1
EXHIBIT 1
AGREEMENT AND PLAN OF MERGER
among
EG&G, Inc.
Venice Acquisition Corp.
and
Vivid Technologies, Inc.
October 4, 1999
2
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER............................................................2
Section 1.01 Effective Time of the Merger............................2
Section 1.02 Closing.................................................2
Section 1.03 Effects of the Merger...................................2
Section 1.04 Directors and Officers..................................2
Section 1.05 Alternative Merger Structure............................2
ARTICLE II
CONVERSION OF SECURITIES..............................................3
Section 2.01 Conversion of Capital Stock.............................3
Section 2.02 Exchange of Certificates................................5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER..............................8
Section 3.01 Organization of Seller..................................8
Section 3.02 Seller Capital Structure................................9
Section 3.03 Authority; No Conflict; Required Filings and Consents..11
Section 3.04 SEC Filings; Financial Statements......................12
Section 3.05 No Undisclosed Liabilities.............................13
Section 3.06 Absence of Certain Changes or Events...................13
Section 3.07 Taxes..................................................13
Section 3.08 Real Properties........................................15
Section 3.09 Intellectual Property..................................15
Section 3.10 Agreements, Contracts and Commitments..................17
Section 3.11 Litigation.............................................17
Section 3.12 Environmental Matters..................................18
Section 3.13 Employee Benefit Plans.................................19
Section 3.14 Compliance With Laws...................................20
Section 3.15 Permits................................................20
Section 3.16 Registration Statement; Proxy Statement/Prospectus.....20
Section 3.17 Labor Matters..........................................21
Section 3.18 Insurance..............................................21
Section 3.19 Government Contracts...................................21
Section 3.20 Year 2000..............................................22
Section 3.21 Cash Balance...........................................22
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Section 3.22 Suppliers..............................................22
Section 3.23 Opinion of Financial Advisor...........................23
Section 3.24 Section 203 of the DGCL Not Applicable.................23
Section 3.25 Rights Agreement.......................................23
Section 3.26 Hologic License........................................23
Section 3.27 Gilardoni Dispute......................................23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND SUB......................24
Section 4.01 Organization of Buyer and Sub..........................24
Section 4.02 Capital Structure......................................25
Section 4.03 Authority; No Conflict; Required Filings and Consents..25
Section 4.04 SEC Filings; Financial Statements......................26
Section 4.05 Registration Statement; Proxy Statement/Prospectus.....27
Section 4.06 Operations of Sub......................................27
Section 4.07 No Undisclosed Liabilities.............................28
Section 4.08 Absence of Certain Changes or Events...................28
ARTICLE V
CONDUCT OF BUSINESS..................................................28
Section 5.01 Covenants of Seller....................................28
Section 5.02 Cooperation............................................31
Section 5.03 Confidentiality........................................31
ARTICLE VI
ADDITIONAL AGREEMENTS................................................31
Section 6.01 No Solicitation........................................31
Section 6.02 Proxy Statement/Prospectus; Registration Statement.....33
Section 6.03 Nasdaq Quotation.......................................34
Section 6.04 Access to Information..................................34
Section 6.05 Stockholders Meeting...................................35
Section 6.06 Legal Conditions to Merger.............................35
Section 6.07 Public Disclosure......................................37
Section 6.08 Tax-Free Reorganization................................37
Section 6.09 Affiliate Agreements...................................38
Section 6.10 NYSE Listing...........................................38
Section 6.11 Seller Stock Plans and Seller Warrants.................38
Section 6.12 Brokers or Finders.....................................39
Section 6.12(A) Employment Matters...................................40
Section 6.13 Indemnification........................................41
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Section 6.14 Letter of Seller's Accountants.........................42
Section 6.15 Notification of Certain Matters........................42
Section 6.16 Environmental Audit....................................42
ARTICLE VII
CONDITIONS TO MERGER.................................................43
Section 7.01 Conditions to Each Party's Obligation To Effect
the Merger...........................................43
Section 7.02 Additional Conditions to Obligations of Buyer and Sub..43
Section 7.03 Additional Conditions to Obligations of Seller.........45
ARTICLE VIII
TERMINATION AND AMENDMENT............................................46
Section 8.01 Termination............................................46
Section 8.02 Effect of Termination..................................48
Section 8.03 Fees and Expenses......................................48
Section 8.04 Amendment..............................................50
Section 8.05 Extension; Waiver......................................50
ARTICLE IX
MISCELLANEOUS........................................................51
Section 9.01 Nonsurvival of Representations, Warranties and
Agreements...........................................51
Section 9.02 Notices................................................51
Section 9.03 Interpretation.........................................52
Section 9.04 Counterparts...........................................53
Section 9.05 Entire Agreement; No Third Party Beneficiaries.........53
Section 9.06 Governing Law and Venue................................53
Section 9.07 Waiver of Jury Trial...................................54
Section 9.08 Assignment.............................................54
Section 9.09 Severability...........................................54
Section 9.10 Other Remedies; Specific Performance...................54
Section 9.11 Proposed Name Change...................................55
Exhibit A Form of Seller Stock Option Agreement
Exhibit B Form of Stockholder Agreement
Exhibit C Termination With Resect to Hologic License
Exhibit D Form of Seller Affiliate Agreement
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TABLES OF DEFINED TERMS
Cross Reference
Terms in Agreement
----- ---------------
Acquisition Proposal...................................... Section 6.01(a)
Affiliate................................................. Section 6.09
Affiliate Agreement....................................... Section 6.09
Agreement................................................. Preamble
Alternative Merger ............................... Section 1.05
Alternative Transaction................................... Section 8.03(g)
Antitrust Laws............................................ Section 6.06(b)
Bankruptcy and Equity Exception........................... Section 3.03(a)
Buyer Common Stock........................................ Section 2.01(c)
Buyer Disclosure Schedule................................. Article IV
Buyer Material Adverse Effect............................. Section 4.01
Buyer Preferred Stock..................................... Section 4.02
Buyer SEC Reports......................................... Section 4.04(a)
Buyer Stock Plans......................................... Section 4.02(a)
Certificates.............................................. Section 2.02(b)
Closing................................................... Section 1.02
Closing Date.............................................. Section 1.02
Code...................................................... Preamble
Confidentiality Agreement................................. Section 5.03
Continuing Employee....................................... Section 6.12(A)(a)
Constituent Corporations.................................. Section 1.03
Daily Per Share Price..................................... Section 2.01(c)
Exchange Ratio............................................ Section 2.01(c)
Effective Time............................................ Section 1.01
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Environmental Law......................................... Section 3.12(b)
ERISA..................................................... Section 3.13(a)
ERISA Affiliate........................................... Section 3.13(a)
Exchange Act.............................................. Section 3.03(c)
Exchange Agent............................................ Section 2.02(a)
Exchange Fund............................................. Section 2.02(a)
Governmental Entity....................................... Section 3.03(c)
Hazardous Substance....................................... Section 3.12(c)
Hologic License........................................... Section 3.26
HSR Act................................................... Section 3.03(c)
Indemnified Parties....................................... Section 6.13(a)
IRS....................................................... Section 3.07(b)
Leases.................................................... Section 3.08
Market Value.............................................. Section 2.01(c)
Maximum Premium........................................... Section 6.13(b)
Merger.................................................... Preamble
NYSE...................................................... Section 2.01(c)
Order..................................................... Section 6.06(b)
Outside Date.............................................. Section 8.01(b)
Plan...................................................... Section 6.12A(d)
Protection Policies....................................... Section 3.09(c)
Proxy Statement........................................... Section 3.16
Registration Statement.................................... Section 3.16
Rule 145.................................................. Section 6.09
SEC....................................................... Section 3.03(c)
Second Request............................................ Section 6.06(b)
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Securities Act............................................ Section 3.04(a)
Seller Balance Sheet ..................................... Section 3.04(b)
Seller Common Stock ...................................... Section 2.01(b)
Seller Disclosure Schedule ............................... Article III
Seller Employee Plans .................................... Section 3.13(a)
Seller Material Adverse Effect ........................... Section 3.01
Seller Material Contract ................................. Section 3.10
Seller Meeting ........................................... Section 3.16
Seller Permits............................................ Section 3.15
Seller Preferred Stock.................................... Section 3.02(a)
Seller Rights ............................................ Section 3.02(b)
Seller Rights Plan........................................ Section 3.02(b)
Seller SEC Reports ....................................... Section 3.04(a)
Seller Stock Option....................................... Section 3.02(a)
Seller Stock Option Agreement ............................ Preamble
Seller Stock Plans ....................................... Section 3.02(a)
Seller Voting Proposal ................................... Section 6.05(a)
Seller Warrants........................................... Section 3.02(a)
Stockholders Agreements................................... Preamble
Subsidiary................................................ Section 3.01
Superior Proposal......................................... Section 6.01(a)(A)(1)
Surviving Corporation..................................... Section 1.03
Tax....................................................... Section 3.07(a)
Taxes..................................................... Section 3.07(a)
Third Party............................................... Section 8.03(g)
Year 2000 Compliant....................................... Section 3.20
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of October 4,
1999, by and among Europe, Inc., a Massachusetts corporation ("Buyer"), Venice
Acquisition Corp., a Delaware corporation and a direct, wholly owned subsidiary
of Buyer ("Sub"), and Venice, Inc., a Delaware corporation ("Seller").
WHEREAS, the Boards of Directors of Buyer and Seller deem it advisable
and in the best interests of each corporation and its respective stockholders
that Buyer and Seller combine in order to advance the long-term business
interests of Buyer and Seller;
WHEREAS, the combination of Buyer and Seller shall be effected by the
terms of this Agreement through a merger of Sub into Seller, as a result of
which the stockholders of Seller will become stockholders of Buyer (the
"Merger");
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Buyer's willingness to enter into this
Agreement, Seller has entered into a Stock Option Agreement dated as of the date
of this Agreement and attached hereto as EXHIBIT A (the "Seller Stock Option
Agreement"), pursuant to which Seller granted Buyer an option to purchase shares
of common stock of Seller under certain circumstances;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Buyer's willingness to enter into this
Agreement, the stockholders of Seller specified in Section 6.05(b) of this
Agreement have entered into Stockholder Agreements dated as of the date of this
Agreement in the form attached as EXHIBIT B (the "Stockholder Agreements"),
pursuant to which such stockholders granted Sub an option to purchase shares of
capital stock of Seller and agreed to give Sub a proxy to vote all of the shares
of capital stock of Seller that such stockholders own; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
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ARTICLE I
THE MERGER
Section 1.01 EFFECTIVE TIME OF THE MERGER. Subject to the provisions of
this Agreement, a certificate of merger in such form as is required by the
relevant provisions of the Delaware General Corporation Law ("DGCL") (the
"Certificate of Merger") shall be duly executed and acknowledged by the
Surviving Corporation (as defined in Section 1.03) and thereafter delivered to
the Secretary of State of the State of Delaware for filing, as soon as
practicable on the Closing Date (as defined in Section 1.02). The Merger shall
become effective upon the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware (the "Effective Time") or at such later time
as is established by Buyer and Seller and set forth in the Certificate of
Merger.
Section 1.02 CLOSING. The closing of the Merger (the "Closing") will
take place at 10:00 a.m., E.S.T., on a date to be specified by Buyer and Seller
(the "Closing Date"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VII (other than
delivery of items to be delivered at Closing), at the offices of Xxxx and Xxxx
LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, unless another date, place or time
is agreed to in writing by Buyer and Seller.
Section 1.03 EFFECTS OF THE MERGER. At the Effective Time (i) the
separate existence of Sub shall cease and Sub shall be merged with and into
Seller (Sub and Seller are sometimes referred to below as the "Constituent
Corporations" and Seller following the Merger is sometimes referred to below as
the "Surviving Corporation"), (ii) the Certificate of Incorporation of Seller
shall be amended so that Article 4 of such Certificate of Incorporation reads in
its entirety as follows: "The total number of shares of all classes of stock
which the Corporation shall have authority to issue is 1,000, all of which shall
consist of Common Stock, $.01 par value per share," and, as so amended, such
Certificate of Incorporation shall be the Certificate of Incorporation of the
Surviving Corporation, and (iii) the Bylaws of the Surviving Corporation shall
be amended to read as the Bylaws of Sub as in effect immediately prior to the
Effective Time. The Merger shall have the effects set forth in Section 259 of
the DGCL.
Section 1.04 DIRECTORS AND OFFICERS. The directors and officers of Sub
immediately prior to the Effective Time shall be the initial directors and
officers of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and Bylaws of the Surviving Corporation.
Section 1.05 ALTERNATIVE MERGER STRUCTURE. While it is currently
contemplated that the Merger shall be effected through the merger of Sub with
and into Seller, Buyer shall have the option, in its sole discretion, to cause
the Merger to be effected through
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an alternative transaction structure of Seller merging with and into Buyer, with
Buyer being the Surviving Corporation (the "Alternative Merger"), in which the
case the appropriate technical provisions of this Agreement shall be deemed to
be amended as necessary in order to effect the Alternative Merger. If Buyer
desires to effect the Alternative Merger, it shall deliver a notice to Seller of
its election to do so, which notice shall be available for the inspection of any
stockholder of Seller upon request during normal business hours. As part of the
Proxy Statement and in the manner required by applicable law, Seller shall
describe the provisions of this Section 1.05 such that approval of the Seller
Voting Proposal shall entail approval of both Merger and (if elected to be
effected by Buyer) the Alternative Merger. In the event an Alternative Merger is
effected, (i) Seller shall not be deemed to be in breach of any representation,
warranty or covenant contained herein to the extent any such representation,
warranty or covenant would not have been breached if the Merger had been
consummated as contemplated by this Agreement without giving effect to this
Section 1.05 and (ii) the Alternative Merger shall in no way reduce, impair or
otherwise impact the indemnification of Seller's directors and officers after
the Closing as set forth in Section 6.13.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.01 CONVERSION OF CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of capital stock of Seller or capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of the
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of Common Stock of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND BUYER-OWNED STOCK. All shares of
common stock, $.01 par value per share, of Seller ("Seller Common Stock") that
are owned by Seller as treasury stock or by any wholly owned Subsidiary (as
defined in Section 3.01) of Seller and any shares of Seller Common Stock owned
by Buyer, Sub or any other wholly owned Subsidiary of Buyer shall be canceled
and retired and shall cease to exist and no stock of Buyer or other
consideration shall be delivered in exchange therefor.
(c) EXCHANGE RATIO FOR SELLER COMMON STOCK. Subject to Section 2.02,
each issued and outstanding share of Seller Common Stock (other than shares to
be canceled in accordance with Section 2.01(b)), shall be converted into the
right to receive 0.1613
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shares (the "Exchange Ratio") of Common Stock, $1.00 par value per share, of
Buyer ("Buyer Common Stock").
