Exhibit (d)(1)
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
DRS TECHNOLOGIES, INC.,
PRINCE MERGER CORPORATION
and
PARAVANT INC.
Dated as of October 23, 2002
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THIS COPY OF THE AGREEMENT AND PLAN OF MERGER IS BEING DELIVERED IN COMPLIANCE
WITH SECTION 607.1104 OF THE FLORIDA BUSINESS CORPORATION ACT.
TABLE OF CONTENTS
Page
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ARTICLE I THE OFFER..................................................................................... 2
Section 1.1 The Offer......................................................................... 2
Section 1.2 Company Actions................................................................... 3
Section 1.3 Directors of the Company.......................................................... 5
ARTICLE II THE MERGER................................................................................... 6
Section 2.1 The Merger........................................................................ 6
Section 2.2 Effective Time; Closing........................................................... 6
Section 2.3 Effect of the Merger.............................................................. 6
Section 2.4 Articles of Incorporation and Bylaws.............................................. 6
Section 2.5 Directors and Officers............................................................ 7
Section 2.6 Conversion of Shares.............................................................. 7
Section 2.7 Exchange of Certificates.......................................................... 8
Section 2.8 Shareholders' Meeting............................................................. 10
Section 2.9 Further Action.................................................................... 11
Section 2.10 Dissenting Shares................................................................. 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................... 12
Section 3.1 Organization; Standing; Charter Documents; Subsidiaries........................... 12
Section 3.2 Capital Structure................................................................. 13
Section 3.3 Authority; Non-Contravention; Necessary Consents.................................. 14
Section 3.4 SEC Filings; Financial Statements................................................. 16
Section 3.5 Absence of Certain Changes or Events.............................................. 17
Section 3.6 Taxes............................................................................. 17
Section 3.7 Intellectual Property............................................................. 18
Section 3.8 Compliance; Permits............................................................... 19
Section 3.9 Litigation........................................................................ 20
Section 3.10 Brokers' and Finders' Fees........................................................ 20
Section 3.11 Transactions With Affiliates...................................................... 20
Section 3.12 Employee Benefit Plans; ERISA; Employees.......................................... 21
Section 3.13 Environmental Matters............................................................. 24
Section 3.14 Contracts......................................................................... 25
Section 3.15 Government Contracts.............................................................. 26
Section 3.16 Disclosure........................................................................ 27
Section 3.17 Fairness Opinion.................................................................. 27
Section 3.18 Takeover Statutes................................................................. 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB..................................... 28
Section 4.1 Organization; Standing; Charter Documents; Subsidiaries........................... 28
Section 4.2 Authority; Non-Contravention; Necessary Consents.................................. 29
Section 4.3 Brokers' and Finders' Fees........................................................ 30
Section 4.4 Disclosure........................................................................ 30
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Section 4.5 Sufficient Funds.................................................................. 31
ARTICLE V CONDUCT PRIOR TO THE EFFECTIVE TIME........................................................... 31
Section 5.1 Conduct of Business by the Company................................................ 31
ARTICLE VI ADDITIONAL AGREEMENTS........................................................................ 34
Section 6.1 Acquisition Proposals............................................................. 34
Section 6.2 Confidentiality; Access to Information; No Modification of Representations,
Warranties or Covenants .......................................................... 38
Section 6.3 Public Disclosure................................................................. 38
Section 6.4 Regulatory Filings; Reasonable Efforts............................................ 39
Section 6.5 Notification of Certain Matters................................................... 41
Section 6.6 Third-Party Consents.............................................................. 41
Section 6.7 Equity Awards and Employee Benefits............................................... 41
Section 6.8 Indemnification................................................................... 43
Section 6.9 Conveyance Taxes.................................................................. 44
ARTICLE VII CONDITIONS TO THE MERGER.................................................................... 44
Section 7.1 Conditions to the Obligations of Each Party to Effect the Merger.................. 44
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.......................................................... 45
Section 8.1 Termination....................................................................... 45
Section 8.2 Notice of Termination; Effect of Termination...................................... 47
Section 8.3 Fees and Expenses................................................................. 47
Section 8.4 Amendment......................................................................... 49
Section 8.5 Extension; Waiver................................................................. 49
ARTICLE IX GENERAL PROVISIONS........................................................................... 49
Section 9.1 Non-Survival of Representations and Warranties.................................... 49
Section 9.2 Notices........................................................................... 49
Section 9.3 Interpretation; Knowledge......................................................... 50
Section 9.4 Counterparts...................................................................... 51
Section 9.5 Entire Agreement; Third-Party Beneficiaries....................................... 51
Section 9.6 Severability...................................................................... 52
Section 9.7 Other Remedies; Specific Performance.............................................. 52
Section 9.8 Governing Law..................................................................... 52
Section 9.9 Rules of Construction............................................................. 52
Section 9.10 Assignment........................................................................ 52
Section 9.11 Consent to Jurisdiction; Waiver of Trial by Jury.................................. 53
ANNEX A Conditions to the Merger
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of October 23, 2002, by and among DRS Technologies, Inc., a
Delaware corporation ("Parent"), Prince Merger Corporation, a Florida
corporation and direct wholly-owned subsidiary of Parent ("Merger Sub"), and
Paravant Inc., a Florida corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have deemed it advisable and in the best interests of their
respective corporations and stockholders that Parent and the Company consummate
the business combination and other transactions provided for herein in order to
advance their respective long-term strategic business interests;
WHEREAS, it is intended that the acquisition be accomplished by Merger
Sub commencing a cash tender offer (as such offer may be amended from time to
time, the "Offer") for all of the outstanding shares of Common Stock, par value
$0.015 per share, of the Company ("Company Common Stock") upon the terms and
subject to the conditions set forth in this Agreement (the shares of Company
Common Stock subject to the Offer are hereinafter referred to as the "Shares")
in an amount of $4.75 per Share (the "Offer Consideration") to be followed by
the Merger (as defined in Section 2.1);
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have approved the Offer and have adopted and approved, in accordance
with applicable provisions of the laws of the state of Delaware and the state of
Florida ("Florida Law"), this Agreement and the transactions contemplated
hereby, including the Merger;
WHEREAS, the Board of Directors of the Company has resolved to
recommend that the shareholders of the Company accept the Offer, tender their
Shares in the Offer, approve and adopt this Agreement and approve the Merger;
WHEREAS, Parent, as the sole shareholder of Merger Sub, has approved
the Offer, has approved and adopted this Agreement and approved the Merger;
WHEREAS, simultaneously with the execution and delivery of this
Agreement, and as a condition to Parent's and Merger Sub's willingness to enter
into this Agreement, certain officers and directors of the Company are entering
into separate voting agreements (the "Shareholder Tender and Voting
Agreements"), pursuant to which such individuals are agreeing, among other
things, to tender their Shares in the Offer and to grant Parent a proxy to vote
their respective shares of Company Common Stock in favor of the Merger, upon the
terms and subject to the conditions set forth therein; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Offer and the
Merger and also to prescribe certain conditions to the Offer and the Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
Article I
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been
terminated and none of the events set forth in Section (a) through (i) of Annex
A attached hereto and made a part hereof ("Annex A") shall have occurred and be
continuing (and shall not have been waived by Merger Sub), Merger Sub shall, and
Parent shall cause Merger Sub to, commence (within the meaning of Rule 14d-2 of
the Exchange Act (as defined in Section 2.8(a)) the Offer as promptly as
reasonably practicable after the date hereof. The obligation of Merger Sub to
accept for payment and pay for the Shares tendered pursuant to the Offer shall
be subject only to the satisfaction of the condition that there be validly
tendered and not withdrawn prior to the expiration of the Offer that number of
Shares which represents at least a majority of the then outstanding Shares on a
fully-diluted basis (the "Minimum Condition") and to the satisfaction or waiver
by Merger Sub of the other conditions set forth in Annex A (the Minimum
Condition and the conditions set forth in Annex A collectively, the "Offer
Conditions"). The Company agrees that no Shares held by the Company or any of
its Subsidiaries (as defined in Section 3.1) will be tendered to Merger Sub
pursuant to the Offer. Merger Sub expressly reserves the right to waive any of
the Offer Conditions (other than the Minimum Condition), to increase the price
per Share payable in the Offer and to make any other changes in the terms of the
Offer; provided, however, that no change may be made without the prior written
consent of the Company which decreases the price per Share payable in the Offer,
reduces the maximum number of Shares to be purchased in the Offer, changes the
form of consideration to be paid in the Offer, imposes conditions to the Offer
in addition to the conditions set forth in Annex A, waives or changes the
Minimum Condition or makes other changes in the terms and conditions of the
Offer that are in any manner adverse to the holders of Shares or, except as
provided below, extends the Offer. Subject to the terms of the Offer and this
Agreement and the satisfaction of the Minimum Condition and the satisfaction or
earlier waiver of all the conditions of the Offer set forth in Annex A as of any
expiration date of the Offer, Merger Sub will accept for payment and pay for all
Shares validly tendered and not withdrawn pursuant to the Offer as soon as it is
permitted to do so under applicable Legal Requirements. Notwithstanding the
foregoing, Merger Sub may, without the consent of the Company, (i) extend the
Offer beyond the scheduled expiration date, which initially shall be twenty (20)
Business Days following the date of commencement of the Offer (counting for such
purposes the day the Offer is commenced as the first day of such period), if, at
the scheduled expiration of the Offer, any of the Offer Conditions shall not be
satisfied or, to the extent permitted by this Agreement, waived, (ii) extend the
Offer for any period required by any rule, regulation or interpretation of the
United States Securities and Exchange Commission (the "SEC"), the
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staff thereof or the Nasdaq National Market ("NASDAQ") applicable to the Offer,
(iii) if on the then scheduled expiration date of the Offer, there shall not
have been validly tendered and not withdrawn at least 80% of the outstanding
Shares on a fully-diluted basis, extend the Offer for a period not to exceed ten
(10) Business Days or (iv) provide a "subsequent offering period" in accordance
with Rule 14d-11 under the Exchange Act. On or prior to the dates that Merger
Sub becomes obligated to accept for payment and pay for Shares pursuant to the
Offer, Parent shall provide or cause to be provided to Merger Sub the funds
necessary to pay for all Shares that Merger Sub becomes so obligated to accept
for payment and pay for pursuant to the Offer. The Offer Price shall, subject to
any required withholding of Taxes (as defined in Section 3.6), be net to the
seller in cash, upon the terms and subject to the conditions of the Offer.
(b) On the date of the commencement of the Offer, Merger Sub
shall file with the SEC a Tender Offer Statement on Schedule TO (together with
all amendments and supplements thereto, the "Schedule TO") with respect to the
Offer. The Schedule TO shall contain or incorporate by reference an offer to
purchase and forms of the related letter of transmittal and all other ancillary
Offer documents (collectively, together with all amendments and supplements
thereto, the "Offer Documents"). Parent and Merger Sub shall cause the Offer
Documents to be disseminated to the holders of the Shares as and to the extent
required by applicable federal securities laws. Parent and Merger Sub, on the
one hand, and the Company, on the other hand, will promptly correct any
information provided by it for use in the Offer Documents if and to the extent
that it shall have become false or misleading in any material respect, and
Merger Sub will cause the Offer Documents as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment upon the
Schedule TO before it is filed with the SEC. In addition, Parent and Merger Sub
agree to provide the Company and its counsel with any comments, whether written
or oral, that Parent or Merger Sub or either of their counsel may receive from
time to time from the SEC or its staff with respect to the Schedule TO promptly
after the receipt of such comments and to consult with the Company and its
counsel prior to responding to any such comments (and provide the Company and
its counsel with copies of any such written response and telephonic notification
of any such verbal response). If the Offer is terminated or withdrawn by Merger
Sub, Parent and Merger Sub shall use their respective reasonable best efforts to
cause the Depositary to cause all tendered Shares to be returned to the
registered holders of the Shares represented by the certificate or certificates
surrendered to the Paying Agent (as defined below).
Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer
and represents and warrants that the Company's Board of Directors, by
resolutions adopted by unanimous vote at a meeting of all Directors called and
held and not rescinded in any way (the "Company Board Approval"), has duly (i)
determined that the terms of this Agreement, the Offer and the Merger are fair
to and in the best interests of the shareholders of the Company, (ii) approved
and adopted this Agreement and
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approved and adopted the transactions contemplated hereby, including the Offer
and the Merger, (iii) approved the Shareholder Tender and Voting Agreement and
(iv) resolved to recommend that (A) the shareholders of the Company accept the
Offer, tender their Shares to Merger Sub thereunder and, if required by Legal
Requirements, approve and adopt this Agreement and the Merger and (B) such
matters be submitted to the Company's shareholders at the Company Shareholder
Meeting. Subject to 6.1(e), the Company hereby consents to the inclusion in the
Offer Documents of the recommendation of the Company's Board of Directors
described in this Section 1.2(a).
(b) As promptly as practicable after the commencement of the
Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D-9") which shall contain the recommendation referred
to in clause (iv) of Section 1.2(a) hereof (subject to Section 6.1(e)). The
Company further agrees to take all steps necessary to cause the Schedule 14D-9
to be disseminated to holders of the Shares as and to the extent required by
applicable federal securities laws. The Company, on the one hand, and each of
Parent and Merger Sub, on the other hand, will promptly correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it shall
have become false or misleading in any material respect, and the Company will
cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall be
given a reasonable opportunity to review and comment upon the Schedule 14D-9
before it is filed with the SEC. In addition, the Company agrees to provide
Parent, Merger Sub and their counsel with any comments, whether written or oral,
that the Company or its counsel may receive from time to time from the SEC or
its staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments and to consult with Parent, Merger Sub and their counsel prior to
responding to any such comments (and provide Parent, Merger Sub and their
counsel with copies of any such written response and telephonic notification of
any such verbal response).
(c) The Company shall promptly furnish Merger Sub with mailing
labels containing the names and addresses of all record holders of Shares and
with security position listings of Shares held in stock depositories, each as of
a recent date, together with all other available listings and computer files
containing names, addresses and security position listings of record holders and
non-objecting beneficial owners of Shares. The Company shall furnish Merger Sub
with such additional information, including updated listings and computer files
of the shareholders of the Company, mailing labels and security position
listings, and such other assistance as Parent, Merger Sub or their
Representatives (as defined in Section 6.1(a)) may reasonably require in
communicating the Offer to the record and beneficial holders of the Shares.
Subject to the requirements of applicable Legal Requirements, and except for
such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, Parent and Merger Sub
shall hold in confidence the information contained in such labels, listings and
files, shall use such information solely in connection with the Offer and the
Merger, and, if this Agreement is terminated or if the Offer is otherwise
terminated, shall promptly destroy, or cause to be destroyed,
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or deliver, or cause to be delivered, to the Company all copies of such
information, labels, listings and files then in their possession or in the
possession of their Representatives and shall certify in writing to the Company
their compliance with this Section 1.2(c).
Section 1.3 Directors of the Company.
(a) Promptly upon the purchase of and payment for a number of
Shares that satisfies the Minimum Condition by Merger Sub pursuant to the Offer,
Parent shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as is equal to
the product obtained by multiplying the total number of directors on such Board
(after giving effect to the directors designated by Parent pursuant to this
sentence) by the percentage that the number of Shares so purchased and paid for
bears to the total number of Shares then outstanding. In furtherance thereof,
the Company shall, upon request of Merger Sub, promptly increase the size of its
Board of Directors or exercise its reasonable best efforts to secure the
resignations of such number of directors, or both, as is necessary to enable
Parent's designees to be so elected or appointed to the Company's Board of
Directors and, subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, shall cause Parent's designees to be so elected or
appointed. At such time, the Company shall, if requested by Parent, also cause
directors designated by Parent and Merger Sub to constitute at least the same
percentage (rounded up to the next whole number) as is on the Company's Board of
Directors of each Board of Directors of each Subsidiary of the Company and
committee of the Company's Board of Directors. Notwithstanding the foregoing, if
Parent's designees are appointed or elected to the Company's Board of Directors
hereunder, until the Effective Time the Company and Parent shall use reasonable
efforts to have at least two (2) members of the Company's Board of Directors who
are directors on the date hereof and who are neither officers of the Company nor
designees of Parent.
