
--------------------------
after the date hereof any Event that has had or reasonably would be expected
to have an MAS Material Adverse Effect.
8.3.4. Certificates and Other Deliveries. MAS shall have delivered,
---------------------------------
or caused to be delivered, to ADSX (i) a certificate executed on its behalf
by Chief Executive Officer or its president and attested by any secretary or
assistant secretary to the effect that the conditions set forth in
Subsections 8.3.1, 8.3.2 and 8.3.3, above and 8.3.5 and 8.3.6 below, have
been satisfied; (ii) certificates of good standing from the Secretary of
State of the State of Delaware stating that MAS and Acquisition Subsidiary
are both validly existing corporations in good standing; (iii) duly adopted
resolutions of the Board of Directors of MAS and Acquisition Subsidiary
approving the execution, delivery and performance of this Agreement and the
instruments contemplated hereby and of the stockholders of MAS approving the
MAS Proposals, certified by the Secretary
42
or an Assistant Secretary of MAS; (iv) a true and complete copy of the
Amended and Restated Certificate of Incorporation of MAS (before the effect
of the MAS Charter Amendment) and Acquisition Subsidiary certified by the
Secretary of State of the State of Delaware, and a true and complete copy of
the Bylaws of MAS and Acquisition Subsidiary certified by the Secretary or
an Assistant Secretary of MAS; (v) one or more certificates evidencing the
MAS Common Stock referred to in Section 2.2 pursuant to the Merger, and
(vi) such other documents and instruments as ADSX reasonably may request.
8.3.5. Opinion of MAS Counsel. ADSX shall have received a customary
----------------------
opinion of counsel to MAS, in form and substance reasonably satisfactory to
ADSX.
8.3.6. Registration Rights Agreement. MAS shall have fully executed
-----------------------------
and delivered to ADSX the Registration Rights Agreement in the form attached
hereto as Exhibit D.
8.3.7. AMEX Listing. ADSX shall have received assurances from the
------------
American Stock Exchange ("AMEX") to its reasonable satisfaction that
following consummation of the Transaction shares of MAS common stock will
remain listed for trading on AMEX.
ARTICLE IX.
TERMINATION AND ABANDONMENT
---------------------------
9.1. Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time, whether before or after approval of this Agreement and the
Merger by the stockholders of MAS:
(a) by mutual consent of MAS and ADSX;
(b) (1) by MAS (provided that MAS is not then in material breach of any
representation, warranty, covenant or other agreement contained herein), if
there has been a breach by ADSX or DA of any of their representations,
warranties, covenants or agreements contained in this Agreement, or any such
representation and warranty shall have become untrue, in any such case such
that the conditions set forth in Section 8.2.1 or Section 8.2.2 will not be
satisfied and, in either such case, such breach or condition has not been
promptly cured within 30 days following receipt by ADSX of written notice of
such breach; (2) by ADSX (provided that ADSX is not then in material breach
of any representation, warranty, covenant or other agreement contained
herein), if there has been a breach by MAS or Acquisition Subsidiary of any
of its representations, warranties, covenants or agreements contained in
this Agreement, or any such representation and warranty shall have become
untrue, in any such case such that the conditions set forth in Section 8.3.1
or Section 8.3.2 will not be satisfied and such breach or condition has not
been promptly cured within 30 days following receipt by MAS of written
notice of such breach;
(c) by either ADSX or MAS if any decree, permanent injunction, judgment,
order or other action by any court of competent jurisdiction, any arbitrator
or any Governmental Authority preventing or prohibiting consummation of the
Merger shall have become final and
43
nonappealable (so long as the party seeking termination is not in breach of
Section 5.5 or Section 6.4 hereof);
(d) by either ADSX or MAS if the Merger and the Contribution shall not
have been consummated before the "End Date", which shall be April 30, 2002.
Notwithstanding the foregoing, a party shall not be permitted to terminate
this Agreement pursuant to this paragraph (d) if the failure of the Effective
Time to occur by the End Date shall be due to the failure of such party to
perform or observe in all material respects the covenants and agreements of
such party set forth herein.
(e) by either ADSX or MAS if the MAS Charter Amendment, this Agreement
and the transactions contemplated by this Agreement including the Merger shall
fail to receive the requisite vote for approval and adoption by the
stockholders of MAS at the MAS Stockholders Meeting or any adjournment or
postponement thereof; provided that the right to terminate this Agreement
under this Section 9.1(e) shall not be available to any party whose failure
to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of such approval to have been obtained;
(f) by either ADSX or MAS concurrently with its acceptance of a DA
Superior Proposal or an MAS Superior Proposal, as applicable;
(g) by either ADSX or MAS if the Board of Directors of the other shall
have withdrawn, or modified or changed, in a manner adverse to the other, its
approval or recommendation of the Merger and the Contribution; or
(h) by MAS at any time following 5:00 PM eastern standard time on
November 2, 2001, and prior to 5:00 PM on November 6, 2001, if either
(i) ADSX has not delivered the DA Disclosure Schedule by such time, or
(ii) upon review of the DA Disclosure Schedule and Exhibits, MAS is not,
for any reason, satisfied therewith.