Notwithstanding the foregoing:
(i) In the event that the Market Value (as defined below) of the
Buyer Common Stock is greater than $46.49, then, if Buyer has
notified Seller of its election to terminate this Agreement
pursuant to Section 8.01(i) hereof, Seller shall have the
option in its sole and absolute discretion, but not the
obligation, exercisable as provided in Section 8.01(i), to
adjust the Exchange Ratio to an amount equal to $7.50 divided
by the Market Value of the Buyer Common Stock, and Buyer shall
be obligated to accept such adjustment. In the event that the
Market Value of the Buyer Common Stock is greater than $46.49
and Buyer does not elect to terminate this Agreement pursuant
to Section 8.01(i), the Exchange Ratio shall be unchanged.
(ii) In the event that the Market Value of the Buyer Common Stock
is less than $30.99, then, if Seller has notified Buyer of its
election to terminate this Agreement pursuant to Section
8.01(h) hereof, Buyer shall have the option in its sole and
absolute discretion, but not the obligation, exercisable as
provided in Section 8.01(h), to adjust the Exchange Ratio to
an amount equal to $5.00 divided by the Market Value of the
Buyer Common Stock, and Seller shall be obligated to accept
such adjustment. In the event that the Market Value of the
Buyer Common Stock is less than $30.99 and Seller does not
elect to terminate this Agreement pursuant to Section 8.01(h),
the Exchange Ratio shall be unchanged.
The "Market Value" of the Buyer Common Stock means the average of the
Daily Per Share Prices (as defined below) of the Buyer Common Stock for the five
consecutive trading days ending on the third trading day prior to the date of
the Seller Meeting (as defined in Section 3.16 hereof), so long as the Closing
Date occurs within five business days of the Seller Meeting or, if the Closing
Date is more than five business days after the Seller Meeting, the Closing Date.
The "Daily Per Share Price" for any trading day means the weighted average of
the per share selling prices of the Buyer Common Stock on the New York Stock
Exchange (the "NYSE"), as reported in the NYSE Composite Transactions, for that
day.
All such shares of Seller Common Stock, when so converted, shall no
longer be outstanding and shall automatically 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 shares of Buyer Common Stock and any cash in lieu of fractional shares of
Buyer Common Stock to be issued or
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paid in consideration therefor upon the surrender of such certificate in
accordance with Section 2.02, without interest.
(d) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio and each of the
target dollar values set forth in Sections 2.01(c)(i), 2.01(c)(ii), 8.01(h) and
8.01(i) shall be equitably adjusted to reflect fully the effect of any stock
split, reverse split, reclassification, stock dividend (including any dividend
or distribution of securities convertible into Buyer Common Stock or Seller
Common Stock), reorganization, recapitalization or other like change with
respect to Buyer Common Stock or Seller Common Stock occurring after the date
hereof and prior to the Effective Time.
Section 2.02 EXCHANGE OF CERTIFICATES. The procedures for exchanging
outstanding shares of Seller Common Stock for Buyer Common Stock pursuant to the
Merger are as follows:
(a) EXCHANGE AGENT. As of the Effective Time, Buyer shall deposit with
a bank or trust company designated by Buyer (the "Exchange Agent"), in trust for
the benefit of the holders of shares of Seller Common Stock, for exchange in
accordance with this Section 2.02, through the Exchange Agent, (i) certificates
representing the shares of Buyer Common Stock (such shares of Buyer Common
Stock, together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Exchange Fund") issuable pursuant to Section
2.01 in exchange for outstanding shares of Seller Common Stock, (ii) cash in an
amount sufficient to make payments required pursuant to Section 2.02(e), and
(iii) any dividends or distributions to which holders of Certificates (as
defined below) may be entitled pursuant to Section 2.02(c).
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time (but in any
event within five business days thereof), Buyer shall cause the Exchange Agent
to mail to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of Seller
Common Stock (the "Certificates") whose shares were converted pursuant to
Section 2.01 into the right to receive shares of Buyer Common Stock (i) a letter
of transmittal in customary form (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in such form and
have such other provisions as Buyer may reasonably specify; provided, however,
that such other provisions shall not materially adversely effect the terms of
the consideration to be received by Seller's stockholders in the Merger) and
(ii) instructions for effecting the surrender of the Certificates in exchange
for certificates representing shares of Buyer Common Stock (plus cash in lieu of
fractional shares, if any, of Buyer Common Stock and any dividends or
distributions as provided below). Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Buyer, together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange
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therefor and Buyer shall cause the Exchange Agent to promptly deliver to such
holder a certificate representing that number of whole shares of Buyer Common
Stock which such holder has the right to receive pursuant to the provisions of
this Article II plus cash in lieu of fractional shares pursuant to Section
2.02(e) and any dividends or distributions pursuant to Section 2.02(c), and the
Certificate so surrendered shall immediately be canceled. In the event of a
transfer of ownership of Seller Common Stock which is not registered in the
transfer records of Seller, a certificate representing the proper number of
shares of Buyer Common Stock plus cash in lieu of fractional shares pursuant to
Section 2.02(e) and any dividends or distributions pursuant to Section 2.02(c)
may be issued to a transferee if the Certificate representing such Seller Common
Stock is presented to the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.02, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the certificate
representing shares of Buyer Common Stock plus cash in lieu of fractional shares
pursuant to Section 2.02(e) and any dividends or distributions pursuant to
Section 2.02(c) as contemplated by this Section 2.02.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the Effective Time with respect to
Buyer Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate with respect to the shares of Buyer
Common Stock represented thereby and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to subsection (e) below until
the holder of record of such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing whole shares of Buyer Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of Buyer Common Stock to which such holder
is entitled pursuant to subsection (e) below and the amount of dividends or
other distributions with a record date after the Effective Time previously paid
with respect to such whole shares of Buyer Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole shares of Buyer
Common Stock.
(d) NO FURTHER OWNERSHIP RIGHTS IN SELLER COMMON STOCK. All shares of
Buyer Common Stock issued upon the surrender for exchange of Certificates in
accordance with the terms hereof (including any cash or other distributions paid
pursuant to subsection (c) or (e) of this Section 2.02) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such shares of
Seller Common Stock, and from and after the Effective Time there shall be no
further registration of transfers
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on the stock transfer books of the Surviving Corporation of the shares of Seller
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Section 2.02.
(e) NO FRACTIONAL SHARES. No certificate or scrip representing
fractional shares of Buyer Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to any other rights of a stockholder of Buyer.
Notwithstanding any other provision of this Agreement, each holder of shares of
Seller Common Stock exchanged pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of Buyer Common Stock (after
taking into account all Certificates delivered by such holder) shall receive, in
lieu thereof, cash (without interest) in an amount equal to such fractional part
of a share of Buyer Common Stock multiplied by the Market Value of the Buyer
Common Stock.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the stockholders of Seller for 180 days after the
Effective Time shall be delivered to Buyer, upon demand, and any stockholders of
Seller who have not previously complied with this Section 2.02 shall thereafter
look only to Buyer for payment of their claim for Buyer Common Stock, any cash
in lieu of fractional shares of Buyer Common Stock and any dividends or
distributions with respect to Buyer Common Stock.
(g) NO LIABILITY. To the extent permitted by applicable law, neither
Buyer nor Seller shall be liable to any holder of shares of Seller Common Stock
or Buyer Common Stock, as the case may be, for such shares (or dividends or
distributions with respect thereto) properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(h) WITHHOLDING RIGHTS. Each of Buyer and the Surviving Corporation
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Seller Common
Stock such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the Surviving
Corporation or Buyer, as the case may be, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Seller Common Stock in respect of which such deduction and withholding
was made by the Surviving Corporation or Buyer, as the case may be.
(i) LOST CERTIFICATES. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation,
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the posting by such person of a bond in such reasonable amount as the Surviving
Corporation may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of Buyer Common Stock
and any cash in lieu of fractional shares, and unpaid dividends and
distributions on shares of Buyer Common Stock deliverable in respect thereof
pursuant to this Agreement.
(j) AFFILIATES. Notwithstanding anything herein to the contrary,
Certificates surrendered for exchange by any Affiliate (as defined in Section
6.09) of Seller shall not be exchanged until Buyer has received an Affiliate
Agreement (as defined in Section 6.09) from such Affiliate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer and Sub that the statements
contained in this Article III are true and correct, except as set forth herein
or in the disclosure schedule delivered by Seller to Buyer on or before the date
of this Agreement (the "Seller Disclosure Schedule"). The Seller Disclosure
Schedule shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Article III and the disclosure in any
paragraph shall qualify other paragraphs in this Article III only to the extent
that it is reasonably apparent from a reading of such disclosure that it also
qualifies or applies to such other paragraphs.
Section 3.01 ORGANIZATION OF SELLER. Each of Seller and its
Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power to own, lease and operate its
property and to carry on its business as now being conducted, and is duly
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the failure to be so qualified would be reasonably
likely to have a material adverse effect on the business, properties, financial
condition, results of operations or prospects of Seller and its Subsidiaries,
taken as a whole, or to have a material adverse effect on the ability of Seller
to consummate the transactions contemplated by this Agreement (a "Seller
Material Adverse Effect"); provided however that (i) any adverse change, event
or effect that is demonstrated to be primarily caused by conditions affecting
the United States economy generally or the economy of any nation or region that
is material to the business of Seller and its Subsidiaries, taken as a whole, in
which Seller or any of its Subsidiaries conducts business shall not be taken
into account in determining whether there has been or would be reasonably likely
to be a "Seller Material Adverse Effect," (ii) any adverse change, event or
effect that is demonstrated to be primarily caused by conditions
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generally affecting the explosives and contraband detection industry shall not
be taken into account in determining whether there has been or would be
reasonably likely to be a "Seller Material Adverse Effect," (iii) any adverse
change, event or effect that is demonstrated to be primarily caused by the
announcement or pendency of the Merger shall not be taken into account in
determining whether there has been or would be reasonably likely to be a "Seller
Material Adverse Effect," (iv) subject to the accuracy of Seller's
representations in Section 3.27, any adverse change, event or effect that is
demonstrated to be primarily caused by the matters described in Section 3.27 of
the Seller Disclosure Schedule shall not be taken into account in determining
whether there has been or would be reasonably likely to be a "Seller Material
Adverse Effect" and (v) the failure of the Seller to obtain certification by or
additional funding from the United States Federal Aviation Association of its
Multiview Tomography (MVT) product shall not, in and of itself, constitute a
"Seller Material Adverse Effect." Except as set forth in the Seller SEC Reports
(as defined in Section 3.04) filed prior to the date hereof, neither Seller nor
any of its Subsidiaries directly or indirectly owns any equity or similar
interest in, or any interest convertible into or exchangeable or exercisable
for, any corporation, partnership, joint venture or other business association
or entity, excluding securities in any publicly traded company held for
investment by Seller and comprising less than five percent (5%) of the
outstanding stock of such company. As used in this Agreement, the word
"Subsidiary" means, with respect to a party, any corporation or other
organization, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such party is a general partner (excluding partnerships,
the general partnership interests of which held by such party or any Subsidiary
of such party do not have a majority of the voting interest in such partnership)
or (ii) at least a majority of the securities or other interests 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.
Section 3.02 SELLER CAPITAL STRUCTURE.
(a) The authorized capital stock of Seller consists of 30,000,000
shares of Seller Common Stock and 1,000,000 shares of preferred stock, $.01 par
value per share ("Seller Preferred Stock"), of which 30,000 shares are
designated Series A Junior Participating Preferred Stock. As of the date of this
Agreement, (i) 10,050,316 shares of Seller Common Stock were issued and
outstanding, all of which are validly issued, fully paid and nonassessable, (ii)
95,000 shares of Seller Common Stock were held in the treasury of Seller or by
Subsidiaries of Seller, and (iii) no shares of Seller Preferred Stock were
issued and outstanding. Section 3.02 of the Seller Disclosure Schedule shows the
number of shares of Seller Common Stock reserved for future issuance pursuant to
stock options granted and outstanding as of the date of this Agreement and the
plans under which such options were granted (collectively, the "Seller Stock
Plans") and sets
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forth a complete and accurate list of all holders of outstanding options to
purchase shares of Seller Common Stock (such outstanding options, the "Seller
Stock Options") under the Seller Stock Plans, indicating the number of shares of
Seller Common Stock subject to each Seller Stock Option, and the exercise price,
the date of grant and the expiration date thereof. Section 3.02 of the Seller
Disclosure Schedule shows the number of shares of Seller Common Stock reserved
for future issuance pursuant to warrants or other outstanding rights to purchase
shares of Seller Common Stock outstanding as of the date of this Agreement (such
outstanding warrants or other rights, the "Seller Warrants") and the agreement
or other document under which such Seller Warrants were granted and sets forth a
complete and accurate list of all holders of Seller Warrants indicating the
number and type of shares of Seller Common Stock subject to each Seller Warrant,
and the exercise price, the date of grant and the expiration date thereof. All
shares of Seller Common Stock subject to issuance as specified above are duly
authorized and, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, shall be validly issued, fully
paid and nonassessable. There are no obligations, contingent or otherwise, of
Seller or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of Seller Common Stock or the capital stock of Seller or any of its
Subsidiaries or to provide funds to or make any material investment (in the form
of a loan, capital contribution or otherwise) in Seller or any Subsidiary of
Seller or any other entity other than guarantees of bank obligations of
Subsidiaries of Seller entered into in the ordinary course of business. All of
the outstanding shares of capital stock of each of Seller's Subsidiaries are
duly authorized, validly issued, fully paid and nonassessable and all such
shares (other than directors' qualifying shares in the case of foreign
Subsidiaries) are owned by Seller or another Subsidiary of Seller free and clear
of all security interests, liens, claims, pledges, agreements, limitations in
Seller's voting rights, charges or other encumbrances of any nature.
(b) Except for the Seller Stock Plans, the Seller Warrants, the Seller
Stock Option Agreement and the rights (the "Seller Rights") issuable under the
Rights Agreement dated as of October 13, 1998 between Seller and American Stock
Transfer & Trust Company (the "Seller Rights Plan") and shares of capital stock
and other securities of Seller issuable pursuant to any of the foregoing, (i)
there are no equity securities of any class of Seller or any of its
Subsidiaries, or any security exchangeable into or exercisable for such equity
securities, issued, reserved for issuance or outstanding and (ii) there are no
other options, warrants, equity securities, calls, rights, commitments or
agreements of any character to which Seller or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound obligating Seller or
any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of Seller or any of its
Subsidiaries or obligating Seller or any of its Subsidiaries to grant, extend,
accelerate the vesting of, otherwise modify or amend or enter into any such
option, warrant, equity security, call, right, commitment or agreement. To the
knowledge of Seller, other than the Stockholder Agreements, there
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are no voting trusts, proxies or other voting agreements or understandings with
respect to the shares of capital stock of Seller or any of its Subsidiaries.