(b) The Company shall promptly take all actions required
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under Section 1.3(a), including
mailing to its shareholders together with the Schedule 14D-9 the information
required by such Section 14(f) and Rule 14f-1 as is necessary to enable Parent's
designees to be elected to the Company's Board of Directors. Parent and Merger
Sub will supply the Company any information with respect to them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The provisions of this Section 1.3(b) are in addition to and shall
not limit any rights that any of Merger Sub, Parent or any of their respective
affiliates may have as a holder or beneficial owner of Shares as a matter of law
with respect to the election of directors or otherwise.
(c) Following the election or appointment of Parent's
designees pursuant to Section 1.3(a) and until the Effective Time, the approval
of a majority of the directors then in office who were neither designated by
Parent nor employed by the Company shall be required to authorize any amendment
of this Agreement or the Company Charter Documents (as defined in Section
3.1(b)), any termination of this
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Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Merger Sub or Parent, any
waiver of any of the Company's rights hereunder or any action as to which
consent or agreement of the Company is required hereunder.
Article II.
THE MERGER
Section 2.1 The Merger. At the Effective Time (as defined in Section
2.2) and subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Florida Law, Merger Sub shall be merged with and into
the Company (the "Merger"), the separate corporate existence of Merger Sub shall
cease and the Company shall continue as the surviving corporation. The Company,
as the surviving corporation after the Merger, is hereinafter sometimes referred
to as the "Surviving Corporation".
Section 2.2 Effective Time; Closing. Subject to the provisions of
this Agreement, the parties hereto shall cause the Merger to be consummated by
filing Articles of Merger with the Secretary of State of the State of Florida in
accordance with the relevant provisions of Florida Law (the "Articles of
Merger") (the time of such filing with the Secretary of State of the State of
Florida (or such later time as may be agreed in writing by the Company and
Parent and specified in the Articles of Merger) being the "Effective Time") as
soon as practicable on or after the Closing Date (as defined below). The closing
of the Merger (the "Closing") shall take place at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, located at Four Times Square, New York, New York, at
a time and date to be specified by the parties, which shall be no later than the
second Business Day after the satisfaction or waiver of the conditions set forth
in Article VII, or at such other time, date and location as the parties hereto
agree in writing (the "Closing Date").
Section 2.3 Effect of the Merger. At the Effective Time, the effect
of the Merger shall be as provided in this Agreement and the applicable
provisions of Florida Law.
Section 2.4 Articles of Incorporation and Bylaws. At the Effective
Time, the Articles of Incorporation of the Company shall be amended and restated
in its entirety to be identical to the Articles of Incorporation of Merger Sub,
as in effect immediately prior to the Effective Time, until thereafter amended
in accordance with Florida Law and as provided in such Articles of
Incorporation; provided, however, that at the Effective Time, Article I of the
Articles of Incorporation of the Surviving Corporation shall be amended and
restated in its entirety to read as follows: "The name of the corporation is
Paravant Inc." At the Effective Time, the Bylaws of the Company shall be amended
and restated in their entirety to be identical to the Bylaws of Merger Sub, as
in effect immediately prior to the Effective Time, until thereafter amended in
accordance with Florida Law and as provided in such Bylaws.
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Section 2.5 Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall become the directors of the
Surviving Corporation from and after the Effective Time, until their respective
successors are duly elected or appointed and qualified. The officers of the
Company immediately prior to the Effective Time shall become the officers of the
Surviving Corporation from and after the Effective Time, until their respective
successors are duly appointed.
Section 2.6 Conversion of Shares. As of the Effective Time, by
virtue of the Merger and without any action on the part of the parties or the
holders of any Shares of the Company:
(a) Each issued and outstanding Share (other than Shares to be
canceled in accordance with Section 2.6(c)) automatically shall be converted
into the right to receive the Offer Consideration (as defined in the recitals)
in cash (the "Merger Consideration") payable, without interest, to the holder of
such Share, upon surrender, in the manner provided in Section 2.7, of the
certificate that formerly evidenced such Share. All such Shares, when so
converted, shall no longer be outstanding and automatically shall be canceled
and retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration therefor upon the
surrender of such certificate in accordance with Section 2.7. Any payment made
pursuant to this Section 2.6(a) shall be made net of applicable withholding
taxes in accordance with Section 2.7(f) to the extent that such withholding is
required by applicable Legal Requirements.
(b) Each issued and outstanding share of common stock, par
value $0.01 per share, of Merger Sub shall be converted into and become one
validly-issued, fully-paid and nonassessable share of common stock of the
Surviving Corporation.
(c) All Shares that are owned at the Effective Time by the
Company, Parent, Merger Sub or any other direct or indirect wholly-owned
Subsidiary (as defined in Section 3.1(a)) of the Company, Parent or Merger Sub
shall be canceled and retired and no Merger Consideration shall be delivered in
exchange therefor.
(d) At the Effective Time, all Company Options (as defined in
Section 3.2(b)) outstanding under the Company's Incentive Stock Option Plan, as
amended June 4, 1999, the Company's Stock Incentive Plan and the Non-employee
Directors' Stock Plan, as amended August 30, 2001, and each other plan or
Contract (as defined in Section 3.2(a)) of any nature with any Person pursuant
to which any stock, option, warrant, or other right to purchase or acquire
capital stock of the Company or right to payment based on the value of Company
capital stock has been granted or issued, but in any case excluding the
Company's Employee Stock Purchase Plan (collectively, the "Company Stock Option
Plans") shall be treated as set forth in Section 6.7(a). Rights outstanding
under the Company's Employee Stock Purchase Plan (the "Company Purchase Plan")
shall be treated as set forth in Section 6.7(d).
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(e) At the Effective Time, all Company Warrants (as defined in
Section 3.2(d)) outstanding as of such time shall be cancelled in exchange for a
single lump sum cash payment to be paid by the Surviving Company as soon as
practicable following the Closing to the holder of such Company Warrant upon
receipt by Parent of a release or other documentation by the holder of such
Company Warrant reasonably satisfactory to Parent relinquishing any right or
benefit under the terms of the Company Warrant or any obligation on the part of
Parent, Merger Sub or Company after the Effective Time (the "Company
Warrantholder Release") equal to the product of (i) the number of shares of
Company Common Stock subject to such Company Warrant and (ii) the excess, if
any, of the Merger Consideration for a share of Company Common Stock at the
Effective Time over the exercise price per share of such Company Warrant. The
Company shall use its reasonable best efforts to obtain the Company
Warrantholder Release promptly after the date hereof and, in any event, prior to
the expiration of the Offer.
(f) The Merger Consideration shall be adjusted to reflect
fully the appropriate effect of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into
Company Common Stock), reorganization, recapitalization, reclassification or
other like change with respect to Company Common Stock having a record date on
or after the date hereof and prior to the Effective Time.
Section 2.7 Exchange of Certificates.
(a) Prior to the Effective Time, Parent shall designate an
agent reasonably acceptable to the Company to act as agent for the holders of
the Shares (other than the Shares held by Parent, Merger Sub, the Company or any
of their Subsidiaries) in connection with the Merger (the "Paying Agent") to
receive in trust, the aggregate Merger Consideration to which holders of Shares
shall become entitled pursuant to Section 2.6(a). At the Effective Time, Parent
shall deposit the Merger Consideration with the Paying Agent. The Merger
Consideration shall be invested by the Paying Agent as directed by Parent or the
Surviving Corporation. If for any reason (including losses) the funds held by
the Paying Agent are inadequate to pay the amounts to which the Shareholders
shall be entitled under Section 2.6(a), Parent and the Surviving Corporation
shall be liable for the payment thereof.
(b) As promptly as practicable after the Effective Time,
Parent and the Surviving Corporation shall cause to be mailed to each record
holder, as of the Effective Time, of an outstanding certificate or certificates
which immediately prior to the Effective Time represented Shares (the
"Certificates" or individually, a "Certificate"), whose Shares were converted
pursuant to Section 2.6(a) into the right to receive the Merger Consideration, a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to a Certificate shall pass, only upon proper delivery of
the Certificate to the Paying Agent and shall be in such form and have such
other provisions as Parent may reasonably specify) and instructions for
effecting the surrender of a Certificate in exchange for the Merger
Consideration for the Shares. Upon surrender of a Certificate for cancellation
to the Paying Agent or to such other agent or agents as
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may be appointed by Parent, together with such letter of transmittal duly
executed and completed in accordance with the instructions thereto, and any
other required documents, the holder of such Certificate shall receive promptly
in exchange therefor the Merger Consideration for each Share formerly evidenced
thereby, and such Certificate shall forthwith be canceled. No interest will be
paid or accrued on the cash payable upon the surrender of a Certificate. If
payment of the Merger Consideration is to be made to a Person other than the
Person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
payment shall (i) have paid any transfer and other Taxes required by reason of
the payment to a Person other than the registered holder of the Certificate
surrendered or (ii) have established to the satisfaction of the Surviving
Corporation that such Taxes have been paid or that payment of Taxes is not
applicable. Until surrendered as contemplated by this Section 2.7, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive the Merger Consideration for each Share in cash as
contemplated by Section 2.6.
(c) At the Effective Time, the stock transfer books of the
Company shall be closed, and there shall be no transfers on the stock transfer
books of the Company of the Shares which were outstanding immediately prior to
the Effective Time. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided for herein or by applicable Legal Requirements. If,
after the Effective Time, Certificates are presented to the Paying Agent or the
Surviving Corporation, they shall be canceled and exchanged for the Merger
Consideration in accordance with the procedures set forth in this Article II.
(d) At any time following the six (6) month anniversary of the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds (including any interest received with
respect thereto) which had been made available to the Paying Agent, and holders
shall be entitled to look to the Surviving Corporation (subject to abandoned
property, escheat or other similar laws) only as general creditors thereof with
respect to the Merger Consideration payable upon due surrender of their
Certificates without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) In the event that any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof as determined in accordance with
this Article II, provided, that the Person to whom the Merger Consideration is
paid shall, as a condition precedent to the payment thereof, give the Surviving
Corporation a bond in such sum as it may direct or otherwise indemnify the
Surviving Corporation in a manner satisfactory to it against any claim that
9
may be made against the Surviving Corporation with respect to the Shares
represented by the Certificate claimed to have been lost, stolen or destroyed.
(f) Parent, Merger Sub and the Surviving Corporation shall be
entitled to deduct and withhold, or cause the Paying Agent to deduct and
withhold, from the Offer Price or the Merger Consideration payable to a holder
of Shares pursuant to the Offer or the Merger any or all such amounts as are
required to be deducted and withheld under the Code (and the regulations
promulgated thereunder), and/or any applicable provision of state, local or
foreign Tax law or under any other applicable Legal Requirement. To the extent
that amounts are so deducted and withheld by Parent, Merger Sub, the Surviving
Corporation or the Paying Agent, such deducted and withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the Shares to which such consideration would otherwise have been paid.
Section 2.8 Shareholders' Meeting.
(a) Following the purchase of the Shares pursuant to the
Offer, if required by applicable Legal Requirements in order to consummate the
Merger,
(i) the Company, acting through its Board of Directors,
shall, in accordance with applicable Legal Requirements, duly call, give notice
of, convene and hold a special meeting of its shareholders (the "Company
Shareholders' Meeting") and submit this Agreement to a vote of the Company's
shareholders;
(ii) the Company shall prepare a preliminary proxy
statement (the "Preliminary Statement") relating to the Merger and this
Agreement which shall comply as to form with all applicable Legal Requirements
and which shall include all information concerning the Company, Parent and
Merger Sub required to be set forth therein pursuant to the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and the applicable rules and
regulations thereunder (the "1934 Act Rules", the 1934 Act Rules together with
the 1934 Act, the "Exchange Act");
(iii) the Company shall, subject to review of the
Preliminary Statement by the SEC and notification (either orally or in writing)
to the Company that the SEC has no further comments relating to such Preliminary
Statement, distribute to the Company's shareholders a letter to shareholders,
notice of meeting, proxy statement and form of proxy in connection with the
Merger (collectively, including any amendments or supplements thereto, the
"Proxy Statement");
(iv) the Company shall file a definitive form of the
Proxy Statement, which shall reflect compliance with or resolution of the
comments and requests in accordance with the Exchange Act from the SEC as the
Company and Parent shall deem appropriate;
(v) the Company shall distribute the definitive Proxy
Statement to the Company's shareholders in accordance with applicable Legal
Requirements; and
10
(vi) subject to Section 6.1(e), the Company shall take
all such other reasonable action necessary or appropriate to obtain the lawful
approval of this Agreement by the Company's shareholders including soliciting
from holders of Shares proxies in favor of the adoption and approval of this
Agreement, the Merger and the transactions contemplated hereby.
(b) Parent and Merger Sub shall furnish to the Company all
information concerning Parent, Merger Sub and their affiliates required by the
Exchange Act or as otherwise required by the SEC to be set forth in the Proxy
Statement.
(c) Each of the Company and Parent shall consult and confer
with the other and the other's counsel regarding the Preliminary Statement and
the Proxy Statement and each shall have the opportunity to comment on the
Preliminary Statement and the Proxy Statement and any amendments and supplements
thereto before the Preliminary Statement and the Proxy Statement, and any
amendments or supplements thereto, are filed with the SEC or mailed to the
Company's shareholders. Each of the Company and Parent will provide to the other
copies of all correspondence between it (or its advisors) and the SEC relating
to the Preliminary Statement and the Proxy Statement.
(d) Parent will vote, or cause to be voted, all Shares
acquired by Parent, Merger Sub or any other Subsidiary of Parent in favor of the
Merger and the approval of this Agreement.
(e) Notwithstanding the provisions of Sections 2.8 (a) and
(b), in the event that Parent, Merger Sub and any other Subsidiaries of Parent
shall acquire in the aggregate at least 80% of the outstanding shares of each
class of capital stock of the Company pursuant to the Offer or otherwise, the
parties hereto shall, subject to Article VII hereof, take all necessary and
appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of the Company's
shareholders, in accordance with Sections 607.0704 and 607.1104 of Florida Law.
Section 2.9 Further Action. At and after the Effective Time, the
officers and directors of Parent and the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company and
Merger Sub, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company and Merger Sub, any other actions
and things to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger.
Section 2.10 Dissenting Shares. Pursuant to Section 607.1302(4) of
Florida Law, no shareholder of the Company shall be entitled to exercise
dissenters' rights under Sections 607.1301-607.1302 and 607.1320 of Florida Law
as a result of the transactions contemplated by this Agreement, including the
Merger.
11
Article III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub,
subject to the exceptions specifically disclosed in writing in the disclosure
letter supplied by the Company to Parent, dated as of the date hereof, and
certified by a duly authorized officer of the Company (the "Company Disclosure
Letter") (it being agreed that disclosure of any item under a Section of this
Article III in the Company Disclosure Letter shall be deemed disclosure with
respect to other Sections of this Article III if the applicability of such item
to any other Section is reasonably apparent from the face of the Company
Disclosure Letter), and except as disclosed in the Company SEC Reports (to the
extent that a disclosure is reasonably apparent from the face of an item in the
Company SEC Report), as follows:
Section 3.1 Organization; Standing; Charter Documents; Subsidiaries.
(a) Organization; Standing. The Company and each of its
Subsidiaries (as defined below) is a corporation or other organization duly
organized, validly existing and in good standing or with active status under the
laws of the jurisdiction of its incorporation or organization, has the requisite
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so organized,
existing and in good standing or with active status would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect (as
defined in Section 9.3(c)) on the Company, and is duly qualified and in good
standing or with active status to do business in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions where the failure to so
qualify or to be good standing or with active status would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company. For purposes of this Agreement, "Subsidiary", when used with
respect to any party, shall mean any corporation or other organization, whether
incorporated or unincorporated, at least a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries.
(b) Charter Documents. The Company has delivered or made
available to Parent: (i) a true and correct copy of the articles of
incorporation (including any certificate of designations) and bylaws of the
Company, each as amended to date (collectively, the "Company Charter Documents")
and (ii) the articles of incorporation and bylaws, or like organizational
documents, of each of its Subsidiaries, each as amended to date (collectively,
"Subsidiary Charter Documents"), and each such instrument is in full force and
effect. The Company is not in violation of any of the
12
provisions of the Company Charter Documents and each Subsidiary is not in
violation of its respective Subsidiary Charter Documents.
(c) Subsidiaries. Section 3.1(c) of the Company Disclosure
Letter sets forth a list of all the Subsidiaries of the Company. All the
outstanding shares of capital stock of, or other equity interests in, each such
Subsidiary have been validly issued and are fully paid and nonassessable and are
owned directly or indirectly by the Company, free and clear of all pledges,
claims, liens, charges, encumbrances, options and security interests of any kind
or nature whatsoever (collectively, "Liens"), including any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other
ownership interests, except for restrictions imposed by applicable securities
laws.
