AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among:
THE TITAN CORPORATION,
a Delaware corporation
GEM ACQUISITION CORP.,
a Delaware corporation; and
DATRON SYSTEMS INCORPORATED,
a Delaware corporation;
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Dated as of June 24, 2001
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SECTION 1. The Offer................................................... 1
1.1 The Offer................................................... 1
1.2 Company Action.............................................. 4
1.3 Directors................................................... 4
1.4 Merger of Merger Sub into the Company....................... 5
1.5 Effect of the Merger........................................ 5
1.6 Closing; Effective Time..................................... 5
1.7 Certificate of Incorporation and Bylaws..................... 5
1.8 Conversion of Shares in the Merger.......................... 6
1.9 Closing of the Company's Transfer Books..................... 6
1.10 Exchange of Certificates.................................... 7
1.11 Appraisal Rights............................................ 8
1.12 Tax Consequences............................................ 8
1.13 Further Action.............................................. 8
SECTION 2. Representations and Warranties of the Company............... 9
2.1 Due Organization; Subsidiaries.............................. 9
2.2 Authority; Binding Nature of Agreement...................... 9
2.3 Capitalization, Etc......................................... 9
2.4 SEC Filings; Financial Statements........................... 11
2.5 Absence of Changes.......................................... 11
2.6 Proprietary Assets.......................................... 12
2.7 Contracts................................................... 13
2.8 Liabilities................................................. 16
2.9 Compliance with Legal Requirements.......................... 16
2.10 Governmental Authorizations................................. 16
2.11 Tax Matters................................................. 17
2.12 Employee and Labor Matters; Benefit Plans................... 17
2.13 Environmental Matters....................................... 20
2.14 Legal Proceedings; Orders................................... 21
2.15 Vote Required............................................... 21
2.16 Non-Contravention; Consents................................. 21
2.17 Fairness Opinion............................................ 21
2.18 Financial Advisor........................................... 22
2.19 Takeover Statutes; No Discussions........................... 22
2.20 Information Included in Offer Documents..................... 22
2.21 Amendment to Rights Agreement............................... 22
2.22 Foreign Corrupt Practices Act............................... 22
SECTION 3. Representations and Warranties of Parent and Merger Sub..... 23
3.1 Due Organization; Subsidiaries.............................. 23
3.2 Authority; Binding Nature of Agreement...................... 23
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3.3 Capitalization, Etc......................................... 23
3.4 SEC Filings; Financial Statements........................... 24
3.5 Liabilities................................................. 24
3.6 Compliance with Legal Requirements.......................... 24
3.7 Governmental Authorizations................................. 25
3.8 Non-Contravention; Consents................................. 25
3.9 Interim Operations of Merger Sub............................ 25
3.10 Information Included in Offer Documents..................... 25
3.11 Parent Stockholder Approval................................. 26
SECTION 4. Certain Covenants of the Company And Parent................. 26
4.1 Access and Investigation.................................... 26
4.2 Operation of the Company's Business......................... 26
4.3 No Solicitation by the Company.............................. 29
SECTION 5. Additional Covenants of the Parties......................... 30
5.1 Registration Statement and Proxy Statement for Stockholder
Approval.................................................... 30
5.2 Company Stockholders' Meeting............................... 31
5.3 Regulatory Approvals........................................ 32
5.4 Assumption of Stock Options................................. 33
5.5 Employee Benefits........................................... 34
5.6 Indemnification of Officers and Directors................... 35
5.7 Additional Agreements....................................... 36
5.8 Public Disclosure........................................... 36
5.9 Tax Matters................................................. 36
5.10 Resignation of Directors.................................... 37
5.11 Listing..................................................... 37
5.12 Takeover Laws; Advice of Changes............................ 37
5.13 Form S-8; Section 16........................................ 37
5.14 Affiliates.................................................. 37
5.15 Rights Agreement; Litigation................................ 37
5.16 No Distributions or Dividends............................... 38
SECTION 6. Conditions to the Merger.................................... 38
6.1 Conditions to Each Party's Obligation....................... 38
SECTION 7. Termination................................................. 38
7.1 Termination................................................. 38
7.2 Effect of Termination....................................... 40
7.3 Expenses; Termination Fees.................................. 40
SECTION 8. Miscellaneous Provisions.................................... 41
8.1 Amendment................................................... 41
8.2 Waiver...................................................... 41
8.3 No Survival of Representations and Warranties............... 41
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8.4 Entire Agreement; Counterparts.............................. 41
8.5 Applicable Law; Jurisdiction................................ 41
8.6 Disclosure Schedule......................................... 42
8.7 Attorneys' Fees............................................. 42
8.8 Assignability............................................... 42
8.9 Notices..................................................... 42
8.10 Cooperation................................................. 43
8.11 Construction................................................ 43
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AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION ("AGREEMENT") is made
and entered into on June 24, 2001, by and among: THE TITAN CORPORATION, a
Delaware corporation ("PARENT"); GEM ACQUISITION CORP., a Delaware corporation
and a wholly owned subsidiary of Parent ("MERGER SUB"); and DATRON SYSTEMS
INCORPORATED, a Delaware corporation (the "COMPANY"). Certain capitalized terms
used in this Agreement are defined in EXHIBIT A.
RECITALS
WHEREAS, Parent, Merger Sub and the Company intend that Merger Sub make an
exchange offer (the "OFFER") to exchange shares of Parent Common Stock for all
of the outstanding shares of Company Common Stock, including the associated
Rights (the "SHARES").
WHEREAS, following the Offer, Parent, Merger Sub and the Company intend to
effect a merger (the "MERGER") of Merger Sub into the Company in accordance with
this Agreement and the Delaware General Corporation Law (the "DGCL"). Upon
consummation of the Merger, Merger Sub will cease to exist, and the Company will
become a wholly owned subsidiary of Parent.
WHEREAS, it is intended that the Offer and the Merger (together, the
"TRANSACTION") shall be treated as an integrated transaction and qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "CODE").
WHEREAS, the Board of Directors of the Company (i) has determined that the
Offer and the Merger together are advisable and consistent with and in
furtherance of the long-term business strategy of the Company and fair to, and
in the best interests of, the Company and its stockholders, (ii) has determined
that this Agreement is advisable and has approved this Agreement, the Offer, the
Merger and the other transactions contemplated by this Agreement, and (iii) has
determined to recommend that the stockholders of the Company accept the Offer
and adopt and approve this Agreement.
WHEREAS, concurrently with the execution and delivery of this Agreement and
as a condition and inducement to the willingness of Parent and Merger Sub to
enter into this Agreement, Parent and certain stockholders of the Company
(collectively, the "STOCKHOLDERS") are entering into Stockholder Tender
Agreements in the form of EXHIBIT B (the "STOCKHOLDER TENDER AGREEMENTS")
pursuant to which the Stockholders have agreed to tender for exchange all of
their shares of Company Common Stock in the Offer and to take certain other
actions in connection with the transactions contemplated hereby.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
SECTION 1. THE OFFER
1.1 THE OFFER
(a) Provided that (i) this Agreement shall not have been terminated in
accordance with Section 7.1 hereof, and (ii) none of the events set forth in
ANNEX I hereto shall have occurred or be existing, Merger Sub shall, as
promptly as practicable after the date hereof commence the Offer. Each Share
accepted by Merger Sub pursuant to the Offer shall be exchanged for the
right to receive that number of fully paid and nonassessable shares of
Parent Common Stock equal to the Exchange Ratio, plus the right to receive
cash in lieu of fractional Shares, if any. The term "EXCHANGE RATIO" shall
mean the fraction (to the fifth decimal point) computed as follows: (i) if
the Average Parent Trading Price is less than or equal to $26.00 per share
and greater than or equal to $19.00 per share, the Exchange Ratio shall be
equal to the quotient obtained by dividing the
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Company Stock Value by the Average Parent Trading Price; (ii) if the Average
Parent Trading Price is less than $19.00 per share and greater than or equal
to $17.50 per share, the Exchange Ratio shall be equal to the quotient
obtained by dividing the Company Stock Value by $19.00; (iii) if the Average
Parent Trading Price is greater than $26.00 per share and less than or equal
to $27.50 per share, the Exchange Ratio shall be equal to the quotient
obtained by dividing the Company Stock Value by $26.00; (iv) if the Average
Parent Trading Price is greater than $27.50 per share, (A) Parent may
terminate this Agreement pursuant to Section 7.1(h), unless the Company
makes a Company Floating Rate Election in accordance with the provisions of
Section 7.1(h), in which case Parent may not terminate this Agreement
pursuant to Section 7.1(h), and the Exchange Ratio shall be equal to the
quotient obtained by dividing (x) the product of the Company Stock Value
multiplied by 1.10, by (y) the Average Parent Trading Price or (B) in the
event that Parent does not terminate this Agreement pursuant to clause (A)
and the Company does not make a Company Floating Rate Election, the Exchange
Ratio shall be equal to the quotient obtained by dividing the Company Stock
Value by $26.00; (v) if the Average Parent Trading Price is less than $17.50
per share, (A) the Company may terminate this Agreement pursuant to
Section 7.1(g), unless Parent makes a Parent Floating Rate Election in
accordance with the provisions of Section 7.1(g), in which case the Company
may not terminate this Agreement pursuant to Section 7.1(g), and the
Exchange Ratio shall be equal to the quotient obtained by dividing (x) the
product of the Company Stock Value multiplied by 0.90 by (y) the Average
Parent Trading Price or (B) in the event that Company does not terminate
this Agreement pursuant to clause (A) and Parent does not make the Parent
Floating Rate Election, the Exchange Ratio shall be equal to the quotient
obtained by dividing the Company Stock Value by $19.00. For purposes of this
Agreement, "AVERAGE PARENT TRADING PRICE" shall mean the average closing
sales price on the New York Stock Exchange, Inc. (the "NYSE") Composite
Transaction Tape (as reported in The Wall Street Journal, or, if not
reported therein, any other authoritative source) for the ten
(10) trading-day period ending five (5) trading days prior to the expiration
of the initial offering period (the "PRICE DETERMINATION DATE"). The initial
expiration date of the Offer shall be the twentieth business day following
commencement of the Offer. The Offer shall be subject to (A) the condition
that there shall be validly tendered in accordance with the terms of the
Offer prior to the expiration date of the Offer (as it may be extended in
accordance with the requirements of this Section 1.1(a)) and not withdrawn a
number of Shares which, together with the Shares then owned by Parent and
Merger Sub (if any), represents at least a majority of the total number of
Shares outstanding immediately prior to the expiration of the Offer (as it
may be extended in accordance with the requirements of this Section 1.1(a))
(the condition referred to in this sentence being referred to as the
"MINIMUM CONDITION"); FOR THE AVOIDANCE OF DOUBT, it being understood that
Shares tendered into the Offer pursuant to a Notice of Guaranteed Delivery
shall be counted in the computation of the Minimum Condition only to the
extent the stock certificates for such Shares are actually delivered to the
Exchange Agent (or, if the Shares are delivered to the Exchange Agent via
book-entry, credited to the Exchange Agent's account with The Depository
Trust Company) prior to computing the Minimum Condition at the expiration of
the Offer (as it may be extended in accordance with the requirements of this
Section 1.1(a)), and (B) to each of the other conditions set forth in ANNEX
I hereto. Parent and Merger Sub expressly reserve the right to waive one or
more conditions to the Offer and to make any change in the terms or
conditions of the Offer; PROVIDED, HOWEVER, that without the prior written
consent of the Company, no change may be made which (i) decreases the number
of Shares sought in the Offer, (ii) changes the form or amount of
consideration to be paid, (iii) imposes conditions to the Offer in addition
to those set forth in ANNEX I, (iv) changes or waives the Minimum Condition
or any of the conditions set forth in clauses (2), (4), (5) or (7) of ANNEX
I, (v) extends the Offer (except as set forth in the following two
sentences), or (vi) makes any other change to any of the terms and
conditions to the Offer which is adverse to the holders of Shares. Subject
to the terms of the Offer and this Agreement and the satisfaction (or waiver
by Parent to the extent permitted by this Agreement) of
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the conditions set forth in ANNEX I to the Offer, Merger Sub shall accept
for payment all Shares validly tendered and not withdrawn pursuant to the
Offer as soon as practicable after the applicable expiration date of the
Offer (as it may be extended in accordance with the requirements of this
Section 1.1(a)) and shall pay for all such Shares promptly after acceptance;
PROVIDED, HOWEVER, that (A) Merger Sub shall extend the Offer for one
10-business day period if the Minimum Condition is not satisfied at the
expiration of the initial 20-business day Offer period, (B) thereafter,
Merger Sub may extend the Offer for successive extension periods (up to the
Termination Date) not in excess of ten (10) business days per extension
period if, at the scheduled expiration date of the Offer or any extension
thereof, any of the conditions to the Offer shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived, and
(C) Merger Sub may extend the Offer if and to the extent required by the
applicable rules and regulations of the SEC, the NYSE or NASD but in no
event after the Termination Date. In addition, Merger Sub may extend the
Offer after the acceptance of Shares thereunder for a further period of time
by means of a subsequent offering period under Rule 14d-11 promulgated under
the Exchange Act.
(b) No fraction of a share of Parent Common Stock will be issued in
connection with the exchange of Parent Common Stock for Shares upon
consummation of the Offer, but in lieu thereof each tendering stockholder
who would otherwise be entitled to receive a fraction of a share of Parent
Common Stock (after aggregating all fractional shares of Parent Common Stock
that otherwise would be received by such stockholder) in the Offer
(including any tendering stockholder during any subsequent offering period
under Rule 14d-11) shall receive from Parent an amount of cash (rounded up
to the nearest whole cent), without interest, equal to the product obtained
by multiplying (A) that fraction of a share of Parent Common Stock to which
such stockholder is entitled (after aggregating all fractional shares of
Parent Common Stock that otherwise would be received by such stockholder) by
(B) the closing sales price of one (1) share of Parent Common Stock on the
NYSE Composite Transaction Tape (as reported in The Wall Street Journal or,
if not reported therein, any other authoritative source) on the date Merger
Sub accepts Shares for exchange in the Offer, and if such date is not a
trading day, on the immediately preceding trading day.
(c) As soon as practicable after the date of this Agreement, Parent
shall prepare and file with the SEC a registration statement on Form S-4 to
register the offer and sale of Parent Common Stock pursuant to the Offer
(the "REGISTRATION STATEMENT"). The Registration Statement will include a
preliminary prospectus containing the information required under
Rule 14d-4(b) promulgated under the Exchange Act (the "PRELIMINARY
PROSPECTUS"). As soon as practicable on the date of commencement of the
Offer, Parent and Merger Sub shall (i) file with the SEC a Tender Offer
Statement on Schedule TO with respect to the Offer which will contain or
incorporate by reference all or part of the Preliminary Prospectus and form
of the related letter of transmittal and summary advertisement, if any
(together with any supplements or amendments thereto, collectively the
"OFFER DOCUMENTS") and (ii) cause the Offer Documents to be disseminated to
holders of Shares. The Company shall promptly furnish to Parent and Merger
Sub all information concerning the Company, the Company's Subsidiaries and
the Company's stockholders that may be required or reasonably requested in
connection with any action contemplated by this Section 1.1. Parent, Merger
Sub and the Company each agree promptly to correct any information provided
by it for use in the Registration Statement or the Offer Documents if and to
the extent that such information shall have become false or misleading in
any material respect. Parent and Merger Sub agree to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the
SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents and the Registration Statement, prior to filing with the
SEC. Parent agrees to provide the Company and its counsel with any comments
3
Parent, Merger Sub or their counsel may receive from the SEC or its staff
with respect to the Offer Documents and the Registration Statement as soon
as practicable after receipt of such comments.
1.2 COMPANY ACTION.
(a) As soon as practicable on the day that the Offer is commenced, the
Company will file with the SEC and disseminate to holders of Shares a
Solicitation/Recommendation Statement on Schedule 14D-9 (the
"SCHEDULE 14D-9") which shall include the opinion of Xxxxxxxx, Ball & Xxxxxx
("PBW") referred to in Section 2.17 and shall include the Recommendations
(as defined in Section 2.2). Parent shall promptly furnish to the Company
all information concerning Parent, Parent's Subsidiaries and Parent's
stockholders that may be required or reasonably requested in connection with
any action contemplated by this Section 1.2(a). The Company hereby consents
to the inclusion of the Recommendations in the Offer Documents and agrees
that none of the Recommendations shall be withdrawn, modified or changed in
the Offer Documents or the Schedule 14D-9 in a manner adverse to Parent or
Merger Sub, and no resolution by the Board of Directors of the Company or
any committee thereof to withdraw, modify or change any of the
Recommendations in a manner adverse to Parent or Merger Sub shall be adopted
or proposed IT BEING UNDERSTOOD THAT, for purposes of this Agreement, a
Recommendation shall be deemed to be withdrawn, modified or changed in a
manner adverse to Parent and Merger Sub if such Recommendation ceases to be
unanimous. Notwithstanding the foregoing, the Board of Directors of the
Company may withhold, withdraw or modify in a manner adverse to Parent its
Recommendations in accordance with the terms of Section 4.3(e) hereof. Each
of the Company, Parent and Merger Sub agrees to correct promptly any
information provided by it for use in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading in any
material respect. The Company agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall
be given a reasonable opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC. The Company agrees to
provide Parent and its counsel with any comments the Company or its counsel
receives from the SEC or its staff with respect to the Schedule 14D-9 as
soon as practicable after receipt of such comments.
(b) The Company will promptly furnish Parent and Merger Sub with a list
of its stockholders, mailing labels and any available listing or computer
file containing the names and addresses of all record holders of Shares and
lists of securities positions of Shares held in stock depositories, in each
case as of the most recent practicable date, and will provide to Parent and
Merger Sub such additional information (including, without limitation,
updated lists of stockholders, mailing labels and lists of securities
positions) and such other assistance as Parent or Merger Sub may reasonably
request in connection with the Offer.
1.3 DIRECTORS
(a) Effective upon the acceptance for payment by Merger Sub of Shares
pursuant to the Offer (the "OFFER ACCEPTANCE TIME"), Parent shall be
entitled to designate four (4) directors on the Company's Board of
Directors; PROVIDED, HOWEVER, that prior to the Effective Time, the
Company's Board of Directors shall always have at least three (3) members
who were directors of the Company prior to consummation of the Offer (each,
a "CONTINUING DIRECTOR"); PROVIDED, HOWEVER, that if Merger Sub purchases
85% or more of the Shares in the Offer, the number of Continuing Directors
shall be one (1). If the number of Continuing Directors is reduced to fewer
than three (3) for any reason prior to the Effective Time, the remaining and
departing Continuing Directors shall be entitled to designate a Person or
Persons to fill the vacancy and Parent shall take all such actions as are
necessary to cause the Person or Persons so designated to be so appointed.
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Notwithstanding anything in this Agreement to the contrary, Parent agrees
that it shall not take any of the following actions without the affirmative
vote of a majority of the Continuing Directors: (a) amend or terminate this
Agreement or agree or consent to any amendment or termination of this
Agreement, (b) waive any of the Company's rights, benefits or remedies
hereunder, (c) extend the time for performance of Parent's and Merger Sub's
respective obligations hereunder, or (d) approve any other action by the
Company which is reasonably likely to adversely affect the interests of the
stockholders of the Company (other than Parent, Merger Sub and their
affiliates (other than the Company and its Subsidiaries)) with respect to
the transactions contemplated by this Agreement.
(b) The Company's obligations to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and
Rule 14f-l promulgated thereunder. The Company shall promptly take all
actions required pursuant to this Section 1.3 and Rule 14f-l in order to
fulfill its obligations under this Section 1.3 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-l. Parent will
supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
affiliates required by Section 14(f) and Rule 14f-1.
1.4 MERGER OF MERGER SUB INTO THE COMPANY. Upon the terms and subject to
the conditions set forth in this Agreement, at the Effective Time (as defined in
Section 1.6), Merger Sub shall be merged with and into the Company, and the
separate existence of Merger Sub shall cease. The Company will continue as the
surviving corporation in the Merger (the "SURVIVING CORPORATION") and will be a
wholly owned subsidiary of Parent
1.5 EFFECT OF THE MERGER. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the DGCL.
1.6 CLOSING; EFFECTIVE TIME. The consummation of the Merger (the
"CLOSING") shall take place at the offices of Xxxxxx Godward llp, 0000 Xxxxxxxxx
Xxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx, at 10:00 a.m. on a date to be
designated by Parent (the "CLOSING DATE"), which date shall be no later than the
third business day after the last to be satisfied or waived of the conditions
set forth in Section 6 shall have been so satisfied or waived (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of such conditions). Subject to the provisions of
this Agreement, a certificate of merger satisfying the applicable requirements
of the DGCL (the "CERTIFICATE OF MERGER") shall be duly executed on behalf of
the Company and simultaneously with the Closing delivered to the Secretary of
State of the State of Delaware for filing. The Merger shall become effective
upon the date and time of the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware or such other date and time as may
be mutually agreed upon by Parent and the Company and set forth in the
Certificate of Merger (the "EFFECTIVE TIME").