Section 3.03 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Seller has all requisite corporate power and authority to enter
into this Agreement and the Seller Stock Option Agreement and to consummate the
transactions contemplated by this Agreement and the Seller Stock Option
Agreement. The execution and delivery of this Agreement and the Seller Stock
Option Agreement and the consummation of the transactions contemplated by this
Agreement and the Seller Stock Option Agreement by Seller have been duly
authorized by all necessary corporate action on the part of Seller, subject only
to the approval of the Merger by Seller's stockholders under the DGCL. The Board
of Directors of Seller has not taken any action to accelerate any options
granted under the Seller Stock Plans and has approved the treatment of the
Seller Stock Options and Seller Warrants set forth in Section 6.11 of this
Agreement. Seller has delivered or concurrently with the execution of this
Agreement is delivering any required notice under the Seller Warrants. This
Agreement and the Seller Stock Option Agreement have been duly executed and
delivered by Seller and constitute the valid and binding obligations of Seller,
enforceable in accordance with their respective 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 (the "Bankruptcy and Equity Exception").
(b) The execution and delivery of this Agreement and the Seller Stock
Option Agreement by Seller does not, and the consummation of the transactions
contemplated by this Agreement and the Seller Stock Option Agreement will not,
(i) conflict with, or result in any violation or breach of, any provision of the
Certificate of Incorporation or Bylaws of Seller or the charter, by-laws, or
other organizational document of any Subsidiary of Seller, (ii) result in any
violation or breach of, or constitute (with or without notice or lapse of time,
or both) a default (or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any material benefit) under, or
require a consent or waiver under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, contract or other agreement,
instrument or obligation to which Seller or any of its Subsidiaries is a party
or by which any of them or any of their properties or assets may be bound, or
(iii) except as provided in clauses (i), (ii), (iii) and (iv) in paragraph (c)
below, conflict with or violate any permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Seller or any of its Subsidiaries or any of its or their properties or
assets, except in the case of (ii) and (iii) for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which are not,
individually or in the aggregate, reasonably likely to have a Seller Material
Adverse Effect.
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(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality, foreign or domestic
("Governmental Entity"), is required by or with respect to Seller or any of its
Subsidiaries in connection with the execution and delivery of this Agreement and
the Seller Stock Option Agreement or the consummation of the transactions
contemplated hereby and thereby, except for (i) the filing of the pre-merger
notification report under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, ("HSR Act"), (ii) the filing of the Certificate of Merger with
the Delaware Secretary of State, (iii) the filing of the Proxy Statement (as
defined in Section 3.16 below) with the Securities and Exchange Commission (the
"SEC") in accordance with the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (iv) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
state securities laws and the laws of any foreign country and (v) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not be reasonably likely to have a Seller Material
Adverse Effect. The Seller stockholder vote required for the approval of the
Seller Voting Proposal (as defined below) is a majority of the outstanding
shares of Seller Common Stock on the record date for the Seller Meeting (as
defined below).
Section 3.04 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Seller has filed and made available to Buyer all forms, reports and
documents required to be filed by Seller with the SEC since January 1, 1996. All
such required forms, reports and documents (including those that Seller may file
after the date hereof until the Closing) are referred to herein as the "Seller
SEC Reports." The Seller SEC Reports (i) were prepared in compliance in all
material respects with the applicable requirements of the Securities Act of
1933, as amended (the "Securities Act"), and the Exchange Act, as the case may
be, and the rules and regulations of the SEC thereunder applicable to such
Seller 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 in such Seller SEC Reports or necessary in order to make the
statements in such Seller SEC Reports, in the light of the circumstances under
which they were made, not misleading. None of Seller's Subsidiaries is required
to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes or schedules) contained in the Seller SEC Reports (i)
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, (ii) were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements or, in the case of unaudited statements, as
permitted by the SEC on Form 10-Q under the Exchange Act)
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and (iii) fairly presented in all material respects the consolidated financial
position of Seller and its Subsidiaries as of the dates and the consolidated
results of its operations and cash flows for the periods indicated, consistent
in all material respects with the books and records of Seller and its
Subsidiaries, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments and for the absence of
complete footnotes which were not or are not expected to be material in amount.
The unaudited balance sheet of Seller as of June 30, 1999 is referred to herein
as the "Seller Balance Sheet."
Section 3.05 NO UNDISCLOSED LIABILITIES. Except as disclosed in the
Seller SEC Reports filed prior to the date hereof, and except for normal or
recurring liabilities incurred since June 30, 1999 in the ordinary course of
business consistent with past practices, Seller and its Subsidiaries do not have
any liabilities, either accrued, contingent or otherwise (whether or not
required to be reflected in financial statements in accordance with generally
accepted accounting principles), and whether due or to become due, which
individually or in the aggregate are reasonably likely to have a Seller Material
Adverse Effect.
Section 3.06 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Seller SEC Reports filed prior to the date hereof, since the date of the
Seller Balance Sheet, Seller and its Subsidiaries, taken as a whole, have
conducted their businesses in all material respects in the ordinary course and
in a manner in all material respects consistent with past practice and, since
such date, there has not been (i) any change in the financial condition, results
of operations, business, properties or prospects of Seller and its Subsidiaries,
taken as a whole, that has had, or is reasonably likely to have, a Seller
Material Adverse Effect; (ii) any damage, destruction or loss (whether or not
covered by insurance) with respect to Seller or any of its Subsidiaries having a
Seller Material Adverse Effect; (iii) any material change by Seller in its
accounting methods not required pursuant to generally accepted accounting
principles, principles or practices to which Buyer has not previously consented
in writing; (iv) any revaluation by Seller of any of its assets having a Seller
Material Adverse Effect; or (v) any other action or event that would have
required the consent of Buyer pursuant to Section 5.01 of this Agreement had
such action or event occurred after the date of this Agreement.
Section 3.07 TAXES.
(a) Seller and each of its Subsidiaries has filed all Tax Returns (as
defined below) that it was required to file, and all such Tax Returns were
correct and complete except for any failure to file, error or omission that,
individually or in the aggregate, is not reasonably likely to have a Seller
Material Adverse Effect. Seller and each of its Subsidiaries has paid all Taxes
(as defined below) that are shown to be due on any such
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Tax Returns. All Taxes that Seller or any of its Subsidiaries is or was required
by law to withhold or collect have been duly withheld or collected and, to the
extent required, have been paid to the proper Governmental Entity, except for
any such Taxes with respect to which the failure to withhold, collect or pay,
individually or in the aggregate, is not reasonably likely to have a Seller
Material Adverse Effect. For purposes of this Agreement, "Taxes" means all
taxes, charges, fees, levies or other similar assessments or liabilities,
including without limitation income, gross receipts, ad valorem, premium,
value-added, excise, real property, personal property, sales, use, services,
transfer, withholding, employment, payroll and franchise taxes imposed by the
United States of America or any state, local or foreign government, or any
agency thereof, or other political subdivision of the United States or any such
government, and any interest, fines, penalties, assessments or additions to tax
resulting from, attributable to or incurred in connection with any tax or any
contest or dispute thereof. For purposes of this Agreement, "Tax Returns" means
all reports, returns, declarations, statements or other information required to
be supplied to a taxing authority in connection with Taxes.
(b) Seller has delivered to Buyer correct and complete copies of all
federal income Tax Returns, examination reports and statements of deficiencies
assessed against or agreed to by any of Seller or any of its Subsidiaries since
December 31, 1996. The federal income Tax Returns of Seller and each of its
Subsidiaries have never been audited by the Internal Revenue Service. Seller has
delivered or made available to Buyer correct and complete copies of all other
material Tax Returns of Seller and its Subsidiaries together with all related
examination reports and statements of deficiency for all periods from and after
December 31, 1996. No examination or audit of any Tax Return of Seller or any of
its Subsidiaries by any Governmental Entity is currently in progress or, to the
knowledge of Seller, threatened or contemplated. Neither Seller nor any of its
Subsidiaries has been informed in writing or, to Seller's knowledge, orally by
any jurisdiction that the jurisdiction believes that Seller or any of its
Subsidiaries was required to file any Tax Return that was not filed, except for
any Tax Return with respect to which the failure to file, individually or in the
aggregate, is not reasonably likely to have a Seller Material Adverse Effect.
(c) Neither Seller nor any of its Subsidiaries has waived any statute
of limitations with respect to Taxes or agreed to an extension of time with
respect to a Tax assessment or deficiency.
(d) Neither Seller nor any of its Subsidiaries is a "consenting
corporation" within the meaning of Section 341(f) of the Code, and none of the
assets of Seller or its Subsidiaries are subject to an election under Section
341(f) of the Code.
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(e) Neither Seller nor any of its Subsidiaries has been a United States
real property holding corporation within the meaning of Section 897(c)(2) of the
Code during the applicable period specified in Section 897(c)(l)(A)(ii) of the
Code.
(f) Neither Seller nor any of its Subsidiaries has made any payment, is
obligated to make any payment, or is a party to any agreement that obligates it
to make any payment that will be an "excess parachute payment" under Section
280G of the Code.
(g) Neither Seller nor any of its Subsidiaries has any actual or
potential liability for any Taxes of any person (other than the Seller and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of federal, state, local, or foreign law), or as a transferee or
successor, by contract, or otherwise.
(h) Neither Seller nor any of its Subsidiaries has undergone a change
in its method of accounting resulting in an adjustment to its taxable income
pursuant to Section 481(h) of the Code.
(i) Neither Seller nor any of its Subsidiaries is or has ever been a
member of a group of corporations with which it has filed (or been required to
file) consolidated, combined or unitary Tax Returns, other than a group of which
only Seller and its Subsidiaries are or were members.
Section 3.08 REAL PROPERTIES. Section 3.08 of the Seller Disclosure
Schedule sets forth a list of all real property leased by Seller or its
Subsidiaries (collectively "Leases") and the location of the premises. The
Seller has provided true and complete copies of all Leases to the Buyer. Seller
is not in default under any of the Leases, except where the existence of such
defaults, individually or in the aggregate, is not reasonably likely to have a
Seller Material Adverse Effect. Seller does not and has never owned any real
property.
Section 3.09 INTELLECTUAL PROPERTY.
(a) To Seller's knowledge, Seller and its Subsidiaries own, or are
licensed or otherwise possess legally enforceable (subject to the Bankruptcy and
Equity Exception) rights to use, all patents, trademarks, trade names, domain
names, service marks and copyrights, any applications for and registrations of
such patents, trademarks, trade names, service marks and copyrights, and all
processes, formulae, methods, schematics, technology, know-how, computer
software programs or applications and tangible or intangible proprietary
information or material that are used or necessary to conduct the business of
Seller and its Subsidiaries as currently conducted, the absence of which
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would, individually or in the aggregate, be reasonably likely to have a Seller
Material Adverse Effect (the "Seller Intellectual Property Rights").
(b) The execution and delivery of this Agreement and consummation of
the Merger will not result in the breach of, or create on behalf of any third
party the right to terminate or modify, any license, sublicense or other
agreement relating to the Seller Intellectual Property Rights, or any license,
sublicense and other agreement as to which Seller or any of its Subsidiaries is
a party and pursuant to which Seller or any of its Subsidiaries is authorized to
use any third party patents, trademarks, copyrights or trade secrets ("Seller
Third Party Intellectual Property Rights"), including software that is used in
the manufacture of, incorporated in, or forms a part of any product or service
sold by Seller or any of its Subsidiaries or in the development stage, the
breach, termination or modification of which license, sublicense or other
agreement, individually or in the aggregate, would be reasonably likely to have
a Seller Material Adverse Effect.
(c) All patents, registered trademarks, service marks and copyrights
which are owned by Seller or any of its Subsidiaries and which are material to
the business of Seller and its Subsidiaries, taken as a whole, are valid and
subsisting. Seller's policies (the "Protection Policies") are to enter into
confidentiality agreements in favor of Seller which protect the proprietary
nature of the Seller Intellectual Property Rights that are proprietary with its
employees, consultants and independent contractors who have access to any such
Seller Intellectual Property Rights and to require such employees, consultants
and independent contractors to maintain in confidence all trade secrets and
confidential information owned or used by Seller or any of its Subsidiaries.
Seller and its Subsidiaries have complied in all material respects with the
Protection Policies, and any failure to comply, individually or in the
aggregate, is not reasonably likely to have a Seller Material Adverse Effect. To
the knowledge of Seller, no other person or entity is infringing, violating or
misappropriating any of the Seller Intellectual Property Rights, except for
infringements, violations or misappropriations that are not, individually or in
the aggregate, reasonably likely to have a Seller Material Adverse Effect.
To the knowledge of Seller, none of the activities or business
currently conducted by the Seller or any of the Subsidiaries infringes, violates
or constitutes a misappropriation of, any patents, trademarks, trade names,
service marks and copyrights, any applications for and registrations of such
patents, trademarks, trade names, service marks and copyrights, and all
processes, formulae, methods, schematics, technology, know-how, computer
software programs or applications and tangible or intangible proprietary
information or material of any other person or entity, except for such
infringements, violations and misappropriations that, individually or in the
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aggregate, are not reasonably likely to have a Seller Material Adverse Effect.
Neither the Seller nor any of its Subsidiaries has received any written
complaint, claim or notice alleging any such infringement, violation or
misappropriation.
Section 3.10 AGREEMENTS, CONTRACTS AND COMMITMENTS.
(a) There are no contracts or agreements that are material contracts
(as defined in Item 601(b)(10) of Regulation S-K) with respect to Seller and its
Subsidiaries ("Seller Material Contracts"), other than those Seller Material
Contracts identified on the exhibit indices of the Seller's most recent annual
report on Form 10- K and the Seller SEC Reports filed thereafter and prior to
the date of this Agreement. Each Seller Material Contract has not expired by its
terms and is in full force and effect against the Seller and, to the knowledge
of the Seller, against the other party or parties thereto. Neither Seller nor
any of its Subsidiaries is in violation of or in default under (nor does there
exist any condition which, upon the passage of time or the giving of notice or
both, would cause such a violation of or default under) any lease, permit,
concession, franchise, license or other contract or agreement to which it is a
party or by which it or any of its properties or assets is bound, except for
violations or defaults that, individually or in the aggregate, have not resulted
in and are not reasonably likely to result in a Seller Material Adverse Effect.
(b) Section 3.10 of the Seller Disclosure Schedule sets forth a
complete list of each lease, permit, concession, franchise, license or other
contract or agreement to which Seller or any of its Subsidiaries is a party or
bound (i) with any Affiliate of Seller (other than any Subsidiary which is a
direct or indirect wholly owned subsidiary of Seller), other than any agreements
which are or have been fully performed and under which neither Seller nor any
Subsidiary of Seller has any continuing rights, liability or obligation, or (ii)
that includes any non-competition or similar provision imposing any restrictions
or undertakings on Seller or any Subsidiary of Seller, other than any agreements
under which neither Seller nor any Subsidiary of Seller has any continuing
rights, liability or obligation or is subject to any restriction or undertaking.
Copies of all the agreements, contracts and arrangements set forth in Section
3.10 of the Seller Disclosure Schedule have heretofore been furnished to Buyer
and such copies are accurate and complete.
Section 3.11 LITIGATION. Except as described in the Seller SEC Reports
filed prior to the date hereof, there is no action, suit or proceeding, claim,
arbitration or, to the knowledge of Seller, investigation, against Seller or any
of its Subsidiaries pending or as to which Seller or any of its Subsidiaries has
received any written notice of assertion, which, if determined adversely,
individually or in the aggregate, is reasonably likely to have a Seller Material
Adverse Effect.