Section 3.2 Capital Structure.
(a) Capital Stock. The authorized capital stock of the Company
consists of: (i) 30,000,000 shares of Company Common Stock and (ii) 2,000,000
shares of preferred stock, par value $10.00 per share (the "Company Preferred
Stock"). As of the date hereof: (i) 17,354,040 shares of Company Common Stock
are issued and outstanding and (ii) no shares of the Company Preferred Stock are
issued and outstanding. All of the outstanding shares of capital stock of the
Company are, and all shares of capital stock of the Company which may be issued
as contemplated or permitted by this Agreement will be when issued, duly
authorized and validly issued, fully paid and nonassessable and not subject to
any preemptive rights.
(b) Stock Options. As of the date hereof, 3,808,682 shares of
Company Common Stock are subject to issuance pursuant to outstanding options to
purchase Company Common Stock under the Company Stock Option Plans (equity or
other equity-based awards, whether payable in cash, shares or otherwise granted
under or pursuant to the Company Stock Option Plans are referred to in this
Agreement as "Company Options"). Section 3.2(b) of the Company Disclosure Letter
sets forth a list, as of the date hereof, of each outstanding Company Stock
Option and (a) the name and location of the holder of such Company Option, (b)
the number and type of shares of Company Common Stock subject to such Company
Option, (c) the exercise price of such Company Option, (4) the date on which
such Company Option was granted, (d) the applicable vesting schedule, and the
extent to which such Company Option is vested and exercisable, and (e) the date
on which such Company Option expires. All shares of Company Common Stock subject
to issuance under the Company Stock Option Plans, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. There
are no commitments or agreements of any character to which the Company is bound
obligating the Company to accelerate the vesting of any Company Option as a
result of the Merger (whether alone or upon the occurrence of any additional or
subsequent events). There are no outstanding or authorized stock appreciation,
phantom stock, profit participation or other similar rights with respect to the
Company. No more than 24,250 shares of Company Common Stock will be issued under
the Company Employee Stock Purchase Plan with respect to the offering period
terminated as of the date hereof pursuant to Section 6.7(d).
13
(c) Voting Debt. No bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which shareholders of
the Company may vote ("Voting Debt") is issued or outstanding as of the date
hereof.
(d) Other Securities. As of the date hereof, 165,000 shares of
Company Common Stock are subject to issuance pursuant to outstanding warrants
(the "Company Warrants"). Except as otherwise set forth in this Section 3.2,
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company or any
of its Subsidiaries is a party or by which any of them is bound obligating the
Company or any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock, Voting Debt or
other voting securities of the Company or any of its Subsidiaries, or obligating
the Company or any of its Subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. All outstanding shares of Company Common Stock, all outstanding
Company Options, and all outstanding shares of capital stock of each Subsidiary
of the Company have been issued and granted in compliance in all material
respects with (i) all applicable securities laws and all other applicable Legal
Requirements (as defined below) and (ii) all requirements set forth in
applicable material Contracts. For purposes of this Agreement, "Legal
Requirements" shall mean any federal, state, local, municipal, foreign or other
law, statute, constitution, principle of common law, resolution, ordinance,
code, order, edict, decree, rule, regulation, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Entity.
Section 3.3 Authority; Non-Contravention; Necessary Consents.
(a) Authority. The Company has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, including the Offer and
the Merger, have been duly authorized by all necessary corporate action on the
part of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize the execution and delivery of this Agreement
or to consummate the Offer and the Merger and the other transactions
contemplated hereby, subject only to the approval and adoption of this Agreement
and the approval of the Merger by the Company's shareholders and the filing of
the Articles of Merger pursuant to Florida Law. The affirmative vote of the
holders of record of not less than a majority of all votes entitled to be cast
by the holders of the outstanding shares of Company Common Stock to approve and
adopt this Agreement and approve the Merger is the only vote of the holders of
any class or series of Company capital stock necessary to approve and adopt this
Agreement, approve the Merger and consummate the Merger and the other
transactions contemplated hereby (the "Company Shareholders' Approval"). This
Agreement has been duly executed and delivered by the Company and, assuming due
execution and delivery by Parent and Merger Sub, constitutes the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws
14
of general applicability relating to or affecting creditors' rights and to
general equity principles.
(b) Non-Contravention. The execution and delivery of this
Agreement by the Company does not, and performance of this Agreement by the
Company will not: (i) conflict with or violate the Company Charter Documents or
any Subsidiary Charter Documents, (ii) subject to obtaining the Company
Shareholders' Approval and compliance with the requirements set forth in Section
3.3(c), conflict with or violate any Legal Requirement applicable to the Company
or any of its Subsidiaries or by which the Company or any of its Subsidiaries or
any of their respective properties is bound or affected, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a material default) under, or impair the Company's rights
or alter the rights or obligations of any third party under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a Lien on any of the material properties or assets of the
Company or any of its Subsidiaries pursuant to, any Company Material Contract
(as defined in Section 3.14 except in the case of clauses (ii) and (iii) above,
for any conflict, violation, breach, violation, impairment, alteration,
termination, amendment, acceleration, cancellation or creation that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company. Section 3.3(b) of the Company Disclosure
Letter lists all consents, waivers and approvals under any of the Company's or
any of its Subsidiaries' Contracts required to be obtained in connection with
the consummation of the transactions contemplated hereby, except those the
failure of which to be obtained would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
(c) Necessary Consents. No consent, approval, order or
authorization of, or registration, declaration or filing with any supranational,
national, state, municipal, local or foreign government, any instrumentality,
subdivision, court, administrative agency or commission or other governmental
authority or instrumentality, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or other governmental or
quasi-governmental authority (a "Governmental Entity") is required to be
obtained or made by the Company in connection with the execution and delivery of
this Agreement or the consummation of the Merger and other transactions
contemplated hereby, except for: (i) the filing of the Articles of Merger with
the Secretary of State of the State of Florida and appropriate documents with
the relevant authorities of other states in which the Company and/or Parent are
qualified to do business, (ii) the filing of (A) the Proxy Statement with the
SEC in accordance with Exchange Act, if approval of the Company's shareholders
is required by Florida Law and (B) the filing of the Schedule TO and (C) the
filing of the Schedule 14D-9, (iii) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal, foreign and state securities (or related) laws and the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iv) the consents listed on Section 3.3(c) of the Company Disclosure
Letter, (v) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities or
"blue sky" laws and the securities laws of any foreign country and (vi) such
other consents, authorizations, filings, approvals and
15
registrations which if not obtained or made would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or Parent or materially adversely affect the ability of the parties
hereto to consummate the Merger within the time frame in which the Merger would
otherwise be consummated in the absence of the need for such consent, approval,
order, authorization, registration, declaration or filings. The consents,
approvals, orders, authorizations, registrations, declarations and filings set
forth in (i) through (v) are referred to herein as the "Necessary Consents".
Section 3.4 SEC Filings; Financial Statements.
(a) SEC Filings. The Company has filed all required
registration statements, prospectuses, reports, schedules, forms, statements and
other documents (including exhibits and all other information incorporated by
reference) required to be filed by it with the SEC since January 1, 1998. The
Company has delivered or made available to Parent all such registration
statements, prospectuses, reports, schedules, forms, statements and other
documents in the form filed with the SEC to the extent such documents are not
available on the SEC's Electronic Data, Gathering, Analysis and Retrieval system
("XXXXX"). All such required registration statements, prospectuses, reports,
schedules, forms, statements and other documents (including those that the
Company may file subsequent to the date hereof), as amended, are referred to
herein as the "Company SEC Reports". As of their respective dates, the Company
SEC Reports (i) were prepared in accordance and complied in all material
respects with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC Reports and
(ii) did not at the time they were filed contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except to the extent
corrected prior to the date hereof by a subsequently filed Company SEC Report.
None of the Company's Subsidiaries is required to file any forms, reports or
other documents with the SEC.
(b) Financial Statements. Each of the consolidated financial
statements (including, in each case, any related notes thereto) contained in the
Company SEC Reports (the "Company Financials"), including each Company SEC
Report filed after the date hereof until the Closing: (i) complied as to form in
all material respects with the published rules and regulations of the SEC with
respect thereto, (ii) was prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the Exchange Act) and (iii) fairly
presented in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as at the respective dates thereof and
the consolidated results of the Company's operations and cash flows for the
periods indicated. The balance sheet of the Company contained in the Company SEC
Reports as of June 30, 2002 is hereinafter referred to as the "Company Balance
Sheet". Except as disclosed in the Company Financials, since the date of the
Company Balance Sheet,
16
neither the Company nor any of its Subsidiaries has incurred any liabilities
required under GAAP to be set forth on a consolidated balance sheet (absolute,
accrued, contingent or otherwise) which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on the Company.
Section 3.5 Absence of Certain Changes or Events. Since the date of
the Company Balance Sheet, the Company and each of its Subsidiaries have
conducted their businesses in the ordinary course consistent with past practice
and, since such date, there has not been (a) an event or development which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on the Company or (b) any event or development which,
individually or in the aggregate, would reasonably be expected to prevent or
materially delay the performance of this Agreement by the Company.
Section 3.6 Taxes. For the purposes of this Agreement, the term
"Tax" or, collectively, "Taxes", shall mean any and all federal, state, local
and foreign taxes, assessments and other governmental charges, duties,
impositions and liabilities, including taxes based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts, and any obligations with respect to such
amounts arising as a result of being a member of an affiliated, consolidated,
combined or unitary group for any period or under any agreements or arrangements
with any other Person and including any liability for taxes of a predecessor
entity. The Company and each of its Subsidiaries, and any consolidated,
combined, unitary or aggregate group for Tax purposes of which the Company or
any of its Subsidiaries is or has been a member, (i) have filed all material
federal, state, local and foreign returns, estimates, information statements and
reports relating to Taxes ("Tax Returns") required to be filed by any of them in
the manner prescribed by law, which Tax Returns are true, complete and correct
and have been prepared in accordance with applicable laws, except to the extent
any failures to file or failures to be true, correct, or accurate would not,
individually or in the aggregate, have a Material Adverse Effect on the Company,
(ii) have timely paid all Taxes required to be paid by them and have provided
adequate reserves in their financial statements according to GAAP for any Taxes
for taxable periods (or portions thereof) ending on or prior to the Closing Date
that have not been paid, whether or not shown as being due on any Tax Returns,
except to the extent that any failures to pay or reserve would not, individually
or in the aggregate, have a Material Adverse Effect on the Company and (iii)
have complied in all respects with all rules and regulations relating to the
withholding of Taxes, except for failures to comply that would not, individually
or in the aggregate, have a Material Adverse Effect on the Company. No claim for
unpaid Taxes has become a lien or encumbrance of any kind against the assets of
the Company or any of its Subsidiaries except for statutory liens for Taxes not
yet due and payable. There are no pending or threatened audits, examinations,
investigations, deficiencies, claims or other proceedings (whether judicial or
administrative) in respect of Taxes relating to the Company or any of its
Subsidiaries. No written waiver of any statute of limitations relating to the
Company or to any of its Subsidiaries has been given and is in effect. Neither
the Company nor any of its Subsidiaries has ever filed any consent
17
agreement under Section 341(f) of the Code. No jurisdiction where the Company or
any of its Subsidiaries does not file a Tax Return has made a claim (or provided
notice) that the Company or any of its Subsidiaries as the case may be, is
required to file a Tax Return for such jurisdiction. Neither the Company nor any
of its Subsidiaries is a party to any tax sharing agreement or tax indemnity
agreement under which it could be liable for Taxes payable to a Governmental
Entity or payments with respect to Taxes payable to a third party. Neither the
Company nor any of its Subsidiaries has any liability for the Taxes of any
person other than the Company or one of its Subsidiaries (i) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law) or (ii) as a transferee or successor. Neither the Company nor any of its
Subsidiaries has been either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of stock qualifying for tax-free treatment under Section 355 of the
Code (i) in the two years prior to the date of this Agreement or (ii) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code and the
Treasury Regulations promulgated thereunder) with the Merger.
Section 3.7 Intellectual Property.
(a) As used herein, the term "Intellectual Property" means all
trademarks, service marks, trade names, Internet domain names, designs, logos,
slogans and general intangibles of like nature, together with goodwill,
registrations and applications relating to the foregoing; patents, copyrights
(including registrations and applications for any of the foregoing) and the
content and information contained on any Web site; computer programs, including
any and all software implementations of algorithms, models and methodologies
whether in source code or object code form, databases and compilations,
including any and all data and collections of data, all documentation, including
user manuals and training materials, related to any of the foregoing
(collectively, "Software"); confidential information, technology, know-how,
inventions, processes, formulae, algorithms, models and methodologies (such
confidential items, collectively "Trade Secrets") held for use or used in the
business of the Company or its Subsidiaries as conducted as of the Closing Date
and any licenses to use any of the foregoing.
(b) Except as would not have a Material Adverse Effect on the
Company:
(i) the Company or its Subsidiaries own or have the
right to use all Intellectual Property, free and clear of all liens or other
encumbrances;
(ii) any Intellectual Property owned or used by the
Company or its Subsidiaries has been duly maintained, is valid and subsisting,
in full force and effect and have been properly maintained or where necessary
renewed;
(iii) the Company and its Subsidiaries have not received
written notice from any third party regarding any actual or potential
infringement or misappropriation by the Company or its Subsidiaries of any
intellectual property of such
18
third party, and the Company has no Knowledge of any basis for such a claim
against the Company or its Subsidiaries;
(iv) the Company and its Subsidiaries have not received
written notice from any third party regarding any assertion or claim challenging
the validity of any Intellectual Property owned or used by the Company or its
Subsidiaries and the Company has no Knowledge of any basis for such a claim;
(v) no third party is misappropriating, infringing,
diluting or violating any Intellectual Property owned by the Company or its
Subsidiaries;
(vi) the agreements granting or obtaining any right to
use or practice any rights under any Intellectual Property, to which the Company
or its Subsidiaries are a party or otherwise bound, as licensee or licensor
thereunder, including, without limitation, license agreements, settlement
agreements and covenants not to xxx (collectively, the "License Agreements") are
valid and binding obligations of the Company or its Subsidiaries, enforceable in
accordance with their terms, and there exists no event or condition which will
result in a violation or breach of, or constitute a default by the Company or
its Subsidiaries or, to the Knowledge of the Company, the other party thereto,
under any such License Agreement;
(vii) the Company and its Subsidiaries take reasonable
measures to protect the confidentiality of Trade Secrets. To the Knowledge of
the Company, no Trade Secret of the Company or its Subsidiaries has been
disclosed or authorized to be disclosed to any third party other than pursuant
to a written nondisclosure agreement that adequately protects the Company and
its applicable Subsidiaries' proprietary interests in and to such Trade Secrets;
(viii) the consummation of the transactions contemplated
hereby will not result in the loss or impairment of the Company or its
Subsidiaries rights to own, use, or to bring any action for the infringement of,
any Intellectual Property, nor will such consummation require the consent of any
third party in respect of any Intellectual Property; and
(ix) to the Knowledge of the Company, the consummation
of the transactions contemplated by this Agreement will not result in: (A) the
granting by Company or its Subsidiaries of any rights or licenses to any
Intellectual Property of Company or its Subsidiaries, to any third party
(including a covenant not to xxx with respect to any Intellectual Property of
Company or its Subsidiaries); or (B) Parent or any of its Subsidiaries (other
than the Company) being bound by any material non-compete or other material
restriction on the operation of any business of the Parent or its Subsidiaries.
Section 3.8 Compliance; Permits.
(a) Compliance. Except with respect to Taxes and Environmental
Laws (which are the subject of Sections 3.6 and 3.13, respectively), neither the
Company nor any of its Subsidiaries is in conflict with, or in default or in
19
violation of any Legal Requirement applicable to the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries or any of their
respective businesses or properties is, or the Company believes is reasonably
likely to be, bound or affected, except, in each case, or in the aggregate, for
conflicts, violations and defaults that would not have a Material Adverse Effect
on the Company. As of the date hereof, no material investigation or review by
any Governmental Entity is pending or, to the Knowledge of the Company, has been
threatened in a writing delivered to the Company or any of its Subsidiaries,
against the Company or any of its Subsidiaries. There is no material judgment,
injunction, order or decree binding upon the Company or any of its Subsidiaries
which has or would reasonably be expected to have the effect of prohibiting or
materially impairing any material business practice of the Company or any of its
Subsidiaries, any acquisition of material property by the Company or any of its
Subsidiaries or the conduct of business by the Company and its Subsidiaries as
currently conducted.