1.7 CERTIFICATE OF INCORPORATION AND BYLAWS. Unless otherwise determined
by Parent prior to the Effective Time:
(a) The Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be amended as of the
Effective Time so that Article Fourth 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 shares
of common stock, par value $.01 per share.", and, as so amended, such
certificate of incorporation shall be the certificate of incorporation of
the Surviving Corporation after the Effective Time until thereafter changed
or amended as provided therein and in accordance with the DGCL.
5
(b) At the Effective Time, the Bylaws of the Company, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the
Surviving Corporation, until thereafter amended in accordance with the DGCL.
(c) The directors and officers of the Surviving Corporation immediately
after the Effective Time shall be the respective individuals who are
directors and officers of Merger Sub immediately prior to the Effective
Time.
1.8 CONVERSION OF SHARES IN THE MERGER.
(a) At the Effective Time, by virtue of the Merger and without any
further action on the part of Parent, Merger Sub, the Company or any
stockholder of the Company:
(i) subject to Sections 1.8(b) and 1.8(c), each share of Company
Common Stock then issued and outstanding, other than Excluded Shares and
Dissenting Shares (as defined in Section 1.11), if any, shall be
converted into the right to receive that number of shares of Parent
Common Stock equal to the Exchange Ratio, plus any cash in lieu of
fractional shares of Parent Common Stock as set forth in Section 1.8(c).
The number of shares of Parent Common Stock equal to the Exchange Ratio
and the cash payable in lieu of fractional shares as specified in
Section 1.8(c) with respect to each share of Company Common Stock being
referred to as the "MERGER CONSIDERATION;"
(ii) each share of the Common Stock, $0.001 par value per share, of
Merger Sub then outstanding shall be converted into one share of Common
Stock of the Surviving Corporation; and
(iii) any and all Excluded Shares shall be cancelled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(b) If, between the date of this Agreement and the Effective Time, the
outstanding shares of Company Common Stock or Parent Common Stock are
changed into a different number or class of shares by reason of any stock
split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction, then the Exchange Ratio shall
be appropriately adjusted to the extent the record date for any such event
is between the date of this Agreement and the Effective Time.
(c) No fractional shares of Parent Common Stock shall be issued in
connection with the Merger, and no certificates or scrip for any such
fractional shares shall be issued. Any holder of Company Common Stock who
would otherwise be entitled to receive a fraction of a share of Parent
Common Stock in the Merger (after aggregating all fractional shares of
Parent Common Stock issuable to such holder) shall, in lieu of such fraction
of a share and upon surrender of such holder's Company Stock Certificate(s)
(as defined in Section 1.9), be paid in cash the dollar amount (rounded to
the nearest whole cent), without interest equal to the product obtained by
multiplying (A) that fraction of a share of Parent Common Stock to which
such stockholder is entitled (after aggregating all fractional shares of
Parent Common Stock issuable to such holder) by (B) the closing sales price
of one (1) share of Parent Common Stock as reported on the NYSE Composite
Transaction Tape (as reported in the Wall Street Journal or, if not reported
therein, any other authoritative source) on the trading day immediately
preceding the Closing Date.
1.9 CLOSING OF THE COMPANY'S TRANSFER BOOKS. At the Effective Time:
(a) all Shares outstanding immediately prior to the Effective Time shall
automatically be canceled and retired and shall cease to exist, and all holders
of certificates representing Shares that were outstanding immediately prior to
the Effective Time shall cease to have any rights as stockholders of the
Company; and (b) the stock transfer books of the Company shall be closed with
respect to all Shares outstanding immediately prior to the Effective Time. No
further transfer of any such Shares shall be made on such stock transfer
6
books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any Shares (a "COMPANY STOCK CERTIFICATE")
is presented to the Exchange Agent (as defined in Section 1.10) or to the
Surviving Corporation or Parent, such Company Stock Certificate shall be
canceled and shall be exchanged as provided in Section 1.10.
1.10 EXCHANGE OF CERTIFICATES.
(a) No later than 10 business days prior to the Closing Date, Parent
shall select a reputable bank or trust company to act as exchange agent in
the Merger (the "EXCHANGE AGENT") to the extent that such Exchange Agent is
different than the exchange agent named in the letter of transmittal sent to
the stockholders of the Company in connection with the Offer. Within 5
business days after the Effective Time, Parent shall deposit with the
Exchange Agent, for the benefit of the holders of Shares, (i) certificates
representing the shares of Parent Common Stock issuable pursuant to this
Section 1 (other than Shares purchased pursuant to the Offer which shall
have been paid for in accordance with Section 1.1 of this Agreement), and
(ii) cash sufficient to make payments in lieu of fractional shares in
accordance with Section 1.8(c). The shares of Parent Common Stock and cash
amounts so deposited with the Exchange Agent, together with any dividends or
distributions with respect to such shares, are referred to collectively as
the "EXCHANGE FUND."
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent will mail to the record holders of Company Stock Certificates
(i) a letter of transmittal in customary form and containing such provisions
as Parent and the Company may reasonably specify (including a provision
confirming that delivery of Company Stock Certificates shall be effected,
and risk of loss and title to Company Stock Certificates shall pass, only
upon delivery of such Company Stock Certificates to the Exchange Agent), and
(ii) instructions for use in effecting the surrender of Company Stock
Certificates in exchange for certificates representing Parent Common Stock
(plus cash in lieu of fractional shares, if any, of Parent Common Stock).
Upon surrender of a Company Stock Certificate to the Exchange Agent for
exchange, together with a duly executed letter of transmittal and such other
documents as may be reasonably required by the Exchange Agent or Parent,
(1) the holder of such Company Stock Certificate shall be entitled to
receive in exchange therefor a certificate representing the number of whole
shares of Parent Common Stock that such holder has the right to receive
pursuant to the provisions of Section 1.8 (and cash in lieu of any
fractional share of Parent Common Stock), and (2) the Company Stock
Certificate so surrendered shall be immediately canceled. Until surrendered
as contemplated by this Section 1.10, each Company Stock Certificate shall
be deemed, from and after the Effective Time, to represent only the right to
receive the Merger Consideration and any distribution or dividend the record
date for which is after the Effective Time. If any Company Stock Certificate
shall have been lost, stolen or destroyed, Parent may, in its discretion and
as a condition precedent to the issuance of any certificate representing
Parent Common Stock, require the owner of such lost, stolen or destroyed
Company Stock Certificate to provide an appropriate affidavit and to deliver
a bond (in such sum as Parent may reasonably direct) as indemnity against
any claim that may be made against the Exchange Agent, Parent or the
Surviving Corporation with respect to such Company Stock Certificate, and,
in such case, the Exchange Agent will issue in exchange for such lost,
stolen or destroyed Company Stock Certificates the shares of Parent Common
Stock and any cash in lieu of fractional shares.
(c) No dividends or other distributions declared or made with respect to
Parent Common Stock with a record date after the Effective Time shall be
paid to the holder of any unsurrendered Company Stock Certificate with
respect to the shares of Parent Common Stock that such holder has the right
to receive in the Merger until such holder surrenders such Company Stock
Certificate in accordance with this Section 1.10 (at which time such holder
shall be entitled, subject to the
7
effect of applicable escheat or similar laws, to receive all such dividends
and distributions, without interest).
(d) Any portion of the Exchange Fund that remains undistributed to
holders of Company Stock Certificates as of the date 180 days after the
Effective Time shall be delivered to Parent upon demand, and any holders of
Company Stock Certificates who have not theretofore surrendered their
Company Stock Certificates in accordance with this Section 1.10 shall
thereafter look only to Parent for satisfaction of their claims for Parent
Common Stock, cash in lieu of fractional shares of Parent Common Stock and
any dividends or distributions with respect to Parent Common Stock.
(e) Each of the Exchange Agent, Parent and the Surviving Corporation
shall be entitled to deduct and withhold from any consideration payable or
otherwise deliverable pursuant to this Agreement to any holder or former
holder of Company Common Stock such amounts as may be required to be
deducted or withheld therefrom under the Code or any provision of state,
local or foreign tax law or under any other applicable Legal Requirement. To
the extent such amounts are so deducted or withheld, such amounts shall be
treated for all purposes under this Agreement as having been paid to the
Person to whom such amounts would otherwise have been paid.
(f) Neither Parent nor the Surviving Corporation shall be liable to any
holder or former holder of Company Common Stock or to any other Person with
respect to any shares of Parent Common Stock (or dividends or distributions
with respect thereto), or for any cash amounts, delivered to any public
official pursuant to any applicable abandoned property law, escheat law or
similar Legal Requirement.
1.11 APPRAISAL RIGHTS. If the Merger is effectuated pursuant to
Section 253 of the DGCL, shares of Company Common Stock outstanding immediately
prior to the Effective Time and held by a holder who is entitled to demand and
properly demands appraisal for such shares of Company Common Stock in accordance
with the DGCL (the "DISSENTING SHARES") shall not be converted into the right to
receive Parent Common Stock, unless such holder fails to perfect or withdraws or
otherwise loses his or her right to appraisal. If after the Effective Time such
holder fails to perfect or withdraws or loses his or her right to appraisal,
each such share of Company Common Stock shall be treated as if it had been
converted as of the Effective Time into a right to receive the Merger
Consideration without any interest thereon. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of shares of Company
Common Stock, and Parent shall have the right to participate in all negotiations
and proceedings with respect to such demands. The Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands. Any amounts paid to a holder pursuant to a
right of appraisal will be paid by the Company out of its own funds and will not
be reimbursed by Parent or any affiliate of Parent.
1.12 TAX CONSEQUENCES. For federal income tax purposes, the Transaction is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "PLAN OF
REORGANIZATION" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.13 FURTHER ACTION. If, at any time after the Effective Time, any further
action is determined by Parent to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation with full right,
title and possession of and to all rights and property of Merger Sub and the
Company, the officers and directors of the Surviving Corporation and Parent
shall be fully authorized (in the name of Merger Sub, in the name of the Company
and otherwise) to take such action.
8
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company Disclosure Schedule, the Company
represents and warrants to Parent and Merger Sub as follows:
2.1 DUE ORGANIZATION; SUBSIDIARIES. Each of the Acquired Corporations (as
defined below) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each of the
Acquired Corporations has all necessary power and authority: (i) to conduct its
business in the manner in which its business is currently being conducted;
(ii) to own and use its assets in the manner in which its assets are currently
owned and used; and (iii) to perform its obligations under all Company Material
Contracts. Each of the Acquired Corporations is qualified to do business as a
foreign corporation, and is in good standing, under the laws of all
jurisdictions where the failure to be so qualified would have a Material Adverse
Effect on the Acquired Corporations. The Company has delivered to Parent
accurate and complete copies of the certificate of incorporation, bylaws and
other charter or organizational documents of each of the Acquired Corporations,
including all amendments thereto (collectively, the "COMPANY ORGANIZATION
DOCUMENTS"). The Company has no Subsidiaries, except for the corporations
identified in Part 2.1 of the Company Disclosure Schedule. (The Company and each
of its Subsidiaries identified in Part 2.1 the Company Disclosure Schedule are
collectively referred to herein as the "ACQUIRED CORPORATIONS"). None of the
Acquired Corporations has any equity interest or similar interest in, or any
interest convertible into or exchangeable or exercisable for any equity or
similar interest in, any Entity, other than (i) the Company's interest in its
Subsidiaries identified in Part 2.1 of the Company Disclosure Schedule, or
(ii) any interest in any publicly traded company held solely for investment and
comprising less than five percent of the outstanding capital stock of such
company.
2.2 AUTHORITY; BINDING NATURE OF AGREEMENT. The Company has all requisite
corporate power and authority to enter into and to perform its obligations under
this Agreement. This Agreement constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies. The Company hereby represents
that its Board of Directors, at a meeting duly called and held on or prior to
the date hereof, has by unanimous vote (i) determined that this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, are
advisable and are fair to and in the best interests of the Company and its
stockholders, (ii) approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger and the Stockholder
Tender Agreements and the transactions contemplated thereby, which approval
constitutes approval under Section 203 of the DGCL such that the Offer, the
Merger, this Agreement and the other transactions contemplated hereby, and the
Stockholder Tender Agreements and the transactions contemplated thereby, are not
and shall not be subject to any of the restrictions on "business combinations"
set forth in Section 203 of the DGCL, and (iii) resolved to recommend acceptance
of the Offer by the Company's stockholders and approval and adoption of this
Agreement by the Company's stockholders (the unanimous recommendations referred
to in this clause (iii) are collectively referred to in this Agreement as the
"RECOMMENDATIONS").
2.3 CAPITALIZATION, ETC.
(a) The authorized capital stock of the Company consists of: 10,000,000
shares of Company Common Stock and 2,000,000 shares of Company Preferred
Stock. As of June 18, 2001, 2,748,957 shares of Company Common Stock have
been issued and are outstanding and no shares of the Company Preferred Stock
have been issued and are outstanding. The Company has designated up to
10,000 shares of its Preferred Stock for issuance under its Rights
Agreement. All of the outstanding shares of Company Common Stock have been
duly authorized and validly issued, and are fully paid and nonassessable.
There are no shares of Company Common Stock held by any of
9
the Company's Subsidiaries. None of the outstanding shares of Company Common
Stock is entitled or subject to any preemptive right, right of
participation, right of maintenance or any similar right or subject to any
right of first refusal in favor of the Company. There is no Contract to
which the Company is a party and, to the Company's knowledge, there is no
Contract between other Persons, relating to the voting or registration of,
or restricting any Person from purchasing, selling, pledging or otherwise
disposing of (or granting any option or similar right with respect to), any
shares of Company Common Stock. None of the Acquired Corporations is under
any obligation, or is bound by any Contract pursuant to which it may become
obligated, to repurchase, redeem or otherwise acquire any outstanding shares
of Company Common Stock.
(b) As of June 18, 2001: (i) 48,500 shares of Company Common Stock are
reserved for issuance pursuant to stock options under the Company 1985 Stock
Option Plan, as amended, all of which have been granted and are outstanding;
(ii) 453,665 shares of Company Common Stock are reserved for issuance
pursuant to stock options under the Company 1995 Stock Option Plan, of which
options to acquire 394,185 shares of Company Common Stock are outstanding;
and (iii) 147,645 shares of Company Common Stock remain available for
purchase pursuant to the Employee Stock Purchase Plan and the Employee Stock
Purchase Plan Offering, both effective as of July 1, 1997 (collectively
referred to herein as the "COMPANY ESPP"). (Stock options granted by the
Company pursuant to the Company Stock Option Plans, as well as any stock
options granted outside of the Company Stock Option Plans, are referred to
collectively herein as "COMPANY OPTIONS.") Part 2.3(b) of the Company
Disclosure Schedule sets forth the following information with respect to
each Company Option outstanding as of June 18, 2001: (i) the particular plan
pursuant to which such Company Option was granted; (ii) the name of the
optionee; (iii) the number of shares of Company Common Stock subject to such
Company Option; (iv) the exercise price of such Company Option; (v) the date
on which such Company Option was granted; (vi) the extent to which such
Company Option is vested and exercisable as of the date of this Agreement;
and (vii) the vesting schedule of such Company Option. The Company has
delivered to Parent accurate and complete copies of all stock option plans
pursuant to which the Company has granted Company Options, and the forms of
all stock option agreements evidencing such options.
(c) Except as set forth in Section 2.3(a) or (b) above, there is no:
(i) outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock or other
securities of any of the Acquired Corporations; (ii) outstanding security,
instrument or obligation that is or may become convertible into or
exchangeable for any shares of the capital stock or other securities of any
of the Acquired Corporations; (iii) rights agreement, stockholder rights
plan (or similar plan commonly referred to as a "POISON PILL") or Contract
under which any of the Acquired Corporations are or may become obligated to
sell or otherwise issue any shares of its capital stock or any other
securities; or (iv) condition or circumstance that may give rise to or
provide a basis for the assertion of a claim by any Person to the effect
that such Person is entitled to acquire or receive any shares of capital
stock or other securities of any of the Acquired Corporations (items
(i) through (iv) above, collectively, "COMPANY STOCK RIGHTS").
(d) All outstanding shares of Company Common Stock, all outstanding
Company Options and all outstanding shares of capital stock of each
Subsidiary of the Company have been issued and granted in compliance with
(i) all applicable securities laws and other applicable Legal Requirements,
and (ii) all requirements set forth in applicable Contracts. All of the
outstanding shares of capital stock of each of the Company's Subsidiaries
have been duly authorized and are validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares, are owned
beneficially and of record by the Company, free and clear of any
Encumbrances.
10
2.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has made available to Parent all registration
statements, proxy statements and other statements, reports, schedules, forms
and other documents filed by the Company with the SEC since March 31, 1999
(the "COMPANY SEC DOCUMENTS"). All statements, reports, schedules, forms and
other documents required to have been filed by the Company with the SEC
since March 31, 1999 have been so filed. As of their respective dates (or,
if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such amendment or superseding filing): (i) each of the
Company SEC Documents complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the case may be);
and (ii) none of the Company SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) The financial statements (including related notes, if any) contained
in the Company SEC Documents (the "COMPANY FINANCIAL STATEMENTS"):
(i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis throughout the periods covered (except as may be
indicated in the notes to such financial statements or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC, and except that
the unaudited financial statements may not have contained footnotes and were
subject to normal and recurring year-end adjustments which were not, or are
not reasonably expected to be, individually or in the aggregate, material in
amount), and (iii) fairly presented in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries as of the respective dates thereof and the consolidated results
of operations and cash flows of the Company and its consolidated
subsidiaries for the periods covered thereby. For purposes of this
Agreement, "COMPANY BALANCE SHEET" means that consolidated balance sheet of
the Company and its consolidated subsidiaries as of March 31, 2001 set forth
in the Company's Annual Report on Form 10-K filed with the SEC and the
"COMPANY BALANCE SHEET DATE" means March 31, 2001.
2.5 ABSENCE OF CHANGES. Since the Company Balance Sheet Date:
(a) each of the Acquired Corporations has operated its respective
business in the ordinary course and consistent with past practices;
(b) there has not been any event that has had a Material Adverse Effect
on the Acquired Corporations, and no fact, event, circumstance or condition
exists or has occurred that could reasonably be expected to have a Material
Adverse Effect on the Acquired Corporations;
(c) none of the Acquired Corporations has (i) declared, accrued, set
aside or paid any dividend or made any other distribution in respect of any
shares of capital stock; (ii) repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities; (iii) sold, issued or
granted, or authorized the issuance of, (A) any capital stock or other
security (except for Company Common Stock issued upon the valid exercise of
outstanding Company Options), (B) any option, warrant or right to acquire
any capital stock or any other security (except for Company Options), or
(C) any instrument convertible into or exchangeable for any capital stock or
other security; (iv) received any Company Acquisition Proposal from any
Person (other than Parent); (v) made any capital expenditure which, when
added to all other capital expenditures made on behalf of the Acquired
Corporations since the Company Balance Sheet Date exceeds the amounts set
forth in the Company's 2002 capital expenditures budget by more than $75,000
in the aggregate; (vi) changed any of its methods of accounting or
accounting practices, except as required by GAAP; (vii) made any material
Tax election; or (viii) commenced or settled any Legal Proceeding;
11
(d) none of the Acquired Corporations has (i) amended or waived any of
its material rights under, or permitted the acceleration of vesting under,
any provision of any of the Company Employee Plans or any provision of any
agreement or Company Stock Option Plan evidencing any outstanding Company
Option; (ii) established or adopted any Company Employee Plan; (iii) caused
or permitted any Company Employee Plan to be amended in any material
respect; or (iv) paid any bonus or made any profit-sharing or similar
payment to, or materially increased the amount of the wages, salary,
commissions, fringe benefits or other compensation or remuneration payable
to, any of its directors, officers or employees;
(e) none of the Acquired Corporations has (i) sold or otherwise disposed
of, or acquired, leased, licensed, waived or relinquished any material right
or other material asset to, from or for the benefit of, any other Person
except for rights or other assets sold, disposed of, acquired, leased,
licensed, waived or relinquished in the ordinary course of business and
consistent with past practice; (ii) made any pledge of any of its material
assets or otherwise permitted any of its material assets to become subject
to any Encumbrance, except in the ordinary course of business and consistent
with past practice; or (iii) guaranteed any indebtedness for borrowed money.