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Section 3.12 ENVIRONMENTAL MATTERS.
(a) Except as disclosed in the Seller SEC Reports filed prior to the
date hereof and except for such matters that, individually or in the aggregate,
are not reasonably likely to have a Seller Material Adverse Effect: (i) Seller
and its Subsidiaries have complied with all applicable Environmental Laws (as
defined in Section 3.12(b)); (ii) the properties currently owned or operated by
Seller and its Subsidiaries (including soils, groundwater, surface water,
buildings or other structures) are not contaminated with any Hazardous
Substances (as defined in Section 3.12(c)) caused by Seller or, to the knowledge
of Seller, by any third party; (iii) the properties formerly owned or operated
by Seller or any of its Subsidiaries were not during the period of ownership or
operation by Seller or any of its Subsidiaries contaminated with Hazardous
Substances by Seller or, to the knowledge of Seller, by any third party; (iv)
neither Seller nor its Subsidiaries are subject to liability for any Hazardous
Substance disposal or contamination by them or, to the knowledge of Seller, by
any third party on the property of any third party; (v) neither Seller nor any
of its Subsidiaries have released any Hazardous Substance to the environment in
violation of any Environmental Law; (vi) neither Seller nor any of its
Subsidiaries has received any written notice, demand, letter, claim or request
for information alleging that Seller or any of its Subsidiaries may be in
violation of, liable under or have reporting or other affirmative obligations
relating to a specific incident or event under any Environmental Law; (vii)
neither Seller nor any of its Subsidiaries is the subject of any order, decree,
injunction or other arrangement with any Governmental Entity or is subject to
any indemnity or other agreement with any third party, in either case relating
to liability under any Environmental Law or relating to Hazardous Substances;
and (viii) to Seller's knowledge, there are no circumstances or conditions
involving Seller or any of its Subsidiaries that could reasonably be expected to
result in any claims, liability, obligations, investigations, costs or
restrictions on the ownership, use or transfer of any property of Seller or any
of its Subsidiaries pursuant to any Environmental Law.
(b) As used herein, the term "Environmental Law" means any federal,
state, local or foreign law, regulation, order, decree, permit, authorization,
opinion, common law or agency requirement relating to: (A) the protection,
investigation or restoration of the environment, human health and safety, or
natural resources, (B) the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance or (C) noise, odor, wetlands,
pollution, contamination or any injury or threat of injury to persons or
property.
(c) As used herein, the term "Hazardous Substance" means any substance
that is: (A) listed, classified, regulated or which falls within the definition
of a "hazardous substance" or "hazardous material" pursuant to any Environmental
Law;
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(B) any petroleum product or by-product, asbestos-containing material,
lead-containing paint or plumbing, polychlorinated biphenyls, radioactive
materials or radon; or (C) any other substance which is the subject of
regulatory action by any Governmental Entity pursuant to any Environmental Law.
Section 3.13 EMPLOYEE BENEFIT PLANS.
(a) Seller has listed in Section 3.13 of the Seller Disclosure Schedule
all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) and all bonus,
stock option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar employee benefit plans, and all
unexpired severance agreements, written or otherwise, for the benefit of, or
relating to, any current or former employee of Seller or any of its Subsidiaries
or any trade or business (whether or not incorporated) which is or was ever a
member of a controlled group of corporations or which is or was ever under
common control with Seller (an "ERISA Affiliate") within the meaning of Section
414 of the Code, or any Subsidiary of Seller (together, the "Seller Employee
Plans").
(b) With respect to each Seller Employee Plan, Seller has furnished to
Buyer, a true and correct copy of (i) the most recent annual report (Form 5500)
filed with the IRS, (ii) such Seller Employee Plan, (iii) each trust agreement
and group annuity contract, if any, relating to such Seller Employee Plan and
(iv) all reports, if any, regarding the satisfaction of the nondiscrimination
requirements of Sections 410(b), 401(k) and 401(m) of the Code for the last
three plan years.
(c) With respect to the Seller Employee Plans, no event has occurred,
and to the knowledge of Seller, there exists no condition or set of
circumstances in connection with which Seller or any of its Subsidiaries could
be subject to any liability that is reasonably likely, individually or in the
aggregate, to have a Seller Material Adverse Effect under ERISA, the Code or any
other applicable law.
(d) With respect to the Seller Employee Plans, there are no funded
benefit obligations for which contributions have not been made or properly
accrued and there are no unfunded benefit obligations which have not been
accounted for by reserves, or otherwise properly footnoted in accordance with
generally accepted accounting principles, on the financial statements of Seller,
which obligations are reasonably likely, individually or in the aggregate, to
have a Seller Material Adverse Effect.
(e) Neither Seller, any Subsidiary of the Seller nor any ERISA
Affiliate has (i) ever maintained a Seller Employee Benefit Plan which was ever
subject to Title IV of
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ERISA or Section 412 of the Code or (ii) ever been obligated to contribute to a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA.
(f) Except as disclosed in Seller SEC Reports filed prior to the date
of this Agreement, and except as provided for in this Agreement, neither Seller
nor any of its Subsidiaries is a party to any oral or written (i) agreement with
any employee of Seller or any of its Subsidiaries, the benefits of which are
contingent, or the terms of which are materially altered, upon the occurrence of
a transaction involving Seller of the nature contemplated by this Agreement,
(ii) agreement with any employee of Seller or any of its Subsidiaries providing
any term of employment or compensation guarantee extending for a period longer
than one year from the date hereof or for the payment of compensation in excess
of $100,000 per annum, or (iii) agreement or plan, including any stock option
plan, stock appreciation right plan, restricted stock plan or stock purchase
plan, any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement.
Section 3.14 COMPLIANCE WITH LAWS. Seller and each of its Subsidiaries
has complied with, is not in violation of, and has not received any written
notice alleging any violation with respect to, any foreign, federal, state or
local statute, law or regulation (other than Environmental Laws) with respect to
the conduct of its business, or the ownership or operation of its properties or
assets, except for failures to comply or violations which, individually or in
the aggregate, have not had and are not reasonably likely to have a Seller
Material Adverse Effect.
Section 3.15 PERMITS. Seller and each of its Subsidiaries have all
permits, licenses and franchises from Governmental Entities required to conduct
their businesses as now being conducted (the "Seller Permits"), except for such
permits, licenses and franchises the absence of which, individually or in the
aggregate, have not resulted in, and are not reasonably likely to result in, a
Seller Material Adverse Effect. Seller and its Subsidiaries are in compliance
with the terms of the Seller Permits, except where the failure to so comply,
individually or in the aggregate, is not reasonably likely to have a Seller
Material Adverse Effect.
Section 3.16 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The
information to be supplied by Seller for inclusion in the registration statement
on Form S-4 pursuant to which shares of Buyer Common Stock issued in the Merger
will be registered under the Securities Act (the "Registration Statement"),
shall not at the time the Registration Statement is declared effective by the
SEC contain any untrue statement of a material fact or omit to state any
material fact required to be stated in the
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Registration Statement or necessary in order to make the statements in the
Registration Statement, in light of the circumstances under which they were
made, not misleading. The information to be supplied by Seller for inclusion in
the proxy statement/prospectus (the "Proxy Statement") to be sent to the
stockholders of Seller in connection with the meeting of Seller's stockholders
to consider this Agreement and the Merger (the "Seller Meeting") shall not, on
the date the Proxy Statement is first mailed to stockholders of Seller, at the
time of the Seller Meeting and at the Effective Time, contain any statement
which, at such time and in light of the circumstances under which it shall be
made, is false or misleading with respect to any material fact, or omit to state
any material fact necessary in order to make the statements made in the Proxy
Statement not false or misleading; or omit to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the Seller Meeting which has become false or
misleading. If at any time prior to the Effective Time any event relating to
Seller or any of its Affiliates, officers or directors should be discovered by
Seller which should be set forth in an amendment to the Registration Statement
or a supplement to the Proxy Statement, Seller shall promptly inform Buyer.
Section 3.17 LABOR MATTERS. Neither Seller nor any of its Subsidiaries
is a party to or otherwise bound by any collective bargaining agreement,
contract or other agreement or understanding with a labor union or labor
organization. Neither Seller nor any of its Subsidiaries is the subject of any
proceeding to which Seller or any Subsidiary has received written notice or is
otherwise aware asserting that Seller or any of its Subsidiaries has committed
an unfair labor practice or is seeking to compel it to bargain with any labor
union or labor organization that, individually or in the aggregate, is
reasonably likely to have a Seller Material Adverse Effect, nor is there pending
or, to the knowledge of Seller, threatened, any labor strike, dispute, walkout,
work stoppage or lockout involving Seller or any of its Subsidiaries that,
individually or in the aggregate, is reasonably likely to have a Seller Material
Adverse Effect.
Section 3.18 INSURANCE. Section 3.18 of the Disclosure Schedule sets
forth a list (including the name of the insurer, the name of the policyholder,
the name of each insured, the periods of coverage and the scope of coverage) of
all policies of fire, theft, casualty, liability, burglary, fidelity, workers
compensation, business interruption, environmental, product liability, fidelity,
workers compensation, product warranty, automobile and other forms of insurance
of Seller and any of its Subsidiaries.
Section 3.19 GOVERNMENT CONTRACTS. Neither Seller nor any of its
Subsidiaries is or has been suspended or debarred (within the meaning of 48
C.F.R. Ch. 1, Section 52 or any similar foreign law, statute or regulation) from
bidding on contracts or subcontracts with any Governmental Entity; to the
knowledge of Seller, no such
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suspension or debarment has been initiated or threatened; and the consummation
of the transactions contemplated by this Agreement will not result in any such
suspension or debarment that, individually or in the aggregate, is reasonably
likely to have a Seller Material Adverse Effect (other than primarily by reason
of the identity of Buyer). Neither Seller nor any of its Subsidiaries has since
January 1, 1993 been audited or investigated or is now being audited or, to
Seller's knowledge, investigated by the U.S. Government Accounting Office, the
U.S. Department of Defense or any of its agencies, the Defense Contract Audit
Agency, the U.S. Department of Justice, the Inspector General of any U.S.
Governmental Entity, any similar agencies or instrumentalities of any foreign
Governmental Entity, or any prime contractor with a Governmental Entity nor, to
Seller's knowledge, has any such audit or investigation been threatened that is
reasonably likely, individually or in the aggregate, to have a Seller Material
Adverse Effect. To Seller's knowledge, there is no valid basis for (a) the
suspension or debarment of Seller or any of its Subsidiaries from bidding on
contracts or subcontracts with any Governmental Entity or (b) any claim pursuant
to an audit or investigation by any of the entities named in the foregoing
sentence that is reasonably likely, individually or in the aggregate, to have a
Seller Material Adverse Effect. Neither Seller nor any of its Subsidiaries has
any agreements, contracts or commitments which require it to obtain or maintain
a security clearance with any Governmental Entity.
Section 3.20 YEAR 2000. Section 3.20 of the Seller Disclosure Schedule
identifies each "year 2000" audit, report or investigation that has been
performed by or on behalf of Seller or any of its Subsidiaries with respect to
its business and operations. Except as set forth in such audits, reports and
investigations, Seller is not aware of any failure of Seller's or any
Subsidiary's computer hardware or software systems to be Year 2000 Compliant,
which failure, individually or in the aggregate, is reasonably likely to have a
Seller Material Adverse Effect. For purposes of this Agreement, "Year 2000
Compliant" means, with respect to each system referred to in the prior sentence
that is intended to perform date-related functions, that such system, when used
properly in accordance with its documentation, is capable of correctly
receiving, processing and providing date data on and between December 31, 1999
and January 1, 2000; provided that all applications, hardware and other systems
used in conjunction with such system correctly exchange date data with or
provide data to such system.
Section 3.21 CASH BALANCE. As of September 30, 1999, Seller and its
Subsidiaries had a consolidated balance of cash, cash equivalents and marketable
securities of not less than $20,500,000.
Section 3.22 SUPPLIERS. No material supplier of Seller or any of its
Subsidiaries has indicated to Seller or any of its Subsidiaries in writing or,
to the Seller's knowledge, orally that it will stop, or decrease the rate of,
supplying materials, products or services
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to them, which cessation or decrease is reasonably likely, individually or in
the aggregate, to have a Seller Material Adverse Effect.
Section 3.23 OPINION OF FINANCIAL ADVISOR. The financial advisor of
Seller, Xxxxxxx & Company, Inc., has delivered to Seller an opinion dated on or
about the date of this Agreement to the effect, as of such date, that the
Exchange Ratio is fair to the holders of Seller Common Stock from a financial
point of view.
Section 3.24 SECTION 203 OF THE DGCL NOT APPLICABLE. The Board of
Directors of Seller has taken all actions so that the restrictions contained in
Section 203 of the DGCL applicable to a "business combination" (as defined in
Section 203) will not apply to the execution, delivery or performance of this
Agreement, the Seller Stock Option Agreement, the Stockholders Agreements or the
consummation of the Merger or the other transactions contemplated by this
Agreement.
Section 3.25 RIGHTS AGREEMENT. Immediately prior to the execution of
this Agreement, Seller has (a) duly entered into an appropriate amendment to the
Seller Rights Plan, which amendment has been provided to Buyer, and approved by
the Board of Directors of Seller and (b) taken all other action necessary or
appropriate so that (A) the entering into of this Agreement and the Seller Stock
Option Agreement by the Seller and the entering into of the Stockholder
Agreements by the Stockholders of the Seller specified in Section 6.05(b) of
this Agreement does not and will not result in the ability of any person to
exercise any Seller Rights under the Seller Rights Plan or enable or require the
Seller Rights issued thereunder to separate from the shares of Seller Common
Stock to which they are attached or to be triggered or become exercisable and
(B) the Final Expiration Date (as defined in the Seller Rights Plan) will occur
immediately prior to the Effective Time.
Section 3.26 HOLOGIC LICENSE. Prior to or concurrently with the
execution of this Agreement, Seller has duly entered into a Termination
Agreement with respect to the License and Technology Agreement between Seller
and Hologic, Inc. (the "Hologic License"), a copy of which is attached as
EXHIBIT C hereto, and such Termination Agreement has been duly executed by
Hologic, Inc. and is in full force and effect.
Section 3.27 GILARDONI DISPUTE. The description of the current dispute
between the Seller and Gilardoni SpA set forth in Section 3.27 of the Seller
Disclosure Schedule is accurate and complete in all material respects.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND SUB
Buyer and Sub represent and warrant to Seller that the statements
contained in this Article IV are true and correct, except as set forth herein or
in the disclosure schedule delivered by Buyer to Seller on or before the date of
this Agreement (the "Buyer Disclosure Schedule"). The Buyer Disclosure Schedule
shall be arranged in paragraphs corresponding to the numbered and lettered
paragraphs contained in this Article IV and the disclosure in any paragraph
shall qualify other paragraphs in this Article IV only to the extent that it is
reasonably apparent from a reading of such document that it also qualifies or
applies to such other paragraphs.