(b) Permits. The Company and its Subsidiaries hold all
permits, licenses, variances, exemptions, orders and approvals from Governmental
Entities ("Permits") that are required for the operation of the business of the
Company, as currently conducted, the failure to hold which would reasonably be
expected to have a Material Adverse Effect on the Company (collectively, the
"Company Permits"). As of the date hereof, no suspension or cancellation of any
of the Company Permits is pending or, to the Knowledge of the Company,
threatened. The Company and its Subsidiaries are in compliance in all material
respects with the terms of the Company Permits.
Section 3.9 Litigation. As of the date hereof, there are no claims,
suits, actions or proceedings pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries, before any court,
governmental department, commission, agency, instrumentality or authority, or
any arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated hereby or which would reasonably be expected, either
singularly or in the aggregate with all such claims, actions or proceedings, to
have a Material Adverse Effect on the Company. Neither the Company nor any of
its Subsidiaries is subject to any outstanding and unsatisfied judgment, writ,
order, decree or arbitration ruling, award or finding.
Section 3.10 Brokers' and Finders' Fees. Except for fees payable to
Wachovia Securities, Inc. pursuant to an engagement letter dated October 19,
1999, a copy of which has been provided to Parent, the Company has not incurred,
nor will it incur, directly or indirectly, any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.
Section 3.11 Transactions With Affiliates. Except as set forth in
the Company SEC Reports, since the date of the Company's last proxy statement
filed with the SEC, no event has occurred as of the date hereof that would be
required to be reported by the Company pursuant to Item 404 of Regulation S-K
promulgated by the SEC.
20
Section 3.12 Employee Benefit Plans; ERISA; Employees.
(a) Section 3.12(a) of the Company Disclosure Letter contains
a true and complete list of each employment, bonus, deferred compensation,
incentive compensation, stock purchase, stock option, stock appreciation right
or other stock-based incentive, severance, change-in-control, or termination
pay, hospitalization or other medical, disability, life or other insurance,
supplemental unemployment benefits, profit-sharing, pension, or retirement plan,
program, agreement or arrangement and each other employee benefit plan, program,
agreement or arrangement, sponsored, maintained or contributed to or required to
be contributed to by the Company or any of its Subsidiaries, or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), that together with
the Company or any of its Subsidiaries would be deemed a "single employer"
within the meaning of Section 4001(b)(1) of ERISA, for the benefit of any
current or former employee or director of the Company, or any of its
Subsidiaries or any ERISA Affiliate, whether formal or informal and whether
legally binding or not (the "Plans"). Section 3.12(a) of the Company Disclosure
Letter identifies each of the Plans that is an "employee welfare benefit plan,"
or "employee pension benefit plan" as such terms are defined in Sections 3(1)
and 3(2) of ERISA (such plans being hereinafter referred to collectively as the
"ERISA Plans"). None of the Company, any of its Subsidiaries nor any ERISA
Affiliate has any formal plan or commitment, whether legally binding or not, to
create any additional Plan or modify or change any existing Plan that would
affect any current or former employee or director of the Company, any of its
Subsidiaries or any ERISA Affiliate.
(b) With respect to each of the Plans, the Company has
heretofore delivered to the Parent true and complete copies of each of the
following documents, as applicable:
(i) a copy of the Plan (including all amendments
thereto) for each written Plan or a written description of any Plan that is not
otherwise in writing;
(ii) a copy of the annual report or Internal Revenue
Service Form 5500 Series, if required under ERISA, with respect to each ERISA
Plan for the last three Plan years ending prior to the date of this Agreement
for which such a report was filed;
(iii) a copy of the actuarial report, if required under
ERISA, with respect to each ERISA Plan for the last three Plan years ending
prior to the date of this Agreement;
(iv) a copy of the most recent Summary Plan Description,
together with all Summary of Material Modifications issued with respect to such
Summary Plan Description, if required under ERISA, with respect to each ERISA
Plan, and all other material employee communications relating to each ERISA
Plan;
(v) if the Plan is funded through a trust or any other
21
funding vehicle, a copy of the trust or other funding agreement (including all
amendments thereto) and the latest financial statements thereof, if any;
(vi) all contracts relating to the Plans with respect to
which the Company, any of its Subsidiaries or any ERISA Affiliate may have any
liability, including insurance contracts, investment management agreements,
subscription and participation agreements and record keeping agreements; and
(vii) the most recent determination letter received from
the IRS with respect to each Plan that is intended to be qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"). ----
(c) No liability under Title IV of ERISA has been incurred by
the Company, any of its Subsidiaries or any ERISA Affiliate since the Effective
Date of ERISA that has not been satisfied in full, and no condition exists that
presents a material risk to the Company, or any of its Subsidiaries or any ERISA
Affiliate of incurring any liability under such Title, other than liability for
premiums due to the Pension Benefit Guaranty Corporation ("PBGC"), which
payments have been or will be made when due.
(d) No Plan is subject to Title IV of ERISA.
(e) None of the Company, any of its Subsidiaries, any ERISA
Affiliate, any of the ERISA Plans, any trust created thereunder, nor to the
Company's Knowledge, any trustee or administrator thereof has engaged in a
transaction or has taken or failed to take any action in connection with which
the Company, any of its Subsidiaries or any ERISA Affiliate could be subject to
any material liability for either a civil penalty assessed pursuant to Section
409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975, 4976 or 4980B
of the Code.
(f) All contributions and premiums required to be paid under
the terms of each of the ERISA Plans have, to the extent due, been paid in full
or properly recorded on the financial statements or records of the Company or
its Subsidiaries.
(g) No Plan is a "multi-employer pension plan," as such term
is defined in Section 3(37) of ERISA.
(h) Each of the Plans has been operated and administered in
all material respects in accordance with applicable Legal Requirements,
including but not limited to ERISA and the Code.
(i) Each of the ERISA Plans that is intended to be "qualified"
within the meaning of Section 401(a) of the Code is so qualified. The Company
has applied for and received a currently effective determination letter from the
IRS stating that it is so qualified, and, to the Knowledge of the Company, no
event has occurred which would affect such qualified status.
22
(j) Any fund established under an ERISA Plan that is
intended to satisfy the requirements of Section 501(c)(9) of the Code has so
satisfied such requirements.
(k) No amounts payable under any of the Plans or any other
contract, agreement or arrangement with respect to which the Company or any of
its Subsidiaries may have any liability could fail to be deductible for federal
income tax purposes by virtue of Section 162(m) or Section 280G of the Code.
(l) No Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current or
former employees of the Company, its Subsidiaries or any ERISA Affiliate after
retirement or other termination of service (other than (i) coverage mandated by
applicable laws, (ii) death benefits or retirement benefits under any "employee
pension plan," as that term is defined in Section 3(2) of ERISA, (iii) benefits,
the full direct cost of which is borne by the current or former employee (or
beneficiary thereof)).
(m) The consummation of the transactions contemplated by
this Agreement will not, either alone or in combination with any other event,
(i) entitle any current or former employee, officer, director or consultant of
the Company, any of its Subsidiaries or any ERISA Affiliate to severance pay,
unemployment compensation or any other similar termination payment, or (ii)
accelerate the time of payment or vesting, or increase the amount of, or
otherwise enhance, any benefit due to any such employee, officer, director or
consultant. No agreement, arrangement or understanding has been entered into by
or on behalf of the Company or any of its Subsidiaries, on the one hand, and any
current or former employee, officer, director or consultant of the Company or
any of its Subsidiaries in contemplation of the negotiation or execution of this
Agreement or the consummation of the transactions contemplated hereby or any
other transaction involving a direct or indirect sale of control of the Company,
in each case that would entitle any such current or former employee, officer,
director or consultant of the Company or any of its Subsidiaries to any payment
or compensation (in the form of a severance payment, non-compete payment, change
in control bonus, stay bonus, unemployment benefit or otherwise) as a result of
the execution of this Agreement or the consummation of the transactions
contemplated hereby.
(n) There are no pending or, to the Company's Knowledge,
threatened or anticipated claims by or on behalf of any Plan, by any employee or
beneficiary under any such Plan or otherwise involving any such Plan (other than
routine claims for benefits).
(o) No employee of the Company is covered by a collective
bargaining agreement and no collective bargaining agreement is being negotiated
by the Company or any of its Subsidiaries. As of the date of this Agreement,
there is no material labor dispute, strike or work stoppage against the Company
or any of its Subsidiaries pending or, to the Knowledge of the Company,
threatened which may interfere with the respective business activities of the
Company or any of its Subsidiaries. As of the date of this Agreement, none of
the Company, any of its Subsidiaries or any of
23
their respective representatives or employees has committed any material unfair
labor practice in connection with the operation of the respective businesses of
the Company or any of its Subsidiaries, and there is no material charge or
complaint against the Company or any of its Subsidiaries by the National Labor
Relations Board or any comparable governmental agency pending or threatened in
writing.
Section 3.13 Environmental Matters.
(a) The Company is in compliance with all applicable
Environmental Laws, holds all permits and authorizations required under such
laws ("Environmental Permits") and complies with their terms and conditions,
except where the failure to be in compliance or hold such Environmental Permits
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. The Company has not received any written communication, whether
from a governmental authority, citizens group, employee or otherwise, that
alleges that the Company is not in such compliance. No proceeding is pending, or
to the Company's Knowledge threatened, to revoke, suspend, fail to renew, or
materially change the terms of any Environmental Permit held by the Company.
(b) There is no Environmental Claim pending or, to the
Company's Knowledge, threatened against the Company or, to the Company's
Knowledge, against any Person whose liability for any Environmental Claim the
Company has retained or assumed either contractually or by operation of law.
(c) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the presence, release, emission, discharge or disposal of any Hazardous Material
at any property currently or formerly owned or operated by the Company or at any
other location as a result of the Company's operations, that could form the
basis of any Environmental Claim against the Company or, to the Company's
Knowledge, against any Person whose liability for any Environmental Claim the
Company has retained or assumed either contractually or by operation of law,
except as would not have a Material Adverse Effect on the Company.
(d) The Company has made available to Parent copies of all
material investigations, audits, reports, and test results in its possession
concerning the Company's compliance with or liability pursuant to applicable
Environmental Laws or the presence of Hazardous Material at any property
currently or formerly owned or operated by the Company.
(e) For purposes of this Agreement, "Environmental Claim"
shall mean, with respect to any Person, any written notice by any Person
alleging potential liability (including, without limitation, potential liability
for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (i) the presence, or release into the
environment of any Hazardous Material at any location, whether or not owned or
operated by such Person or (ii) circumstances forming the basis
24
of any violation, or alleged violation, of any Environmental Law; "Environmental
Laws" shall mean all federal, state, local and foreign laws and regulations
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials; and "Hazardous Materials" shall mean any substance that has
been designated pursuant to Environmental Law as radioactive, toxic, hazardous
or otherwise a danger to human health or the environment, including PCBs,
asbestos, petroleum, urea-formaldehyde and all substances designated as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the Resource Conservation and Recovery Act.
Section 3.14 Contracts.
(a) Material Contracts. For purposes of this Agreement,
"Company Material Contract" shall mean:
(i) any "material contracts" (as such term is defined
in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Company and
its Subsidiaries;
(ii) any Contract containing any covenant: (A) limiting
the right of the Company or its Subsidiaries to engage in any material line of
business, make use of any material Intellectual Property (via License Agreement
or otherwise) or compete with any Person in any material line of business, (B)
granting any exclusive distribution or supply rights, or (C) otherwise having an
adverse effect on the right of the Company and its Subsidiaries to sell,
distribute or manufacture any material products or services or to purchase or
otherwise obtain any material software, components, parts or subassemblies; and
(iii) any Contract, or group of Contracts with a Person
(or group of affiliated Persons), the termination or breach of which would be
reasonably expected to have a Material Adverse Effect on the Company. For
purposes of this Agreement, "Contract" shall mean any written, oral or other
agreement, contract, subcontract, settlement agreement, lease, binding
understanding, instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan or legally binding commitment or
undertaking of any nature, as in effect as of the date hereof or as may
hereinafter be in effect.
(b) Schedule. Section 3.14(b) of the Company Disclosure
Letter sets forth a list of all the Company Material Contracts to which the
Company or one of its Subsidiaries is a party or is bound by as of the date
hereof which are described in Sections 3.14(a)(i) through 3.14(a)(iii) hereof.
25
(c) No Breach. All the Company Material Contracts are valid
and in full force and effect except to the extent they have previously expired
in accordance with their terms or if the failure to be in full force and effect,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company. Neither the Company nor any of its
Subsidiaries has violated any provision of, or committed or failed to perform
any act which, with or without notice, lapse of time or both would constitute a
default under the provisions of, any Company Material Contract, except in each
case for those violations and defaults which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on the
Company.
Section 3.15 Government Contracts.
(a) With respect to each Government Contract to which the
Company or any of its Subsidiaries is a party or Bid: (i) the Company or its
Subsidiary that is a party to such Government Contract (as defined in Section
3.15(d)) or Bid (as defined in Section 3.15(d)) has complied with all material
terms and conditions and all applicable requirements of statute, rule,
regulation, order or agreement, whether incorporated expressly, by reference or
by operation of law; (ii) all representations and certifications were current,
accurate and complete in all material respects when made, and the Company has
complied with all such representations and certifications; (iii) no allegation
has been made, either orally or in writing, that the Company or its Subsidiary
that is a party to such Government Contract or Bid is in breach or violation of
any statutory, regulatory or contractual requirement; (iv) no termination for
convenience, termination for default, cure notice or show cause notice has been
issued and received by the Company; (v) no cost incurred by the Company or one
of its Subsidiaries or one of their respective subcontractors has been
questioned or disallowed; and (vi) no money due to the Company or one of its
Subsidiaries has been (or has threatened to be) withheld or set off.
(b) Neither the Company, any of its Subsidiaries or any of
their current or, to the Company's Knowledge former employees is (or for the
last three years has been) (i) under administrative, civil or criminal
investigation, indictment or information, audit or internal investigation with
respect to any alleged irregularity, misstatement or omission regarding a
Government Contract or Bid, or (ii) suspended or debarred from doing business
with the U.S. Government or any state or local government or declared
nonresponsible or ineligible for government contracting. Neither the Company nor
any of its Subsidiaries has made a voluntary disclosure to any U.S. Government,
state or local government entity with respect to any alleged irregularity,
misstatement or omission arising under or relating to any Government Contract or
Bid. The Company does not have Knowledge of any circumstances that would warrant
the institution of suspension or debarment proceedings or the finding of
nonresponsibility or ineligibility on the part of the Company or one of its
Subsidiaries or any of the current employees in the future.
(c) Neither the U.S. Government, any state or local
government nor any prime contractor, subcontractor or vendor has asserted any
claim or initiated any
26
dispute proceeding against the Company or any of its Subsidiaries or one of
their current employees, nor has the Company or one of its Subsidiaries asserted
any claim or initiated any dispute proceeding, directly or indirectly, against
any such party, concerning any Government Contract or Bid. The Company has no
Knowledge of any facts upon which such a claim or dispute proceeding may be
based.
(d) For purposes of this Section 3.15, the following terms
shall have the meanings set forth below:
(i) "Bid" means any quotation, bid or proposal by the
Company or any of its Subsidiaries which, if accepted or awarded, would lead to
a contract with the U.S. Government or any other entity, including a prime
contractor or a higher tier subcontractor to the U.S. Government, for the
design, manufacture or sale of products or the provision of services by the
Company or one of its Subsidiaries.
(ii) "Government Contract" means any prime contract,
subcontract, teaming agreement or arrangement, joint venture, basic ordering
agreement, letter contract, purchase order, delivery order, Bid, change order,
arrangement or other commitment of any kind relating to the business of the
Company or one of its Subsidiaries between the Company or one of its
Subsidiaries and (i) the U.S. Government, (ii) any prime contractor to the U.S.
Government or (iii) any subcontractor with respect to any contract described in
clause (i) or (ii).
(iii) "U.S. Government" means the United States
government including any and all agencies, commissions, branches,
instrumentalities and departments thereof.