2.6 PROPRIETARY ASSETS.
(a) Part 2.6(a) of the Company Disclosure Schedule sets forth all U.S.
and foreign patents, patent applications, trademarks, trademark
applications, copyright registrations and copyright applications owned by
any of the Acquired Corporations. Each Acquired Corporation has good, valid
and marketable title to, or has a valid right to use, license or otherwise
exploit, all of the Acquired Corporation Proprietary Assets necessary for
the conduct of such Acquired Corporation's business as presently conducted,
free and clear of all Encumbrances, except for (i) any lien for current
taxes not yet due and payable; and (ii) non-material liens that have arisen
in the ordinary course of business and that do not (individually or in the
aggregate) materially detract from the value of the assets subject thereto
or materially impair the operations of any of the Acquired Corporations.
None of the Acquired Corporations have developed jointly with any other
Person any Acquired Corporation Proprietary Asset that is material to the
business of any of the Acquired Corporations with respect to which such
other Person has any rights. There is no Acquired Corporation Contract (with
the exception of end user license agreements in the form previously
delivered by the Company to Parent) pursuant to which any Person has any
right (whether or not currently exercisable) to use, license or otherwise
exploit any material Acquired Corporation Proprietary Asset.
(b) (i) All material patents, trademarks, service marks and copyrights
owned by any of the Acquired Corporations are valid, enforceable and
subsisting; (ii) none of the Acquired Corporation Proprietary Assets and no
Proprietary Asset that is currently being developed by any of the Acquired
Corporations (either by itself or with any other Person) infringes,
misappropriates or conflicts with any Proprietary Asset owned or used by any
other Person; (iii) none of the products that are or have been designed,
created, developed, assembled, manufactured or sold by any of the Acquired
Corporations is infringing, misappropriating or making any unlawful or
unauthorized use of any Proprietary Asset owned or used by any other Person,
and none of such products has at any time infringed, misappropriated or made
any unlawful or unauthorized use of, and none of the Acquired Corporations
has received any written notice or, to its knowledge, other communication of
any actual, alleged, possible or potential infringement, misappropriation or
unlawful or unauthorized use of, any Proprietary Asset owned or used by any
other Person; and (iv) to the Company's knowledge, no other Person is
infringing, misappropriating or making any unlawful or unauthorized use of,
and no Proprietary Asset owned or used by any other Person infringes or
conflicts with, any material Acquired Corporation Proprietary Asset. The
Acquired Corporation Proprietary Assets constitute all the Proprietary
Assets necessary to enable each of the Acquired Corporations to conduct its
business in the manner in which such business is being conducted.
12
None of the Acquired Corporations has (A) licensed any of the Acquired
Corporation Proprietary Assets to any Person on an exclusive basis, or
(B) entered into any covenant not to compete or Contract limiting its
ability to exploit fully any material Acquired Corporation Proprietary
Assets or to transact business in any market or geographical area or with
any Person.
2.7 CONTRACTS.
(a) For purposes of this Agreement, each of the following shall be
deemed to constitute a "COMPANY MATERIAL CONTRACT":
(i) any Acquired Corporation Contract that is required by the
rules and regulations of the SEC to be filed as an exhibit to the Company
SEC Documents;
(ii) any Acquired Corporation Contract relating to the employment of
any employee, and any Contract pursuant to which any of the Acquired
Corporations is or may become obligated to make any severance,
termination, bonus or relocation payment or any other payment (other than
payments in respect of salary) in excess of $50,000, to any current or
former employee or director;
(iii) any Acquired Corporation Contract relating to the acquisition,
transfer, development, sharing or license of any material Proprietary
Asset (except for any Acquired Corporation Contract pursuant to which
(A) any material Proprietary Asset is licensed to the Acquired
Corporations under any third party software license generally available
for sale to the public, or (B) any material Proprietary Asset is licensed
by any of the Acquired Corporations to any Person on a non-exclusive
basis);
(iv) any Acquired Corporation Contract which provides for
indemnification of any officer, director or employee;
(v) any Acquired Corporation Contract creating or relating to any
partnership or joint venture or any sharing of revenues, profits, losses,
costs or liabilities;
(vi) any Acquired Corporation Contract that involves the payment or
expenditure of $250,000 that may not be terminated by the applicable
Acquired Corporation (without penalty) within 60 days after the delivery
of a termination notice by the applicable Acquired Corporation;
(vii) any Acquired Corporation Contract contemplating or involving
(A) the payment or delivery of cash or other consideration in an amount
or having a value in excess of $250,000 in the aggregate, or (B) the
performance of services having a value in excess of $250,000 in the
aggregate; or
(viii) any Government Contract (i) creating or relating to the creation
of any Encumbrance with respect to any asset owned or used by any
Acquired Corporation having a value in excess of $250,000;
(ii) involving or incorporating any liability, obligation, guaranty,
pledge, performance or completion bond, indemnity (other than customary
intellectual property indemnitees for hardware and software sold by any
Acquired Corporation), right of contribution or surety arrangement, any
of which obligations involve or may reasonably be expected to involve an
Acquired Corporation obligation in excess of $250,000 per year; or
(iii) contemplating or involving (A) the payment or delivery of cash or
other consideration in an amount or having a value in excess of $250,000
in the aggregate, or (B) the performance of services having a value in
excess of $250,000 in the aggregate;
(ix) any Acquired Corporation Contract imposing any restriction on
the right or ability of any Acquired Corporation to (A) compete with any
other Person, (B) acquire any material product or other material asset or
any services from any other Person, sell any material
13
product or other material asset to or perform any services for any other
Person or transact business or deal in any other manner with any other
Person, or (C) develop or distribute any material technology; and
(x) any other Acquired Corporation Contract, if a breach of such
Acquired Corporation Contract could reasonably be expected to have a
Material Adverse Effect on the Acquired Corporations.
(b) Each Company Material Contract is valid and in full force and
effect, and is enforceable in accordance with its terms.
(c) None of the Acquired Corporations has violated or breached, or
committed any default under, any Company Material Contract. To the Company's
knowledge, no other Person has violated or breached, or committed any
default under, any Company Material Contract.
(d) No event has occurred, and no circumstance or condition exists, that
(with or without notice or lapse of time) could reasonably be expected to
(i) result in a violation or breach of any provision of any Company Material
Contract by any of the Acquired Corporations; (ii) give any Person the right
to declare a default or exercise any remedy under any Company Material
Contract; (iii) to the Company's knowledge, give any Person the right to
receive or require a material rebate, chargeback, penalty or change in
delivery schedule under any Company Material Contract; (iv) give any Person
the right to accelerate the maturity or performance of any Company Material
Contract; or (v) give any Person the right to cancel, terminate or modify
any Company Material Contract.
(e) Since March 31, 1996:
(i) the Acquired Corporations have not had any determination of
noncompliance, entered into any consent order or undertaken any internal
investigation relating directly or indirectly to any Government Contract
or Government Bid;
(ii) the Acquired Corporations have complied with all Legal
Requirements with respect to all Government Contracts and Government
Bids;
(iii) the Acquired Corporations have not, in obtaining or performing
any Government Contract, violated (A) the Truth in Negotiations Act of
1962, as amended, (B) the Service Contract Act of 1963, as amended,
(C) the Contract Disputes Act of 1978, as amended, (D) the Office of
Federal Procurement Policy Act, as amended, (E) the Federal Acquisition
Regulations (the "FAR") or any applicable agency supplement thereto,
(F) the Cost Accounting Standards, (G) the Defense Industrial Security
Manual (DOD 5220.22-M), (H) the Defense Industrial Security Regulation
(DOD 5220.22-R) or any related security regulations, or (I) any other
applicable procurement law or regulation or other Legal Requirement;
(iv) all facts set forth in or acknowledged by any Acquired
Corporation in any certification, representation or disclosure statement
submitted by any Acquired Corporation with respect to any Government
Contract or Government Bid were current, accurate and complete in all
material respects as of the date of submission;
(v) none of the Acquired Corporations nor any of their respective
employees have been debarred or suspended from doing business with any
Governmental Body, and, to the Company's knowledge, no circumstances
exist that would warrant the institution of debarrment or suspension
proceedings against any Acquired Corporation or any employee of any
Acquired Corporation;
14
(vi) no negative determinations of responsibility, as contemplated in
Part 9 of the FAR (Contractor Qualifications), have been issued against
any Acquired Corporation in connection with any Government Contract or
Government Bid;
(vii) no material direct or indirect costs incurred by any Acquired
Corporation have been disallowed as a result of a finding or
determination of any kind by any Governmental Body;
(viii) no Governmental Body, and no prime contractor or high-tier
subcontractor of any Governmental Body, has withheld or set off, or, to
the Company's knowledge, threatened to withhold or set off, any material
amount due to any Acquired Corporation under any Government Contract;
(ix) there are not and have not been any irregularities,
misstatements or omissions relating to any Government Contract or
Government Bid that have led to or could reasonably be expected to lead
to (A) any administrative, civil, criminal or other investigation, Legal
Proceeding or indictment involving any Acquired Corporation or any of
their employees, (B) the disallowance of any costs submitted for payment
by any Acquired Corporation, (C) the recoupment of any payments
previously made to any Acquired Corporation, (D) a finding or claim of
fraud, defective pricing, mischarging or improper payments on the part of
any Acquired Corporation, or (E) the assessment of any material penalties
or damages of any kind against any Acquired Corporation;
(x) there is not any (A) outstanding claim against any Acquired
Corporation by, or dispute involving any Acquired Corporation with, any
prime contractor, subcontractor, vendor or other Person arising under or
relating to the award or performance of any Government Contract,
(B) fact known by any Acquired Corporation upon which any such claim
could reasonably be expected to be based or which may give rise to any
such dispute, or (C) final decision of any Government Body against any
Acquired Corporation;
(xi) no Acquired Corporation is undergoing, and no Acquired
Corporation has undergone, any audit, and there is no impending audit,
arising under or relating to any Government Contract (other than normal
routine audits conducted in the ordinary course of business);
(xii) no Acquired Corporation is subject to any financing arrangement
or assignment of proceeds with respect to the performance of any
Government Contract;
(xiii) no payment has been made by any Acquired Corporation or, to the
Company's knowledge, by a Person acting on any Acquired Corporation's
behalf to any Person (other than to any bona fide employee or agent (as
defined in subpart 3.4 of the FAR) of any Acquired Corporation) which is
or was contingent upon the award of any Government Contract or which
would otherwise be in violation of any applicable procurement law or
regulation or any other Legal Requirement;
(xiv) each Acquired Corporation's cost accounting system is in
compliance with applicable regulations and other applicable Legal
Requirements, and has not been determined by any Governmental Body not to
be in compliance with any Legal Requirement;
(xv) each Acquired Corporation has complied in all material respects
with all applicable regulations and other Legal Requirements and with all
applicable contractual requirements relating to the placement of legends
or restrictive markings on technical data, computer software and other
Acquired Corporation Proprietary Assets;
15
(xvi) in each case in which an Acquired Corporation has delivered or
otherwise provided any technical data, computer software or Acquired
Corporation Proprietary Asset to any Governmental Body in connection with
any Government Contract, such Acquired Corporation has marked such
technical data, computer software or Acquired Corporation Proprietary
Asset with all markings and legends (including any "restricted rights"
legend and any "government purpose license rights" legend) necessary
(under the FAR or other applicable Legal Requirements) to ensure that no
Governmental Body or other Person is able to acquire any unlimited rights
with respect to such technical data, computer software or Acquired
Corporation Proprietary Asset, except where failure to do so has not had
and will not have a Material Adverse Effect on any Acquired Corporation;
(xvii) no Acquired Corporation has made any disclosure to any
Governmental Body pursuant to any voluntary disclosure agreement;
(xviii) each Acquired Corporation has reached agreement with the
cognizant government representatives approving and "closing" all indirect
costs charged to Government Contracts for 1993, 1994, 1995, 1996 and
1997, and those years are closed;
(xix) none of the Acquired Corporations is subject to any "forward
pricing" regulations; and
(xx) except for novation requirements, each Acquired Corporation is
not and will not be required to make any filings with or give notice to,
or to obtain any Consent from, any Governmental Body under or in
connection with any Government Contract or Government Bid as a result of
or by virtue of (A) the execution, delivery or performance of this
Agreement or any of the other agreements referred to in this Agreement,
or (B) the consummation of the Offer or the Merger or any of the other
transactions contemplated by this Agreement.
(f) Part 2.7(f) of the Company Disclosure Schedule provides a list of
all Company Material Contracts (including all amendments thereto). The
Company has provided or made available to Parent a copy of each Company
Material Contract (including all amendments thereto) listed in
Section 2.7(f) of the Company Disclosure Schedule, other than Company
Material Contracts filed as Exhibits to the Company SEC Documents and all
copies of all amendments to the Company Material Contracts filed as exhibits
to the Company SEC Documents, to the extent such amendments have not been
filed with the SEC.
2.8 LIABILITIES. None of the Acquired Corporations has any accrued,
contingent or other liabilities of any nature, either matured or unmatured
(whether or not required to be reflected in financial statements prepared in
accordance with GAAP and whether due or to become due), except for:
(a) liabilities that are reflected in the "Liabilities" column of the Company
Balance Sheet, and (b) normal and recurring liabilities that have been incurred
by the Acquired Corporations since the Company Balance Sheet Date in the
ordinary course of business and consistent with past practices that,
individually or in the aggregate, are not material in nature.
2.9 COMPLIANCE WITH LEGAL REQUIREMENTS. Each of the Acquired Corporations
is, and at all times since March 31, 1996, has been, in compliance in all
material respects with all applicable Legal Requirements. Since March 31, 1996,
none of the Acquired Corporations has received any written notice or, to the
Company's knowledge, other communication from any Governmental Body regarding
any actual or possible violation of, or failure to comply with, any Legal
Requirement.
2.10 GOVERNMENTAL AUTHORIZATIONS. Each of the Acquired Corporations holds
all Governmental Authorizations necessary to enable such Acquired Corporation to
conduct its business in the manner in which such business is currently being
conducted. All such Governmental Authorizations are valid and in full force and
effect. Each Acquired Corporation is, and at all times since March 31, 1996 has
been,
16
in compliance in all material respects with the terms and requirements of such
Governmental Authorizations. Since March 31, 1996, none of the Acquired
Corporations has received any notice or other communication from any
Governmental Body regarding (a) any actual or possible violation of or failure
to comply with any term or requirement of any Governmental Authorization, or
(b) any actual or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any Governmental Authorization.
2.11 TAX MATTERS. All Tax Returns required to be filed by or on behalf of
any of the Acquired Corporations with any Governmental Body with respect to any
taxable period ending on or before the Closing Date (the "ACQUIRED CORPORATION
RETURNS") (a) have been or will be filed on or before the applicable due date
(including any extensions of such due date), and (b) have been, or will be when
filed, prepared in all material respects in compliance with all applicable Legal
Requirements. All amounts shown on the Acquired Corporation Returns to be due on
or before the Closing Date have been or will be paid on or before the Closing
Date. The Company Financial Statements fully accrue all actual and contingent
liabilities for Taxes with respect to all periods through the dates thereof in
accordance with GAAP. There are no unsatisfied liabilities for material Taxes
(including liabilities for interest, additions to tax and penalties thereon and
related expenses) with respect to any notice of deficiency or similar document
received by any Acquired Corporation with respect to any material Tax (other
than liabilities for Taxes asserted under any such notice of deficiency or
similar document which are being contested in good faith by the Acquired
Corporations and with respect to which adequate reserves for payment have been
established). There are no liens for material Taxes upon any of the assets of
any of the Acquired Corporations except liens for current Taxes not yet due and
payable. No extension or waiver of the limitation period applicable to any of
the Acquired Corporation Returns has been granted and is currently in effect (by
the Company or any other Person), and no such extension or waiver has been
requested from any Acquired Corporation. No claim or Legal Proceeding is pending
or, to the Company's knowledge, has been threatened against or with respect to
any Acquired Corporation in respect of any material Tax. None of the Acquired
Corporations has entered into or become bound by any agreement or consent
pursuant to Section 341(f) of the Code. None of the Acquired Corporations has
been, and none of the Acquired Corporations will be, required to include any
adjustment in taxable income for any tax period (or portion thereof) pursuant to
Section 481 or 263A of the Code or any comparable provision under state or
foreign Tax laws as a result of transactions or events occurring, or accounting
methods employed, prior to the Closing. There is no agreement, plan, arrangement
or other Contract covering any employee or independent contractor or former
employee or independent contractor of any of the Acquired Corporations that,
considered individually or considered collectively with any other such
Contracts, will, or could reasonably be expected to, give rise directly or
indirectly to the payment of any amount that would not be deductible pursuant to
Section 280G or Section 162(m) of the Code. None of the Acquired Corporations is
a party to any Contract, nor does it have any obligations (current or
contingent), to compensate any person for excise taxes paid pursuant to
Section 4999 of the Code. None of the Acquired Corporations is, or has ever
been, a party to or bound by any tax indemnity agreement, tax sharing agreement,
tax allocation agreement or similar Contract and none of the Acquired
Corporations has or, by reason of the consummation of the transactions
contemplated under this Agreement, will have any liability or obligation under
any tax indemnity agreement, tax sharing agreement, tax allocation agreement or
similar Contract. None of the Acquired Corporations has made any distribution of
stock of any "CONTROLLED CORPORATION" as that term is defined in
Section 355(a)(1) of the Code. None of the Acquired Corporations has at any time
been a member of an affiliated group within the meaning of Section 1504 of the
Code, other than an affiliated group of which the Company is the common parent.
2.12 EMPLOYEE AND LABOR MATTERS; BENEFIT PLANS.
(a) Part 2.12(a) of the Company Disclosure Schedule lists (i) all
employee pension benefit plans (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as
17
amended ("ERISA")), (ii) all employee welfare benefit plans (as defined in
Section 3(1) of ERISA), (iii) all other bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement, severance, fringe
benefits and other similar benefit plans, programs, Contracts, arrangements
or policies (including a specific identification of those which contain
change of control provisions or pending change of control provisions), and
(iv) any employment, executive compensation or severance agreements
(including a specific identification of those which contain change of
control provisions or pending change of control provisions), whether written
or otherwise, as amended, modified or supplemented, of any Acquired
Corporation or any other Entity (whether or not incorporated) which is a
member of a controlled group which includes any of the Acquired Corporations
or which is under common control with any of the Acquired Corporations
within the meaning of Sections 414(b), (c), (m) or (o) of the Code or
Section 4001(a) (14) or (b) of ERISA ("ERISA AFFILIATES") (all such plans,
programs, Contracts, agreements, arrangements or policies as described in
this Section 2.12 shall be collectively referred to as the "COMPANY EMPLOYEE
PLANS") for the benefit of, or relating to, any former or current employee,
officer or director (or any of their beneficiaries) of any Acquired
Corporation or any other ERISA Affiliate. The Company has made available to
Parent, in a reasonable time, place and manner, copies of (i) each such
written Company Employee Plan (or a written description of any Company
Employee Plan which is not written) and all related trust agreements,
insurance and other contracts (including policies), summary plan
descriptions, summaries of material modifications, registration statements
(including all attachments), prospectuses and communications distributed to
plan participants, (ii) the three most recent annual reports on Form 5500
series, with accompanying schedules and attachments, filed with respect to
each Company Employee Plan required to make such a filing, (iii) the most
recent actuarial valuation for each Company Employee Plan subject to Title
IV of ERISA, (iv) the latest reports which have been filed with the U.S.
Department of Labor with respect to each Company Employee Plan required to
make such filing, (v) the most recent favorable determination letters issued
for each Company Employee Plan and related trust which is intended to be
qualified under Section 401(a) of the Code (and, if an application for such
determination is pending, a copy of the application for such determination),
(vi) financial and other information regarding current and projected
liabilities with respect to each Company Employee Plan for which the filings
described in (ii), (iii) or (iv) above are not required under ERISA and
(vii) all correspondence within the last four years between the Internal
Revenue Service and/or the Department of Labor and the Company and/or any of
the other Acquired Corporations with respect to any Company Employee Plan.