Section 4.01 ORGANIZATION OF BUYER AND SUB. Each of Buyer and Sub and
Buyer's other Subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, has
all requisite corporate power to own, lease and operate its property and to
carry on its business as now being conducted, and is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the failure to be so qualified would be reasonably likely to have a
material adverse effect on the business, properties, financial condition,
results of operations or prospects of Buyer and its Subsidiaries, taken as a
whole, or to have a material adverse effect on the ability of Buyer to
consummate the transactions contemplated by this Agreement (a "Buyer Material
Adverse Effect"); provided however that (i) any adverse change, event or effect
that is demonstrated to be primarily caused by conditions affecting the United
States economy generally or the economy of any nation or region in which Buyer
or any of its Subsidiaries conducts business that is material to the business of
Buyer and its Subsidiaries, taken as a whole, shall not be taken into account in
determining whether there has been or would be a "Buyer Material Adverse
Effect," (ii) any adverse change, event or effect that is demonstrated to be
primarily caused by conditions generally affecting any of the life sciences,
aerospace, health care, advanced lighting systems or analytical instruments
industries shall not be taken into account in determining whether there has been
or would be reasonably likely to be a "Buyer Material Adverse Effect", and (iii)
any adverse change, event or effect that is demonstrated to be primarily caused
by the announcement or pendency of the Merger shall not be taken into account in
determining whether there has been or would be reasonably likely to be a "Buyer
Material Adverse Effect."
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Section 4.02 CAPITAL STRUCTURE.
(a) As of the date of this Agreement, the authorized capital stock of
Buyer consists of (i) 100,000,000 shares of Common Stock, $1.00 par value
("Buyer Common Stock") and (ii) 1,000,000 shares of Preferred Stock, $1.00 par
value ("Buyer Preferred Stock"), of which 70,000 shares are designated Series C
Junior Participating Preferred Stock. As of September 29, 1999, there were
issued and outstanding 46,006,748 shares of Buyer Common Stock and no shares of
Buyer Preferred Stock. The Buyer Disclosure Schedule shows the number of shares
of Buyer Common Stock reserved for future issuance pursuant to stock options
granted and outstanding as of September 29, 1999, and the plans under which such
options were granted (collectively, the "Buyer Stock Plans"). No material change
in such capitalization has occurred between September 29, 1999 and the date of
this Agreement. All shares of Buyer Common Stock subject to issuance as
specified above are duly authorized and, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be validly issued, fully paid and nonassessable.
(b) The authorized capital stock of Sub consists of 1,000 shares of
common stock, $.01 par value, all of which shares are issued and outstanding and
are held beneficially and of record by Buyer. Such shares were validly issued
and are fully paid and nonassessable.
Section 4.03 AUTHORITY; NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Each of Buyer and Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of each of Buyer
and Sub (including the approval of the Merger by Buyer as the sole stockholder
of Sub). This Agreement and has been duly executed and delivered by each of
Buyer and Sub and constitutes the valid and binding obligation of each of Buyer
and Sub, enforceable in accordance with its terms, subject to the Bankruptcy and
Equity Exception.
(b) The execution and delivery of this Agreement by each of Buyer and
Sub does not, and the consummation of the transactions contemplated by this
Agreement will not, (i) conflict with, or result in any violation or breach of,
any provision of the Articles of Organization or Bylaws of Buyer or the
Certificate of Incorporation or Bylaws of Sub, (ii) result in any violation or
breach of, or constitute (with or without notice or lapse of time, or both) a
default (or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any material benefit) under, or
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require a consent or waiver under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, contract or other agreement,
instrument or obligation to which Buyer or any of its Subsidiaries is a party or
by which any of them or any of their properties or assets may be bound, or (iii)
except as provided in clauses (i), (ii), (iii), (iv) and (v) in paragraph (c)
below, conflict with or violate any permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Buyer or any of its Subsidiaries or any of its or their properties or assets,
except in the case of (ii) and (iii) for any such conflicts, violations,
defaults, terminations, cancellations or accelerations which are not,
individually or in the aggregate, reasonably likely to have a Buyer Material
Adverse Effect.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Buyer or any of its Subsidiaries in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of the pre-merger notification report under
the HSR Act, (ii) the filing of the Registration Statement with the SEC in
accordance with the Securities Act, (iii) the filing of the Certificate of
Merger with the Delaware Secretary of State, (iv) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable state securities laws and the laws of any foreign
country, (v) the approval by the NYSE of the listing of the shares of Buyer
Common Stock to be issued in the transactions contemplated by this Agreement,
and (vi) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not be reasonably likely to
have a Buyer Material Adverse Effect.
Section 4.04 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Buyer has filed all forms, reports and documents required to be
filed by Buyer with the SEC since January 1, 1996. All such required forms,
reports and documents (including those that Buyer may file after the date hereof
until the Closing) are referred to herein as the "Buyer SEC Reports." The Buyer
SEC Reports (i) were prepared in compliance in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Buyer 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 in such Buyer SEC Reports or necessary in order to make the statements
in such Buyer SEC Reports, in the light of the circumstances under which they
were made, not misleading. None of Buyer's Subsidiaries is required to file any
forms, reports or other documents with the SEC.
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(b) Each of the consolidated financial statements (including, in each
case, any related notes or schedules) contained in the Buyer SEC Reports,(i)
complied as to form in all material respects with the applicable published rules
and regulations of the SEC with respect thereto, (ii) were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes
to such financial statements or, in the case of unaudited statements, as
permitted by the SEC on Form 10-Q under the Exchange Act) and (iii) fairly
presented in all material respects the consolidated financial position of Buyer
and its Subsidiaries as of the dates and the consolidated results of its
operations and cash flows for the periods indicated, consistent in all material
respects with the books and records of Seller and its Subsidiaries, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount.
Section 4.05 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The
information in the Registration Statement (except for information supplied by
Seller for inclusion in the Registration Statement, as to which Buyer makes no
representation and which shall not constitute part of a Buyer SEC Report for
purposes of this Agreement) shall not at the time the Registration Statement is
declared effective by the SEC contain any untrue statement of a material fact or
omit to state any material fact required to be stated in the Registration
Statement or necessary in order to make the statements in the Registration
Statement, in light of the circumstances under which they were made, not
misleading. The information (except for information to be supplied by Seller for
inclusion in the Proxy Statement, as to which Buyer makes no representation) in
the Proxy Statement shall not, on the date the Proxy Statement is first mailed
to stockholders of Seller, at the time of the Seller Meeting and at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or omit to state any material fact necessary in order to
make the statements made in the Proxy Statement not false or misleading; or omit
to state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Seller Meeting
which has become false or misleading. If at any time prior to the Effective Time
any event relating to Buyer or any of its Affiliates, officers or directors
should be discovered by Buyer which should be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement, Buyer shall
promptly inform Seller.
Section 4.06 OPERATIONS OF SUB. Sub was formed solely for the purpose
of engaging in the transactions contemplated by this Agreement, has engaged in
no other business activities and has conducted its operations only as
contemplated by this Agreement.
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Section 4.07 NO UNDISCLOSED LIABILITIES. Except as disclosed in the
Buyer SEC Reports filed prior to the date hereof, and except for normal or
recurring liabilities incurred since June 30, 1999 in the ordinary course of
business consistent with past practices, as of the date of this Agreement Buyer
and its Subsidiaries do not have any liabilities, either accrued, contingent or
otherwise (whether or not required to be reflected in financial statements in
accordance with generally accepted accounting principles), and whether due or to
become due, which individually or in the aggregate are reasonably likely to have
a Buyer Material Adverse Effect.
Section 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as expressly
contemplated by this Agreement or as disclosed in the Buyer SEC Reports filed
prior to the date hereof, since June 30, 1999, there has not been any change in
the financial condition, results of operations, business, properties or
prospects of Buyer and its Subsidiaries, taken as a whole, that has had, or is
reasonably likely to have, a Buyer Material Adverse Effect.
ARTICLE V
CONDUCT OF BUSINESS
Section 5.01 COVENANTS OF SELLER. Except as expressly contemplated
hereby, during the period from the date of this Agreement and continuing until
the earlier of the termination of this Agreement or the Effective Time, Seller
agrees as to itself and its Subsidiaries (except to the extent that Buyer shall
otherwise consent in writing), to carry on its business in the ordinary course
in substantially the same manner as previously conducted, to pay its debts and
Taxes and perform other obligations when due in the ordinary course in
substantially the same manner as previously conducted, subject to good faith
disputes over such debts, Taxes or obligations, and, to the extent consistent
with such business, use commercially reasonable efforts consistent in all
material respects with past practices and policies to preserve intact its
present business organization, keep available the services of its present
officers and key employees and to preserve its relationships with customers,
suppliers, distributors, and others having business dealings with it. Except as
expressly contemplated by this Agreement or set forth in the Seller Disclosure
Schedule, Seller shall not (and shall not permit any of its Subsidiaries to),
without the written consent of Buyer:
(a) Accelerate, amend or change the period of exercisability of any
Seller Warrant or any outstanding option or restricted stock granted under any
Seller Stock Plan or any other employee stock plan of Seller or authorize cash
payments in exchange for any Seller Warrant or any option granted under any of
such plans except as
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required by the terms of such plans or any related agreements in effect as of
the date of this Agreement;
(b) Declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any of its capital stock, or
split, combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock;
(c) Issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any shares of its capital stock or securities convertible
into shares of its capital stock, or subscriptions, rights, warrants or options
to acquire, or other agreements or commitments of any character obligating it to
issue any such shares or other convertible securities, other than the issuance
of shares of Seller Common Stock pursuant to the exercise of the Seller Warrants
or options outstanding on the date of this Agreement under the Seller Stock
Plans;
(d) Acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or substantial portion of the assets
of, or by any other manner, any business or any corporation, partnership or
other business organization or division, or otherwise acquire or agree to
acquire any assets (other than inventory, supplies and other items, in each
case, in the ordinary course of business consistent in all material respects
with past practice);
(e) Sell, lease, license or otherwise dispose of any of its properties
or assets, except for sales of inventory or products, in each case, in the
ordinary course of business consistent in all material respects with past
practice;
(f) (i) Increase or agree to increase the compensation payable or to
become payable to its officers or employees, other than for normal scheduled
bonuses set forth in Section 5.01(f) of the Seller Disclosure Schedule (it being
understood that the Seller's normal scheduled salary increase for January 1,
2000 shall be subject to the Buyer's prior written approval), (ii) grant any
severance or termination pay to, or enter into any employment or severance
agreements with, any employees or officers, (iii) enter into any collective
bargaining agreement, (iv) establish, adopt, enter into or amend (except as may
be required by law) any bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination or severance or other plan, trust, fund, policy or
arrangement for the benefit of any directors, officers or employees or (v)
forgive any indebtedness of any employee to the Seller or any of its
Subsidiaries;
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(g) Amend or propose to amend its charter or bylaws, except as
contemplated by this Agreement;
(h) Incur any indebtedness for borrowed money, make any loans to any
person or entity or guarantee any debt securities of others (other than as a
result of the endorsement of checks for collection and for advances for employee
reimbursable expenses, in each case in the ordinary course of business
consistent in all material respects with past practice);
(i) Initiate, compromise, or settle any material litigation or
arbitration proceeding;
(j) Modify, amend or terminate any contract that is material to Seller
and its Subsidiaries, taken as a whole (other than any immaterial modification
or amendment to a purchase order in the ordinary course of business consistent
with past practice), or waive, release or assign any material rights or claims,
including any write-off or other compromise of any material accounts receivable
of Seller or any of its Subsidiaries;
(k) Make or rescind any Tax election, settle or compromise any Tax
liability or amend any Tax return;
(l) Change its methods of accounting as in effect at June 30, 1999
except as required by generally accepted accounting principles;
(m) Make or commit to make any capital expenditures that exceed the
capital budget furnished by Seller to Buyer;
(n) Enter into any new license for any material intellectual property
rights to or from any third party;
(o) Revalue any of the significant assets of the Seller or any of its
Subsidiaries, including the writing down of inventory other than in the ordinary
course of business consistent in all material respects with past practice;
(p) Close any facility or office;
(q) Invest funds in debt securities or other instruments maturing more
than 90 days after the date of investment except as set forth in Section 5.01(q)
of the Seller Disclosure Schedule;
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(r) Adopt or implement any stockholder rights plan that could have the
effect of impeding or restricting the consummation of the transactions
contemplated hereby or modify, amend or terminate the Seller Rights Plan;
(s) Fail to pay accounts payable and other obligations in the ordinary
course of business in a manner consistent in all material respects with past
practice or accelerate the payment of any accounts receivable other than in the
ordinary course of business in a manner consistent in all material respects with
past practice;
(t) Modify, amend or terminate the Hologic License; or
(u) Take, or agree in writing or otherwise to take, any of the actions
described in paragraphs (a) through (t) above.
Section 5.02 COOPERATION. Subject to compliance with applicable law,
from the date hereof until the Effective Time, Seller and each of its
Subsidiaries shall make its officers available to confer on a regular and
frequent basis with one or more representatives of the Buyer at reasonable times
and upon reasonable advance notice to report on the general status of ongoing
operations and shall promptly provide Buyer or its counsel with copies of all
filings made by such party with any Governmental Entity in connection with this
Agreement, the Merger and the transactions contemplated hereby and thereby.
Section 5.03 CONFIDENTIALITY. The parties acknowledge that Buyer and
Seller have previously executed a Confidentiality Agreement, dated as of April
28, 1999 (the "Confidentiality Agreement"), which Confidentiality Agreement will
continue in full force and effect in accordance with its terms, except as
expressly modified herein.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01 NO SOLICITATION.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to its terms, Seller
and its Subsidiaries shall not, directly or indirectly, through any officer,
director, employee, financial advisor, representative or agent (i) solicit,
initiate, or encourage any inquiries or proposals that constitute, or could
reasonably be expected to lead to, a proposal or offer for a merger,
consolidation, business combination, tender offer, sale of
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substantial assets, sale of shares of capital stock (excluding sales pursuant to
existing Seller Stock Plans or pursuant to the Seller Warrants) or similar
transaction involving Seller or any of its Subsidiaries, other than the
transactions contemplated by this Agreement (any of the foregoing inquiries or
proposals being referred to in this Agreement as an "Acquisition Proposal"),
(ii) engage in negotiations or discussions concerning, or provide any non-public
information to any person or entity relating to, any Acquisition Proposal, or
(iii) agree to or recommend any Acquisition Proposal; PROVIDED, HOWEVER, that,
if Seller has not breached this Section 6.01, nothing contained in this
Agreement shall prevent Seller or its Board of Directors, from:
(A) furnishing non-public information to, or entering into
discussions or negotiations with, any person or entity in connection with an
unsolicited bona fide written Acquisition Proposal by such person or entity or
agreeing to (with the terms of any such agreement being subject to termination
of this Agreement in accordance with Article VIII) or recommending an
unsolicited bona fide written Acquisition Proposal to the stockholders of
Seller, if and only to the extent that
(1) the Board of Directors of Seller believes in good
faith (after consultation with its financial advisor) that such Acquisition
Proposal is reasonably capable of being completed on the terms proposed and
would, if consummated, result in a transaction more favorable than the
transaction contemplated by this Agreement (any such more favorable Acquisition
Proposal being referred to in this Agreement as a "Superior Proposal") and
Seller's Board of Directors determines in good faith after consultation with
outside legal counsel that such action is necessary for such Board of Directors
to comply with its fiduciary duties to stockholders under applicable law,
(2) prior to furnishing such non-public information
to, or entering into discussions or negotiations with, such person or entity,
such Board of Directors receives from such person or entity an executed
confidentiality agreement with terms no more favorable to such party than those
contained in the Confidentiality Agreement, and
(3) prior to recommending a Superior Proposal, Seller
shall provide Buyer with at least five business days' prior notice of its
proposal to do so, during which time Buyer may make, and in such event Seller
shall consider, a counterproposal to such Superior Proposal, and, subject to the
fiduciary duties of Seller's Board of Directors, Seller shall itself and shall
cause its financial and legal advisors to negotiate on its behalf with Buyer
with respect to the terms and conditions of such counterproposal for a
reasonable period of time given the terms and conditions of such counterproposal
and such Superior Proposal; or
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(B) complying with Rule 14d-9 and 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal.