Section 3.16 Disclosure. Neither the Proxy Statement, the Schedule
14D-9 nor any information supplied by the Company for inclusion in the Offer
Documents will, at the respective times the Proxy Statement, the Schedule 14D-9,
the Offer Documents or any amendments or supplements thereto are filed with the
SEC or are first published, sent or given to the Company's shareholders, as the
case may be, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they
are made, not misleading. The Proxy Statement and the Schedule 14D-9, will, when
filed by the Company with the SEC, comply as to form in all material respects
with the applicable provisions of the Exchange Act. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to
information supplied by or on behalf of Parent or Merger Sub which is contained
in any of the foregoing documents, or which Parent or Acquisition failed to
supply.
Section 3.17 Fairness Opinion. The Company's Board of Directors has
received a written opinion from Wachovia Securities, Inc. ("Wachovia"), dated as
of October 21, 2002, to the effect that, as of such date, the cash consideration
to be received by the Company's shareholders in the Offer and the Merger is fair
from a financial point of view to such shareholders, and has delivered to Parent
a copy of such opinion. The
27
Company has been authorized by Wachovia to permit the inclusion of such opinion
in its entirety in the Offer Documents, the Schedule 14D-9 and the Proxy
Statement.
Section 3.18 Takeover Statutes. The Board of Directors of the
Company has taken all actions so that the restrictions contained in Sections
607.0901 and 607.0902 of the Florida Law applicable to Parent, and any other
similar Legal Requirement, will not apply to Parent during the pendency of this
Agreement, including the execution, delivery or performance of this Agreement
and the consummation of the Offer and the Merger and the other transactions
contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company, subject to the
exceptions specifically disclosed in writing in the disclosure letter supplied
by Parent and Merger Sub to the Company, dated as of the date hereof, and
certified by a duly authorized officer of each of Parent and Merger Sub (the
"Parent Disclosure Letter") (it being agreed that disclosure of any item under a
Section of this Article IV in the Parent Disclosure Letter shall be deemed
disclosure with respect to other Sections of this Article IV if the
applicability of such item to any other Section is reasonably apparent from the
face of the Parent Disclosure Letter), and except as disclosed in the Parent SEC
Reports (to the extent that a disclosure is reasonably apparent from the face of
an item in the Parent SEC Report), as follows:
Section 4.1 Organization; Standing; Charter Documents; Subsidiaries.
(a) Organization; Standing and Power. Parent and each of its
Subsidiaries is a corporation or other organization duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has the requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to be so organized, existing and in good
standing would not reasonably be expected to have a Material Adverse Effect on
Parent, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary other than in such
jurisdictions where the failure to so qualify or to be good standing,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Parent.
(b) Charter Documents. Parent has delivered or made
available to the Company (i) a true and correct copy of the Certificate of
Incorporation (including any Certificate of Designations) and Bylaws of Parent,
each as amended to date (collectively, the "Parent Charter Documents") and (ii)
the Subsidiary Charter Documents of each of its Subsidiaries, and each such
instrument is in full force and effect. Parent is
28
not in violation of any of the provisions of the Parent Charter Documents and
each Subsidiary is not in violation of its respective Subsidiary Charter
Documents.
(c) Subsidiaries. Section 4.1(c) of the Parent Disclosure
Letter sets forth a list of all the Subsidiaries of Parent. All the outstanding
shares of capital stock of, or other equity interests in, each such Subsidiary
have been validly issued and are fully paid and nonassessable and are owned
directly or indirectly by Parent, free and clear of all Liens, including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests, except for restrictions imposed by
applicable securities laws, except in the case of a Subsidiary, as would not
reasonably be expected to have a Material Adverse Effect on Parent or a Material
Adverse Effect on such Subsidiary. Except as contemplated by this Agreement,
Merger Sub does not hold, nor has it held, any material assets or incurred any
material liabilities nor has Merger Sub carried on any business activities other
than in connection with the Merger and the transactions contemplated by this
Agreement.
Section 4.2 Authority; Non-Contravention; Necessary Consents.
(a) Authority. Each of Parent and Merger Sub has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby has
been duly authorized by all necessary corporate action on the part of Parent and
Merger Sub and no other corporate proceedings on the part of Parent or Merger
Sub are necessary to authorize the execution and delivery of this Agreement or
to consummate the Offer or the Merger and the other transactions contemplated
hereby, subject to the filing of the Articles of Merger pursuant to Florida Law.
This Agreement has been duly executed and delivered by Parent and Merger Sub
and, assuming due execution and delivery by the Company, constitutes the valid
and binding obligation of Parent, enforceable against Parent and Merger Sub in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(b) Non-Contravention. The execution and delivery of this
Agreement by Parent and Merger Sub does not, and performance of this Agreement
by Parent will not: (i) conflict with or violate the Parent Charter Documents,
the Articles of Incorporation or Bylaws of Merger Sub or any other Subsidiary
Charter Documents of any Subsidiary of Parent, (ii) conflict with or violate any
material Legal Requirement applicable to Parent, Merger Sub or any of Parent's
other Subsidiaries or by which Parent, Merger Sub or any of Parent's other
Subsidiaries or any of their respective properties is bound or affected or (iii)
result in any breach of or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give rise to any rights
of termination, amendment, acceleration under or cancellation of, Parent's
Credit Agreement (assuming the receipt of an appropriate amendment to Parent's
Credit Agreement or the receipt of an appropriate consent from the lenders under
Parent's Credit Agreement to permit Parent to draw down funds under Parent's
Credit Agreement to pay for the Shares that Merger Sub becomes obligated to
accept for payment and pay for
29
pursuant to the Offer and to pay the aggregate Merger Consideration pursuant to
the Merger), except, in the case of clauses (ii) and (iii) above, for any
conflict, violation, breach, violation, impairment, alteration, termination,
amendment, acceleration, cancellation or creation that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Parent. For purposes of this Agreement, "Parent's Credit Agreement" shall mean
the Credit Agreement, dated as of September 28, 2001, by and among Parent, as
borrower, the lenders who are or may become a party to such Credit Agreement, as
lenders, First Union National Bank, a national banking association, as
administrative agent for the lenders, TD Securities (USA) Inc., as syndication
agent and Mellon Bank, N.A., as documentation agent.
(c) Necessary Consents. No consent, approval, order or
authorization of, or registration, declaration or filing with any Governmental
Entity is required to be obtained or made by Parent in connection with the
execution and delivery of this Agreement or the consummation of the Merger and
other transactions contemplated hereby, except for (i) the Necessary Consents
and (ii) such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Parent,
Merger Sub or the Company or materially adversely affect the ability of the
parties hereto to consummate the Merger within the time frame in which the
Merger would otherwise be consummated in the absence of the need for such
consent, approval, order, authorization, registration, declaration or filings.
Section 4.3 Brokers' and Finders' Fees. Except for fees payable to
Bear Xxxxxxx Inc., Parent has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
Section 4.4 Disclosure. None of the information supplied by Parent
or Merger Sub for inclusion in the Preliminary Statement, the Proxy Statement or
the Schedule 14D-9 will, at the date mailed to the Company's shareholders and at
the time of the Company Shareholders' Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated in the
Preliminary Statement and the Proxy Statement or necessary in order to make the
statements in the Preliminary Statement and the Proxy Statement, in light of the
circumstances under which they are made, not misleading. The Schedule TO, the
Offer Documents and any information supplied by Parent or Merger Sub for
inclusion in the Schedule 14D-9 will not, at the respective times the Schedule
TO, the Offer Documents, the Schedule 14D-9 or any amendments or supplements
thereto are filed with the SEC or are first published, sent or given to the
Company's shareholders, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Schedule TO will,
when filed by Parent with the SEC, comply as to form in all material aspects
with the applicable provisions of the Exchange Act. Notwithstanding the
foregoing, Parent makes no representation or warranty with respect to
information supplied by or on behalf of the Company, which is contained in any
of the foregoing documents, or which the Company failed to supply.
30
Section 4.5 Sufficient Funds. Parent and Merger Sub will have
sufficient cash available to pay for the Shares that Merger Sub becomes
obligated to accept for payment and pay for pursuant to the Offer and to pay the
aggregate Merger Consideration pursuant to the Merger.
ARTICLE V
CONDUCT PRIOR TO THE EFFECTIVE TIME
Section 5.1 Conduct of Business by the Company.
(a) Ordinary Course. During the period from the date hereof
and continuing until the earlier of (x) the termination of this Agreement
pursuant to its terms, (y) the Effective Time or (z) such time the designees of
Parent shall constitute a majority of the Company's Board of Directors, the
Company shall, and shall cause each of its Subsidiaries to, except as otherwise
expressly contemplated by this Agreement or to the extent that Parent shall
otherwise consent in writing, carry on its business in the usual, regular and
ordinary course, in substantially the same manner as heretofore conducted, and
use all reasonable efforts consistent with past practices and policies to (i)
preserve intact its present business organization, (ii) keep available the
services of the Company Key Employees, and (iii) preserve its relationships with
customers, suppliers, licensors, licensees, and others with which it has
business dealings.
(b) Required Consent. In addition, without limiting the
generality of Section 5.1(a), except as permitted by the terms of this
Agreement, and except as provided in Article V of the Company Disclosure Letter
or as reflected in the Company's budget as previously delivered to Parent,
without the prior written consent of Parent, during the period from the date
hereof and continuing until the earlier of the termination of this Agreement
pursuant to its terms or the Effective Time, the Company shall not do, and shall
not permit its Subsidiaries to do, any of the following:
(i) Enter into any new line of business material to it
and its Subsidiaries taken as a whole;
(ii) Declare, set aside or pay any dividends on or make
any other distributions (whether in cash, stock, equity securities or property)
in respect of any capital stock or split, combine or reclassify any capital
stock or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for any capital stock (other than dividends or
distributions paid by wholly-owned Subsidiaries of the Company to the Company or
to other wholly-owned Subsidiaries of the Company);
(iii) Purchase, redeem or otherwise acquire, directly or
indirectly, any shares of its capital stock or the capital stock of its
Subsidiaries, except repurchases of unvested shares at cost in connection with
the termination of the employment relationship with any employee pursuant to
stock option or purchase agreements in effect on the date hereof;
31
(iv) Issue, deliver, sell, authorize, pledge or
otherwise encumber any shares of capital stock, Voting Debt or any securities
convertible into shares of capital stock or Voting Debt, or subscriptions,
rights, warrants or options to acquire any shares of capital stock or Voting
Debt or any securities convertible into shares of capital stock or Voting Debt,
or enter into other agreements or commitments of any character obligating it to
issue any such securities or rights, other than issuances of Company Common
Stock upon the exercise of Company Options existing on the date hereof in
accordance with their present terms (including cashless exercises);
(v) Cause, permit or propose any amendments to its
Charter Documents or any of the Subsidiary Charter Documents of its
Subsidiaries;
(vi) Acquire or agree to acquire by merging or
consolidating with, or by purchasing any equity interest in or a portion of the
assets of, or by any other manner, any business or any Person or division
thereof, or otherwise acquire or agree to acquire any assets which are material,
individually or in the aggregate, to its business, other than acquisitions of
inventory and other assets in the ordinary course of business consistent with
past practices;
(vii) Enter into any joint ventures, strategic
partnerships or alliances that are material to any of its divisions or business
units if such entry would (A) present a material risk of delaying the Merger or
make it more difficult to obtain any Necessary Consent or (B) require a consent
of the other party thereto to consummate the Merger;
(viii) Sell, pledge, dispose of, transfer, lease,
license, or encumber, or authorize the sale, pledge, disposition, transfer,
lease, license, or encumbrance of, any material property or assets of the
Company or any of its Subsidiaries, except (A) sales, pledges, dispositions,
transfers, leases, licenses or encumbrances pursuant to existing Contracts which
have been made available to Parent prior to the date hereof, or (B) sales or
dispositions of inventory and other tangible current assets in the ordinary
course of business consistent with past practices;
(ix) Make any loans, advances or capital contributions
to, or investments in, any other Person, other than loans or investments by the
Company or one of its Subsidiaries to or in the Company or one of its
wholly-owned Subsidiaries;
(x) Except as required by GAAP or the SEC as concurred
in by its independent auditors, make any material change in its methods or
principles of accounting;
(xi) Make or change any material Tax election;
(xii) Settle any material claim (including any Tax
claim), action or proceeding involving money damages, except (A) in the ordinary
course of business consistent with past practice or (B) to the extent subject to
reserves existing as of the date hereof in accordance with GAAP;
32
(xiii) Except as required by Legal Requirements or
Contracts currently binding on the Company or its Subsidiaries, (1) increase in
any manner the amount of compensation or fringe benefits of, pay any bonus to or
xxxxx xxxxxxxxx or termination pay to, any executive officer or director of the
Company or key employee of the Company or any Subsidiary, division or business
unit of the Company (collectively, "Company Key Employees") or materially
increase the foregoing with respect to employees of the Company and its
Subsidiaries generally, (2) make any increase in, or commitment to increase, any
Company Benefit Plan (including any severance plan), adopt or amend, or make any
commitment to adopt or amend, any Company Benefit Plan or make any contribution,
other than regularly scheduled contributions, to any Company Benefit Plan, (3)
waive any stock repurchase rights, accelerate, amend or change the period of
exercisability of Company Options or restricted stock, or reprice any Company
Options or authorize cash payments in exchange for any Company Options, (4)
enter into any employment, severance, termination or indemnification agreement
with any Company employee, (5) make any material oral or written representation
or commitment with respect to any material aspect of any Company Benefit Plan
that is not materially in accordance with the existing written terms and
provision of such Company Benefit Plan, (6) grant any stock appreciation right,
phantom stock award, stock-related award or performance award (whether payable
in cash, shares or otherwise) (each, a "SAR") to any Person (including any
Company Employee), or (7) enter into any agreement with any Company employee the
benefits of which are (in whole or in part) contingent or the terms of which are
materially altered upon the occurrence of a transaction involving the Company of
the nature contemplated hereby;
(xiv) Subject Parent or the Surviving Corporation or any
of their respective Subsidiaries to any non-compete or other material
restriction on any of their respective businesses following the Closing;
(xv) Enter into any agreement or commitment the effect
of which would be to grant to a third party following the Merger any actual or
potential right of license to any material Intellectual Property owned by Parent
or any of its Subsidiaries;
(xvi) Enter into, modify or amend in a manner adverse in
any material respect to such party, or terminate any Company Material Contract
or waive, release or assign any material rights or claims thereunder, in each
case, in a manner adverse in any material respect to such party, other than any
modification, amendment or termination of any such Company Material Contract in
the ordinary course of business consistent with past practice;
(xvii) (i) Incur any indebtedness for borrowed money or
guarantee any such indebtedness of another Person, issue or sell any debt
securities or options, warrants, calls or other rights to acquire any debt
securities of it, guarantee any debt securities of another Person, enter into
any "keep well" or other agreement to maintain any financial statement condition
of any other Person (other than any wholly-owned Subsidiary of the Company) or
enter into any arrangement having the economic
33
effect of any of the foregoing (collectively, "Indebtedness"), except for
Indebtedness for borrowed money under the Company's existing credit facilities
or replacement credit facilities in an aggregate amount not materially larger
than the Company's existing credit facilities, or (ii) make or authorize any
capital expenditure materially in excess of the Company's budget as disclosed to
Parent prior to the date hereof;
(xviii) Write up, write down or write off the book value
of any assets other than in the ordinary course of business or otherwise not in
excess of $2 million;
(xix) Take any action to render inapplicable, or to
exempt any third party from any state takeover law or state law that purports to
limit or restrict business combinations or the ability to acquire or vote
shares, except to the extent that the Company would be permitted to effect a
Change of Company Recommendation pursuant to Section 6.1(e); or
(xx) Agree in writing or otherwise to take any of the
actions described in (i) through (xix) above.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Acquisition Proposals.