(b) None of the Company Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person (other than
continuation coverage to the extent required by law, whether pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 or otherwise), and
none of the Company Employee Plans is a "MULTIEMPLOYER PLAN" (as defined in
Section 3(37) of ERISA) or A "MULTIPLE EMPLOYER WELFARE ARRANGEMENT" (as
defined in Section 3(40) of ERISA); (ii) no party in interest or
disqualified person (as defined in Section 3(14) of ERISA and Section 4975
of the Code, respectively) has at any time engaged in a transaction with
respect to any Company Employee Plan which could subject any of the Acquired
Corporations, directly or indirectly, to any tax, penalty or other liability
for prohibited transactions under ERISA or Section 4975 of the Code;
(iii) no fiduciary of any Company Employee Plan has breached any of the
responsibilities or obligations imposed upon fiduciaries under Title I of
ERISA which shall subject any of the Acquired Corporations, directly or
indirectly, to any penalty or liability for breach of fiduciary duty;
(iv) all Company Employee Plans have been established and maintained in
accordance with their terms and have been operated in compliance in all
respects with all applicable Legal Requirements, and may by their terms be
amended and/or terminated at any time without the consent of any other
Person subject to applicable Legal Requirements and the terms
18
of each Company Employee Plan, and each of the Acquired Corporations has
performed all obligations required to be performed by them under, and are
not in any respect in default under or in violation of, any Company Employee
Plan, and none of the Acquired Corporations has any knowledge of any default
or violation by any other Person with respect to any of the Company Employee
Plans; (v) each Company Employee Plan which is intended to be qualified
under Section 401(a) of the Code is the subject of a favorable determination
letter from the Internal Revenue Service as to such plan's qualified status
under Section 401(a) of the Code (or comparable letter, such as an opinion
or notification letter as to the form of plan adopted by one or more
Acquired Corporations), and nothing has occurred since the issuance of such
letter (or could reasonably be expected to occur) which might impair such
favorable determination or otherwise impair the qualified status of such
plan; and (vi) all contributions required to be made or reserved, as
appropriate, with respect to any Company Employee Plan pursuant to the terms
of the Company Employee Plan or any collective bargaining agreement, have
been made or reserved on or before their due dates (including any extensions
thereof).
(c) None of the Acquired Corporations or any other ERISA Affiliate
currently maintains, sponsors or participates in, or has in the last six
years maintained, sponsored or participated in, any "EMPLOYEE BENEFIT PLAN"
(as defined in Section 3(3) of ERISA) that is subject to Section 412 of the
Code or Title IV of ERISA.
(d) None of the Company Employee Plans currently covers, or has ever
covered, former or current non-U.S. Employees, independent contractors or
consultants (or any of their beneficiaries). The consummation of the
transactions contemplated by this Agreement will not cause, in itself, or
result in an increase in the amount of compensation or benefits or
accelerate the vesting or timing of payment of any benefits or compensation
payable in respect of any former or current foreign employee, independent
contractor or consultant (or any of their beneficiaries);
(e) There are no Legal Proceedings pending or, to the knowledge of the
Company, threatened in respect of or relating to any Company Employee Plan.
There are no facts or circumstances which could reasonably be expected to
give rise to any such Legal Proceeding (other than routine, uncontested
benefit claims) in respect of or relating to any Company Employee Plan.
(f) Except as set forth in the Company SEC Documents filed on the date
of this Agreement: (i) none of the Acquired Corporations has ever maintained
an employee stock ownership plan (within the meaning of
Section 4975(e)(7) of the Code) or any other Company Employee Plan that
invests in Company capital stock; (ii) since December 31, 1998, none of the
Acquired Corporations has proposed or agreed to any increase in benefits
under any Company Employee Plan (or the creation of new benefits) or change
in employee coverage which would materially increase the expense of
maintaining any Company Employee Plan; (iii) the consummation of the
transactions contemplated by this Agreement will not cause, in itself, or
result in an increase in the amount of compensation or benefits or
accelerate the vesting or timing of payment of any benefits or compensation
payable in respect of any former or current employee, officer or director
(or any of their beneficiaries); and (iv) no person will be entitled to any
severance benefits or the acceleration of any options under the terms of any
Company Employee Plan as a result of the consummation of the transactions
contemplated by this Agreement.
(g) To the extent that any Company Employee Plan is required by any
applicable Legal Requirement to be covered by any bond (e.g., fidelity or
otherwise) in any particular amount, each such Company Employee Plan
required to be covered by such bond has at all times been covered by such
bond in accordance and compliance with all applicable Legal Requirements.
(h) Except as set forth in the Company SEC Documents filed as of the
date of this Agreement: (i) there are no controversies pending or, to the
knowledge of the Company, threatened, between any of the Acquired
Corporations and any of their respective foreign or
19
domestic former or current employees, officers, directors, independent
contractors or consultants (or any of their beneficiaries), which
controversies could reasonably be expected to result in a material liability
to any of the Acquired Corporations; (ii) none of the Acquired Corporations
is in breach of any collective bargaining agreement or other labor union
contract applicable to persons employed by any of the Acquired Corporations,
nor does the Company know of any activities or proceedings of any labor
union to organize any significant number of such employees; and (iii) none
of the Acquired Corporations is in breach of any collective bargaining
agreement or other labor union contract, nor has any knowledge of any
activities or proceedings of any labor unions to organize employees, or of
any strikes, slowdowns, work stoppages, lockouts, or threats thereof, by or
with respect to any employees (foreign or domestic) of any of the Acquired
Corporations.
(i) The Company has amended the Company Stock Option Plans and the
Company ESPP in accordance with applicable Legal Requirements to give effect
to the transactions contemplated in Section 5.4(f). As of the date of this
Agreement, the Company has paid to its employees all profit-sharing or other
bonuses with respect to performance during the fiscal year ended March 31,
2001.
2.13 ENVIRONMENTAL MATTERS. Each of the Acquired Corporations is in
compliance in all respects with all applicable Environmental Laws, which
compliance includes the possession by each of the Acquired Corporations of all
permits and other Governmental Authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof. None
of the Acquired Corporations has received any notice or other communication (in
writing or otherwise), whether from a Governmental Body, citizens group,
employee or otherwise, that alleges that any of the Acquired Corporations is not
in compliance with any Environmental Law, and, there are no circumstances that
may prevent or interfere with the compliance by any of the Acquired Corporations
with any Environmental Law in the future. To the Company's knowledge, no current
or prior owner of any property leased or controlled by any of the Acquired
Corporations has received any notice or other communication (in writing or
otherwise), whether from a Governmental Body, citizens group, employee or
otherwise, that alleges that such current or prior owner or any of the Acquired
Corporations is not in compliance with any Environmental Law. All property that
is or has been leased to, controlled by or used by the Acquired Corporations,
and all surface water, groundwater and soil associated with or adjacent to such
property is in clean and healthful condition and is free of any material
environmental contamination of any nature and none of the Acquired Corporations
has any liability for any clean-up or remediation under any Environmental Law.
All property that is leased to, controlled by or used by any of the Acquired
Corporations is free of any friable asbestos or asbestos-containing material.
(For purposes of this Section 2.13: (i) "ENVIRONMENTAL LAW" shall mean any
foreign, federal, state or local statute, law, rule, regulation, ordinance,
treaty, code, policy or rule of common law now or from time to time in effect
and in each case as amended, and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment, relating to the environment, natural resources, health, safety or
Hazardous Materials, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the Resource Conservation
and Recovery Act, as amended; the Hazardous Materials Transportation Act, as
amended; the Clean Water Act, as amended; the Toxic Substances Control Act, as
amended; the Clean Air Act, as amended; the Safe Drinking Water Act, as amended;
the Atomic Energy Act, as amended; the Federal Insecticide, Fungicide and
Rodenticide Act, as amended; and the Occupational Safety and Health Act, as
amended; and (ii) "HAZARDOUS MATERIALS" Shall mean (i) petroleum or petroleum
products (including crude oil or any fraction thereof, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel, or any mixture
thereof), polychlorinated biphenyls (PCBs), asbestos or asbestos containing
materials, urea formaldehyde foam insulation, and radon gas; (ii) any substance
defined as or included in the definition of "hazardous substance," "hazardous
waste," "hazardous material," "extremely hazardous waste," "restricted hazardous
waste," "waste," "special waste," "toxic substance," "toxic pollutant,"
"contaminant" or "pollutant," or words of similar import, under any applicable
20
Environmental Law (as defined below); (iii) infectious materials and other
regulated medical wastes; (iv) any substance which is toxic, explosive,
corrosive, flammable, radioactive, carcinogenic, mutagenic or otherwise
hazardous and is or becomes regulated by any governmental agency; and (v) any
other substance, material or waste the presence of which requires investigation
or remediation under any Environmental Law
2.14 LEGAL PROCEEDINGS; ORDERS. There is no pending Legal Proceeding and,
to the Company's knowledge, no Person has threatened to commence any Legal
Proceeding, that involves any of the Acquired Corporations or any of the assets
owned or used by any of the Acquired Corporations; and there is no Order, writ,
injunction, judgment or decree to which any of the Acquired Corporations, or any
of the material assets owned or used by any of the Acquired Corporations, is
subject.
2.15 VOTE REQUIRED. The affirmative vote of the holders of a majority of
the shares of Company Common Stock outstanding on the record date for the
Company Stockholders' Meeting is the only vote of the holders of any class or
series of the Company's capital stock necessary to adopt this Agreement and
otherwise approve the Merger.
2.16 NON-CONTRAVENTION; CONSENTS. Neither the execution, delivery or
performance of this Agreement nor the consummation of the Offer or the Merger,
or any of the other transactions contemplated by this Agreement, will directly
or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of any of the
provisions of the Company Organization Documents or any resolution adopted
by the stockholders, the board of directors or any committee of the board of
directors of any of the Acquired Corporations;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body the right to challenge the Offer or the Merger or any of
the other transactions contemplated by this Agreement or to exercise any
remedy or obtain any relief under, any Legal Requirement or any Order, writ,
injunction, judgment or decree to which any of the Acquired Corporations, or
any of the material assets owned or used by any of the Acquired
Corporations, is subject;
(c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental
Authorization that is held by any of the Acquired Corporations or that
otherwise relates to the business of any of the Acquired Corporations or to
any of the assets owned or used by any of the Acquired Corporations; or
(d) contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any Company Material Contract,
or give any Person the right to (i) declare a default or exercise any remedy
under any Company Material Contract, (ii) a rebate, chargeback, penalty or
change in delivery schedule under any Company Material Contract,
(iii) accelerate the maturity or performance of any Company Material
Contract, or (iv) cancel, terminate or modify any term of any Company
Material Contract.
Except as may be required by the Exchange Act, the DGCL, the HSR Act,
applicable anti-trust laws of any foreign country and the rules and regulations
of the Nasdaq Stock Market (as such bylaws relate to the Registration Statement
and the Proxy Statement) none of the Acquired Corporations was, is or will be
required to make any filing with or give any notice to, or obtain any Consent
from, any Person in connection with (x) the execution, delivery or performance
of this Agreement, or (y) the consummation of the Offer or the Merger or any of
the other transactions contemplated by this Agreement, except in each case,
where the failure to obtain any Consent would not, individually or in the
aggregate, have a Material Adverse Effect on the Acquired Corporations.
2.17 FAIRNESS OPINION. The Company's board of directors has received the
opinion of PBW, financial advisor to the Company, as of the date of this
Agreement, to the effect that the consideration
21
to be received by the stockholders of the Company in the Offer and the Merger is
fair to the stockholders of the Company from a financial point of view. The
Company will furnish an accurate and complete copy of said opinion to Parent.
2.18 FINANCIAL ADVISOR. Except for PBW, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger or any of the other transactions contemplated by this
Agreement based upon arrangements made by or on behalf of any of the Acquired
Corporations. The Company has furnished to Parent accurate and complete copies
of all agreements under which any such fees, commissions or other amounts have
been paid or may become payable and all indemnification and other agreements
related to the engagement of PBW.
2.19 TAKEOVER STATUTES; NO DISCUSSIONS. To the knowledge of the Company,
no Takeover Laws are applicable to the Offer, the Merger, this Agreement and the
transactions contemplated hereby other than Section 203 of the DGCL. None of the
Acquired Corporations, and no Representative of any of the Acquired
Corporations, is engaged, directly or indirectly, in any discussions or
negotiations with any other Person relating to any Acquisition Proposal, and the
Company has provided to Parent the terms of any Acquisition Proposal received by
the Company in the last 90 days.
2.20 INFORMATION INCLUDED IN OFFER DOCUMENTS. None of the information
supplied or to be supplied by or on behalf of the Company for inclusion or
incorporation by reference in the Registration Statement, the Offer Documents or
the Schedule 14D-9 will, at the time the Registration Statement, the Offer
Documents or the Schedule 14D-9 are filed with the SEC or at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. None of the information
supplied or to be supplied by or on behalf of the Company for inclusion or
incorporation by reference in the Proxy Statement will, at the time the Proxy
Statement is mailed to the stockholders of the Company or at the time of the
Company Stockholders' Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading. The Proxy Statement will comply as to form
in all material respects with the provisions of the Exchange Act and the rules
and regulations promulgated by the SEC thereunder. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to any
information supplied by Parent or Merger Sub that is contained in the foregoing
documents.
2.21 AMENDMENT TO RIGHTS AGREEMENT. As of the date hereof, the Company has
taken all action necessary to irrevocably amend the Rights Agreement to provide
that neither Parent nor Merger Sub nor any of their respective affiliates shall
be deemed to be an Acquiring Person (as such term is defined in the Rights
Agreement), that neither a Distributing Date nor Shares Acquisition Date (as
each such term is defined in the Rights Agreement) shall be deemed to occur and
the Rights will not separate from the Shares as a result of the execution,
delivery or performance of this Agreement, the Stockholder Tender Agreements or
the public announcement or consummation of the Offer, the Merger, or the other
transactions contemplated hereby or thereby and that none of the Company,
Parent, Merger Sub nor the Surviving Corporation, nor any of their respective
affiliates, shall have any obligations under the Rights Agreement to any holder
(or former holder) of Rights as of and following the public announcement or
consummation of the Offer and/or the Effective Time.
2.22 FOREIGN CORRUPT PRACTICES ACT. Neither the Company, any other
Acquired Corporation, any of the Acquired Corporation's officers, directors,
nor, to the Company's knowledge, any employees or agents (or stockholders),
distributors, representatives or other persons acting on the express, implied or
apparent authority of any Acquired Corporation, have paid, given or received or
have offered or promised to pay, give or receive, any bribe or other unlawful
payment of money or other thing of value, any unlawful discount, or any other
unlawful inducement, to or from any person or
22
Governmental Entity in the United States or elsewhere in connection with or in
furtherance of the business of any of the Acquired Corporations (including,
without limitation, any unlawful offer, payment or promise to pay money or other
thing of value (a) to any foreign official, political party (or official
thereof) or candidate for political office for the purposes of influencing any
act, decision or omission in order to assist any Acquired Corporation in
obtaining business for or with, or directing business to, any person, or (b) to
any person, while knowing that all or a portion of such money or other thing of
value will be offered, given or promised unlawfully to any such official or
party for such purposes). Neither the business of the Company nor any other
Acquired Corporation is in any manner dependent upon the making or receipt of
such payments, discounts or other inducements. Neither the Company nor any other
Acquired Corporation has otherwise taken any action that could cause the Company
or any other Acquired Corporation to be in violation of the Foreign Corrupt
Practices Act of 1977, as amended, the regulations thereunder, or any applicable
Legal Requirements of similar effect.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as disclosed in the Parent Disclosure Schedule, Parent and Merger Sub
represent and warrant to the Company as follows:
3.1 DUE ORGANIZATION; SUBSIDIARIES. Each of Parent and Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Parent and Merger Sub has all necessary
corporate power and authority to conduct its business in the manner in which its
business is currently being conducted and to own and use its assets in the
manner in which its assets are currently owned and used. Each of Parent and
Merger Sub is qualified to do business as a foreign corporation, and is in good
standing, under the laws of all jurisdictions where the nature of its business
requires such qualification and where the failure to be so qualified would have
a Material Adverse Effect on Parent and its Significant Subsidiaries. Parent has
made available to the Company accurate and complete copies of the certificate of
incorporation and bylaws of each of Parent and Merger Sub, including all
amendments thereto (collectively, the "PARENT ORGANIZATION DOCUMENTS").
3.2 AUTHORITY; BINDING NATURE OF AGREEMENT. Each of Parent and Merger Sub
has all requisite corporate power and authority to enter into and to perform its
obligations under this Agreement. The Board of Directors of Parent (at a meeting
duly called and held) has authorized and approved the execution, delivery and
performance of this Agreement by Parent and approved the Offer and the Merger.
This Agreement constitutes the legal, valid and binding obligation of Parent and
Merger Sub, enforceable against Parent and Merger Sub in accordance with its
terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
3.3 CAPITALIZATION, ETC.
(a) As of June 18, 2001, the authorized capital stock of Parent consists
of: (i) 200,000,000 shares of Parent Common Stock and (ii) 5,000,000 shares
of Parent Preferred Stock. As of June 18, 2001, 54,313,381 shares of Parent
Common Stock have been issued and are outstanding, 689,978 shares of Parent
Cumulative Preferred Stock have been issued or are outstanding and no shares
of Parent Series A Preferred Stock are issued and outstanding. As of
June 18, 2001, 610,622 shares of Parent Common Stock are held in Parent's
treasury. All of the outstanding shares of Parent Common Stock have been
duly authorized and validly issued, and are fully paid and nonassessable.
None of the outstanding shares of Parent Common Stock is entitled or subject
to any preemptive right, right of participation, right of maintenance or any
similar right or subject to any right of first refusal in favor of Parent.
23
(b) All outstanding shares of Parent Common Stock and all outstanding
shares of capital stock of each Subsidiary of Parent have been issued and
granted in compliance with (i) all applicable securities laws and other
applicable Legal Requirements, and (ii) all requirements set forth in
applicable Parent Contracts. All of the outstanding shares of capital stock
of each of the Subsidiaries of Parent have been duly authorized and are
validly issued, are fully paid and nonassessable and, except for directors'
qualifying shares, are owned beneficially and of record by Parent, free and
clear of any Encumbrances. The Parent Common Stock to be issued in the Offer
and the Merger will, when issued in accordance with the provisions of this
Agreement, be validly issued, fully paid and nonassessable and in compliance
with all applicable securities laws and other applicable Legal Requirements.
The shares of Parent Common Stock to be issued upon exercise of Company
Options assumed by Parent in connection with the Offer and the Merger will,
when issued, be issued and granted in compliance with (i) all applicable
securities laws and other applicable Legal Requirements, and (ii) all
requirements set forth in applicable Parent Contracts.
3.4 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Parent has made available to the Company all registration
statements, proxy statements and other statements, reports, schedules, forms
and other documents filed by Parent with the SEC since December 31, 1998
(the "PARENT SEC DOCUMENTS"). All statements, reports, schedules, forms and
other documents required to have been filed by Parent with the SEC since
December 31, 1998 have been so filed. As of their respective dates (or, if
amended or superseded by a filing prior to the date of this Agreement, then
on the date of such amendment or superseding filing): (i) each of the Parent
SEC Documents complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the case may be);
and (ii) none of the Parent SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) The financial statements (including any related notes) contained in
the Parent SEC Documents (the "PARENT FINANCIAL STATEMENTS"): (i) complied
as to form in all material respects with the published rules and regulations
of the SEC applicable thereto; (ii) were prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered (except as may
be indicated in the notes to such financial statements or, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC, and except that
the unaudited financial statements may not have contained footnotes and were
subject to normal and recurring year-end adjustments which were not, or are
not reasonably expected to be, individually or in the aggregate, material in
amount), and (iii) fairly presented in all material respects the
consolidated financial position of Parent and its consolidated subsidiaries
as of the respective dates thereof and the consolidated results of
operations and cash flows of Parent and its consolidated subsidiaries for
the periods covered thereby.
3.5 LIABILITIES. Neither of Parent nor any Subsidiary of Parent has any
accrued, contingent or other liabilities of any nature, either matured or
unmatured (whether or not required to be reflected in financial statements
prepared in accordance with generally accepted accounting principles, and
whether due or to become due), except for: (a) liabilities required to be
identified as such in the "LIABILITIES" column of the Parent Balance Sheet,
including the notes thereto; (b) normal and recurring liabilities that have been
incurred by Parent and its Significant Subsidiaries since the Parent Balance
Sheet Date in the ordinary course of business and consistent with past practices
that, individually or in the aggregate, have not had or could not reasonably be
expected to have, a Material Adverse Effect on Parent and its Significant
Subsidiaries; and (c) liabilities incurred under this Agreement.
3.6 COMPLIANCE WITH LEGAL REQUIREMENTS. Parent, and each Subsidiary of
Parent, is, and at all times since December 31, 1998 has been, in compliance
with all applicable Legal Requirements, except
24
where the failure to comply with such Legal Requirements, individually or in the
aggregate, has not had and could not reasonably be expected to have a Material
Adverse Effect on Parent and its Significant Subsidiaries. Since December 31,
1998, none of Parent or any Subsidiary of Parent has received any written notice
or other communication from any Governmental Body regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement, except
where such violation or noncompliance could not reasonably be expected to have a
Material Adverse Effect on Parent and its Significant Subsidiaries.