(b) Seller will immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore of the nature
described in Section 6.01(a) and will use commercially reasonable efforts to
obtain the return of any confidential information furnished to any such parties.
(c) Seller shall notify Buyer promptly, but in any event no more than
24 hours, after receipt by Seller (or its advisors) of any Acquisition Proposal
or any request for non-public information in connection with an Acquisition
Proposal or for access to the properties, books or records of Seller by any
person or entity that informs Seller that it is considering making, or has made,
an Acquisition Proposal. Such notice shall be made in writing and shall indicate
in reasonable detail the identity of the offeror and the terms and conditions of
such proposal, inquiry or contact. Seller shall continue to keep Buyer informed,
on a current basis, of all material developments with respect to the status of
any such discussions or negotiations and the terms being discussed or
negotiated.
(d) Nothing in this Section 6.01 shall (i) permit Seller to terminate
this Agreement (except as specifically provided in Section 8.01 hereof), (ii)
permit Seller to enter into any agreement with respect to an Acquisition
Proposal during the term of this Agreement (it being agreed that during the term
of this Agreement, Seller shall not enter into any agreement with any person
that provides for, or in any way facilitates, an Acquisition Proposal (other
than a confidentiality agreement of the type referred to in Section 6.01(a)
above)) or (iii) affect any other obligation of Seller under this Agreement.
Section 6.02 PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT.
(a) As promptly as practical after the execution of this Agreement,
Buyer and Seller shall prepare and Seller shall file with the SEC the Proxy
Statement, and Buyer shall prepare and file with the SEC the Registration
Statement, in which the Proxy Statement will be included as a prospectus,
provided that Buyer may delay the filing of the Registration Statement until
approval of the Proxy Statement by the SEC. Buyer and Seller shall use all
reasonable efforts to cause the Registration Statement to become effective as
soon after such filing as practicable. Each of Buyer and Seller will promptly
respond to any comments of the SEC and will use its respective commercially
reasonable efforts to have the Proxy Statement cleared by the SEC and the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filings and Seller will cause the Proxy Statement and
the prospectus contained
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within the Registration Statement to be mailed to its stockholders at the
earliest practicable time after both the Proxy Statement is cleared by the SEC
and the Registration Statement is declared effective under the Securities Act.
Each of Buyer and Seller will notify the other promptly upon the receipt of any
comments from the SEC or its staff or any other government officials and of any
request by the SEC or its staff or any other government officials for amendments
or supplements to the Registration Statement, the Proxy Statement or any filing
pursuant to Section 6.02(b) or for additional information and will supply the
other with copies of all correspondence between such party or any of its
representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Registration
Statement, the Proxy Statement, the Merger or any filing pursuant to Section
6.02(b). Each of Buyer and Seller will cause all documents that it is
responsible for filing with the SEC or other regulatory authorities under this
Section 6.02 to comply in all material respects with all applicable requirements
of law and the rules and regulations promulgated thereunder. Whenever any event
occurs which is required to be set forth in an amendment or supplement to the
Proxy Statement, the Registration Statement or any filing pursuant to Section
6.02(b), Buyer or Seller, as the case may be, will promptly inform the other of
such occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Seller, such amendment
or supplement.
(b) Buyer and Seller shall make all necessary filings with respect to
the Merger under the Securities Act, the Exchange Act, applicable state blue sky
laws and the rules and regulations thereunder.
Section 6.03 NASDAQ QUOTATION. Seller agrees to continue the quotation
of Seller Common Stock on the Nasdaq National Market during the term of this
Agreement.
Section 6.04 ACCESS TO INFORMATION. Upon reasonable notice, Seller
shall (and shall cause each of its Subsidiaries to) afford to Buyer's officers,
employees, accountants, counsel and other representatives, reasonable access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records and, during such
period, Seller shall (and shall cause each of its Subsidiaries to) furnish
promptly to Buyer (a) a copy of each report, schedule, registration statement
and other document filed or received by it during such period pursuant to the
requirements of federal securities laws and (b) all other information concerning
its business, properties and personnel as Buyer may reasonably request. Unless
otherwise required by law, Buyer will and shall cause its officers, employees,
accountants, counsel and other representatives or persons who have access to
such information to hold any such information which is non-public in confidence
in accordance with the Confidentiality Agreement. No information or knowledge
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obtained in any investigation pursuant to this Section 6.04 or otherwise shall
affect or be deemed to modify any representation or warranty contained in this
Agreement or the conditions to the obligations of the parties to consummate the
Merger.
Section 6.05 STOCKHOLDERS MEETING.
(a) The Seller, acting through its Board of Directors, shall, subject
to and in accordance with applicable law and its Certificate of Incorporation
and Bylaws, promptly and duly call, give notice of, convene and hold as soon as
practicable following the date on which the Registration Statement becomes
effective the Seller Meeting for the purpose of voting to approve and adopt this
Agreement and the Merger (the "Seller Voting Proposal"). The Board of Directors
of the Seller shall (i) recommend approval and adoption of the Seller Voting
Proposal by the stockholders of the Seller and include in the Proxy Statement
such recommendation and (ii) take all reasonable and lawful action to solicit
and obtain such approval; provided, however, that in the context of an
Acquisition Proposal the Board of Directors of Seller may withdraw or modify
such recommendation if (but only if) (i) the Board of Directors of Seller has
received a Superior Proposal, (ii) such Board of Directors upon advice of its
outside legal counsel determines that it is required, in order to comply with
its fiduciary duties under applicable law, to recommend such Superior Proposal
to the stockholders of Seller and (iii) Seller has complied with the provisions
of Section 6.01.
(b) S. Xxxxx Xxxxxxxxxx, Xxxxxxxxxx Family Irrevocable Trust of 1996,
S. Xxxxx Xxxxxxxxxx 1996 Retained Annuity Trust, Xxx X. Xxxxx and Xxx X. Xxxxx
1996 Retained Annuity Trust have each executed and delivered a Stockholder
Agreement to Buyer and Sub concurrently with the signing of this Agreement.
Section 6.06 LEGAL CONDITIONS TO MERGER.
(a) Subject to the terms hereof, Seller and Buyer shall use their
respective commercially reasonable efforts to (i) take, or cause to be taken,
all appropriate action, and do, or cause to be done, all things necessary and
proper under applicable law to consummate and make effective the transactions
contemplated hereby as promptly as practicable, (ii) obtain from any
Governmental Entity or any other third party any consents, licenses, permits,
waivers, approvals, authorizations, or orders required to be obtained or made by
Seller or Buyer or any of their Subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby including, without limitation, the Merger,
(iii) as promptly as practicable, make all necessary filings, and thereafter
make any other required submissions, with respect to this Agreement and the
Merger required under (A) the Securities Act and the Exchange Act, and any other
applicable federal or state
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securities laws, (B) the HSR Act and any related governmental request
thereunder, and (C) any other applicable law and (iv) execute or deliver any
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement. Seller and Buyer shall
cooperate with each other in connection with the making of all such filings,
including providing or making available copies of all such documents to the
non-filing party and its advisors (or, in connection with information relating
to filings under the HSR Act, to the advisors of the non-filing party) prior to
filing and, if requested, consider in good faith all reasonable additions,
deletions or changes suggested in connection therewith. Seller and Buyer shall
use their respective commercially reasonable efforts to furnish to each other
all information required for any application or other filing to be made by the
other party pursuant to the rules and regulations of any applicable law
(including all information required to be included in the Proxy Statement and
the Registration Statement) in connection with the transactions contemplated by
this Agreement.
(b) Subject to the terms hereof, Buyer and Seller agree, and shall
cause each of their respective Subsidiaries, to cooperate and to use their
respective commercially reasonable efforts to obtain any government clearances
or approvals required for Closing under the HSR Act, the Xxxxxxx Act, as
amended, the Xxxxxxx Act, as amended, the Federal Trade Commission Act, as
amended, and any other federal, state or foreign law or, regulation or decree
designed to prohibit, restrict or regulate actions for the purpose or effect of
monopolization or restraint of trade (collectively "Antitrust Laws"). From and
after the occurrence of a Second Request (as defined below), Seller shall, at
Buyer's request and subject to Buyer's obligation to bear expenses as set forth
below, cooperate in all reasonable respects with Buyer to respond to any
government requests for information under any Antitrust Law, and to contest and
resist any action, including any legislative, administrative or judicial action,
and to have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or permanent) (an
"Order") that restricts, prevents or prohibits the consummation of the Merger or
any other transactions contemplated by this Agreement under any Antitrust Law.
The parties hereto will consult and cooperate with one another, and consider in
good faith the views of one another, in connection with any analyses,
appearances, presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted by or on behalf of any party hereto in connection with
proceedings under or relating to any Antitrust Law. Buyer shall be entitled to
direct any proceedings or negotiations with any Governmental Entity relating to
any of the foregoing, provided that it shall afford Seller a reasonable
opportunity to participate therein and shall consider in good faith any
proposals made by Seller in connection therewith. The Buyer shall have the
right, directly and/or through its counsel, to assume full control over
coordinating the response to any formal request for additional information or
documentary material made by the Federal Trade
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Commission or the Antitrust Division of the U.S. Department of Justice pursuant
to 16 C.F.R. 803.20 under the HSR Act ("Second Request") and for developing and
implementing any strategies to resolve any governmental concerns; provided,
however that, subject to the expense reimbursement provisions set forth in the
following sentence, Seller shall make, on its own behalf, any submissions
required to be made by Seller in connection with any such Second Request. In the
event that Buyer so elects to assume the control over the response to such
request, (i) Buyer shall bear all expenses relating to such response and (ii)
Buyer shall keep Seller informed, on a current basis, of all material
developments with respect to the status of such request at the request of
Seller. Notwithstanding anything to the contrary in this Section 6.06, neither
Buyer nor any of its Subsidiaries shall be required to (i) divest any of their
respective businesses, product lines or assets, or to take or agree to take any
other action or agree to any limitation, that could reasonably be expected to
have a Buyer Material Adverse Effect or a material adverse effect on Buyer,
combined with Seller, after the Effective Time or (ii) take any action under
this Section 6.06 if the United States Department of Justice or the United
States Federal Trade Commission authorizes its staff to seek a preliminary
injunction or restraining order to enjoin consummation of the Merger.
(c) Each of Seller and Buyer shall give (or shall cause their
respective Subsidiaries to give) any notices to third parties, and use, and
cause their respective Subsidiaries to use, their commercially reasonable
efforts to obtain any third party consents related to or required in connection
with the Merger that are (A) necessary to consummate the transactions
contemplated hereby, (B) disclosed or required to be disclosed in the Seller
Disclosure Schedule or the Buyer Disclosure Schedule, as the case may be, or (C)
required to prevent a Seller Material Adverse Effect or a Buyer Material Adverse
Effect from occurring prior to or after the Effective Time.
Section 6.07 PUBLIC DISCLOSURE. Buyer and Seller shall use commercially
reasonable efforts to consult with each other before issuing any press release
or otherwise making any public statement with respect to the Merger or this
Agreement and shall not issue any such press release or make any such public
statement prior to using such efforts, except as may be required by law. The
initial press release relating to this Agreement shall be in a form that was
heretofore agreed by the parties.
Section 6.08 TAX-FREE REORGANIZATION. Buyer and Seller shall each use
its best efforts to cause the Merger to be treated as a reorganization within
the meaning of Section 368(a) of the Code. The parties hereto hereby adopt this
Agreement as a plan of reorganization.
Section 6.09 AFFILIATE AGREEMENTS. Upon the execution of this
Agreement, Seller will provide Buyer with a list of those persons who are, in
Seller's reasonable judgment,
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"affiliates" of Seller, within the meaning of Rule 145 (each such person who is
an "affiliate" of Seller within the meaning of Rule 145 is referred to as an
"Affiliate") promulgated under the Securities Act ("Rule 145"). Seller shall
provide such information and documents as Buyer shall reasonably request for
purposes of reviewing such list and shall notify Buyer in writing regarding any
change in the identity of its Affiliates prior to the Closing Date. Seller shall
use its commercially reasonable efforts to deliver or cause to be delivered to
Buyer by October 15, 1999 (and in any case prior to the mailing of the Proxy
Statement) from each of its Affiliates, an executed Affiliate Agreement, in
substantially the form appended hereto as EXHIBIT D. Buyer shall be entitled to
place appropriate legends on the certificates evidencing any Buyer Common Stock
to be received by Rule 145 Affiliates of Seller pursuant to the terms of this
Agreement, and to issue appropriate stop transfer instructions to the transfer
agent for the Buyer Common Stock (provided that such legends or stop transfer
instructions shall be removed, two years after the Effective Date, upon the
request of any stockholder that is not then an Affiliate of Buyer).
Section 6.10 NYSE LISTING. Buyer shall use best efforts to cause the
shares of Buyer Common Stock to be issued in the Merger to be listed on the
NYSE, subject to official notice of issuance, on or prior to the Closing Date.
Section 6.11 SELLER STOCK PLANS AND SELLER WARRANTS.
(a) At the Effective Time, each outstanding Seller Stock Option under
the Seller Stock Plans, whether vested or unvested, shall be deemed to
constitute an option to acquire, on the same terms and conditions as were
applicable under such Seller Stock Option, the same number of shares of Buyer
Common Stock as the holder of such Seller Stock Option would have been entitled
to receive pursuant to the Merger had such holder exercised such option in full
immediately prior to the Effective Time (rounded downward to the nearest whole
number), at a price per share (rounded upward to the nearest whole cent) equal
to (y) the aggregate exercise price for the shares of Seller Common Stock
purchasable pursuant to such Seller Stock Option immediately prior to the
Effective Time divided by (z) the number of full shares of Buyer Common Stock
deemed purchasable pursuant to such Seller Stock Option in accordance with the
foregoing.
(b) As soon as practicable after the Effective Time, Buyer shall
deliver to the participants in Seller Stock Plans appropriate notice setting
forth such participants' rights pursuant thereto and the grants pursuant to
Seller Stock Plans shall continue in effect on the same terms and conditions
(subject to the adjustments required by this Section 6.11 after giving effect to
the Merger).