(a) No Solicitation. After the execution of this Agreement
and prior to the Effective Time, the Company agrees that neither it nor any of
its Subsidiaries nor any of their respective officers, directors, advisors,
agents, accountants, consultants, employees, investment bankers and legal
counsel (collectively, "Representatives") shall directly or indirectly: (i)
solicit, initiate, encourage, knowingly facilitate or induce any inquiry with
respect to, or the making, submission or announcement of, any Acquisition
Proposal (as defined in Section 6.1(g)(i)), (ii) participate in any discussions
or negotiations regarding, or furnish to any Person any nonpublic information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes or may reasonably be expected to lead
to, any Acquisition Proposal, (iii) engage in discussions with any Person with
respect to any Acquisition Proposal, except as to the existence of these
provisions, (iv) approve, endorse or recommend any Acquisition Proposal (except
to the extent specifically permitted pursuant to Section 6.1(e)), or (v) enter
into any letter of intent or similar document or any contract agreement or
commitment contemplating or otherwise relating to any Acquisition Proposal or
any transaction contemplated thereby. The Company shall immediately terminate,
and shall cause each of its Subsidiaries and its and their Representatives to
immediately terminate, all activities, discussions or negotiations, if any, with
any third party with respect to, or any that could reasonably be expected to
lead to or contemplate the possibility of, an Acquisition Proposal. The Company
shall promptly request that each person which has heretofore executed a
confidentiality agreement with the
34
Company or any of its affiliates or Subsidiaries or any of its or their
Representatives with respect to such Person's consideration of a possible
Acquisition Proposal to promptly return or destroy (which destruction shall be
certified in writing by such person to the Company) all confidential information
heretofore furnished by the Company or any of its affiliates or Subsidiaries or
any of its or their Representatives to such person or any of its affiliates or
Subsidiaries or any of its or their Representatives.
(b) Notification Of Unsolicited Acquisition Proposals.
(i) As promptly as practicable after receipt of any
Acquisition Proposal or any request for nonpublic information or inquiry which
it reasonably believes could lead to an Acquisition Proposal, the Company shall
provide Parent with oral and written notice of the material terms and conditions
of such Acquisition Proposal, request or inquiry, and the identity of the Person
or group making any such Acquisition Proposal, request or inquiry and a copy of
all written materials provided in connection with such Acquisition Proposal,
request or inquiry. The Company shall provide Parent as promptly as practicable
oral and written notice setting forth all such information as is reasonably
necessary to keep Parent informed in all material respects of the status and
details (including material amendments or proposed material amendments) of any
such Acquisition Proposal, request or inquiry and shall promptly provide to
Parent a copy of all written materials subsequently provided in connection with
such Acquisition Proposal, request or inquiry.
(ii) The Company shall provide Parent with forty-eight
(48) hours prior notice (or such lesser prior notice as is provided to the
members of its Board of Directors) of any meeting of its Board of Directors at
which its Board of Directors is reasonably expected to discuss or consider any
Acquisition Proposal.
(c) Superior Offers. Notwithstanding anything to the
contrary contained in Section 6.1(a), prior to the acceptance of a majority of
the then outstanding Shares by Merger Sub in the Offer, in the event that the
Company receives an unsolicited, bona fide written Acquisition Proposal from a
third party that its Board of Directors has in good faith concluded (following
consultation with its outside legal counsel and its financial advisor), is, or
is reasonably likely to result in, a Superior Offer, it may then take the
following actions (but only (A) if and to the extent that its Board of Directors
concludes in good faith, following consultation with its outside legal counsel,
that there is a reasonable possibility that the failure to do so would result in
a breach of its fiduciary obligations under applicable Legal Requirements and
(B) after the Company has given written notice ("Superior Offer Notice") to
Parent that expressly states (1) that it has received a bona fide, written
Acquisition Proposal from a third party that the Company's Board of Directors
has in good faith concluded (following consultation with its outside legal
counsel and its financial advisor), is, or is reasonably likely to result in, a
Superior Offer, (2) that the Company's Board of Directors has concluded in good
faith, following consultation with its outside legal counsel, that there is a
reasonable possibility that the failure to take such action would result in a
breach of its fiduciary obligations under applicable Legal Requirements, (3) the
identity of the third party making such
35
Acquisition Proposal and the material terms and conditions of such Acquisition
Proposal, and (4) the nature of the action that the Company intends to take):
(i) Furnish nonpublic information to the third party
making such Acquisition Proposal, provided that (A) it receives from the third
party an executed confidentiality agreement containing customary limitations on
the use and disclosure of all nonpublic written and oral information furnished
to such third party on its behalf, the terms of which are at least as
restrictive as the terms contained in the Confidentiality Agreement (as defined
in Section 6.2(a)) and (B) contemporaneously with furnishing any such nonpublic
information to such third party, it furnishes such nonpublic information to
Parent (to the extent such nonpublic information has not been previously so
furnished); and
(ii) Engage in negotiations with the third party with
respect to the Acquisition Proposal.
(d) For a period of not less than three (3) Business Days
after Parent's receipt from the Company of each Superior Offer Notice, the
Company shall, if requested by Parent, negotiate in good faith with Parent to
revise this Agreement so that the Acquisition Proposal that constituted a
Superior Offer no longer constitutes a Superior Offer.
(e) Changes of Recommendation. Neither the Company's Board
of Directors nor any committee thereof shall withdraw, modify or change, or
propose publicly to withdraw, modify or change, in a manner adverse to Parent,
the Company Board of Director's recommendation that the shareholders of the
Company accept the Offer, tender their Shares to Merger Sub thereunder and, if
required by Legal Requirements, approve and adopt this Agreement and the Merger.
Notwithstanding the foregoing, (A) in response to the receipt of a Superior
Offer that has not been withdrawn and continues to constitute a Superior Offer
after the Company's compliance with Section 6.1(d), the Board of Directors of
the Company may withhold or withdraw its recommendation that the shareholders of
the Company accept the Offer, tender their Shares to Merger Sub thereunder and,
if required by Legal Requirements, approve and adopt this Agreement and the
Merger, and, (B) in the case of a Superior Offer that is a tender or exchange
offer made directly to its shareholders, may recommend that its shareholders
accept the tender or exchange offer (any of the foregoing actions in (A) or (B),
whether by a Board of Directors or a committee thereof, a "Change of Company
Recommendation"), if in the case of (A) or (B) all of the following conditions
in clauses (i) through (iv) are met:
(i) Merger Sub shall not yet have accepted a majority
of the then outstanding Shares in the Offer;
(ii) It shall have (A) provided to Parent written
notice which shall state expressly (1) that it has received a Superior Offer,
(2) the material terms and conditions of the Superior Offer and the identity of
the Person or group making the Superior Offer, and (3) that it intends to effect
a Change of Company Recommendation
36
and the manner in which it intends to do so, and (B) provided to Parent a copy
of all written materials delivered to the Person or group making the Superior
Offer;
(iii) Its Board of Directors has concluded in good
faith, after consultation with its outside legal counsel, that, in light of such
Superior Offer, there is a reasonable possibility that failure of the Company
Board of Directors to effect a Change of Company Recommendation would result in
a breach of its fiduciary obligations to its shareholders under applicable Legal
Requirements; and
(iv) It shall not have breached in any material respect
any of the provisions set forth in this Section 6.1.
(f) Compliance with Tender Offer Rules. Nothing contained in
this Agreement shall prohibit the Company or the Company Board of Directors, in
connection with a tender or exchange offer for the Company's outstanding
securities by a third party, from taking and disclosing to its shareholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act or making any disclosure to the Company's shareholders if, the Company's
Board of Directors has concluded in good faith, after consultation with its
outside legal counsel, that the failure to do so would be inconsistent with
applicable Legal Requirements; provided that the content of any such disclosure
thereunder shall be governed by the terms of this Agreement. Without limiting
the foregoing proviso, the Company shall not effect a Change of Company
Recommendation unless specifically permitted pursuant to the terms of Section
6.1(e).
(g) Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
(i) "Acquisition Proposal", with respect to the
Company, shall mean any offer or proposal, relating to any transaction or series
of related transactions involving: (A) any purchase from the Company or
acquisition by any Person or "group" (as defined under Section 13(d) of the
Exchange Act) of more than a ten percent (10%) interest in the total outstanding
voting securities of the Company or any of its Subsidiaries or any tender or
exchange offer that if consummated would result in any Person or group
beneficially owning ten percent (10%) or more of the total outstanding voting
securities of the Company or any of its Subsidiaries or any merger,
consolidation, business combination or similar transaction involving the Company
or any of its Subsidiaries, (B) any sale, lease (other than in the ordinary
course of business), exchange, transfer, license (other than in the ordinary
course of business), acquisition or disposition of more than ten percent (10%)
of the assets of the Company (including its Subsidiaries taken as a whole), or
(C) any liquidation or dissolution of the Company; and
(ii) "Superior Offer," with respect to the Company,
shall mean an unsolicited, bona fide written offer made by a third party to
acquire, directly or indirectly, pursuant to a tender or exchange offer, merger,
consolidation or other business combination, all or substantially all of the
assets of the Company or a majority of the total outstanding voting securities
of the Company and as a result of which the shareholders of the Company
immediately preceding such transaction would
37
hold less than fifty percent (50%) of the equity interests in the surviving or
resulting entity of such transaction or any direct or indirect parent or
subsidiary thereof, on terms that the Board of Directors of the Company has in
good faith concluded (following consultation with its outside legal counsel and
its financial adviser), taking into account, among other things, all legal,
financial, regulatory and other aspects of the offer and the Person making the
offer, to be more favorable, from a financial point of view, to the Company's
shareholders (in their capacities as shareholders) than the terms of the Offer
and the Merger and is reasonably capable of being consummated.
Section 6.2 Confidentiality; Access to Information; No Modification
of Representations, Warranties or Covenants.
(a) Confidentiality. The parties acknowledge that the
Company and Parent have previously executed a Confidentiality Agreement dated
April 24, 2002 (the "Confidentiality Agreement"), which Confidentiality
Agreement will continue in full force and effect in accordance with its terms
and each of Parent and the Company will hold, and will cause its respective
Representatives to hold, any Information (as defined in the Confidentiality
Agreement) confidential in accordance with the terms of the Confidentiality
Agreement.
(b) Access to Information. Each of the Company, Merger Sub
and Parent will afford the other and the other's Representatives reasonable
access during normal business hours to its properties, books, records and
personnel during the period prior to the Effective Time to obtain all
information concerning its business, including the status of product development
efforts, properties, results of operations and personnel, as such other party
may reasonably request, and, during such period, upon request by the other party
hereto, each of Parent and Merger Sub, on the one hand, and the Company, on the
other hand, shall, and shall cause each of their respective Subsidiaries to,
furnish promptly to the other party a copy of any report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws; provided, however, that any
party may restrict the foregoing access to the extent that any law, treaty, rule
or regulation of any Governmental Entity applicable to such party requires such
party or its Subsidiaries to restrict or prohibit access to any such properties
or information.
(c) No Modification of Representations and Warranties or
Covenants. No information or knowledge obtained in any investigation or
notification pursuant to this Section 6.2, Section 6.4 or Section 6.5 shall
affect or be deemed to modify any representation or warranty contained herein,
the covenants or agreements of the parties hereto, the conditions to the
obligations of the parties or the remedies available to any of the parties under
this Agreement.
Section 6.3 Public Disclosure. Without limiting any other provision
of this Agreement, Parent and the Company will consult with each other before
issuing, and provide each other the opportunity to review, comment upon and
concur with, and use all reasonable efforts to agree on, any press release or
public statement with respect to this Agreement and the transactions
contemplated hereby, including the Offer,
38
the Merger, and any Acquisition Proposal and will not issue any such press
release or make any such public statement prior to such consultation and
agreement, except as may be required by applicable Legal Requirements or any
listing agreement with the NYSE, NASDAQ or any other applicable national or
regional securities exchange. The parties have agreed to the text of the joint
press release announcing the signing of this Agreement.
Section 6.4 Regulatory Filings; Reasonable Efforts.
(a) Regulatory Filings. Each of Parent, Merger Sub and the
Company shall coordinate and cooperate with one another and shall each use all
reasonable efforts to comply with, and shall each refrain from taking any action
that would impede compliance with, all Legal Requirements, and, as promptly as
practicable after the date hereof, each of Parent, Merger Sub and the Company
shall make all filings, notices, petitions, statements, registrations,
submissions of information, application or submission of other documents
required by any Governmental Entity in connection with the Offer and the Merger
and the transactions contemplated hereby, including, without limitation: (i)
Notification and Report Forms with the United States Federal Trade Commission
(the "FTC") and the Antitrust Division of the United States Department of
Justice ("DOJ") as required by the HSR Act, (ii) any other filing necessary to
obtain any Necessary Consent, (iii) filings under any other comparable
pre-merger notification forms required by the merger notification or control
laws of any applicable jurisdiction, as agreed by the parties hereto, and (iv)
any filings required under the Securities Act, the Exchange Act, any applicable
state or securities or "blue sky" laws and the securities laws of any foreign
country, or any other Legal Requirement relating to the Merger. Each of Parent
and the Company will cause all documents that it is responsible for filing with
any Governmental Entity under this Section 6.4(a) to comply in all material
respects with all applicable Legal Requirements.
(b) Exchange of Information. Parent, Merger Sub and the
Company each shall promptly supply the other with any information which may be
required in order to effectuate any filings or application pursuant to Section
6.4(a). Except where prohibited by applicable Legal Requirements, and subject to
the Confidentiality Agreement, each of the Company and Parent shall consult with
the other prior to taking a position with respect to any such filing, shall
permit the other to review and discuss in advance, and consider in good faith
the views of the other in connection with any analyses, appearances,
presentations, memoranda, briefs, white papers, arguments, opinions and
proposals before making or submitting any of the foregoing to any Governmental
Entity by or on behalf of any party hereto in connection with any investigations
or proceedings in connection with this Agreement or the transactions
contemplated hereby (including under any antitrust or fair trade Legal
Requirement), coordinate with the other in preparing and exchanging such
information and promptly provide the other (and its counsel) with copies of all
filings, presentations or submissions (and a summary of any oral presentations)
made by such party with any Governmental Entity in connection with this
Agreement or the transactions contemplated hereby, provided that with respect to
any such filing, presentation or submission, each of Parent and the Company need
not supply the other (or its counsel) with copies (or in case of oral
39
presentations, a summary) to the extent that applicable Legal Requirements
require such party or its Subsidiaries to restrict or prohibit access to any
such properties or information.
(c) Notification. Each of Parent, Merger Sub and the Company
will notify the other promptly upon the receipt of: (i) any comments from any
officials of any Governmental Entity in connection with any filings made
pursuant hereto and (ii) any request by any officials of any Governmental Entity
for amendments or supplements to any filings made pursuant to, or information
provided to comply in all material respects with, any applicable Legal
Requirement. Whenever any event occurs that is required to be set forth in an
amendment or supplement to any filing made pursuant to Section 6.4(a), Parent,
Merger Sub or the Company, as the case may be, will promptly inform the other of
such occurrence and cooperate in filing with the applicable Governmental Entity
such amendment or supplement.
(d) Reasonable Efforts. Each of the parties agrees to use
all reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including using all reasonable efforts to
accomplish the following: (i) the taking of all reasonable acts necessary to
cause the Offer Conditions and the conditions set forth in Article VII to be
satisfied, (ii) the obtaining of all necessary actions or nonactions, waivers,
consents, approvals, orders and authorizations from Governmental Entities and
the making of all necessary registrations, declarations and filings (including
registrations, declarations and filings with Governmental Entities, if any) and
the taking of all reasonable steps as may be necessary to avoid any suit, claim,
action, investigation or proceeding by any Governmental Entity, (iii) the
obtaining of all necessary consents, approvals or waivers from third parties,
including all Necessary Consents, (iv) the defending of any suits, claims,
actions, investigations or proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (v)
the execution or delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement. In connection with and without limiting the foregoing, the Company
and its Board of Directors shall, if any takeover statute or other Legal
Requirement is or becomes applicable to the Offer, the Merger, this Agreement or
any of the transactions contemplated by this Agreement, use all reasonable
efforts to ensure that the Merger and the other transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to render inapplicable or minimize
the effect of such takeover statute or other Legal Requirement on the Merger,
this Agreement and the transactions contemplated hereby.
(e) Limitation on Divestiture. Notwithstanding anything in
this Agreement to the contrary, nothing contained in this Agreement shall be
deemed to require Parent or the Company or any Subsidiary or affiliate thereof
to take or agree to
40
take any Action of Divestiture (as defined below). For purposes of this
Agreement, an "Action of Divestiture" shall mean making proposals, executing or
carrying out agreements or submitting to Legal Requirements providing for the
license, sale or other disposition or holding separate (through the
establishment of a trust or otherwise) of any assets or categories of assets
that are material to Parent, the Company or any of their respective Subsidiaries
or the holding separate of the Company capital stock or imposing or seeking to
impose any limitation on the ability of Parent, the Company or any of their
respective Subsidiaries, to conduct their respective businesses or own such
assets or to acquire, hold or exercise full rights of ownership of the Company's
business.