3.7 GOVERNMENTAL AUTHORIZATIONS. Parent and each Subsidiary of Parent
holds all material Governmental Authorizations necessary to enable Parent and
the Significant Subsidiaries of Parent, to conduct their respective businesses
in the manner in which such businesses are currently being conducted and as
proposed to be conducted, except where the failure to have such authorization
would not be reasonably likely to have a Material Adverse Effect on Parent. All
such Governmental Authorizations are valid and in full force and effect. Parent,
and each Subsidiary of Parent, is, and at all times since December 31, 1998 has
been, in compliance with the terms and requirements of such Governmental
Authorizations except where the failure to comply with such terms and
requirements has not had and could not reasonably be expected to have a Material
Adverse Effect on Parent and its Significant Subsidiaries. Except as could not
reasonably be expected to have a Material Adverse Effect on Parent and its
Significant Subsidiaries, since December 31, 1998, none of Parent or any
Subsidiary of Parent has received any notice or other communication from any
Governmental Body regarding (a) any actual or possible violation of or failure
to comply with any term or requirement of any Governmental Authorization, or
(b) any actual or possible revocation, withdrawal, suspension, cancellation,
termination or modification of any Governmental Authorization.
3.8 NON-CONTRAVENTION; CONSENTS. Neither the execution, delivery or
performance of this Agreement nor the consummation of the Offer, the Merger or
any of the other transactions contemplated by this Agreement, will directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of any of the
provisions of the Parent Organization Documents or any resolution adopted by
the stockholders, the board of directors or any committee of the board of
directors of Parent or any Subsidiary of Parent; or
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body the right to challenge the Offer or the Merger or any of
the other transactions contemplated by this Agreement or to exercise any
remedy or obtain any relief under, any Legal Requirement or any order, writ,
injunction, judgment or decree to which Parent, or any of the assets owned
or used by Parent, is subject;.
Except as may be required by the Securities Act, the Exchange Act, the DGCL,
the HSR Act, applicable anti-trust laws of any foreign country, and the NYSE
Listed Company Manual (as they relate to the Registration Statement and the
Proxy Statement) none of Parent or any Subsidiary of Parent was, is or will be
required to make any filing with or give any notice to, or obtain any Consent
from, any Person in connection with (x) the execution, delivery or performance
of this Agreement, or (y) the consummation of the Merger or any of the other
transactions contemplated by this Agreement, except in each case, where the
failure to make any filing, give any notice or obtain any Consent would not have
a Material Adverse Effect on Parent and its Significant Subsidiaries.
3.9 INTERIM OPERATIONS OF MERGER SUB. Merger 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.
3.10 INFORMATION INCLUDED IN OFFER DOCUMENTS. None of the information
supplied or to be supplied by or on behalf of Parent for inclusion or
incorporation by reference in the Registration Statement and the Offer Documents
will, at the time the Registration Statement and the Offer
25
Documents are filed with the SEC or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. None of the information supplied or to be supplied by or
on behalf of Parent for inclusion or incorporation by reference in the Proxy
Statement will, at the time the Proxy Statement is mailed to the stockholders of
the Company or at the time of the Company Stockholders' Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
Notwithstanding the foregoing, Parent makes no representation or warranty with
respect to any information supplied by the Company that is contained in the
foregoing documents.
3.11 PARENT STOCKHOLDER APPROVAL. This Agreement and the transactions
contemplated hereby, including the issuance of shares of Parent Common Stock
pursuant to the Offer and the Merger, do not require the approval of the holders
of any (A) shares of capital stock of Parent or (b) voting securities of Parent.
SECTION 4. CERTAIN COVENANTS OF THE COMPANY AND PARENT
4.1 ACCESS AND INVESTIGATION. During the period from the date of this
Agreement through the Effective Time unless this Agreement shall be terminated
in accordance with Section 7 (the "PRE-CLOSING PERIOD"), subject to applicable
antitrust laws and regulations relating to the exchange of information, the
Company shall, and shall cause the respective Representatives of the Acquired
Corporations to: (i) provide Parent and Parent's Representatives with reasonable
access during normal business hours to the Acquired Corporations'
Representatives, personnel and assets and to all existing books, records, Tax
Returns, work papers and other documents and information relating to the
Acquired Corporations; and (ii) provide Parent and Parent's Representatives with
such copies of the existing books, records, Tax Returns, work papers and other
documents and information relating to the Acquired Corporations, and with such
additional financial, operating and other data and information regarding the
Acquired Corporations, in each case, as Parent may reasonably request. Parent
will hold any such information which is not public in confidence in accordance
with the Mutual Nondisclosure Agreement.
4.2 OPERATION OF THE COMPANY'S BUSINESS.
(a) During the Pre-Closing Period the Company shall: (i) ensure that
each of the Acquired Corporations conducts its business and operations
(A) in the ordinary course and substantially in accordance with past
practices, and (B) in material compliance with all applicable Legal
Requirements and the requirements of all Company Material Contracts;
(ii) to the extent consistent with its business, use its commercially
reasonable efforts to ensure that each of the Acquired Corporations
preserves intact its current business organization, keeps available the
services of its current officers and employees and maintains its relations
and goodwill at least as favorable as at the date of this Agreement with all
suppliers, customers, distributors, landlords, creditors, licensors,
licensees and other Persons having business relationships with the
respective Acquired Corporations; (iii) provide all notices, assurances and
support required by any Contract relating to any Proprietary Asset in order
to ensure that no condition under such Contract occurs which could result
in, or could increase the likelihood of any transfer or disclosure by any
Acquired Corporation of any source code materials or other Proprietary
Asset; and (iv) keep in full force and effect (with the same scope and
limits of coverage) all insurance policies in effect as of the date of this
Agreement covering all material assets of the Acquired Corporations.
26
(b) During the Pre-Closing Period, except as set forth in
Section 4.2(b) of the Company Disclosure Schedule, the Company shall not
(without the prior written consent of Parent), and shall not permit any of
the other Acquired Corporations to:
(i) declare, accrue, set aside or pay any dividend or make any other
distribution in respect of any shares of capital stock or repurchase,
redeem or otherwise reacquire any shares of capital stock or other
securities;
(ii) sell, issue, grant or authorize the issuance or grant of
(A) any capital stock or other security (including the sale, transfer or
grant of any treasury shares) or (B) any Company Stock Right (except
that, prior to the Offer Acceptance Time, the Company may issue Company
Common Stock upon the valid exercise of Company Options outstanding as of
the date of this Agreement or pursuant to the Company ESPP as in effect
on the date hereof);
(iii) amend or waive any of its rights under, or accelerate the
vesting under, any provision of any of the Company Stock Option Plans,
any provision of any agreement evidencing any outstanding stock option or
any restricted stock purchase agreement, or otherwise modify any of the
terms of any outstanding option, warrant, or other security or any
related Contract;
(iv) amend or permit the adoption of any amendment to the Company
Organization Documents, or effect or become a party to any Company
Acquisition Transaction, recapitalization, reclassification of shares,
stock split, reverse stock split or similar transaction;
(v) form any Subsidiary or acquire any equity interest or other
interest in any other Entity;
(vi) make any capital expenditure not included in the Company's 2002
capital expenditure budget, a copy of which has been furnished to Parent,
to the extent such new capital expenditures exceed $75,000 in the
aggregate;
(vii) enter into or become bound by, or permit any of the assets owned
or used by it to become bound by, any Company Contract with obligations
in excess of $250,000, or amend or terminate, or waive or exercise any
material right or remedy under, any Company Material Contract with
obligations in excess of $250,000;
(viii) acquire, lease or license any right or other asset from any
other Person or sell or otherwise dispose of, or lease or license, any
right or other asset to any other Person (except in each case for
immaterial assets acquired, leased, licensed or disposed of by the
Company in the ordinary course of business and consistent with past
practices, and except for licensing of intellectual property in the sale
or licensing of the Company's products in the ordinary course of business
and consistent with past practices), or waive or relinquish any material
right;
(ix) lend money to any Person, or incur or guarantee any indebtedness
(except that the Company may make routine borrowings in the ordinary
course of business and in accordance with past practices under the
Company's credit facilities outstanding as of the date hereof (without
any amendment or modification thereto));
(x) except as required by applicable Legal Requirements,
(i) establish, adopt or amend any Company Employee Plan or collective
bargaining agreement, (ii) pay any bonus or make any profit-sharing or
similar payment to any employee or director of any Acquired Corporation,
(iii) or increase the amount of wages, salary, commissions, fringe
benefits or other compensation or remuneration payable to, (1) any
employee (who is not an officer or director) other than in the ordinary
course of business and consistent with scheduled salary increases, or
(2) to any officer or director; (iv) pay or make available any benefit
not provided for under any Company Employee Plan, or (v) enter into,
amend or change in any way, or
27
make any severance or termination payments under, any agreement or other
arrangement not in existence as of the date of this Agreement;
(xi) hire or fire (1) any employee who is (or would be) an officer of
any Acquired Corporation, or (2) any employee (other than an officer of
any Acquired Corporation) except in the ordinary course of business;
(xii) change any of its methods of accounting or accounting practices
in any respect, except as required by GAAP;
(xiii) make any material Tax election;
(xiv) commence or settle any Legal Proceeding;
(xv) enter into any material transaction or take any other material
action outside the ordinary course of business or inconsistent with past
practices;
(xvi) take, or permit the taking of any action, which could reasonably
be expected to cause the vesting of any Company Options to be accelerated
in accordance with the terms of any of the Company Stock Option Plans;
(xvii) take, agree to take, or omit to take any action which would
(A) make any of the representations and warranties of the Company
contained in this Agreement untrue or incorrect, (B) prevent the Company
from performing or cause the Company not to perform its covenants
hereunder, or (C) cause any of the conditions set forth in Section 6 or
Section 7 not to be able to be satisfied prior to the Termination Date;
or
(xviii) agree or commit to take any of the actions described in clauses
"(i)" through "(xvii)" of this Section 4.2(b).
(c) During the Pre-Closing Period, the Company shall promptly notify
Parent in writing of: (i) the discovery by the Company of any event,
condition, fact or circumstance that occurred or existed on or prior to the
date of this Agreement and that caused or constitutes a material inaccuracy
in any representation or warranty made by the Company in this Agreement;
(ii) any event, condition, fact or circumstance that occurs, arises or
exists after the date of this Agreement and that would cause or constitute a
material inaccuracy in any representation or warranty made by the Company in
this Agreement if (A) such representation or warranty had been made as of
the time of the occurrence, existence or discovery of such event, condition,
fact or circumstance, or (B) such event, condition, fact or circumstance had
occurred, arisen or existed on or prior to the date of this Agreement;
(iii) any material breach of any covenant or obligation of the Company; and
(iv) any event, condition, fact or circumstance that would make the timely
satisfaction of any condition set forth in Section 6 or ANNEX I impossible
or unlikely or that has had or could reasonably be expected to have a
Material Adverse Effect on the Acquired Corporations. No notification given
to Parent pursuant to this Section 4.2(c) shall limit or otherwise affect
any of the representations, warranties, covenants or obligations of the
Company contained in this Agreement.
(d) During the Pre-Closing Period, Parent shall promptly notify the
Company in writing of: (i) the discovery by Parent of any event, condition,
fact or circumstance that occurred or existed on or prior to the date of
this Agreement and that caused or constitutes a material inaccuracy in any
representation or warranty made by Parent in this Agreement; (ii) any event,
condition, fact or circumstance that occurs, arises or exists after the date
of this Agreement and that would cause or constitute a material inaccuracy
in any representation or warranty made by Parent in this Agreement if
(A) such representation or warranty had been made as of the time of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, or (B) such event, condition, fact or circumstance had
occurred, arisen or existed on or prior to the date of this Agreement;
(iii) any material breach of any covenant or obligation of Parent; and
(iv) any event,
28
condition, fact or circumstance that would make the timely satisfaction of
any condition set forth in Section 6 or ANNEX I impossible or unlikely or
that has had or could reasonably be expected to have a Material Adverse
Effect on the Parent. No notification given to the Company pursuant to this
Section 4.2(d) shall limit or otherwise affect any of the representations,
warranties, covenants or obligations of Parent contained in this Agreement.
4.3 NO SOLICITATION BY THE COMPANY.
(a) During the Pre-Closing Period, the Company shall not directly or
indirectly, and shall not authorize or permit any of the other Acquired
Corporations or any Representative of any of the Acquired Corporations
directly or indirectly to, (i) solicit, initiate, encourage, induce or
facilitate the making, submission or announcement of any Company Acquisition
Proposal or take any action that could reasonably be expected to lead to a
Company Acquisition Proposal, (ii) furnish any information regarding any of
the Acquired Corporations to any Person in connection with or in response to
a Company Acquisition Proposal or an inquiry or indication of interest that
could lead to a Company Acquisition Proposal, (iii) engage in discussions or
negotiations with any Person with respect to any Company Acquisition
Proposal, (iv) approve, endorse or recommend any Company Acquisition
Proposal or (v) enter into any letter of intent or similar document or any
Contract contemplating or otherwise relating to any Company Acquisition
Transaction; PROVIDED, HOWEVER, that this Section 4.3(a) shall not prohibit
(A) the Company, or the Board of Directors of the Company, from furnishing
nonpublic information regarding the Acquired Corporations to, or entering
into discussions with, any Person in response to a Company Superior Offer
that is submitted to the Company by such Person (and not withdrawn) if
(1) neither the Company nor any Representative of any of the Acquired
Corporations shall have violated any of the restrictions set forth in this
Section 4.3, (2) the Board of Directors of the Company concludes in good
faith, after consultation with its outside legal counsel, that such action
is required in order for the Board of Directors of the Company to comply
with its fiduciary obligations to the Company's stockholders under
applicable Legal Requirements, (3) at least three (3) business days prior to
furnishing any such nonpublic information to, or entering into discussions
with, such Person, the Company gives Parent written notice of the identity
of such Person and of the Company's intention to furnish nonpublic
information to, or enter into discussions with, such Person, and the Company
receives from such Person an executed confidentiality agreement containing
customary limitations on the use and disclosure of all nonpublic written and
oral information furnished to such Person or any of such Person's
Representatives by or on behalf of the Company, and (4) at least two
(2) business days prior to furnishing any such nonpublic information to such
Person, the Company furnishes such nonpublic information to Parent (to the
extent such nonpublic information has not been previously furnished by the
Company to Parent); or (B) the Company from complying with Rule 14e-2
promulgated under the Exchange Act with regard to a Company Acquisition
Proposal. Without limiting the generality of the foregoing, the Company
acknowledges and agrees that any violation of any of the restrictions set
forth in the preceding sentence by any Representative of any of the Acquired
Corporations, whether or not such Representative is purporting to act on
behalf of any of the Acquired Corporations, shall be deemed to constitute a
breach of this Section 4.3 by the Company.
(b) The Company shall promptly (and in no event later than 24 hours
after receipt of any Company Acquisition Proposal, any inquiry or indication
of interest that could lead to a Company Acquisition Proposal or any request
for nonpublic information) advise Parent orally and in writing of any
Company Acquisition Proposal, any inquiry or indication of interest that
could lead to a Company Acquisition Proposal or any request for nonpublic
information relating to any of the Acquired Corporations (including the
identity of the Person making or submitting such Company Acquisition
Proposal, inquiry, indication of interest or request, and the terms thereof)
that is made or submitted by any Person during the Pre-Closing Period. The
Company shall keep Parent fully
29
informed on a prompt basis with respect to the status of any such Company
Acquisition Proposal, inquiry, indication of interest or request and any
modification or proposed modification thereto.
(c) The Company shall immediately cease and cause to be terminated any
existing discussions with any Person (other than Parent) that relate to any
Company Acquisition Proposal, except as may be provided for in
Section 4.3(a).
(d) The Company agrees not to release any Person (other than Parent)
from or waive any provision of any confidentiality, "STANDSTILL" or similar
agreement to which the Company is a party and will use its reasonable best
efforts to enforce each such agreement at the request of Parent. The Company
also will promptly request each Person (other than Parent) that has
executed, within 12 months prior to the date of this Agreement, a
confidentiality, standstill or similar agreement in connection with its
consideration of a possible Company Acquisition Transaction to return all
confidential information heretofore furnished to such Person by or on behalf
of the Company.
(e) Notwithstanding anything in this Agreement to the contrary, the
Recommendations may be withheld, withdrawn or modified in a manner adverse
to Parent if: (i) (A) an unsolicited, bona fide written offer is made to the
Company by a third party for a merger, consolidation, business combination,
sale of substantial assets, sale of shares of capital stock (including
without limitation by way of a tender offer) or similar transaction, and
such offer is not withdrawn; (B) the Company's board of directors determines
in good faith (after consultation with PBW or another nationally recognized
financial advisor) that such offer constitutes a Company Superior Offer;
(C) the Company's board of directors determines in good faith, based upon
the advice of the Company's outside legal counsel, that, in light of such
Company Superior Offer, the withdrawal or modification of the
Recommendations is required in order for the Company's Board of Directors to
comply with its fiduciary obligations to the Company's stockholders under
applicable Legal Requirements; (D) the Recommendations are not withdrawn or
modified in a manner adverse to Parent at any time prior to five business
days after Parent receives written notice from the Company confirming that
the Company's Board of Directors has determined that such offer is a Company
Superior Offer and providing to Parent a copy of any such Superior Offer,
(E) the Company shall have released Parent from the provisions of any
standstill or similar agreement restricting Parent from acquiring securities
of the Company; and (F) neither the Company nor any of its Representatives
shall have violated any of the restrictions set forth in Section 4.3(a); or
(ii) other than with respect to an unsolicited, bona fide written offer made
to the Company by a third party as contemplated by Section 4.3(e)(i)(A) (in
which case the Company shall comply with the provisions of
Section 4.3(e)(i)), the Board of Directors of the Company determines in good
faith, after consultation with its outside legal counsel, that withholding,
withdrawing or modifying the Recommendations is required in order for the
Board of Directors of the Company to comply with its fiduciary obligations
to the Company's stockholders under applicable Legal Requirements.
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 REGISTRATION STATEMENT AND PROXY STATEMENT FOR STOCKHOLDER
APPROVAL. If approval of the Company's stockholders is required by applicable
Legal Requirements in order to consummate the Merger other than pursuant to
Section 253 of the DGCL, Parent and the Company shall, as soon as practicable
following the Offer Acceptance Time, prepare and the Company shall file with the
SEC a proxy statement of the Company in connection with the Merger complying
with applicable Legal Requirements (the "PROXY STATEMENT"), and Parent and the
Company shall prepare and Parent shall file with the SEC a post-effective
amendment to the Registration Statement (the "POST-EFFECTIVE AMENDMENT") for the
offer and sale of Parent Common Stock pursuant to the Merger and in which the
Proxy Statement will be included as a prospectus. Each of the Company and Parent
shall use commercially reasonable efforts to have the Post-Effective Amendment
declared effective under the Securities Act as promptly as practicable after
such filing. The Company will use reasonable efforts to
30
cause the Proxy Statement to be mailed to the Company's stockholders as promptly
as practicable after the Post-Effective Amendment is declared effective under
the Securities Act, but in any event within ten (10) business days thereafter.
Parent shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or filing a general consent to
service of process) required to be taken under any applicable state securities
laws in connection with the issuance of Parent Common Stock in the Merger and
the Company shall furnish all information concerning the Company and the holders
of capital stock of the Company as may be reasonably requested in connection
with any such action and the preparation, filing and distribution of the Proxy
Statement. No filing of, or amendment or supplement to, or correspondence to the
SEC or its staff with respect to, the Post-Effective Amendment will be made by
Parent, or with respect to the Proxy Statement will be made by the Company,
without providing the other party a reasonable opportunity to review and comment
thereon. Parent will advise the Company, promptly after it receives notice
thereof, of the time when the Post-Effective Amendment has become effective or
any supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Post-Effective Amendment or comments
thereon and responses thereto or requests by the SEC for additional information.
The Company will advise Parent, promptly after it receives notice thereof, of
any request by the SEC for the amendment of the Proxy Statement or comments
thereon and responses thereto or requests by the SEC for additional information.
If at any time prior to the Effective Time any information relating to the
Company or Parent, or any of their respective affiliates, officers or directors,
should be discovered by the Company or Parent which should be set forth in an
amendment or supplement to either the Post-Effective Amendment or the Proxy
Statement, so that any of such documents would not include any misstatement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party which discovers such information shall promptly notify
the other parties hereto and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the extent
required by applicable Legal Requirements, disseminated to the stockholders of
the Company.