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(c) Buyer shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Buyer Common Stock for delivery under
the Seller Stock Plans assumed in accordance with this Section 6.11. As soon as
practicable after the Effective Time, and in any event within 30 days
thereafter, Buyer shall file one or more registration statements on Form S-8 (or
any successor or other appropriate forms), or another appropriate form, with
respect to the shares of Buyer Common Stock subject to such options and shall
use its best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding.
(d) The Board of Directors of Seller shall have approved, prior to the
date of this Agreement, and shall take, prior to or as of the Effective Time,
all necessary actions, if any, pursuant to and in accordance with the terms of
the Seller Stock Plans and the instruments evidencing the Seller Stock Options,
to provide for the conversion of the Seller Stock Options into options to
acquire Buyer Common Stock in accordance with this Section 6.11, and that no
consent of the holders of the Seller Stock Options is required in connection
with such conversion.
(e) At the Effective Time, each outstanding Seller Warrant shall be
deemed to constitute a warrant to acquire, on the same terms and conditions as
were applicable under such Seller Warrant, the same number of shares of Buyer
Common Stock as the holder of such Seller Warrant would have been entitled to
receive pursuant to the Merger (including with respect to the treatment of
fractional shares) had such holder exercised such warrant in full immediately
prior to the Effective Time, at a price per share (rounded upward to the nearest
whole cent) equal to (y) the aggregate exercise price for the shares of Seller
Common Stock purchasable pursuant to such Seller Warrant immediately prior to
the Effective Time divided by (z) the number of full shares of Buyer Common
Stock deemed purchasable pursuant to such Seller Warrant in accordance with the
foregoing.
(f) The Board of Directors of Seller shall have approved, prior to the
date of this Agreement, and shall take, prior to or as of the Effective Time,
all necessary actions, pursuant to and in accordance with the terms of the
Seller Warrants, to provide for the conversion of the Seller Warrants into
warrants to acquire Buyer Common Stock in accordance with this Section 6.11, and
that no consent of the holders of any Seller Warrant is required in connection
with such conversion.
Section 6.12 BROKERS OR FINDERS. Each of Buyer and Seller represents,
as to itself, its Subsidiaries and its Affiliates, that no agent, broker,
investment banker, financial advisor or other firm or person is or will be
entitled to any broker's or finder's fee or
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any other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except Xxxxxxx & Company, Inc., whose fees and
expenses will be paid by Seller in accordance with Seller's agreement with such
firm (a copy of which has been delivered by Seller to Buyer prior to the date of
this Agreement).
Section 6.12(A) EMPLOYMENT MATTERS.
(a) For purposes of eligibility, vesting and, except with respect to
any pension benefit plan or retiree medical plan, calculation of benefits
(except to the extent crediting such service would result in the duplication of
benefits) under each of Buyer's employee benefit plans, programs and
arrangements in which an employee of Seller who is employed as of the Closing
Date and who becomes an employee of Buyer or the Surviving Corporation
immediately following the Closing (each a "Continuing Employee") participates,
Buyer shall grant, or shall cause the Surviving Corporation to grant, each
Continuing Employee with credit for all service with Seller to the extent
permitted by law. Sub and Buyer will provide as of the Closing that Sub will
become a participating employer in the 401(k) plan which Buyer sponsors for its
employees and employees of participating subsidiaries.
(b) Buyer shall provide, or shall cause the Surviving Corporation to
provide, to each Continuing Employee (and each Continuing Employee's
beneficiaries and dependents) immediate coverage under a health benefit plan
maintained by the Surviving Corporation or Buyer. Buyer shall waive, or cause
the Surviving Corporation to waive, any applicable preexisting condition
exclusion (to the extent such exclusion did not apply to a preexisting condition
under Seller's plan) under any such health benefit plan to the extent permitted
by law.
(c) It is expressly agreed that the provisions of this Section 6.12(A)
are not intended to be for the benefit of or otherwise enforceable by any third
person including, without limitation, any employee of Seller, or any collective
bargaining unit or employee organization.
(d) At least two business days prior to the Closing, the Board of
Directors of Seller will vote to terminate its Section 401(k) plan (the "Plan").
After the Closing, Sub or Buyer will assume sole sponsorship of the Plan and
will authorize the distribution of assets to participants in accordance with
Plan provisions, ERISA and qualification requirements of the Code. Participants
will be permitted to make direct rollovers of their Plan balances (including
loans) to the 401(k) plan of Buyer in which they participate. However, no
distribution of assets will occur, except with respect to employees who
discontinue employment with Sub or Buyer, prior to the issuance by
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the Internal Revenue Service of a ruling that the distribution of assets from
the terminated Plan is in accordance with Section 401(k)(10) of the Code, taking
into account the fact that participants of the Plan will immediately be eligible
for participation in a defined contribution plan of the Sub or Buyer. In the
event that such a ruling is not obtained, Sub or Buyer will either (i) maintain
the Plan on a "frozen" basis, or (ii) merge the Plan into a Code qualified
employee retirement plan sponsored by Sub or Buyer.
Section 6.13 INDEMNIFICATION.
(a) From and after the Effective Time, Buyer agrees that it will, and
will cause the Surviving Corporation to, jointly and severally with the
Surviving Corporation, defend, indemnify and hold harmless each present and
former director and officer of Seller (the "Indemnified Parties"), against any
costs or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities or amounts paid in settlement incurred in connection with
any claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Effective Time (including acts or
omissions of any such director or officer occurring prior to the Effective
Time), whether asserted or claimed prior to, at or after the Effective Time, to
the fullest extent that Seller would have been permitted under Delaware law and
its Certificate of Incorporation or Bylaws in effect on the date hereof to
indemnify an Indemnified Party (and, to the extent permitted in the Certificate
of Incorporation or Bylaws of Seller in effect on the date hereof, Buyer and the
Surviving Corporation shall also advance expenses as incurred to the fullest
extent permitted under applicable law, provided the Indemnified Party to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such Indemnified Party is not entitled to
indemnification).
(b) For a period of six years after the Effective Time, Buyer shall
cause the Surviving Corporation to maintain (to the extent available in the
market) in effect a directors' and officers' liability insurance policy covering
those persons who are currently covered by Seller's directors' and officers'
liability insurance policy (a copy of which has been heretofore delivered to
Buyer) with coverage in amount and scope at least as favorable to such persons
as Seller's existing coverage; PROVIDED, that in no event shall Buyer or the
Surviving Corporation be required to make annual premium payments to the extent
such premiums exceed an amount equal to 175% of the annual premium paid by
Seller for such coverage as of the date of this Agreement (the "Maximum
Premium"); PROVIDED FURTHER, that if such premiums exceed the Maximum Premium
the Surviving Corporation shall purchase insurance policies in such amounts and
with such coverage as reasonably can be purchased for the Maximum Premium.
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(c) The provisions of this Section 6.13 are intended to be an addition
to the rights otherwise available to the current officers and directors of
Seller by law, charter, statute, bylaw or agreement, and shall operate for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, their
heirs and their representatives.
Section 6.14 LETTER OF SELLER'S ACCOUNTANTS. Seller shall use all
reasonable efforts to cause to be delivered to Buyer and Seller a letter of
Xxxxxx Xxxxxxxx LLP, Seller's independent auditors, dated a date within two
business days before the date on which the Registration Statement shall become
effective and addressed to Buyer, in form reasonably satisfactory to Buyer and
customary in scope and substance for letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement.
Section 6.15 NOTIFICATION OF CERTAIN MATTERS. The Buyer will give
prompt notice to Seller, and Seller will give prompt notice to Buyer, of the
occurrence, or failure to occur, of any event, which occurrence or failure to
occur would be reasonably likely to cause (a) any representation or warranty of
such party contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Effective
Time, or (b) any material failure of Buyer and Sub or Seller, as the case may
be, or of any officer, director, employee or agent thereof, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement. Notwithstanding the above, the delivery of any notice
pursuant to this section will not limit or otherwise affect the remedies
available hereunder to the party receiving such notice or the conditions to such
party's obligation to consummate the Merger. Seller and each of its Subsidiaries
will promptly provide Buyer with copies of all correspondence between Seller and
any Subsidiary, on the one hand, and the Federal Aviation Administration or BBA
plc, on the other hand, and will keep Buyer informed of all material discussions
with such entities.
Section 6.16 ENVIRONMENTAL AUDIT. Buyer agrees that from and after the
date of this Agreement and prior to the Effective Time, it shall not initiate or
request a third party acting on its behalf to initiate a Phase I or II
environmental audit of the real property of Seller or any Subsidiary of Seller.
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ARTICLE VII
CONDITIONS TO MERGER
Section 7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of each party to this Agreement to effect the
Merger shall be subject to the satisfaction prior to the Closing Date of the
following conditions:
(a) STOCKHOLDER APPROVAL. The Seller Voting Proposal shall have been
approved and adopted at the Seller Meeting, at which a quorum is present, by the
affirmative vote of the holders of a majority of the shares of Seller Common
Stock outstanding on the record date for the Seller Meeting.
(b) HSR ACT. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(c) GOVERNMENTAL APPROVALS. Other than the filing provided for by
Section 1.02, all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
Governmental Entity, the failure of which to file, obtain or occur is reasonably
likely to have a Buyer Material Adverse Effect or a Seller Material Adverse
Effect shall have been filed, been obtained or occurred.
(d) REGISTRATION STATEMENT. The Registration Statement shall have
become effective under the Securities Act and shall not be the subject of any
stop order or proceedings seeking a stop order.
(e) NO INJUNCTIONS. No Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any order,
executive order, stay, decree, judgment or injunction (each an "Order") or
statute, rule or regulation which is in effect and which has the effect of
making the Merger illegal or otherwise prohibiting consummation of the Merger.
(f) NYSE. The shares of Buyer Common Stock to be issued in the Merger
shall have been approved for listing on the NYSE, subject only to official
notice of issuance.
Section 7.02 ADDITIONAL CONDITIONS TO OBLIGATIONS OF BUYER AND SUB. The
obligations of Buyer and Sub to effect the Merger are subject to the
satisfaction of each of the following conditions, any of which may be waived in
writing exclusively by Buyer and Sub:
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(a) REPRESENTATIONS AND WARRANTIES.
(i) The representations and warranties of Seller set forth in
this Agreement that are not qualified as to materiality or Seller Material
Adverse Effect shall be true and correct in all material respects as of the date
of this Agreement;
(ii) The representations and warranties of Seller set forth in
this Agreement that are qualified as to materiality or Seller Material Adverse
Effect shall be true and correct in all respects as of the date of this
Agreement;
(iii) The representations and warranties of Seller set forth
in this Agreement shall be true and correct as of the Closing Date (without
regard to any materiality, Seller Material Adverse Effect or knowledge
qualifications contained therein), except (A) for changes contemplated by this
Agreement, (B) to the extent such representations and warranties speak as of an
earlier date and (C) where the failures to be true and correct (without regard
to any materiality, Seller Material Adverse Effect or knowledge qualifications
contained therein), individually or in the aggregate, have not had and are not
reasonably likely to have a Seller Material Adverse Effect; and
(iv) Buyer shall have received a certificate signed on behalf
of Seller by the chief executive officer and the chief financial officer of
Seller to the effect that each of the conditions specified in paragraphs (i),
(ii) and (iii) of this paragraph (a) is satisfied in all respects.
(b) PERFORMANCE OF OBLIGATIONS OF SELLER. Seller shall have performed
in all material respects all obligations required to be performed by it under
this Agreement at or prior to the Closing Date; and Buyer shall have received a
certificate signed on behalf of Seller by the chief executive officer and the
chief financial officer of Seller to such effect.
(c) TAX OPINION. Buyer shall have received a written opinion from Xxxx
and Xxxx LLP, counsel to Buyer, to the effect that the Merger will be treated
for federal income tax purposes as a tax-free reorganization within the meaning
of Section 368(a) of the Code; provided that if Xxxx and Xxxx LLP does not
render such opinion, this condition shall nonetheless be deemed satisfied if
Brown, Rudnick, Freed & Gesmer renders such opinion to Buyer (it being agreed
that Buyer and Seller shall each provide reasonable cooperation, including
making reasonable representations, to Brown, Rudnick, Freed & Gesmer or Xxxx and
Xxxx LLP, as the case may be, to enable them to render such opinion).
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(d) THIRD PARTY CONSENTS. The Seller shall have obtained (i) all
consents and approvals of third parties referred to in Section 7.02(d) of the
Seller Disclosure Schedule and (ii) any other consent or approval of any third
party (other than a Governmental Entity) the failure of which to obtain,
individually or in the aggregate, is reasonably likely to have a Seller Material
Adverse Effect.
Section 7.03 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SELLER. The
obligation of Seller to effect the Merger is subject to the satisfaction of each
of the following conditions, any of which may be waived, in writing, exclusively
by Seller:
(a) REPRESENTATIONS AND WARRANTIES.
(i) The representations and warranties of Buyer and Sub set
forth in this Agreement that are not qualified as to materiality or Seller
Material Adverse Effect shall be true and correct in all material respects as of
the date of this Agreement;
(ii) The representations and warranties of Buyer and Sub set
forth in this Agreement that are qualified as to materiality or Buyer Material
Adverse Effect shall be true and correct in all respects as of the date of this
Agreement;
(iii) The representations and warranties of Buyer and Sub set
forth in this Agreement shall be true and correct as of the Closing Date
(without regard to any materiality, Buyer Material Adverse Effect or knowledge
qualifications contained therein), except (A) for changes contemplated by this
Agreement, (B) to the extent such representations and warranties speak as of an
earlier date and (C) where the failures to be true and correct (without regard
to any materiality, Buyer Material Adverse Effect or knowledge qualifications
contained therein), individually or in the aggregate, have not had and are not
reasonably likely to have a Buyer Material Adverse Effect; and
(iv) Seller shall have received a certificate signed on behalf
of Buyer by the chief executive officer or the chief financial officer of Buyer
to the effect that each of the conditions specified in paragraphs (i), (ii) and
(iii) of this paragraph (a) is satisfied in all respects.
(b) PERFORMANCE OF OBLIGATIONS OF BUYER AND SUB. Buyer and Sub shall
have performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Closing Date, and Seller shall
have received a certificate signed on behalf of Buyer by the chief executive
officer or the chief financial officer of Buyer to such effect.
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(c) TAX OPINION. Seller shall have received the opinion of Brown,
Rudnick, Freed & Gesmer counsel to Seller, to the effect that the Merger will be
treated for federal income tax purposes as a tax-free reorganization within the
meaning of Section 368(a) of the Code; provided that if Brown, Rudnick, Freed &
Gesmer does not render such opinion, this condition shall nonetheless be deemed
satisfied if Xxxx and Xxxx LLP renders such opinion to Seller (it being agreed
that Buyer and Seller shall each provide reasonable cooperation, including
making reasonable representations, to Brown, Rudnick, Freed & Gesmer or Xxxx and
Xxxx LLP, as the case may be, to enable them to render such opinion).