9.2. Effect of Termination. (a) In the event of the termination of this
---------------------
Agreement by either MAS or ADSX pursuant to Section 9.1, this Agreement
shall forthwith become void, there shall be no liability under this
Agreement on the part of ADSX, DA, Acquisition Subsidiary or MAS, other than
the provisions of this Section 9.2, Section 10.1 and Section 10.7, and
except to the extent that such termination results from the material breach
by a party of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
ARTICLE X.
MISCELLANEOUS
-------------
10.1. Confidentiality. Unless (i) otherwise expressly provided in this
---------------
Agreement, (ii) required by applicable Law, (iii) necessary to secure
any required Consents as to which the other party has been advised, or
(iv) consented to in writing by ADSX and MAS, this Agreement and any
information or documents furnished in connection herewith shall be kept
strictly confidential by MAS and the MAS Subsidiaries, ADSX, DA, the
DA Subsidiaries, the Other Subsidiaries and any other subsidiaries of
ADSX, and their respective officers, directors, employees and agents.
44
Prior to any disclosure pursuant to the preceding sentence, the party
intending to make such disclosure shall consult with the other party to the
extent practicable regarding the nature and extent of the disclosure.
Subject to the preceding sentence, nothing contained herein shall preclude
disclosures to the extent necessary to comply with accounting, SEC, National
Association of Securities Dealers of AMEX and other disclosure obligations
imposed by applicable Law. ADSX and MAS shall cooperate with the other and
provide such information and documents as may be required in connection with
any such filings. In the event the Merger is not consummated, ADSX and MAS
shall return to the other all documents furnished by the other and all
copies thereof made by such party and will hold in absolute confidence all
information obtained from the other party except to the extent (i) such
party is required to disclose such information by Law or such disclosure is
necessary in connection with the pursuit or defense of a claim, (ii) such
information was known by such party prior to such disclosure or was
thereafter developed or obtained by such party independent of such
disclosure, (iii) such party received such information on a non-confidential
basis from a source, other than the other party, which is not known by such
party to be bound by a confidentiality obligation with respect thereto or
(iv) such information becomes generally available to the public or is
otherwise no longer confidential. Prior to any disclosure of information
pursuant to the exception in clause (i) of the preceding sentence, the party
intending to disclose the same shall so notify the party which provided the
same to the extent practicable in order that such party may seek a
protective order or other appropriate remedy should it choose to do so.
10.2. Amendment and Modification. To the extent permitted by applicable
--------------------------
Law, this Agreement may be amended, modified or supplemented only by a written
agreement among MAS, Acquisition Subsidiary, ADSX and DA, whether before or
after approval of this Agreement and the Merger by the stockholders of MAS,
except that following approval by the stockholders of MAS, there shall be no
amendment or change to the provisions hereof with respect to the Transaction
Consideration or that adversely affects the Public Stockholders without
further approval by the Public Stockholders of MAS, and no other amendment
shall be made which by law requires further approval by such stockholders
without such further approval.
10.3. Waiver of Compliance; Consents. Any failure of MAS or Acquisition
------------------------------
Subsidiary on the one hand, or ADSX or DA on the other hand, to comply with
any obligation, covenant, agreement or condition herein may be waived by
ADSX on the one hand, or MAS on the other hand, only by a written instrument
signed by the party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 10.3.
10.4. Survival of Representations and Warranties. The respective
------------------------------------------
representations and warranties of MAS and Acquisition Subsidiary and ADSX
and DA contained herein or in any certificates or other documents delivered
prior to or at the Closing shall survive the execution and delivery of this
Agreement, notwithstanding any investigation made or information obtained by
the other party, but shall terminate at the Effective Time.
45
10.5. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given when delivered in
person, by facsimile, receipt confirmed, or on the next business day when
sent by overnight courier or on the second succeeding business day when sent
by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(i) if to ADSX or DA,
Applied Digital Solutions, Inc.
000 Xxxxx Xxxx Xxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopy: (000)000-0000
with a copy to:
Xxxxx Xxxx LLP
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. XxXxxxxx, Esq.
Telecopy: (000) 000-0000
and
(ii) if to MAS or Acquisition Subsidiary,
Medical Advisory Systems, Inc.
0000 Xxxxxxxx Xxxxxxxx Xxxx.
Xxxxxx, Xxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
46
with a copy to:
Xxxxx & Xxxxxxxxx LLP
Washington Square, Suite 1100
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
and to:
Xxxxxxx & Xxxxxxxxx Xxxxxx Xxxxxx LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
10.6. Binding Effect; Assignment. This Agreement and all of the
--------------------------
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto prior to the
Effective Time without the prior written consent of the other parties
hereto.
10.7. Expenses. All costs and expenses incurred in connection with this
--------
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs or expenses.
10.8. Governing Law. This Agreement shall be deemed to be made in, and
-------------
in all respects shall be interpreted, construed and governed by and in
accordance with the internal laws of, the State of New York, and the parties
hereto consent to the jurisdiction of the courts of or in the State of New
York in connection with any dispute or controversy relating to or arising
out of this Agreement and the transactions contemplated hereby.