5.2 COMPANY STOCKHOLDERS' MEETING.
(a) If approval of the Company's stockholders is required by applicable
Legal Requirements in order to consummate the Merger other than pursuant to
Section 253 of the DGCL, after acceptance for exchange of Shares pursuant to
the Offer, Parent and the Company shall take all action necessary under all
applicable Legal Requirements to call, give notice of and hold a meeting of
the holders of Company Common Stock to vote on a proposal to adopt this
Agreement (the "COMPANY STOCKHOLDERS' MEETING"). The Company Stockholders'
Meeting shall be held as soon as reasonably practicable after the
Post-Effective Amendment is declared effective under the Securities Act. The
Company shall use reasonable efforts to take all actions necessary or
advisable to solicit proxies in favor of the Merger and shall ensure that
all proxies solicited in connection with the Company Stockholders' Meeting
are solicited in compliance with all applicable Legal Requirements. Once the
Company Stockholders' Meeting has been called and noticed, the Company shall
not postpone or adjourn the Company Stockholders' Meeting (other than for
the absence of a quorum) without the consent of Parent. The Proxy Statement
shall include the opinion of PBW.
(b) The Proxy Statement shall include the Recommendations, and, subject
to Section 4.3(e), the Recommendations shall not be withdrawn or modified in
a manner adverse to Parent, and no resolution by the board of directors of
the Company or any committee thereof to withdraw or modify the
Recommendations in a manner adverse to Parent shall be adopted or proposed.
31
(c) The Company's obligation to call, give notice of and hold the
Company Stockholders' Meeting in accordance with Section 5.2(a) shall not be
limited or otherwise affected by the commencement, disclosure, announcement
or submission of any Company Superior Offer or other Company Acquisition
Proposal, or by any withdrawal or modification of the Recommendations.
(d) The Company and Parent shall cooperate with one another (i) in
connection with the preparation of the Proxy Statement and the
Post-Effective Amendment, (ii) in determining whether any action by or in
respect of, or filing with, any Governmental Entity is required, or any
actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of
the transactions contemplated by this Agreement and (iii) in seeking any
such actions, consents, approvals or waivers or making any such filings,
furnishing information required in connection therewith or with the Proxy
Statement and the Post-Effective Amendment and seeking timely to obtain any
such actions, consents, approvals or waivers.
(e) Notwithstanding clauses (a) and (b) above, if Merger Sub shall own
by virtue of the Offer or otherwise at least 90% of the outstanding shares
of Company Common Stock, the parties hereto shall take all necessary actions
(including actions referred to in this Section 5.2, as applicable) to cause
the Merger to become effective, as soon as practicable after the expiration
of the Offer, as it may be extended in accordance with the requirements of
Section 1.1(a) hereof, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
5.3 REGULATORY APPROVALS. Each of the Company and Parent shall use its
reasonable efforts to file, as soon as practicable after the date of this
Agreement, all notices, reports and other documents required to be filed with
any Governmental Body with respect to the Merger and the other transactions
contemplated by this Agreement, and to submit promptly any additional
information requested by any such Governmental Body. Without limiting the
generality of the foregoing, if Parent determines that it is so required, the
Company and Parent shall, promptly after the date of this Agreement, prepare and
file the notifications required under the HSR Act and any applicable foreign
antitrust laws or regulations in connection with the Merger. The Company and
Parent shall respond as promptly as practicable to (i) any inquiries or requests
received from the Federal Trade Commission or the Department of Justice for
additional information or documentation and (ii) any inquiries or requests
received from any state attorney general, foreign antitrust authority or other
Governmental Body in connection with antitrust or related matters. Each of the
Company and Parent shall (i) give the other party prompt notice of the
commencement or threat of commencement of any Legal Proceeding by or before any
Governmental Body with respect to the Merger or any of the other transactions
contemplated by this Agreement, (ii) keep the other party informed as to the
status of any such Legal Proceeding or threat, and (iii) promptly inform the
other party of any communication to or from the Federal Trade Commission, the
Department of Justice or any other Governmental Body regarding the Merger.
Except as may be prohibited by any Governmental Body or by any Legal
Requirement, the Company and Parent will consult and cooperate with one another,
and will consider in good faith the views of one another, in connection with any
analysis, appearance, presentation, memorandum, brief, argument, opinion or
proposal made or submitted in connection with any Legal Proceeding under or
relating to the HSR Act or any other foreign, federal or state antitrust or fair
trade law. In addition, except as may be prohibited by any Governmental Body or
by any Legal Requirement, in connection with any Legal Proceeding under or
relating to the HSR Act or any other foreign, federal or state antitrust or fair
trade law or any other similar Legal Proceeding, each of the Company and Parent
will permit authorized Representatives of the other party to be present at each
meeting or conference with government representatives relating to any such Legal
Proceeding and to have access to and be consulted in connection with any
document, opinion or proposal made or submitted to any Governmental Body in
connection with any such Legal Proceeding. Notwithstanding anything to the
contrary in this Section 5.3, neither Parent nor the Company nor any of their
respective Subsidiaries
32
shall be required to take any action that could reasonably be expected to
substantially impair the overall benefits expected, as of the date hereof, to be
realized from the consummation of the Merger.
5.4 ASSUMPTION OF STOCK OPTIONS.
(a) Subject to Sections 5.4(b), at the Offer Acceptance Time all rights
with respect to Company Common Stock under each Company Option then
outstanding shall be converted into and become rights with respect to Parent
Common Stock, and Parent shall assume each such Company Option in accordance
with the terms and conditions (as in effect as of the date of this
Agreement) of the stock option plan under which it was issued and the terms
and conditions of the stock option agreement by which it is evidenced. From
and after the Offer Acceptance Time, subject to Section 5.4(f), (i) each
Company Option assumed by Parent may be exercised solely for shares of
Parent Common Stock, (ii) the number of shares of Parent Common Stock
subject to each such Company Option shall be equal to the number of shares
of Company Common Stock subject to such Company Option immediately prior to
the Offer Acceptance Time multiplied by the Exchange Ratio, rounding down to
the nearest whole share, (iii) the per share exercise price under each such
Company Option shall be adjusted by dividing the per share exercise price
under such Company Option by the Exchange Ratio and rounding up to the
nearest cent, and (iv) any restriction on the exercise of any such Company
Option shall continue in full force and effect and the term, exercisability,
vesting schedule and other provisions of such Company Option shall otherwise
remain unchanged; PROVIDED, HOWEVER, that each Company Option assumed by
Parent in accordance with this Section 5.4(a) shall, in accordance with its
terms, be subject to further adjustment as appropriate to reflect any stock
split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction effected subsequent to the
Offer Acceptance Time.
(b) Notwithstanding anything to the contrary contained in this
Section 5.4, in lieu of assuming outstanding Company Options in accordance
with Section 5.4(a), Parent may, with the consent of each optionholder with
respect to such optionholders options, cause such outstanding Company
Options to be replaced by issuing reasonably equivalent replacement stock
options in substitution therefor.
(c) Prior to the Offer Acceptance Time, the Company shall take all
action that may be necessary (under the plans pursuant to which Company
Options are outstanding and otherwise) to effectuate the provisions of this
Section 5.4 and to ensure that, from and after the Offer Acceptance Time,
holders of Company Options have no rights with respect thereto other than
those specifically provided in this Section 5.4.
(d) Parent shall take all corporate action necessary to reserve for
issuance a sufficient number of shares of Parent Common Stock for delivery
under the Company Options Plans assumed in accordance with this
Section 5.4.
(e) Prior to the Offer Acceptance Time, the Company shall take all
actions necessary or required under the Company ESPP and applicable Legal
Requirements to ensure that, except for the six-month Offering beginning
July 1, 2001 (the "JULY 1 OFFERING"), no additional Offerings shall be
authorized or commenced. At the Offer Acceptance Time (and without any
further action on the part of any Person) the purchase rights then
outstanding under the Company ESPP (the "PURCHASE RIGHTS") with respect to
Company Common Stock shall be assumed by Parent and shall be automatically
converted into and become rights with respect to Parent Common Stock, and
such assumption and conversion of the Purchase Rights shall be in accordance
with the terms and conditions (as in effect as of the date of this
Agreement) of the Company ESPP. From and after the Offer Acceptance Time,
except as specifically provided otherwise below, (i) each Purchase Right
assumed by Parent may be exercised solely for shares of Parent Common Stock
on the applicable Purchase Date under the Company ESPP, (ii) the number of
shares of Parent Common
33
Stock subject to all Purchase Rights shall be equal to the number of shares
of Company Common Stock subject to such Purchase Rights immediately prior to
the Offer Acceptance Time multiplied by the Exchange Ratio, rounding down to
the nearest whole share, (iii) the per share purchase price under each such
Purchase Right shall be appropriately adjusted as of the applicable Purchase
Date by dividing the per share purchase price under such Purchase Right by
the Exchange Ratio and rounding up to the nearest cent, and (iv) any
restriction on the exercise of any such Purchase Right shall continue in
full force and effect and all other terms and conditions of such Purchase
Rights (other than the right to acquire Company Common Stock) shall
otherwise remain unchanged; PROVIDED, HOWEVER, that each Purchase Right
assumed by Parent as provided herein shall, in accordance with its terms, be
subject to further adjustment as appropriate to reflect any stock split,
stock dividend, reverse stock split, reclassification, recapitalization or
other similar transaction effected by Parent subsequent to the Offer
Acceptance Time. Pursuant to the terms of the Company ESPP, as of the time
immediately prior to the Effective Time (i) the accumulated payroll
deductions of participants under the Company ESPP for the July 1 Offering
shall be used to purchase Parent Common Stock, (ii) the date on which such
purchases occur shall be the Purchase Date for the July 1 Offering, and
(iii) as of the time immediately following the purchase on such Purchase
Date, the Company ESPP shall terminate.
(f) If, at any time after the Offer Acceptance Time, Parent shall
directly or indirectly hold less than 50% of the total shares of Company
Common Stock then outstanding (the "SEPARATION TIME"), then, as of such
Separation Time, the Company shall automatically assume in accordance with
the terms of this Plan (without any further action on the part of any
Person) each Purchase Right outstanding as of the Separation Time (each such
right referred to herein as the "FORMER PURCHASE RIGHT") on the terms and
conditions of such Former Purchase Right as in existence immediately prior
to the Offer Acceptance Time. From and after the Separation Time, (i) each
Former Purchase Right assumed by the Company may be exercised solely for
shares of Company Common Stock, (ii) the number of shares of Company Common
Stock subject to each such Former Purchase Right shall be equal to the
number of shares of Company Common Stock subject to such Former Purchase
Right immediately prior to the Offer Acceptance Time, (iii) the per share
purchase price under each such Former Purchase Right shall be equal to the
purchase price under such Former Purchase Right as in effect immediately
prior to the Offer Acceptance Time, and (iv) any restriction on the exercise
of any such Former Purchase Right shall continue in full force and effect
and all other terms and conditions of such Former Purchase Rights shall
otherwise remain unchanged. In addition, as of the Separation Time the
Company shall assume in accordance with the terms of the Company Stock
Option Plans (without any further action on the part of the Company, Parent
or any stockholder or optionholder of Parent or the Company) each option to
acquire Parent Common Stock which was previously assumed by Parent pursuant
to Section 5.4(a) and which is then outstanding (each such option, "FORMER
COMPANY OPTION") on the terms and conditions of such Former Company Option
as in existence prior to the Offer Acceptance Time. From and after the
Separation Time, (i) each Former Company Option assumed by the Company may
be exercised solely for shares of Company Common Stock, (ii) the number of
shares of Company Common Stock subject to each such Former Company Option
shall be equal to the number of shares of Company Common Stock subject to
such Former Company Option immediately prior to the Offer Acceptance Time,
(iii) the per share exercise price under each such Former Company Option
shall be equal to the exercise price under such Former Company Option as in
effect prior to the Offer Acceptance Time, and (iv) any restriction on the
exercise of any such Former Company Option shall continue in full force and
effect and the term, exercisability, vesting schedule and other provisions
of such Former Company Option shall otherwise remain unchanged.
5.5 EMPLOYEE BENEFITS. All employees of the Company who continue
employment with Parent, the Surviving Corporation or a Subsidiary of Parent
after the Effective Time ("CONTINUING EMPLOYEES")
34
shall be eligible to continue to participate in the Surviving Corporation's
health, vacation and other employee benefit plans; PROVIDED, HOWEVER, that
(a) nothing in this Section 5.5 or elsewhere in this Agreement shall limit the
right of Parent or the Surviving Corporation to amend or terminate any such
health, vacation or other employee benefit plan at any time, and (b) if Parent
or the Surviving Corporation terminates any such health, vacation or other
employee benefit plan and only to the extent Parent maintains comparable health,
vacation and other employee benefit plans, then subject to any transition or
waiting period required by Legal Requirements or any third-party notwithstanding
Parent's good faith efforts to obtain a waiver of any such period from such
third-party, the Continuing Employees shall be eligible to participate in
Parent's health, vacation and other employee benefit plans, to substantially the
same extent as employees of Parent in similar positions with the same seniority
or years of service and such seniority and service with the Company shall be
recognized for eligibility and vesting purposes. Nothing in this Section 5.5 or
elsewhere in this Agreement shall be construed to create any obligation on
behalf of Parent to create any employee benefit plan that does not exist as of
the date of this Agreement or amend any employee benefit plan currently
maintained by Parent, except as any such amendment is required to give effect to
the seniority and years of service provisions with respect to eligibility and
vesting as set forth in this Section 5.5, nor shall this be construed to create
any right in any employee to employment with Parent, the Surviving Corporation
or any other Subsidiary of Parent and, subject to any other binding written
agreement between an employee and Parent or the Surviving Corporation, the
employment of each Continuing Employee shall be "AT WILL"employment.
5.6 INDEMNIFICATION OF OFFICERS AND DIRECTORS.
(a) Parent shall cause all rights to indemnification existing in favor
of those Persons who are or were directors and officers of the Company prior
to or as of the date of this Agreement (the "INDEMNIFIED PERSONS") for acts
and omissions occurring prior to the Effective Time, as provided in the
Company's certificate of incorporation and bylaws (as in effect as of the
date of this Agreement) and as provided in the indemnification agreements
between the Company and each of the Indemnified Persons (as in effect as of
the date of this Agreement) in the form of the indemnification agreement
attached to the Company Disclosure Schedule (the "INDEMNIFICATION
AGREEMENTS") prior to the date of this Agreement, to continue in effect
after the consummation of the Offer and to survive the Merger and to be
observed by the Surviving Corporation to the fullest extent permitted by
Delaware law for a period of six years from the Effective Time. From and
after the Offer Acceptance Time, Parent shall: (i) cause the Indemnification
Agreement for any Indemnified Person who continues as a director or officer
of the Company or the Surviving Corporation after the Offer Acceptance Time
to continue in effect in accordance with its terms and to be observed by the
Company or the Surviving Corporation to the fullest extent permitted by
Delaware law; and (ii) pay to or reimburse such Indemnified Person all
amounts to which such Indemnified Person is entitled under such Indemnity
Agreement to the fullest extent permitted by Delaware law for acts and
omissions occurring after the Offer Acceptance Time, if and to the extent
that such amounts are not paid to such Indemnified Person when due under the
terms of such Indemnity Agreement.
(b) From the Effective Time until the sixth anniversary of the Effective
Time, the Surviving Corporation shall provide for the benefit of the insured
parties named in such policy and the Indemnified Persons, only with respect
to acts or omissions occurring prior to the Offer Acceptance Time,
directors' and officers' liability insurance on terms with respect to
coverage and amount at least as favorable as those of the insurance policy
maintained by the Company as of the date of this Agreement in the form
attached to the Company Disclosure Schedule.
(c) From and after the Offer Acceptance Time, Parent shall cause the
Indemnified Persons who continue as directors or officers of the Surviving
Corporation to be named as insureds or otherwise covered under Parent's
existing directors' and officers' liability insurance policies as in effect
at the date of this Agreement to the same extent that directors and officers
of Parent are
35
insured under such policies with respect to acts or omissions occurring
after the Offer Acceptance Time.
(d) The obligations of Parent and the Surviving Corporation under this
Section 5.6 shall not be terminated or modified in such a manner as to
adversely affect any Indemnified Person to whom this Section 5.6 applies
without the consent of such affected Indemnified Person (it being expressly
agreed that the Indemnified Person to whom this Section 5.6 applies shall be
third party beneficiaries of this Section 5.6).
(e) In the event Parent or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any
other Person and shall not be the continuing or surviving corporation or
entity in such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any Person, then, and in
each case, proper provision shall be made so that the successors and assigns
of Parent or the Surviving Corporation, as the case may be, honor the
indemnification obligations set forth in this Section 5.6.
5.7 ADDITIONAL AGREEMENTS.
(a) Each of Parent and the Company shall use its reasonable best efforts
to take, or cause to be taken, all actions necessary to consummate the Offer
and the Merger and make effective the other transactions contemplated by
this Agreement. Without limiting the generality of the foregoing each party
to this Agreement (i) shall make all filings (if any) and give all notices
(if any) required to be made and given by such party in connection with the
Offer and the Merger and the other transactions contemplated by this
Agreement; (ii) shall use its reasonable best efforts to obtain each Consent
(if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Offer and the Merger or any of the other transactions contemplated by this
Agreement; and (iii) shall use its reasonable best efforts to lift any
restraint, injunction or other legal bar to the Offer and the Merger. The
Company shall promptly deliver to Parent a copy of each such filing made,
each such notice given and each such Consent obtained by it during the
Pre-Closing Period.
5.8 PUBLIC DISCLOSURE. Parent and the Company shall consult with each
other before issuing any press release or otherwise making any public statement
with respect to the Offer or the Merger, this Agreement or any of the other
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, each party shall not, and shall not permit any of its
Representatives to, make any disclosure regarding the Offer or the Merger, this
Agreement or any of the other transactions contemplated by this Agreement unless
(a) the other party shall have approved such disclosure, or (b) the disclosing
party shall have been advised in writing by its outside legal counsel that such
disclosure is required by applicable Legal Requirements.
5.9 TAX MATTERS. At or prior to the filing of the Registration Statement,
the Company and Parent shall execute and deliver to Xxxxxx Godward llp and to
Xxxxxx Xxxxxx White & XxXxxxxxx LLP ("HEWM") tax representation letters in
customary form. Parent, Merger Sub and the Company shall each confirm to Xxxxxx
Godward llp and to HEWM on such dates as shall be reasonably requested by Cooley
Godward LLP and HEWM, the accuracy and completeness of the tax representation
letters delivered pursuant to the immediately preceding sentence. Each of Parent
and the Company shall use its reasonable best efforts prior to the Effective
Time to cause the Transaction to qualify as a reorganization under
Section 368(a) of the Code. Following delivery of the tax representations
letters pursuant to the first sentence of this Section 5.9, each of Parent and
the Company shall use its reasonable efforts to cause Xxxxxx Godward llp and
HEWM, respectively, to deliver to it a tax opinion satisfying the requirements
of Item 601 of Regulation S-K promulgated under the Securities Act. In rendering
such opinions, each of such counsel shall be entitled to rely on the tax
representation letters referred to in this Section 5.9.
36
5.10 RESIGNATION OF DIRECTORS. The Company shall use its reasonable best
efforts to obtain and deliver to Parent prior to the Closing the resignation of
each director of each of the Acquired Corporations, effective as of the
Effective Time.
5.11 LISTING. Parent shall use its reasonable best efforts to cause the
shares of Parent Common Stock being issued in the Merger to be approved for
listing (subject to official notice of issuance) on the NYSE.
5.12 TAKEOVER LAWS; ADVICE OF CHANGES.
(a) If any Takeover Law may become, or may purport to be, applicable to
the transactions contemplated in this Agreement, each of Parent and the
Company and the members of their respective Boards of Directors will grant
such approvals and take such actions as are necessary so that the
transactions contemplated by this Agreement may be consummated as promptly
as practicable, and in any event prior to the Termination Date, on the terms
and conditions contemplated hereby and thereby and otherwise act to
eliminate the effect of any Takeover Law on any of the transactions
contemplated by this Agreement.
(b) Each of the Company and Parent will give prompt notice to the other
(and will subsequently keep the other informed on a current basis of any
developments related to such notice) upon its becoming aware of the
occurrence or existence of any fact, event or circumstance that (i) is
reasonably likely to result in any Material Adverse Effect with respect to
it, (ii) would cause or constitute a breach of any representations,
warranties or covenants contained herein or (iii) is reasonably likely to
result in any of the conditions set forth in Section 6 or in Annex I not
being able to be satisfied prior to the Termination Date.