Section 6.5 Notification of Certain Matters.
(a) By the Company. The Company shall give prompt notice to
Parent and Merger Sub of any representation or warranty made by it contained in
this Agreement becoming untrue or inaccurate, or any failure of the Company to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement.
(b) By Parent. Parent and Merger Sub shall give prompt
notice to the Company of any representation or warranty made by it contained in
this Agreement becoming untrue or inaccurate, or any failure of Parent to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement.
Section 6.6 Third-Party Consents. As soon as practicable following
the date hereof, Parent and the Company will each use all reasonable efforts to
obtain any material consents, waivers and approvals under any of its or its
Subsidiaries' respective Contracts required to be obtained in connection with
the consummation of the transactions contemplated hereby.
Section 6.7 Equity Awards and Employee Benefits.
(a) Treatment of Stock Options. Each Company Option that is
outstanding immediately prior to the Effective Time, whether or not then vested
or exercisable, shall, effective as of the Effective Time, be cancelled in
exchange for a single lump sum cash payment, to be paid by the Surviving
Corporation as soon as practicable following the Closing upon its receipt of a
release or other documentation by the holder of such Company Option reasonably
satisfactory to the Parent and the Surviving Corporation, equal to the product
of (i) the number of shares of Company Common Stock subject to such Company
Option and (ii) the excess, if any, of the Merger Consideration for a share of
Company Common Stock at the Effective Time over the exercise price per share of
such Company Option (the aggregate amount payable under this Section 6.7(a), the
"Option Consideration"). Prior to the expiration date of the Offer, the Company
shall (i) obtain any required consents from holders of Company Options and (ii)
take all actions necessary to give effect to the provisions of paragraph (a) of
this Section 6.7.
41
(b) Waivers. The Company shall cause, within 10 Business
Days following the date hereof, the individuals listed on Section 6.7(b) of the
Company Disclosure Letter to waive such individuals' rights to payment made
pursuant to Section 6.7(a) above, to the extent that such payment would be
subject (in whole or part) to excise tax, as a result of section 4999 of the
Code, to the extent necessary to make such payment not subject to such excise
tax.
(c) Termination of Stock Option Plans. Except as otherwise
agreed to by the parties, prior to the Effective Time, (i) the Company shall
cause the Company Stock Option Plans to be terminated as of the Effective Time
and the provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of Company Common Stock or
any equity securities in any of the Subsidiaries to be deleted as of the
Effective Time, and (ii) the Company shall take all action necessary to ensure
that the payments or conversions into the right to receive cash set forth in
Section 6.7(a) extinguish all rights of participants under the Company Stock
Option Plans and such plans, programs and arrangements to receive equity
securities of the Company or any of its Subsidiaries and that following the
Effective Time no such participant shall have any right thereunder to acquire
equity securities of the Company, the Surviving Corporation, the Parent or any
of their respective Subsidiaries.
(d) Termination of the Company Employee Stock Purchase
Plans. The Company Purchase Plan shall be terminated on the date of this
Agreement. The rights of participants in each the Company Purchase Plan with
respect to the offering period currently underway under the Company Purchase
Plan shall be determined by treating the last Business Day prior to, or if more
administratively advisable, the last payroll date of the Company immediately
prior to, the date hereof, as the last day of such offering period and by making
such other pro-rata adjustments as may be necessary to reflect the shortened
offering period but otherwise treating such shortened offering period as a fully
effective and completed offering period for all purposes under the Company
Purchase Plan.
(e) Service Credit. Following the Effective Time, Parent
will use all reasonable efforts to give employees of the Surviving Corporation
or its Subsidiaries who were employees of Company or its Subsidiaries
immediately prior to the Effective Time ("Continuing Employees") full credit for
prior service with the Company or its Subsidiaries for purposes of eligibility
and vesting under any employee benefit plan maintained by Parent or its
Subsidiaries except where such crediting would (A) result in a duplication of
benefits or (B) otherwise cause Parent or its Subsidiaries or any employee
benefit plan maintained by Parent or its Subsidiaries to accrue or pay for
benefits that relate to any time period prior to the Continuing Employee's
participation in such plan.
(f) Employee Communications. With respect to matters
described in this Agreement, the Company will consult with Parent (and consider
in good faith the advice of Parent) prior to sending any notices or other
communication materials to its employees.
42
(g) The Company shall terminate any and all 401(k) plans of
the Company, effective not later than the day immediately preceding the Closing
Date. The Company shall provide Parent with evidence that such 401(k) plan(s)
have been terminated pursuant to resolution of Company's Board of Directors (the
form and substance of which shall be subject to review and approval by Parent)
not later than the day immediately preceding the Closing Date.
Section 6.8 Indemnification.
(a) Indemnity. From and after the Effective Time, Parent
will, and will cause the Surviving Corporation to, fulfill and honor in all
respects the obligations of the Company pursuant to any indemnification
agreements between the Company and its directors and officers immediately prior
to the Effective Time (the "Indemnified Parties"), subject to applicable Legal
Requirements. The Articles of Incorporation and Bylaws of the Surviving
Corporation will contain provisions with respect to exculpation and
indemnification that are at least as favorable to the Indemnified Parties as
those contained in the Articles of Incorporation and Bylaws of the Company as in
effect on the date hereof, which provisions will not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who,
immediately prior to the Effective Time, were directors, officers, employees or
agents of the Company, unless such modification is required by applicable Legal
Requirements.
(b) Insurance. For a period of six years after the Effective
Time, Parent shall cause, or shall cause the Surviving Corporation, to be
maintained in effect for the benefit of the Company's current directors and
officers liability insurance covering those persons who are covered by the
Company's directors' and officers' liability insurance policy as of the date
hereof on terms no less favorable to those applicable to the current directors
and officers of the Company for a period of six (6) years; provided, however,
that in no event will the Surviving Corporation be required to expend in excess
of two hundred (200%) of the annual premium currently paid by the Company for
such coverage (and to the extent annual premium would exceed two hundred (200%)
of the annual premium currently paid by the Company for such coverage, the
Surviving Corporation shall use all reasonable efforts to cause to be maintained
the maximum amount of coverage as is available for such two hundred (200%) of
such annual premium).
(c) Obligation. For six years after the Effective Time,
Parent shall indemnify and hold harmless the Indemnified Parties to the fullest
extent permitted under applicable Legal Requirements, with respect to all
actions or omissions by them prior to the Effective Time in their capacities as
officers or directors of the Company or any of its Subsidiaries (including with
respect to all acts or omissions by them in their capacities as officers or
directors of the Company or any of its Subsidiaries in connection with the
adoption and approval of this Agreement and the transactions contemplated
hereby). In the event any claim in respect of which indemnification is available
pursuant to the foregoing provisions is asserted or made within such six-year
period, all rights to
43
indemnification shall continue until such claim is disposed of or all judgments,
orders, decrees or other rulings in connection with such claim are duly
satisfied.
(d) Third-Party Beneficiaries. This Section 6.8 is intended
to be for the benefit of, and shall be enforceable by the Indemnified Parties
and their heirs and personal representatives and shall be binding on Parent and
the Surviving Corporation and its successors and assigns. In the event Parent or
the Surviving Corporation or its successor or assign (i) consolidates with or
merges into any other Person and shall not be the continuing or surviving
corporation or entity in such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then, and in each
case, proper provision shall be made so that the successor and assign of Parent
or the Surviving Corporation, as the case may be, honor the obligations set
forth with respect to Parent or the Surviving Corporation, as the case may be,
in this Section 6.8.
Section 6.9 Conveyance Taxes. Parent, Merger Sub and the Company
shall cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents regarding any real property
transfer or gains, sales, use, transfer, value added, stock transfer or stamp
taxes, any transfer, recording, registration or other fees or any similar taxes
which become payable in connection with the transactions contemplated by this
Agreement that are required or permitted to be filed on or before the Effective
Time. All such taxes will be paid by the party bearing the legal responsibility
for such payment; provided, however, that, as between Parent and the Company,
the Company shall pay on behalf of those Persons holding Company Common Stock
immediately prior to the Effective Time any real estate transfer or similar
Taxes payable by such Person in connection with Merger.
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.1 Conditions to the Obligations of Each Party to Effect
the Merger. The respective obligations of each party to this Agreement to effect
the Merger shall be subject to the satisfaction at or prior to the Closing Date
of each of the following conditions:
(a) Company Shareholders' Approval. The Company
Shareholders' Approval shall have been obtained; provided that Parent may not
assert this condition if it fails to vote all Shares held by it or Merger Sub in
favor of the Merger and the Company may not assert this condition if it fails to
comply with Section 2.8
(b) No Order. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which (i) is in effect and (ii)
has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger (which illegality or prohibition would have a
material impact on Parent and its Subsidiaries, on a combined
44
basis with the Company and its Subsidiaries, if the Merger were consummated
notwithstanding such statute, rule, regulation, executive order, decree,
injunction or other order).
(c) Purchase of Shares. Parent or Merger Sub shall have
purchased Shares pursuant to the Offer, except that this condition shall not be
a condition to Parent's and Merger Sub's obligation to effect the Merger if
Parent or Merger Sub shall have failed to purchase Shares pursuant to the Offer
in breach of their obligations under this Agreement; and
(d) HSR Act. Any waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as provided below,
whether before or after the Company Shareholders' Approval is obtained:
(a) by mutual written consent duly authorized by the Boards
of Directors of Parent and the Company;
(b) By either the Company or Parent, if as a result of any
of the Offer Conditions being incapable of being satisfied (i) Merger Sub shall
have failed to commence the Offer within 30 days following the date of this
Agreement or (ii) the Offer shall have expired without any Shares being
purchased pursuant thereto; provided, however, that the right to terminate this
Agreement pursuant to this Section 8.1(b) shall not be available to any party
whose failure to fulfill any obligation under this Agreement or the Offer has
been the cause of, or resulted in, the failure of the Shares to have been
purchased pursuant to the Offer;
(c) By either the Company or Parent, if the Offer has not
been consummated on or before April 30, 2003 (the "End Date"); provided,
however, that the right to terminate this Agreement pursuant to this Section
8.1(c) shall not be available to any party whose failure to fulfill any
obligation under this Agreement or the Offer has been the cause of, or resulted
in, the failure of the Offer to have been consummated by such date;
(d) by either the Company or Parent, if a Governmental
Entity shall have issued an order, decree or ruling or taken any other action
(including the failure to have taken an action), in any case having the effect
of permanently restraining, enjoining or otherwise prohibiting the Offer or the
Merger, which order, decree, ruling or other action is final and nonappealable;
45
(e) by Parent, if a Company Triggering Event (as defined
below in this Section 8.1) shall have occurred;
(f) by the Company, (i) if Merger Sub or Parent shall have
materially breached any of their respective covenants, obligations or other
agreements under this Agreement, or (ii) if the representations and warranties
of Parent and Merger Sub set forth in this Agreement shall not be true and
correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" set forth therein) at and as of the date of the
Agreement and as of the expiration of the date of termination of this Agreement
(except to the extent expressly made as of an earlier date, in which case as of
such date) except where the failure to be so true and correct, individually or
in the aggregate would not reasonably be expected to have, a Material Adverse
Effect on the Parent; provided, further that the breach of the covenant,
obligation, agreement, representation or warranty is incapable of being or has
not been cured by Parent or Merger Sub prior to or on the date which is 30
calendar days immediately following written notice by the Company to Parent of
such breach or failure to perform; or
(g) by Parent, (i) if the Company shall have materially
breached any of its respective covenants, obligations or other agreements under
this Agreement, or (ii) if the representations and warranties of the Company set
forth in this Agreement shall not be true and correct (without giving effect to
any limitation as to "materiality" or "Material Adverse Effect" set forth
therein) at and as of the date of the Agreement and as of the expiration of the
date of termination of this Agreement (except to the extent expressly made as of
an earlier date, in which case as of such date), except where the failure to be
so true and correct, individually or in the aggregate would not reasonably be
expected to have, a Material Adverse Effect on the Company; provided, further
that the breach of the covenant, obligation, agreement, representation or
warranty is incapable of being or has not been cured by the Company prior to or
on the date which is 30 calendar days immediately following written notice by
Parent to the Company of such breach or failure to perform.
For the purposes of this Agreement, a "Company Triggering Event" shall be
deemed to have occurred if: (i) a Change of Company Recommendation shall have
occurred for any reason, (ii) the Company shall have failed to include in the
Preliminary Proxy, the Proxy Statement or the Schedule 14D-9 the recommendation
of its Board of Directors in favor of the adoption and approval of the Agreement
and the approval of the Merger and that the shareholders of the Company accept
the Offer, tender their Shares to Merger Sub pursuant to the Offer, (iii) the
Company Board of Directors fails to reaffirm (publicly, if so requested) its
recommendation in favor of the adoption and approval of the Agreement and the
approval of the Merger and that the shareholders of the Company accept the
Offer, tender their Shares to Merger Sub pursuant to the Offer within three (3)
calendar days after Parent requests in writing that such recommendation be
reaffirmed, (iv) the Company Board of Directors or any committee thereof shall
have approved or recommended any Acquisition Proposal, (v) a tender or exchange
offer relating to the Company's securities shall have been commenced by a Person
unaffiliated with Parent and (A) the Company shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Exchange Act,
within ten (10) Business Days after such tender or
46
exchange offer is first published, sent or given, a statement disclosing that
the Board of Directors of the Company recommends rejection of such tender or
exchange offer or (B) such tender or exchange offer shall result in such Person
beneficially owning fifty (50) percent or greater of the Company's outstanding
equity securities, or (vi) any Person unaffiliated with Parent shall
beneficially own twenty-five (25) percent or more of the Company's outstanding
equity securities.
Section 8.2 Notice of Termination; Effect of Termination. Any
termination of this Agreement under Section 8.1 above will be effective
immediately upon the delivery of a valid written notice of the terminating party
to the other party hereto. In the event of the termination of this Agreement as
provided in Section 8.1, this Agreement shall be of no further force or effect,
except (i) as set forth in Section 6.2(a), this Section 8.2, Section 8.3 and
Article IX, each of which shall survive the termination of this Agreement and
(ii) nothing herein shall relieve any party from liability for any willful
breach of this Agreement. No termination of this Agreement shall affect the
obligations of the parties contained in the Confidentiality Agreement, all of
which obligations shall survive termination of this Agreement in accordance with
their terms.
Section 8.3 Fees and Expenses.
(a) General. Except as set forth in this Section 8.3, all
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses whether or not the Merger is consummated; provided, however, that
Parent and the Company shall share equally any SEC filing fees and Parent shall
pay the filing fee for the Notification and Report Forms filed with the FTC and
DOJ under the HSR Act and premerger notification and reports forms under similar
applicable laws of other jurisdictions, in each case pursuant to Section 6.4(a).
(b) Payments.
(i) Payment by the Company. In the event that this
Agreement is terminated
(1) by Parent or the Company pursuant to
Sections 8.1(b) or 8.1(c), the Company shall pay Parent a fee equal to
four million dollars ($4,000,000) in immediately available funds (the
"Company Termination Fee"); provided, that (A) such payment shall be made
only if following the date hereof and prior to the termination of this
Agreement, there has been public disclosure of an Acquisition Proposal
with respect to the Company and (1) within nine (9) months following the
termination of this Agreement an Acquisition (as defined in Section
8.3(b)(iv)) is consummated or (2) within nine (9) months following the
termination of this Agreement the Company enters into an agreement
providing for an Acquisition of the Company and an Acquisition is
consummated within eighteen (18) months of the termination of this
Agreement and (B) such payment shall be made promptly, but in no event
47
later than two (2) Business Days after the consummation of such
Acquisition.
(2) by Parent pursuant to 8.1(e), the Company
shall promptly, but in no event later than two (2) Business Days after the
date of such termination, pay Parent the Company Termination Fee.
(ii) Parent Expenses. In the event that (A) this
Agreement is terminated by Parent or the Company, as applicable, pursuant to
Section 8.1(b) or 8.1(c) and following the date hereof and prior to the
termination of this Agreement there has been public disclosure of an Acquisition
Proposal with respect to the Company, or (B) this Agreement is terminated by
Parent pursuant to Section 8.1(e), then the Company shall pay Parent promptly
and from time to time (as applicable) an amount equal to Parent's documented or
documentable out-of-pocket expenses (including attorneys', accountants' and
financial advisors' fees and any fees incurred by Parent in connection with the
filing of the Schedule TO or the Proxy Statement with the SEC and the filing of
the Notification and Report Forms with the FTC and DOJ under the HSR Act and any
premerger notification and reports forms under similar applicable Legal
Requirements of other jurisdictions, in each case pursuant to Section 6.4(a)),
but which amount shall in no event exceed one million dollars ($1,000,000).