ARTICLE VIII
TERMINATION AND AMENDMENT
Section 8.01 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time (with respect to Sections 8.01(b) through 8.01(g),
by written notice by the terminating party to the other party), whether before
or after approval of the Merger by the stockholders of Seller:
(a) by mutual written consent of Buyer and Seller; or
(b) by either Buyer or Seller if the Merger shall not have been
consummated by April 30, 2000 (the "Outside Date") (provided that the right to
terminate this Agreement under this Section 8.01(b) shall not be available to
any party whose failure to fulfill any obligation under this Agreement has been
a principal cause of or resulted in the failure of the Merger to occur on or
before such date); or
(c) by either Buyer or Seller if a Governmental Entity of competent
jurisdiction shall have issued a nonappealable final order, decree or ruling or
taken any other nonappealable final action, in each case having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger; or
(d) by either Buyer or Seller if at the Seller Meeting (including any
adjournment or postponement), the requisite vote of the stockholders of Seller
in favor of the Seller Voting Proposal shall not have been obtained (provided
that the right to terminate this Agreement under this Section 8.01(d) shall not
be available to the Seller where the failure to obtain Seller stockholder
approval shall have been caused by the action or failure to act of Seller in
breach of this Agreement and shall not be available to Buyer where such failure
is caused by a breach of this Agreement by Buyer); or
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(e) by Buyer, if: (i) the Board of Directors of Seller shall have
failed to recommend approval of the Seller Voting Proposal in the Proxy
Statement or shall have withdrawn or modified its recommendation of the Seller
Voting Proposal; (ii) after the receipt by Seller of an Acquisition Proposal,
Buyer requests in writing that the Board of Directors of Seller reconfirm its
recommendation of this Agreement or the Merger and the Board of Directors of
Seller fails to do so within five business days after its receipt of Buyer's
request or, in the case of an Acquisition Proposal that is a tender or exchange
offer, within 10 business days after its receipt of Buyer's request; (iii) the
Board of Directors of Seller shall have approved or recommended to the
stockholders of Seller an Alternative Transaction (as defined in Section
8.03(g)); (iv) a tender offer or exchange offer for 20% or more of the
outstanding shares of Seller Common Stock is commenced (other than by Buyer or
an Affiliate of Buyer) and the Board of Directors of Seller recommends that the
stockholders of Seller tender their shares in such tender or exchange offer or
within 10 business days after such tender offer or exchange offer fails to
recommend against acceptance of such offer or takes no position with respect to
acceptance thereof; or (v) for any reason Seller fails to call and hold the
Seller Meeting by the Outside Date (unless primarily due to acts or omissions of
the SEC or of Buyer); or
(f) by either Buyer or Seller, if there has been a breach of any
representation, warranty, covenant or agreement on the part of the other party
set forth in this Agreement, which breach (i) causes the conditions set forth in
Section 7.02(a) or (b) (in the case of termination by Buyer) or 7.03(a) or (b)
(in the case of termination by Seller) not to be satisfied, and (ii) shall not
have been cured within 10 days following receipt by the breaching party of
written notice of such breach from the other party;
(g) by Buyer, if: (i) Buyer has incurred (or incurred on behalf of
Seller) more than an aggregate of $500,000 in out-of-pocket expenses seeking to
obtain clearance or approval of the Merger and other transactions contemplated
hereby under applicable Antitrust Laws or (ii) the Federal Trade Commission or
the Antitrust Division of the U.S. Department of Justice has made a Second
Request, and HSR clearance has not been received within 90 days of the date of
such request;
(h) by Seller, if the Market Value of the Buyer Common Stock would be
less than $30.99 per share unless Buyer, within two days after receipt of
written notice by Seller of its intention to so terminate, shall have elected in
its sole discretion to adjust the Exchange Ratio pursuant to Section 2.01(c)(ii)
hereof; or
(i) by Buyer, if the Market Value of the Buyer Common Stock would be
greater than $46.49 per share unless Seller, within two days after receipt of
written
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notice by Buyer of its intention to so terminate, shall have elected in its sole
discretion to adjust the Exchange Ratio pursuant to Section 2.01(c)(i) hereof.
Section 8.02 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 8.01, this Agreement shall immediately become
void and there shall be no liability or obligation on the part of Buyer, Seller,
Sub or their respective officers, directors, stockholders or Affiliates, except
as set forth in Sections 5.03, 6.12, 8.03 and Article IX; provided that any such
termination shall not relieve any party from liability for any willful breach of
this Agreement (which includes without limitation the making of any
representation or warranty by a party in this Agreement that the party knew was
not true and accurate when made) and the provisions of the Seller Stock Option
Agreement, Sections 5.03, 6.12, 8.03 and Article IX of this Agreement and the
Confidentiality Agreement shall remain in full force and effect and survive any
termination of this Agreement.
Section 8.03 FEES AND EXPENSES.
(a) Except as set forth in this Section 8.03, 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 (it being understood that the HSR filing fee shall be paid
100% by Buyer); provided however, that Seller and Buyer shall share equally all
fees and expenses, other than attorneys' fees, incurred with respect to the
printing and filing of the Proxy Statement (including any related preliminary
materials) and the Registration Statement (including financial statements and
exhibits) and any amendments or supplements thereto.
(b) Seller shall pay Buyer up to $500,000 (or $700,000 in the case of a
termination described in clause (ii) below) as reimbursement for reasonable
out-of-pocket expenses of Buyer actually incurred relating to the transactions
contemplated by this Agreement prior to termination (including, but not limited
to, reasonable fees and expenses of Buyer's counsel, accountants and financial
advisors, but excluding any discretionary fees paid to such financial advisors),
upon the termination of this Agreement (i) by Buyer pursuant to (A) Section
8.01(d); (B) Section 8.01(e), (C) Section 8.01(b) as a result of the failure to
satisfy the condition set forth in Section 7.02(a)(i) or Section 7.02(a)(ii); or
(D) Section 8.01(f); or (ii) by Seller pursuant to Section 8.01(h). Buyer shall
promptly provide Seller with invoices or other reasonable evidence of such
expenses upon written request by Seller. In the event that Seller pays Buyer the
termination fee set forth in Section 8.03(c) in connection with the event giving
rise to Seller's obligation to reimburse Buyer for expenses pursuant to this
Section 8.03(b), such termination fee shall be deemed to satisfy Seller's
obligations pursuant this Section 8.03(b).
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(c) Seller shall pay Buyer a termination fee of $2,500,000 upon the
earliest to occur of the following events:
(i) the termination of this Agreement by Buyer pursuant to
Section 8.01(e); or
(ii) the termination of this Agreement by Buyer pursuant to
Section 8.01(f) after a willful breach by Seller of this Agreement, if before
such termination or within 12 months thereafter Seller shall have entered into
an agreement to engage in or shall have engaged in an Alternative Transaction;
or
(iii) the termination of this Agreement by Buyer or Seller
pursuant to Section 8.01(d) as a result of the failure to receive the requisite
vote for approval of the Seller Voting Proposal by the stockholders of Seller at
the Seller Meeting if, at the time of such failure, there shall have been
announced (and not unconditionally withdrawn) an Alternative Transaction
relating to Seller and within 12 months Seller shall have entered into an
agreement to engage in or shall have engaged in an Alternative Transaction.
(d) Buyer shall pay Seller up to $500,000 (or $700,000 in the case of a
termination described in clause (ii) below) as reimbursement for reasonable
out-of-pocket expenses of Seller actually incurred relating to the transactions
contemplated by this Agreement prior to termination (including, but not limited
to, reasonable fees and expenses of Seller's counsel, accountants and financial
advisors, but excluding any discretionary fees paid to such financial advisors),
upon the termination of this Agreement (i) by Seller pursuant to (A) Section
8.01(b) as a result of the failure to satisfy the condition set forth in Section
7.03(a)(i) or Section 7.03(a)(ii) or (B) Section 8.01(f); or (ii) by Buyer
pursuant to Section 8.01(i). Seller shall promptly provide Buyer with invoices
or other reasonable evidence of such expenses upon written request by Buyer.
(e) [Intentionally Omitted.]
(f) The expenses and fees, if applicable, payable pursuant to Section
8.03(b), 8.03(c) and 8.03(d) shall be paid within two business days after demand
therefor following the first to occur of the events giving rise to the payment
obligation described in Section 8.03(b), 8.03(c)(i), (ii) or (iii) or 8.03(d);
provided that in no event shall Buyer or Seller, as the case may be, be required
to pay the expenses and fees, if applicable, to the other, if, immediately prior
to the termination of this Agreement, the party to receive the expenses and
fees, if applicable, was in material breach of its obligations under this
Agreement. If one party fails to promptly pay to the other any expense
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reimbursement or fee due hereunder, the defaulting party shall pay the costs and
expenses (including legal fees and expenses) in connection with any action,
including the filing of any lawsuit or other legal action, taken to collect
payment, together with interest on the amount of any unpaid fee at the publicly
announced prime rate of Fleet Bank, N.A. plus five percent per annum, compounded
quarterly, from the date such expense reimbursement or fee was required to be
paid.
(g) As used in this Agreement, "Alternative Transaction" means either
(i) a transaction pursuant to which any person (or group of persons) other than
Buyer or its affiliates (a "Third Party"), acquires more than 20% of the
outstanding shares of Seller Common Stock pursuant to a tender offer or exchange
offer or otherwise, (ii) a merger or other business combination involving Seller
pursuant to which any Third Party acquires more than 20% of the outstanding
shares of Seller Common Stock or of the entity surviving such merger or business
combination, (iii) any other transaction pursuant to which any Third Party
acquires control of assets (including for this purpose the outstanding equity
securities of Subsidiaries of Seller, and the entity surviving any merger or
business combination including any of them) of Seller having a fair market value
equal to more than 20% of the fair market value of all the assets of Seller
immediately prior to such transaction, or (iv) any public announcement by a
Third Party of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
Section 8.04 AMENDMENT. 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 approval of the matters presented in connection with
the Merger by the stockholders of Seller, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
Section 8.05 EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards 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
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions 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 a written instrument signed on behalf of such party.
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ARTICLE IX
MISCELLANEOUS
Section 9.01 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
None of the representations, warranties and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, but shall expire with and be terminated and extinguished upon the
Effective Time, except for the agreements contained in Articles I and II,
Sections 6.11, 6.13 and Article IX, and the agreements of the Affiliates
delivered pursuant to Section 6.09. The Confidentiality Agreement shall survive
the execution and delivery of this Agreement.
Section 9.02 NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly delivered three business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service for next business day delivery, in each case to the
intended recipient as set forth below:
(a) if to Buyer or Sub, to
EG&G, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: General Counsel
Telecopy: (000) 000-0000
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telecopy: (000) 000-0000
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(b) if to Seller, to
Vivid Technologies, Inc.
00 Xxxx Xxxxxxxx Xxx
Xxxxxx, XX 00000
Attn: Chief Executive Officer
Telecopy: (000) 000-0000
with a copy to:
Brown, Rudnick, Freed & Gesmer
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx Xxxx, Esq.
Telecopy: (000) 000-0000
Any party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other parties notice in the manner herein set forth.
Section 9.03 INTERPRETATION. When a reference is made in this Agreement
to Articles or Sections, such reference shall be to an Article or Section of
this Agreement unless otherwise indicated. The table of contents, table of
defined terms 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. The phrases "the date of this Agreement," "the date hereof," and
terms of similar import, unless the context otherwise requires, shall be deemed
to refer to October 4, 1999. The words "include," "includes" and "including"
when used herein shall be deemed in each case to be following by the words
"without limitation." References to "knowledge of Seller" or any similar
expression shall mean the actual knowledge of the individuals listed in Section
9.03 of the Seller Disclosure Schedule and shall be deemed to include any
information contained in any document in the possession or files of such
persons. References to "knowledge of Buyer" or any similar expression shall mean
the actual knowledge of the individuals listed in Section 9.03 of the Buyer
Disclosure Schedule and shall be deemed to include any information contained in
any document in the possession or files of such persons.
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Section 9.04 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 two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 9.05 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (including the documents and the instruments referred to herein) (a)
constitute the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) except as provided in Section 6.13 are not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder; provided that the Confidentiality Agreement shall remain in
full force and effect until the Effective Time. Each party hereto agrees that,
except for the representations and warranties contained in this Agreement,
neither Seller nor Buyer makes any other representations or warranties, and each
hereby disclaims any other representations and warranties made by itself or any
of its officers, directors, employees, agents, financial and legal advisors or
other representatives, with respect to the execution and delivery of this
Agreement or the transactions contemplated hereby, notwithstanding the delivery
or disclosure to the other or the other's representatives of any documentation
or other information with respect to any one or more of the foregoing.
Section 9.06 GOVERNING LAW AND VENUE. THIS AGREEMENT SHALL BE DEEMED TO
BE MADE IN, AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY
AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
TO BE PERFORMED WHOLLY IN SUCH STATE. The parties hereby (a) irrevocably submit
to the jurisdiction of the Chancery Court of the State of Delaware and the
federal courts of the United States of America located in the State of Delaware
solely in respect of the interpretation and enforcement of the provisions of
this Agreement and the Seller Stock Option and in respect of the transactions
contemplated hereby and thereby and (b) waive, and agree not to assert, as a
defense in any action, suit or proceeding for the interpretation or enforcement
hereof, that it is not subject to such jurisdiction or that such action, suit or
proceeding may not be brought or is not maintainable in said courts or that the
venue thereof may not be appropriate or that this Agreement or the Seller Stock
Option may not be enforced in or by such courts, and the parties irrevocably
agree that all claims with respect to such action or proceeding shall be heard
and determined in such courts. The parties hereby consent to and grant any such
court's jurisdiction over the person of such parties and over the subject matter
of such dispute and agree that mailing of process or other papers in connection
with any such action or
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proceeding in the manner provided in Section 9.02, or in such other manner as
may be permitted by law, shall be valid and sufficient service thereof.
Section 9.07 WAIVER OF JURY TRIAL. EACH OF BUYER, SUB AND SELLER
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SELLER STOCK
OPTION AGREEMENT OR THE ACTIONS OF BUYER, SUB OR SELLER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF OR THEREOF.
Section 9.08 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.
Section 9.09 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 extent possible, the
economic, business and other purposes of such void or unenforceable provision.
Section 9.10 OTHER REMEDIES; SPECIFIC PERFORMANCE. 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. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions 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 9.11 PROPOSED NAME CHANGE. Seller acknowledges that Buyer has
received approval from its stockholders of an amendment to Buyer's Articles of
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Organization to change the name of Buyer to "PerkinElmer, Inc." and that the
proposed name change may be effective prior to the Effective Time.
[Remainder of page intentionally blank]
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IN WITNESS WHEREOF, Buyer, Sub and Seller have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the date
first written above.
EG&G, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------
Title: Senior Vice President
---------------------------
VENICE ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------
Title: Treasurer
------------------------------
VIVID TECHNOLOGIES, INC.
By: /s/ S. Xxxxx Xxxxxxxxxx
-------------------------------
Title: Chief Executive Officer
---------------------------
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