5.13 FORM S-8; SECTION 16. Parent agrees to file one or more registration
statements on Form S-8 for the shares of Parent Common Stock issuable with
respect to assumed Company Stock Options and Company ESPP within one business
day after the Offer Acceptance Time and keep any such registration statements
effective until all shares registered thereunder have been issued. In addition,
Parent shall, prior to the Effective Time, cause Parent's Board of Directors to
approve the issuance of shares of Parent Common Stock (including shares of
Parent Common Stock to be issued in connection with the exercise of any Company
Options and Purchase Rights assumed by Parent under Section 5.4), with respect
to any employees of the Company who will become subject to the reporting
requirements of Section 16 of the Exchange Act to the extent necessary for such
issuance to be an exempt acquisition pursuant to SEC Rule 16b-3, PROVIDED,
HOWEVER, that Parent shall not be deemed to have violated this covenant if the
Company does not provide to the Board of Directors of Parent at least five
business days prior to the Effective Time, all information reasonably requested
by Parent for the purpose of effecting such exemption. Prior to the Effective
Time, the board of directors of the Company shall approve the disposition of
Company Common Stock in connection with the Merger by those directors and
officers of the Company subject to the reporting requirements of Section 16 of
the Exchange Act to the extent necessary for such disposition to be an exempt
disposition pursuant to SEC Rule 16b-3.
5.14 AFFILIATES. Within 10 days after the date of this Agreement, the
Company shall deliver to Parent a letter identifying all Persons who are, to the
Company's knowledge, affiliates of the Company for purposes of Rule 145 under
the Securities Act. Parent shall place the appropriate Rule 145 legend on the
stock certificates representing Parent Common Stock issued in the Transaction to
such affiliates. Parent shall use its reasonable efforts to remove such legends
promptly when such legends are no longer required by applicable Legal
Requirements.
5.15 RIGHTS AGREEMENT; LITIGATION.
(a) Except as expressly required by this Agreement, the Company shall
not, without the prior written consent of Parent, amend the Rights Agreement
or take any other action with respect to,
37
or make any determination under, the Rights Agreement, including a
redemption of the Rights or any action to facilitate a Company Acquisition
Proposal.
(b) The Company shall give Parent the opportunity to participate in the
defense of any litigation against the Company and/or its directors relating
to the transactions contemplated by this Agreement and the Stockholder
Tender Agreement.
5.16 NO DISTRIBUTIONS OR DIVIDENDS. Until the earlier of (i) the
Termination Date or (ii) one trading day after the Effective Time, Parent shall
not set a record date for any dividend or distribution of any assets to any of
its stockholders including distribution of shares of capital stock or other
securities of any Subsidiary of Parent to its stockholders.
SECTION 6. CONDITIONS TO THE MERGER
6.1 CONDITIONS TO EACH PARTY'S OBLIGATION. The respective obligations of
the Company, Parent and Merger Sub to consummate the Merger are subject to the
satisfaction or, to the extent permitted by Legal Requirements, the waiver by
each party on or prior to the Effective Time of each of the following
conditions:
(a) If required by the DGCL, this Agreement shall have been adopted and
approved by the stockholders of the Company;
(b) Merger Sub shall have accepted for exchange and exchanged all of the
shares of Company Common Stock tendered pursuant to the Offer;
(c) No provision of any applicable Legal Requirements and no judgment,
injunction, Order or decree shall prohibit the consummation of the Merger or
the other transactions contemplated by this Agreement; and
(d) The Post-Effective Amendment shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order, and any material "blue sky" and other state securities
laws applicable to the registration and qualification of the Parent Common
Stock shall have been complied with.
SECTION 7. TERMINATION
7.1 TERMINATION. This Agreement may be terminated prior to the Effective
Time, whether before or after adoption of this Agreement by the Company's
stockholders:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if (i) the Offer shall not have been
consummated by August 31, 2001 (the "TERMINATION DATE") (unless the failure
to consummate the Offer is attributable to a failure on the part of the
party seeking to terminate this Agreement to perform any material obligation
required to be performed by such party at or prior to the Termination Date);
or (ii) the Offer shall have expired or been terminated in accordance with
the terms of this Agreement without Parent or Merger Sub having accepted for
exchange any Shares pursuant to the Offer (unless the expiration or
termination of the Offer is attributable to a failure on the part of the
party seeking to terminate this Agreement to perform any material obligation
required to be performed by such party at or prior to the Effective Time);
(c) by either Parent or the Company if a court of competent jurisdiction
or other Governmental Body shall have issued a final and nonappealable
Order, decree or ruling, or shall have taken any other action, having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Offer or the Merger;
38
(d) by Parent, at any time prior to the Offer Acceptance Time, if a
Company Triggering Event shall have occurred;
(e) by Parent at any time prior to the Offer Acceptance Time, if
(i) any of the Company's representations and warranties contained in this
Agreement shall be inaccurate as of the date of this Agreement, or shall
have become inaccurate as of a date subsequent to the date of this Agreement
(as if made on such subsequent date), such that the condition set forth in
paragraph (d) of ANNEX I would not be satisfied, or (ii) any of the
Company's covenants contained in this Agreement shall have been breached
such that the condition set forth in paragraph (c) of ANNEX I would not be
satisfied; PROVIDED, HOWEVER, that, in the case of (i) or (ii) above, if an
inaccuracy in the Company's representations and warranties or a breach of a
covenant by the Company is reasonably capable of being cured by the Company
prior to the Termination Date and the Company is continuing to exercise its
commercially reasonable efforts to cure such inaccuracy or breach, then
Parent may not terminate this Agreement under this Section 7.1(e) on account
of such inaccuracy or breach until the 10th calendar day from the date on
which such inaccuracy or breach became known to Parent or the Company;
(f) by the Company, prior to the Offer Acceptance Time, if (i) (A) any
of Parent's representations and warranties not qualified by any
"materiality" or "Material Adverse Effect" qualifiers contained in this
Agreement shall be inaccurate in any material respect, or (B) any of
Parent's representations and warranties qualified by any "materiality" or
"Material Adverse Effect" qualifiers contained in this Agreement shall be
inaccurate in any respect, in the case of each of (A) and (B) as of the date
of this Agreement or as of the expiration of the Offer (as may be extended
pursuant to Section 1.1(a)), or (ii) any of Parent's covenants contained in
this Agreement shall not have been performed in all material respects;
PROVIDED, HOWEVER, that, in the case of (i) or (ii) above, if an inaccuracy
in Parent's representations and warranties or a breach of a covenant by
Parent is reasonably capable of being cured by Parent prior to the
Termination Date and Parent is continuing to exercise its commercially
reasonable efforts to cure such inaccuracy or breach, then the Company may
not terminate this Agreement under this Section 7.1(f) on account of such
inaccuracy or breach until the 10th calendar day form the date on which such
inaccuracy or breach became known to Parent or the Company;
(g) this Agreement may be terminated and the Offer and the Merger may be
abandoned by the Company, at any time during the two-day period commencing
on (and including) the Price Determination Date if the Average Parent
Trading Price is less than $17.50; SUBJECT, HOWEVER, to the following three
sentences. If the Company elects to exercise its termination right pursuant
to the immediately preceding sentence, it shall promptly give written notice
to Parent; PROVIDED that such notice of election to terminate this Agreement
may be withdrawn by the Company at any time during the aforementioned
two-day period pursuant to written notice provided by the Company to Parent.
During the two-day period following the date on which Parent receives such
notice, Parent shall have the option to make the Parent Floating Rate
Election. If Parent makes the Parent Floating Rate Election within such
two-day period, it shall give prompt written notice to the Company of such
election, whereupon no termination shall have occurred pursuant to this
Section 7.1(g), and this Agreement shall remain in effect in accordance with
its terms, and any reference in this Agreement to "EXCHANGE RATIO" shall
thereafter be deemed to refer to the Exchange Ratio as computed pursuant to
paragraph (v)(A) of the definition of the term "EXCHANGE RATIO" in
Section 1.1(a) of this Agreement; or
(h) this Agreement may be terminated and the Offer and the Merger may be
abandoned by Parent, at any time during the two-day period commencing on
(and including) the Price Determination Date if the Average Parent Trading
Price is greater than $27.50; SUBJECT, HOWEVER, to the following three
sentences. If Parent elects to exercise its termination right pursuant to
the immediately preceding sentence, it shall promptly give written notice to
the Company; PROVIDED
39
that such notice of election to terminate this Agreement may be withdrawn by
Parent at any time during the aforementioned two-day period pursuant to
written notice provided by Parent to the Company. During the two-day period
following the date on which the Company receives such notice, the Company
shall have the option to make the Company Floating Rate Election. If the
Company makes the Company Floating Rate Election within such two-day period,
it shall give prompt written notice to Parent of such election, whereupon no
termination shall have occurred pursuant to this Section 7.1(h), and this
Agreement shall remain in effect in accordance with its terms, and any
reference in this Agreement to "EXCHANGE RATIO" shall thereafter be deemed
to refer to the Exchange Ratio as computed pursuant to paragraph (iv)(A) of
the definition of the term "EXCHANGE RATIO" in Section 1.1(a) of this
Agreement.
7.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as provided in Section 7.1, this Agreement shall be of no further
force or effect; PROVIDED, HOWEVER, that (i) this Section 7.2, Section 7.3 and
Section 8 shall survive the termination of this Agreement and shall remain in
full force and effect, and (ii) the termination of this Agreement shall not
relieve any party from any liability or damages for any willful breach of any
provision contained in this Agreement.
7.3 EXPENSES; TERMINATION FEES.
(a) EXPENSES. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Merger is consummated; PROVIDED, HOWEVER, that:
(i) Parent and the Company shall share equally all fees and expenses, other
than attorneys' fees, incurred in connection with (A) the filing, printing
and mailing of the Registration Statement and the Offer Documents and any
amendments or supplements thereto and (B) the filing of any premerger
notification and report forms relating to the Merger under the HSR Act and
the filing of any notice or other document under any applicable foreign
antitrust law or regulation; (ii) if this Agreement is terminated by Parent
pursuant to Section 7.1(d), then, at the time specified in the next
sentence, the Company shall make a nonrefundable cash payment to Parent (in
addition to any other amount that may be payable pursuant to
Section 7.3(b)), in an amount equal to the aggregate amount of all
reasonably documented fees and expenses (including all attorneys' fees,
accountants' fees, financial advisory fees and filing fees) that have been
paid or that may become payable by or on behalf of Parent in connection with
the preparation and negotiation of this Agreement and otherwise in
connection with the Offer and the Merger up to an aggregate amount of
$300,000. In the case of termination of this Agreement by Parent pursuant to
Section 7.1(d), the nonrefundable payment referred to in clause "(ii)" of
the proviso to the first sentence of this Section 7.3(a) shall be made by
the Company within two (2) business days after such termination.
(b) TERMINATION FEE.
(i) If (x) (A) this Agreement is terminated by Parent or the Company
pursuant to Section 7.1(b), (B) at or prior to the time of such
termination a Company Acquisition Proposal shall have been disclosed,
announced, commenced, submitted or made, and (C) within 12 months after
such termination the Company enters into a definitive agreement related
to, or consummates, a Company Acquisition Transaction with any Person, or
(y) this Agreement is terminated by Parent pursuant to Section 7.1(d),
then, in the case of each of (x) and (y), the Company shall pay to
Parent, in cash at the applicable time specified in the next two
sentences, a nonrefundable fee in the amount of $2,000,000 (in addition
to any payment required to be made pursuant to Section 7.3(a), if any).
In the case of termination of this Agreement pursuant to Section 7.1(b),
the fee referred to in the previous sentence shall be paid by the Company
upon the execution of such definitive agreement. In the case of
termination of this Agreement by Parent pursuant to Section 7.1(d), the
fee referred to in the
40
first sentence of this Section 7.3(b)(i) shall be paid by the Company
within two (2) business days after such termination.
(ii) The Company acknowledges that the agreements contained in this
Section 7.3(b) are an integral part of the transaction contemplated by
this Agreement, and that, without these agreements, Parent would not
enter into this Agreement; accordingly, if the Company fails to pay in a
timely manner the amounts due pursuant to this Section 7.3(b) and, in
order to obtain such payment, Parent makes a claim that results in a
judgment against the Company for the amounts set forth in this
Section 7.3(b), the Company shall pay to Parent its costs and expenses
(including attorneys' fee and expenses) in connection with such suit,
together with interest on the amounts set forth in this Section 7.3(b) at
the prime rate of Citibank, N.A. in effect on the date such payment was
required to be made. Payment of the fees and expenses described in this
Section 7.3 shall not be in lieu of damages incurred in the event of
willful breach of this Agreement.
SECTION 8. MISCELLANEOUS PROVISIONS
8.1 AMENDMENT. This Agreement may be amended with the approval of the
respective boards of directors of the Company and Parent at any time (whether
before or after adoption of this Agreement by the stockholders of the Company);
PROVIDED, HOWEVER, that after any such adoption of this Agreement by the
Company's stockholders, no amendment shall be made which by law requires further
approval of the stockholders of the Company without the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
8.2 WAIVER.
(a) No failure on the part of any party to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
party in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or
of any other power, right, privilege or remedy.
(b) No party shall be deemed to have waived any claim arising out of
this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given.
8.3 NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations, warranties or agreements contained in this Agreement or in any
certificate delivered pursuant to this Agreement shall survive the Effective
Time, except for agreements which by their terms survive the Effective Time.
This Section 8.3 shall not limit any covenant or agreement of the parties which
by its terms contemplate performance after the Effective Time.
8.4 ENTIRE AGREEMENT; COUNTERPARTS. This Agreement and that certain
Confidentiality Agreement, dated May 10, 2001 between Parent and the Company
(the "MUTUAL NONDISCLOSURE AGREEMENT") constitute the entire agreement among the
parties hereto and all other prior agreements and understandings, both written
and oral, among or between any of the parties with respect to the subject matter
hereof and thereof. This Agreement may be executed in several counterparts, each
of which shall be deemed an original and all of which shall constitute one and
the same instrument.
8.5 APPLICABLE LAW; JURISDICTION. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof. In any action between any of the parties arising out of or
relating to this Agreement or any of the transactions contemplated by this
Agreement:
41
(a) each of the parties irrevocably and unconditionally consents and submits to
the exclusive jurisdiction and venue of the state and federal courts located in
the State of Delaware; (b) if any such action is commenced in a state court,
then, subject to applicable law, no party shall object to the removal of such
action to any federal court located in the State of Delaware; (c) each of the
parties irrevocably waives the right to trial by jury; and (d) each of the
parties irrevocably consents to service of process by first class certified
mail, return receipt requested, postage prepaid, to the address at which such
party is to receive notice in accordance with Section 8.9.
8.6 DISCLOSURE SCHEDULE. The Company Disclosure Schedule shall be arranged
in separate parts corresponding to the numbered and lettered sections contained
in Section 2, and the information disclosed in any numbered or lettered part
shall be deemed to relate to and to qualify only the particular representation
or warranty set forth in the corresponding numbered or lettered section in
Section 2, and shall qualify other numbered or lettered sections in Section 2
only to the extent that it is expressly so cross-referenced. The Parent
Disclosure Schedule shall be arranged in separate parts corresponding to the
numbered and lettered sections contained in Section 3, and the information
disclosed in any numbered or lettered part shall be deemed to relate to and to
qualify only the particular representation or warranty set forth in the
corresponding numbered or lettered section in Section 3, and shall qualify other
numbered or lettered section in Section 3 only to the extent that it is
expressly so cross-referenced.
8.7 ATTORNEYS' FEES. In any action at law or suit in equity to enforce
this Agreement or the rights of any of the parties hereunder, the prevailing
party in such action or suit shall be entitled to receive a reasonable sum for
its attorneys' fees and all other reasonable costs and expenses incurred in such
action or suit.
8.8 ASSIGNABILITY. This Agreement shall be binding upon, and shall be
enforceable by and inure solely to the benefit of, the parties hereto and their
respective successors and assigns; PROVIDED, HOWEVER, that neither this
Agreement nor any of the Company's rights hereunder may be assigned by the
Company without the prior written consent of Parent, and any attempted
assignment of this Agreement or any of such rights by the Company without such
consent shall be void and of no effect. Except as provided in Section 5.6,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any Person (other than the parties hereto) any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
8.9 NOTICES. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when actually delivered (by hand,
by registered mail, by courier or express delivery service or by facsimile) to
the address or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone number as such
party shall have specified in a written notice given to the other parties
hereto); PROVIDED, HOWEVER, that a written notice delivered via facsimile shall
be deemed delivered only if at the time of, or shortly after, such facsimile
transmission the party giving the notice confirms by telephone the actual
receipt by the other party of such facsimile transmission:
IF TO PARENT OR MERGER SUB:
The Titan Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Facsimile No. (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq., General Counsel
42
WITH A COPY TO (WHICH COPY SHALL NOT CONSTITUTE NOTICE
HEREUNDER):
Xxxx X. Xxxxxxx, Esq.
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Facsimile No. (000) 000-0000
IF TO THE COMPANY:
Datron Systems Incorporated
0000 Xxxxxxxxxx Xxxxx
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxx, President and CEO
WITH A COPY TO (WHICH COPY SHALL NOT CONSTITUTE NOTICE
HEREUNDER):
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxx White & XxXxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Facsimile No. (000) 000-0000
8.10 COOPERATION. The parties agree to cooperate fully with each other and
to execute and deliver such further documents, certificates, agreements and
instruments and to take such other actions as may be reasonably requested by the
other party to evidence or reflect the transactions contemplated by this
Agreement and to carry out the intent and purposes of this Agreement.
8.11 CONSTRUCTION.
(a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender
shall include the masculine and neuter genders; and the neuter gender shall
include masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "INCLUDE" and "INCLUDING," and
variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "WITHOUT LIMITATION."
(d) Except as otherwise indicated, all references in this Agreement to
"SECTIONS" and "EXHIBITS"are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.
43
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as
of the date first above written.
THE TITAN CORPORATION
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx XxXxxxx
------------------------------------
Title: Chief Operating Officer
------------------------------------
GEM ACQUISITION CORP.
By: /s/ XXXX XXXXXXX
------------------------------------
Name: Xxxx XxXxxxx
------------------------------------
Title: President
------------------------------------
DATRON SYSTEMS INCORPORATED
By: /s/ XXXXX XXXXX
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: Chairman, President and CEO
------------------------------------
44
EXHIBITS
Exhibit A Certain Definitions
Exhibit B Form of Stockholder Tender Agreement
Annex I Conditions to the Offer
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUIRED CORPORATION CONTRACT. "ACQUIRED CORPORATION CONTRACT" shall mean
any Contract: (a) to which any of the Acquired Corporations is a party; (b) by
which any of the Acquired Corporations or any asset of any of the Acquired
Corporations is or may become bound or under which any of the Acquired
Corporations has, or may become subject to, any obligation; or (c) under which
any of the Acquired Corporations has or may acquire any right or interest.
ACQUIRED CORPORATION PROPRIETARY ASSET. "ACQUIRED CORPORATION PROPRIETARY
ASSET" shall mean any Proprietary Asset owned by or licensed to any of the
Acquired Corporations or otherwise used by any of the Acquired Corporations.
AGREEMENT. "AGREEMENT" shall mean the Agreement and Plan of Merger and
Reorganization to which this Exhibit A is attached, as it may be amended from
time to time.
COMPANY ACQUISITION PROPOSAL. "COMPANY ACQUISITION PROPOSAL" shall mean any
offer, proposal, inquiry or indication of interest (other than an offer,
proposal, inquiry or indication of interest by Parent) contemplating or
otherwise relating to any Company Acquisition Transaction.
COMPANY ACQUISITION TRANSACTION. "COMPANY ACQUISITION TRANSACTION" shall
mean any transaction or series of transactions involving:
(a) any merger, consolidation, share exchange, business combination,
issuance of securities, direct or indirect acquisition of securities, tender
offer, exchange offer or other similar transaction in which (i) any of the
Acquired Corporations is a constituent corporation, (ii) a Person or "GROUP"
(as defined in the Exchange Act and the rules promulgated thereunder) of
Persons directly or indirectly acquires beneficial or record ownership of
securities representing more than 20% of the outstanding securities of any
class of voting securities of any of the Acquired Corporations, or
(iii) any of the Acquired Corporations issues securities representing more
than 20% of the outstanding securities of any class of voting securities of
any of the Acquired Corporations;
(b) any direct or indirect sale, lease, exchange, transfer, license,
acquisition or disposition of any business or businesses or of assets or
rights that constitute or account for 20% or more of the consolidated net
revenues, net income or assets of the Acquired Corporations; or
(c) any liquidation or dissolution of any of the Acquired Corporations.