10.9. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.10. Interpretation. The article and section headings contained in
--------------
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. No rule of construction shall apply to
this Agreement which construes ambiguous language in favor of or against any
party by reason of that party's role in drafting this Agreement. As used in
this Agreement, (i) the term "person" shall mean and include an individual,
------
a partnership, a joint venture, a corporation, a limited liability company,
a trust, an association, an unincorporated organization, a Governmental
Authority and any other entity; (ii) the term "affiliate," with respect to
---------
any person,
47
shall mean and include any person controlling, controlled by or under common
control with such person; and (iii) the term "subsidiary" of any specified
----------
person shall mean any corporation the majority of the outstanding voting
power of which, or any partnership, joint venture, limited liability company
or other entity the majority of the total equity interest of which, is
directly or indirectly owned by such specified person.
10.11. Entire Agreement. This Agreement and the other agreements,
----------------
documents or instruments referred to herein or executed in connection
herewith including, but not limited to, the MAS Disclosure Schedule and DA
Disclosure Schedule, which schedules are incorporated herein by reference,
embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties, covenants, or undertakings, other
than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and the understandings between the parties
with respect to such subject matter.
10.12. Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions in this Agreement
were not performed in accordance with their specific terms or were otherwise
reached. Accordingly, the parties further agree that each party shall be
entitled to an injunction or restraining order to prevent breaches hereof or
thereof and to enforce specifically the terms and provisions hereof or
thereof in any court of the United States or any state having jurisdiction,
this being in addition to any other right or remedy to which such party may
be entitled under this Agreement, at law or in equity.
10.13. Third Parties. Nothing contained in this Agreement or in any
-------------
instrument or document executed by any party in connection with the
transactions contemplated hereby shall create any rights in, or be deemed to
have been executed for the benefit of, any person that is not a party hereto
or thereto, or, a successor or permitted assign of such a party.
[REMAINDER OF PAGE BLANK]
48
IN WITNESS WHEREOF, ADSX, DA, MAS and Acquisition Subsidiary have caused
this Agreement to be signed and delivered by their respective duly authorized
officers as of the date first above written.
APPLIED DIGITAL SOLUTIONS, INC. MEDICAL ADVISORY SYSTEMS, INC.
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
DIGITAL ANGEL CORPORATION ACQUISITION SUBSIDIARY, INC.
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
49
INDEX OF DEFINED TERMS
----------------------
PAGE WHERE
TERM DEFINED
Acquisition Subsidiary.......................................................1
Acquisition Subsidiary Common Stock..........................................5
ADSX.........................................................................1
ADSX Securities Filings.....................................................18
affiliate ..................................................................46
Agreement ...................................................................1
Benefit Plan................................................................10
Certificate of Merger........................................................2
Closing .....................................................................2
Closing Date.................................................................2
Code ........................................................................1
Consent......................................................................6
Contract ....................................................................9
Contribution ................................................................1
DA...........................................................................1
DA Acquisition Proposal.....................................................37
DA Common Stock .............................................................3
DA Disclosure Schedule......................................................15
DA Group Financial Statements...............................................19
DA Xxxxx Xxxxxxxx Adverse Effect............................................16
DA Xxxxx Xxxxxxxx Contract..................................................20
DA Options ..................................................................4
DA Subsidiaries ............................................................15
DA Superior Proposal........................................................37
DGCL.........................................................................2
Effective Time...............................................................2
Enforceability Exceptions....................................................6
Environmental Laws..........................................................13
Environmental Permits.......................................................13
ERISA ......................................................................10
Event .......................................................................8
Exchange Act ................................................................5
Final Order ................................................................40
Governmental Authority.......................................................6
Indemnified Parties ........................................................38
Intellectual Property.......................................................12
Interested Stockholders......................................................1
IP Claim Notice.............................................................13
Law..........................................................................7
Litigation ..................................................................7
MAS..........................................................................1
MAS Acquisition Proposal....................................................31
MAS Charter Amendment........................................................3
MAS Common Stock.............................................................3
1
MAS Disclosure Schedule......................................................4
MAS Financial Statements.....................................................8
MAS Material Adverse Effect..................................................4
MAS Material Contract........................................................9
MAS Proposals...............................................................29
MAS Securities Filings.......................................................7
MAS Stockholders Meeting....................................................29
MAS Subsidiaries.............................................................4
MAS Superior Proposal.......................................................31
Merger.......................................................................1
Multi-Employer Plan.........................................................10
NASD.........................................................................6
New MAS Options..............................................................4
Other Subsidiaries...........................................................1
Other Subsidiaries Common Stock..............................................2
person......................................................................46
Proxy Statement.............................................................38
Public Stockholders..........................................................1
SEC .........................................................................6
Securities Act ..............................................................5
subsidiary .................................................................47
Surviving Corporation........................................................2
Takeover Statute............................................................32
Tax.........................................................................12
Tax Return..................................................................12
Transaction..................................................................1
Transaction Consideration....................................................3
2