(iii) Interest and Costs; Other Remedies. The Company
acknowledges that the agreements contained in this Section 8.3(b) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, Parent would not enter into this Agreement;
accordingly, if the Company fails to pay in a timely manner the amounts due
pursuant to this Section 8.3(b), and, in order to obtain such payment, Parent
makes a claim that results in a judgment against the Company for the amounts set
forth in this Section 8.3(b), the Company shall pay to Parent its reasonable
costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amounts set forth in
this Section 8.3(b) at the prime rate of Citibank, N.A. in effect on the date
such payment was required to be made. Payment of the fees described in this
Section 8.3(b) shall not be in lieu of damages incurred in the event of breach
of this Agreement.
(iv) Certain Definitions. For the purposes of this
Section 8.3(b) only, "Acquisition" shall mean any of the following transactions
(other than the transactions contemplated by this Agreement): (i) a merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company pursuant to which the shareholders
of the Company immediately preceding such transaction hold less than sixty
percent (60%) of the aggregate equity interests in the surviving or resulting
entity of such transaction or any direct or indirect parent thereof, (ii) a sale
or other disposition by the Company of assets representing in excess of forty
percent (40%) of the aggregate fair market value of the Company's business
immediately prior to such sale, or (iii) the acquisition by any Person or group
(including by way of a tender offer or an exchange offer or issuance by the
Company or such Person or group), directly or indirectly, of beneficial
ownership or a right to acquire
48
beneficial ownership of shares representing in excess of forty percent (40%) of
the voting power of then outstanding shares of capital stock of the Company.
Section 8.4 Amendment. Subject to applicable Legal Requirements,
this Agreement may be amended by the parties hereto, by action taken or
authorized by their respective Boards of Directors, at any time before or after
the Company Shareholders' Approval is obtained, provided, after any such
approval, no amendment shall be made which by law or in accordance with the
rules of any relevant stock exchange requires further approval by such
shareholders without such further shareholder approval. This Agreement may not
be amended except by execution of an instrument in writing signed on behalf of
each of Parent, Merger Sub and the Company.
Section 8.5 Extension; Waiver. At any time prior to the Effective
Time either party hereto, by action taken or authorized by its Board of
Directors, may, to the extent legally allowed: (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto, and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties. The
representations and warranties of the Company, Parent and Merger Sub contained
in this Agreement, or any instrument delivered pursuant to this Agreement, shall
terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time and this Article IX shall survive the Effective Time.
Section 9.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (i) on the date of delivery
if delivered personally, (ii) on the date of confirmation of receipt (or, the
first Business Day following such receipt if the date is not a Business Day) of
transmission by telecopy or telefacsimile, or (iii) on the date of confirmation
of receipt (or, the first Business Day following such receipt if the date is not
a Business Day) if delivered by a nationally recognized courier service. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:
(a) if to Parent or Merger Sub, to:
DRS Technologies, Inc.
0 Xxxxxx Xxx
00
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to the Company, to:
Paravant Inc.
00 Xxxxxxxxxxxx Xxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with copies to:
Holland & Knight LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx XxXxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Section 9.3 Interpretation; Knowledge.
(a) When a reference is made in this Agreement to Exhibits,
such reference shall be to an Exhibit to this Agreement unless otherwise
indicated. When a reference is made in this Agreement to Sections, such
reference shall be to a section of this Agreement unless otherwise indicated.
For purposes of this Agreement, the words "include," "includes" and "including,"
when used herein, shall be deemed in each case to be followed by the words
"without limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. When reference is made herein to
"the business of" an entity, such reference shall be deemed to include the
business of all such entity and its Subsidiaries, taken as a whole. An exception
or disclosure made in the Company Disclosure Letter with regard to a
representation of the Company, or in the Parent Disclosure Letter with regard to
a representation of Parent or Merger Sub, shall
50
only be deemed made with respect to any other representation by such party if an
express cross-reference is set forth herein.
(b) For purposes of this Agreement, the term "Knowledge"
means, with respect to any matter in question, the actual knowledge of such
matter of the executive officers of the Company and the presidents of its
Subsidiaries.
(c) For purposes of this Agreement, the term "Material
Adverse Effect", when used in connection with an entity, means any fact, change,
event, violation, inaccuracy, circumstance or effect (any such item, an
"Effect"), individually or when taken together with all other Effects that have
occurred prior to the date of determination of the occurrence of the Material
Adverse Effect, that is or could be reasonably expected to (i) be materially
adverse to the business, assets (including intangible assets), capitalization,
financial condition or results of operations of such entity taken as a whole
with its Subsidiaries or (ii) materially impede the consummation of the
transactions contemplated by this Agreement, including the Offer, in accordance
with the terms hereof and applicable Legal Requirements excluding with respect
to clauses (i) and (ii) Effects (A) generally affecting the industry in which
such entity and its Subsidiaries operate or arising from changes in general
business or economics conditions, or (B) affecting the securities markets
generally.
(d) For purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
(e) For purposes of this Agreement, the term "Business Day"
means any day on which banks are not required or authorized to close in the City
of New York.
Section 9.4 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
all parties need not sign the same counterpart.
Section 9.5 Entire Agreement; Third-Party Beneficiaries. This
Agreement and the documents and instruments and other agreements among the
parties hereto as contemplated by or referred to herein, including the Company
Disclosure Letter and the Parent Disclosure Letter (i) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, it being understood that
the Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement and (ii) are not
intended to confer upon any other Person any rights or remedies hereunder,
except as specifically provided, following the Effective Time, in Section 6.8.
51
Without limiting the foregoing, it is expressly understood and agreed that the
provisions of Section 6.7 are statements of intent and no Continuing Employee or
other Person (including any party hereto) shall have any rights or remedies,
including rights of enforcement, with respect thereto and no Continuing Employee
or other Person is or is intended to be a third-party beneficiary thereof.
Section 9.6 Severability. In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other Persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the greatest extent possible,
the economic, business and other purposes of such void or unenforceable
provision.
Section 9.7 Other Remedies; Specific Performance.
(a) Other Remedies. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached.
(b) Specific Performance. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
Section 9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof, except that Florida Law shall govern the Merger.
Section 9.9 Rules of Construction. The parties hereto agree that
they have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
Section 9.10 Assignment. No party may assign either this Agreement
or any of its rights, interests, or obligations hereunder without the prior
written approval of the other parties. Any purported assignment in violation of
this Section 9.10 shall be void. Subject to the preceding sentence, this
Agreement shall be
52
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Notwithstanding the foregoing,
Merger Sub reserves the right to transfer or assign, in whole or in part, to
Parent or to any affiliate of Parent, the right to purchase Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Merger Sub of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
Section 9.11 Consent to Jurisdiction; Waiver of Trial by Jury.
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any Delaware State court, or Federal court of the United States
of America, sitting in Delaware, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or the
agreements delivered in connection herewith or the transactions contemplated
hereby or thereby or for recognition or enforcement of any judgment relating
thereto, and each of the parties hereby irrevocably and unconditionally (a)
agrees not to commence any such action or proceeding except in such courts, (b)
agrees that any claim in respect of any such action or proceeding may be heard
and determined in such Delaware State court or, to the extent permitted by Law,
in such Federal court, (c) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such action or proceeding in any such Delaware State or
Federal court, and (d) waives, to the fullest extent permitted by Law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such Delaware State or Federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by Law. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.11. Nothing
in this Agreement shall affect the right of any party to this Agreement to serve
process in any other manner permitted by Law.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE EITHER OF SUCH WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF SUCH WAIVERS, (C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT
HAS BEEN INDUCED TO ENTER INTO
53
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11(b).
*****
54
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
DRS TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
PRINCE MERGER CORPORATION,
a Florida corporation
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
PARAVANT INC.,
a Florida corporation
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
****AGREEMENT AND PLAN OF MERGER****
Annex A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Merger Sub shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange
Act (relating to Merger Sub's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for, and may
postpone the acceptance for payment of and payment for Shares tendered, and,
except as set forth in this Agreement, terminate the Offer as to any Shares not
then paid for if (i) the Minimum Condition shall not have been satisfied at the
scheduled expiration date of the Offer, (ii) any applicable waiting period under
the HSR Act shall not have expired or been terminated, or (iii) immediately
prior to the expiration of the Offer, any of the following conditions shall
exist:
(a) there shall have been instituted or be pending, by any Governmental Entity
or any other Person or threatened by any Governmental Entity, any suit, action
or proceeding against Parent, Merger Sub or the Company challenging or seeking
(i) to make illegal, restrain or prohibit or make materially more costly the
making of the Offer, the acceptance for payment of, or payment for, any Shares
by Parent or Merger Sub, or the consummation of the Merger transaction, (ii) to
prohibit or limit materially the ownership or operation by the Company, Parent,
Merger Sub or any of their affiliates of all or any material portion of the
business or assets of the Company, Parent or any of their affiliates, or compel
the Company, Parent or any of their affiliates to effect an Action of
Divestiture, (iii) to impose or confirm limitations on the ability of Parent,
Merger Sub or any other affiliate of Parent to exercise full rights of ownership
of any Shares, including, without limitation, the right to vote any Shares
acquired by Merger Sub pursuant to the Offer or otherwise on all matters
properly presented to the Company's shareholders, including, without limitation,
the approval and adoption of this Agreement and the transactions contemplated by
this Agreement, (iv) to require divestiture by Parent or Merger Sub of any
Shares; or (v) which otherwise seeks damages or relief which could reasonably be
expected to have a Material Adverse Effect on Parent or the Company;
(b) there shall have been entered, enforced, enacted or deemed applicable to (A)
Parent, Merger Sub or the Company or (B) the Agreement, the Offer or the Merger,
in any case, any statute, rule, regulation, legislation, judgment, order,
injunction or decree by any Governmental Entity or any other Person that is
reasonably likely to, directly or indirectly, result in any of the consequences
referred to in clauses (i) through (v) of paragraph (a) above.
(c) a Company Triggering Event shall have occurred;
(d) the representations and warranties of the Company set forth in the Agreement
shall not be true and correct (without giving effect to any limitation as to
"materiality" or "Material Adverse Effect" set forth therein) at and as of the
date of this Agreement and the expiration of the Offer (except to the extent
that such representations and warranties
A-1
speak as of a specific date, in which case as of such specific date), except
where the failure to be so true and correct, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on the
Company;
(e) the Company shall have materially breached any covenant, obligation or other
agreement to be performed or complied by it under the Agreement;
(f) the Agreement shall have been terminated in accordance with its terms;
(g) any of the following shall have occurred: (1) any general suspension of
trading in, or limitation on prices for, securities on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ for a period in excess of 24
hours (excluding suspensions or limitations resulting solely from physical
damage or interference with such exchanges not related to market conditions),
(2) a declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (3) a
commencement or material worsening of a war, armed hostilities or other national
or international calamity directly or indirectly involving the United States or
any terrorist activities which materially and adversely affects Parent, Merger
Sub or the Company or the ability of financial institutions in the United States
to extend credit or syndicate loans, (4) any limitation (whether or not
mandatory) by any Governmental Entity on the extension of credit generally by
banks or other financial institutions, or (5) a change in general financial,
bank or capital market conditions which materially and adversely affects the
ability of financial institutions in the United States to extend credit or
syndicate loans;
(h) Merger Sub and the Company shall have agreed that Merger Sub shall terminate
the Offer or postpone the acceptance for payment of or payment for Shares
thereunder; or
(i) any party to the Shareholder Tender and Voting Agreements other than Merger
Sub and Parent shall have breached or failed to perform any of its covenants or
agreements under such agreements or breached any of its representations and
warranties in any of such agreements, or any of such agreements shall not be
valid, binding and enforceable, except for such breaches or failures to be
valid, binding and enforceable that do not materially and adversely affect the
benefits expected to be received by Parent and Merger Sub under the Merger
Agreement or the Shareholder Tender and Voting Agreements.
The foregoing conditions are for the benefit of Merger Sub and Parent and may be
asserted by Merger Sub or Parent regardless of the circumstances giving rise to
any such condition or may be waived by Merger Sub or Parent in whole or in part
at any time and from time to time in their sole and absolute discretion.
The failure by Parent or Merger Sub at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right; the waiver of any such
right with respect to particular facts and other circumstances shall not be
deemed a waiver with respect to any other facts and circumstances; and each such
right shall be deemed an ongoing right that may be asserted at any time and from
time to time.
A-2
INDEX OF DEFINED TERMS
Page
----
1934 Act......................................................................10
1934 Act Rules................................................................10
Acquisition...................................................................49
Acquisition Proposal..........................................................37
Action of Divestiture.........................................................41
Agreement......................................................................1
Annex A........................................................................2
Articles of Merger.............................................................6
Bid...........................................................................27
Business Day..................................................................51
Certificate....................................................................8
Certificates...................................................................8
Change of Company Recommendation..............................................36
Closing........................................................................6
Closing Date...................................................................6
Code..........................................................................22
Company........................................................................1
Company Balance Sheet.........................................................17
Company Board Approval.........................................................4
Company Charter Documents.....................................................13
Company Common Stock...........................................................1
Company Disclosure Letter.....................................................12
Company Financials............................................................16
Company Key Employees.........................................................33
Company Material Contract.....................................................25
Company Options...............................................................13
Company Permits...............................................................20
Company Preferred Stock.......................................................13
Company Purchase Plan..........................................................8
Company SEC Reports...........................................................16
Company Shareholders' Approval................................................15
Company Shareholders' Meeting.................................................10
Company Stock Option Plans.....................................................8
Company Termination Fee.......................................................48
Company Triggering Event......................................................47
Company Warrantholder Release..................................................8
Company Warrants..............................................................14
Confidentiality Agreement.....................................................38
Continuing Employees..........................................................42
Contract......................................................................25
DOJ...........................................................................39
XXXXX.........................................................................16
Effect........................................................................51
Effective Time.................................................................6
End Date......................................................................46
Environmental Claim...........................................................24
Environmental Laws............................................................25
Environmental Permits.........................................................24
ERISA Affiliate...............................................................21
ERISA Plans...................................................................21
Exchange Act..................................................................10
Florida Law....................................................................1
FTC...........................................................................39
GAAP..........................................................................16
Government Contract...........................................................27
Governmental Entity...........................................................15
Hazardous Materials...........................................................25
HSR Act.......................................................................16
include.......................................................................51
Indebtedness..................................................................34
Indemnified Parties...........................................................43
Intellectual Property.........................................................18
Knowledge.....................................................................51
Legal Requirements............................................................14
License Agreements............................................................19
Liens.........................................................................13
Material Adverse Effect.......................................................51
Merger.........................................................................6
Merger Consideration...........................................................7
Merger Sub.....................................................................1
Minimum Condition..............................................................2
NASDAQ.........................................................................3
Necessary Consents............................................................16
Offer..........................................................................1
Offer Conditions...............................................................2
Offer Consideration............................................................1
Offer Documents................................................................3
Option Consideration..........................................................41
Parent.........................................................................1
Parent Charter Documents......................................................29
Parent Disclosure Letter......................................................28
Parent's Credit Agreement.....................................................30
Paying Agent...................................................................8
PBGC..........................................................................22
Permits.......................................................................20
Person........................................................................51
Plans.........................................................................21
Preliminary Statement.........................................................10
Proxy Statement...............................................................10
Representatives...............................................................34
SAR...........................................................................33
Schedule 14D-9.................................................................4
Schedule TO....................................................................3
SEC............................................................................3
Securities Act................................................................16
Shareholder Tender and Voting Agreements.......................................1
Shares.........................................................................1
Software......................................................................18
Subsidiary....................................................................12
Subsidiary Charter Documents..................................................13
Superior Offer................................................................37
Superior Offer Notice.........................................................35
Surviving Corporation..........................................................6
Tax...........................................................................17
Tax Returns...................................................................17
Taxes.........................................................................17
Trade Secrets.................................................................18
U.S. Government...............................................................27
Voting Debt...................................................................14
Wachovia......................................................................27