COMPANY COMMON STOCK. "COMPANY COMMON STOCK" shall mean the Common Stock,
$0.01 par value per share, of the Company, including the associated Rights.
COMPANY DISCLOSURE SCHEDULE. "COMPANY DISCLOSURE SCHEDULE" shall mean the
disclosure schedule that has been prepared by the Company in accordance with the
requirements of Section 8.6 of the Agreement and that has been delivered by the
Company to Parent on the date of the Agreement.
COMPANY FLOATING RATE ELECTION. "COMPANY FLOATING RATE ELECTION" shall mean
an election made by the Company to use the Exchange Ratio calculated pursuant to
paragraph (iv)(A) of the definition of the term Exchange Ratio.
COMPANY PREFERRED STOCK. "COMPANY PREFERRED STOCK" shall mean the Preferred
Stock, $0.01 par value per share, of the Company.
A-1
COMPANY STOCK OPTION PLANS. "COMPANY STOCK OPTION PLANS" shall mean the
Company 1985 Stock Option Plan, as amended, 1995 Stock Option Plan, Employee
Stock Purchase Plan (effective July 1, 1997) and all stock option agreements
evidencing option grants under each of the foregoing stock option plans.
COMPANY STOCK VALUE. "COMPANY STOCK VALUE"means the result of dividing
$51,226,912 by the sum of (a) the number of shares of Company Common Stock
outstanding as of the Offer Acceptance Time, (b) the number of shares of Company
Common Stock which would be issuable with respect to all Company Options
outstanding as of the Offer Acceptance Time and with respect to any other rights
to acquire shares of Company Common Stock outstanding as of the Offer Acceptance
Time.
COMPANY SUPERIOR OFFER. "COMPANY SUPERIOR OFFER" shall mean an unsolicited,
bona fide written offer made by a third party for a merger, consolidation,
business combination, sale of substantial assets, sale of shares of capital
stock (including without limitation by way of a tender offer) or similar
transaction with respect to any Acquired Corporation on terms that the board of
directors of the Company determines, in good faith, after consultation with PBW
or another nationally recognized independent financial advisor, if accepted, is
reasonably likely to be consummated, taking into account all legal, financial
and regulatory aspects of the Offer and the Person making the Offer, and would,
if consummated, be more favorable to the Company's stockholders, from a
financial point of view, than the Transaction; PROVIDED, HOWEVER, that any such
offer shall not be deemed to be a "Company Superior Offer" if any financing
required to consummate the transaction contemplated by such offer is not
committed or is not, in the good faith judgment of the Company, reasonably
capable of being obtained by such third party on a timely basis.
COMPANY TRIGGERING EVENT. A "COMPANY TRIGGERING EVENT" shall be deemed to
have occurred if: (i) the board of directors of the Company shall have failed to
recommend that the Company stockholders accept the Offer, vote to adopt and
approve this Agreement, or shall have withdrawn or modified in a manner adverse
to Parent the Recommendations or shall otherwise have made a disclosure to the
Company stockholders or a public announcement that makes it reasonably apparent
that, absent the restriction contained in Section 4.3, the Board of Directors of
the Company would so withdraw, modify or amend any of its Recommendations;
(ii) the Company shall have failed to include the Recommendations in the
Registration Statement, the Preliminary Prospectus, the Offer Documents, the
Post-Effective Amendment or the Proxy Statement; (iii) the board of directors of
the Company fails to reaffirm in writing the Recommendations, or fails to
reaffirm in writing its determination that the Offer and the Merger are in the
best interests of the Company's stockholders, within five business days after
Parent requests in writing that such recommendation or determination be
reaffirmed; (iv) the board of directors of the Company shall have approved,
endorsed or recommended any Company Acquisition Proposal or shall have resolved
or announced an intention to do so; (v) the Company shall have entered into any
letter of intent or similar document or any Contract relating to any Company
Acquisition Proposal; (vi) a tender or exchange offer (other than the Offer)
relating to securities of the Company shall have been commenced and the Company
shall have recommended such offer or shall not have sent to its securityholders,
within ten (10) business days after the commencement of such tender or exchange
offer, a statement disclosing that the Company recommends rejection of such
tender or exchange offer IT BEING UNDERSTOOD that taking no position or
indicating its inability to take a position does not constitute recommending a
rejection of such tender or exchange offer, (vii) a Company Acquisition Proposal
is publicly announced, and the Company (A) fails to issue a press release
announcing its opposition to such Company Acquisition Proposal within five
business days after such Company Acquisition Proposal is announced or
(B) otherwise fails to actively oppose such Company Acquisition Proposal, or
(viii) the Company breaches its obligations under Section 4.3 of this Agreement,
except for any inadvertent breach of any notice provision contained in
Section 4.3 which breach has been cured within 16 hours of its occurrence.
A-2
CONSENT. "CONSENT" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
CONTRACT. "CONTRACT" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, option, warranty,
purchase order, license, sublicense, insurance policy, benefit plan or legally
binding commitment or undertaking of any nature.
ENCUMBRANCE. "ENCUMBRANCE" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
ENTITY. "ENTITY" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
EXCHANGE ACT. "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended, and the regulations promulgated thereunder.
EXCLUDED SHARES. "EXCLUDED SHARES" shall mean any shares of Company Common
Stock held as of the Effective Time (A) by Parent, Merger Sub or any Subsidiary
of Parent or Merger Sub, (B) by the Company or any Subsidiary of the Company or
(C) by the Company as treasury shares.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
GOVERNMENT BID. "GOVERNMENT BID" shall mean any quotation, bid or proposal
submitted to any Governmental Body or any proposed prime contractor or
higher-tier subcontractor of any Governmental Body.
GOVERNMENT CONTRACT. "GOVERNMENT CONTRACT" shall mean any prime contract,
subcontract, letter contract, purchase order or delivery order executed or
submitted to or on behalf of any Governmental Body or any prime contractor or
higher-tier subcontractor, or under which any Governmental Body or any such
prime contractor otherwise has or may acquire any right or interest.
GOVERNMENTAL AUTHORIZATION. "GOVERNMENTAL AUTHORIZATION" shall mean any:
(a) permit, license, certificate, franchise, permission, variance, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.
GOVERNMENTAL BODY. "GOVERNMENTAL BODY" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).
HSR ACT. "HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the regulations promulgated thereunder.
LEGAL PROCEEDING. "LEGAL PROCEEDING" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
A-3
LEGAL REQUIREMENT. "LEGAL REQUIREMENT" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body (or under the
authority of the NYSE or NASD).
MATERIAL ADVERSE EFFECT. An event, violation, inaccuracy, circumstance or
other matter will be deemed to have a "MATERIAL ADVERSE EFFECT" on the Acquired
Corporations if such event, violation, inaccuracy, circumstance or other matter
(considered together with all other matters that would constitute exceptions to
the representations and warranties set forth in the Agreement but for the
presence of "MATERIAL ADVERSE EFFECT" or other materiality qualifications, or
any similar qualifications, in such representations and warranties) had or could
reasonably be expected to have or give rise to a material adverse effect on
(i) the business, condition, capitalization, assets, liabilities, operations or
financial performance of the Acquired Corporations taken as a whole, (ii) the
ability of the Company to consummate the Merger or any of the other transactions
contemplated by this Agreement or to perform any of its obligations under this
Agreement prior to the Termination Date, or (iii) Parent's ability to vote,
receive dividends with respect to or otherwise exercise ownership rights with
respect to the stock of the Surviving Corporation. An event, violation,
inaccuracy, circumstance or other matter will be deemed to have a "MATERIAL
ADVERSE EFFECT" on Parent if such event, violation, inaccuracy, circumstance or
other matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement but
for the presence of "MATERIAL ADVERSE EFFECT" or other materiality
qualifications, or any similar qualifications, in such representations and
warranties) had or could reasonably be expected to have or give rise to a
material adverse effect on (i) the business, condition, capitalization, assets,
liabilities, operations or financial performance of Parent and its Significant
Subsidiaries taken as a whole or (ii) the ability of Parent to consummate the
Offer and the Merger or any of the other transactions contemplated by this
Agreement or to perform any of its obligations under this Agreement prior to the
Termination Date.
NASD. "NASD" shall mean the National Association of Securities
Dealers, Inc.
ORDER. "ORDER" shall mean any: (a) order, judgment, injunction, edict,
decree, ruling, pronouncement, determination, decision, opinion, verdict,
sentence, subpoena, writ or award issued, made, entered, rendered or otherwise
put into effect by or under the authority of any court, administrative agency or
other Governmental Body or any arbitrator or arbitration panel; or (b) Contract
with any Governmental Body entered into in connection with any Legal Proceeding.
PARENT COMMON STOCK. "PARENT COMMON STOCK" shall mean the Common Stock,
$0.01 par value per share, of Parent, including the associated rights to
purchase capital stock of Parent pursuant to and in accordance with the Rights
Agreement, dated as of August 21, 1995, between The Titan Corporation and
American Stock Transfer and Trust Company.
PARENT CONTRACT. "PARENT CONTRACT" shall mean any Contract: (a) to which
Parent or any Subsidiary of Parent is a party; (b) by which Parent or any
Subsidiary of Parent or any asset of Parent or any Subsidiary of Parent is or
may become bound or under which Parent or any Subsidiary of Parent has, or may
become subject to, any obligation; or (c) under which Parent or any Subsidiary
of Parent has or may acquire any right or interest.
PARENT DISCLOSURE SCHEDULE. "PARENT DISCLOSURE SCHEDULE" shall mean the
disclosure schedule that has been prepared by Parent in accordance with the
requirements of Section 8.6 of the Agreement and that has been delivered by
Parent to the Company on the date of the Agreement.
A-4
PARENT FLOATING RATE ELECTION. "PARENT FLOATING RATE ELECTION" shall mean
an election made by Parent to use the Exchange Ratio calculated pursuant to
paragraph (v)(A) of the definition of the term Exchange Ratio.
PARENT BALANCE SHEET DATE. "PARENT BALANCE SHEET DATE" shall mean
March 31, 2001.
PARENT CUMULATIVE PREFERRED STOCK. "PARENT CUMULATIVE PREFERRED STOCK"
shall mean the Cumulative Convertible Preferred Stock, $1.00 par value, of
Parent.
PARENT SERIES A PREFERRED STOCK. "PARENT SERIES A PREFERRED STOCK" shall
mean the Series A Junior Participating Preferred Stock, $1.00 par value, of
Parent.
PARENT PREFERRED STOCK. "PARENT PREFERRED STOCK" shall mean the Parent
Cumulative Preferred Stock and Parent Series A Preferred Stock.
PERSON. "PERSON" shall mean any individual, Entity or Governmental Body.
PROPRIETARY ASSET. "PROPRIETARY ASSET" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service xxxx (whether
registered or unregistered), service xxxx application, copyright (whether
registered or unregistered), domain name, copyright application, copyright
registration, maskwork, maskwork application, trade secret, know-how, customer
list, franchise, system, computer software, source code, algorithm, invention,
design, blueprint, engineering drawing, proprietary product, technology,
proprietary right or other intellectual property right or intangible asset; or
(b) right to use or exploit any of the foregoing.
REPRESENTATIVES. "REPRESENTATIVES" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors consultants and
representatives.
RIGHTS. "RIGHTS" shall mean all outstanding rights to purchase capital
stock of the Company pursuant to and in accordance with the Rights Agreement.
RIGHTS AGREEMENT. "RIGHTS AGREEMENT" shall mean the Stockholders Rights
Agreement, between the Company and Mellon Investor Services, L.L.C. dated
September 5, 2000, as amended.
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
SECURITIES ACT. "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended and the regulations promulgated thereunder.
SIGNIFICANT SUBSIDIARY. "SIGNIFICANT SUBSIDIARY" shall have the meaning set
forth in Rule 1-02(w) of Regulation S-X under the Exchange Act.
SUBSIDIARY. An entity shall be deemed to be a "SUBSIDIARY" of another
Person if such Person directly or indirectly owns, beneficially or of record,
(a) an amount of voting securities of other interests in such Entity that is
sufficient to enable such Person to elect at least a majority of the members of
such Entity's board of directors or other governing body, or (b) at least 50% of
the outstanding equity or financial interests of such Entity.
TAKEOVER LAWS. "TAKEOVER LAWS" means (1) any "MORATORIUM," "CONTROL SHARE
ACQUISITION," "FAIR PRICE," "SUPERMAJORITY," "AFFILIATE TRANSACTIONS," or
"BUSINESS COMBINATION STATUTE OR REGULATION" or other similar state antitakeover
laws and regulations and (2) Section 203 of the DGCL.
TAX. "TAX" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
A-5
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
TAX RETURN. "TAX RETURN" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
A-6
EXHIBIT B
FORM OF STOCKHOLDER TENDER AGREEMENT
THIS STOCKHOLDER TENDER AGREEMENT is entered into as of June 24, 2001, by
and between THE TITAN CORPORATION, a Delaware corporation ("PARENT"), and [NAME]
("STOCKHOLDER").
RECITALS
A. Parent, Gem Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("MERGER SUB"), and Datron Systems Incorporated, a Delaware
corporation (the "COMPANY"), are entering into an Agreement and Plan of Merger
and Reorganization of even date herewith (the "MERGER AGREEMENT") which provides
(subject to the conditions set forth therein) for the offer by Merger Sub to
purchase all outstanding shares of the Company Common Stock and the subsequent
merger of Merger Sub with and into the Company (the "MERGER"). Capitalized terms
not otherwise defined herein shall have the meanings given to them in the Merger
Agreement.
B. In order to induce Parent and Merger Sub to enter into the Merger
Agreement, Stockholder, solely in its capacity as a Stockholder of the Company,
is entering into this Stockholder Tender Agreement.
AGREEMENT
The parties to this Stockholder Tender Agreement, intending to be legally
bound, agree as follows:
SECTION 1. TENDER AND VOTING OF SHARES
1.1 AGREEMENT TO TENDER. Unless Parent shall otherwise request, the
Stockholder hereby agrees to tender, or cause to be tendered, pursuant to and in
accordance with the terms of the Offer, the Subject Securities, and agrees that
it will not withdraw or permit the withdrawal of the tender of the Subject
Securities. Within ten (10) business days after commencement of the Offer, the
Stockholder shall (x) deliver to the depository designated in the Offer (i) a
letter of transmittal with respect to the Subject Securities complying with the
terms of the Offer, (ii) certificates representing the Subject Securities and
(iii) all other documents or instruments required to be delivered pursuant to
the terms of the Offer, and/or (y) instruct its broker or such other Person who
is the holder of record of any Subject Securities beneficially owned by the
Stockholder to promptly tender such Subject Securities for exchange in the Offer
pursuant to the terms and conditions of the Offer. Provided that the conditions
to the Offer are satisfied, or waived by Parent, Parent shall purchase the
Subject Securities in accordance with the terms of the Offer.
1.2 VOTING. Stockholder agrees that, during the period from the date of
this Stockholder Tender Agreement through the Expiration Date, at any meeting of
stockholders of the Company, however called, and in any action by written
consent of the stockholders of the Company, Stockholder shall, unless otherwise
directed in writing by Parent, vote the Subject Securities or cause the Subject
Securities to be voted (to the extent such securities are entitled to be voted)
in such Stockholder's sole capacity as a stockholder:
(a) against any action or agreement that would result in a breach of any
representation, warranty, covenant or obligation of the Company in the
Merger Agreement;
(b) against any action or agreement that would cause any provision
contained in Section 6 or ANNEX I of the Merger Agreement to not be
satisfied; and
(c) against the following actions (other than the Offer, the Merger and
the transactions contemplated by the Merger Agreement): (i) any Company
Acquisition Proposal; (ii) any change in a majority of the members of the
board of directors of the Company, other than any change contemplated by
Section 1.3 of the Merger Agreement; or (iii) any other action which is
intended, or could reasonably be expected to, impede, interfere with, delay,
postpone, discourage or
adversely affect the consummation of the Offer, the Merger or any of the
other transactions contemplated by the Merger Agreement or this Stockholder
Tender Agreement.
1.3 PROXY; FURTHER ASSURANCES. Contemporaneously with the execution of
this Stockholder Tender Agreement: (i) Stockholder shall execute and deliver to
Parent a proxy in the form attached to this Stockholder Tender Agreement as
EXHIBIT A, which shall be irrevocable to the fullest extent permitted by law,
with respect to the shares referred to therein (the "PROXY"); and
(ii) Stockholder shall cause to be delivered to Parent an additional proxy (in
the form attached hereto as EXHIBIT A) executed on behalf of the record owner of
any outstanding shares of Company Common Stock that are Owned by the
Stockholder.
SECTION 2. TRANSFER OF SUBJECT SECURITIES
2.1 TRANSFEREE OF SUBJECT SECURITIES TO BE BOUND BY THIS
AGREEMENT. Stockholder agrees that, during the period from the date of this
Stockholder Tender Agreement through the Expiration Date, Stockholder shall not
(i) cause or permit any Transfer of any of the Subject Securities to be effected
(other than pursuant to the Offer); (ii) tender any of the Subject Securities to
any Person (other than Merger Sub and Parent) or (iii) create or permit to exist
any Encumbrance with respect to any Subject Securities (other than Encumbrances
which do not affect the right to tender such Subject Securities pursuant to the
Offer and Encumbrances which do not affect, directly or indirectly, the right of
Parent to vote the Subject Securities as provided herein).
2.2 TRANSFER OF VOTING RIGHTS. Stockholder agrees that, during the period
from the date of this Stockholder Tender Agreement through the Expiration Date,
Stockholder shall ensure that: (a) none of the Subject Securities are deposited
into a voting trust; and (b) no proxy is granted, and no voting agreement or
similar agreement is entered into, with respect to any of the Subject
Securities.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants to Parent as follows:
3.1 AUTHORIZATION, ETC. Stockholder has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Stockholder
Tender Agreement and the Proxy and to perform its obligations hereunder and
thereunder. This Stockholder Tender Agreement and the Proxy have been duly
executed and delivered by Stockholder and constitute legal, valid and binding
obligations of Stockholder, enforceable against Stockholder in accordance with
their terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies.
3.2 NO CONFLICTS OR CONSENTS.
(a) The execution and delivery of this Stockholder Tender Agreement and
the Proxy by Stockholder do not, and the performance of this Stockholder
Tender Agreement and the Proxy by Stockholder will not: (i) conflict with or
violate any law, rule, regulation, order, decree or judgment applicable to
Stockholder or by which it or any of its properties is or may be bound or
affected; or (ii) result in or constitute (with or without notice or lapse
of time) any breach of or default under, or give to any other Person (with
or without notice or lapse of time) any right of termination, amendment,
acceleration or cancellation of, or result (with or without notice or lapse
of time) in the creation of any Encumbrance or restriction on any of the
Subject Securities pursuant to, any contract to which Stockholder is a party
or by which Stockholder or any of his affiliates or properties is or may be
bound or affected.
(b) The execution and delivery of this Stockholder Tender Agreement and
the Proxy by Stockholder do not, and the performance of this Stockholder
Tender Agreement and the Proxy by Stockholder will not, require any consent
or approval of any Person.
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3.3 TITLE TO SECURITIES. As of the date of this Stockholder Tender
Agreement: (a) Stockholder holds of record (free and clear of any Encumbrances
or restrictions except as specifically disclosed on the signature page hereof)
the number of outstanding shares of Company Common Stock set forth under the
heading "Shares Held of Record" on the signature page hereof; (b) Stockholder
holds (free and clear of any Encumbrances or restrictions except as specifically
disclosed on the signature page hereof) the options, warrants and other rights
to acquire shares of Company Common Stock set forth under the heading "Options,
Warrants and Other Rights" on the signature page hereof; (c) Stockholder Owns
the additional securities of the Company set forth under the heading "Additional
Securities Beneficially Owned" on the signature page hereof; and
(d) Stockholder does not directly or indirectly Own any shares of Company Common
Stock or other securities of the Company, or any option, warrant or other right
to acquire (by purchase, conversion or otherwise) any shares of Company Common
Stock or other securities of the Company, other than the shares and options,
warrants and other rights set forth on the signature page hereof.
SECTION 4. MISCELLANEOUS
4.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties, covenants and agreements made by Stockholder in
this Stockholder Tender Agreement shall survive until the Expiration Date.
4.2 EXPENSES. All costs and expenses incurred in connection with the
transactions contemplated by this Stockholder Tender Agreement shall be paid
solely by the party incurring such costs and expenses.
4.3 NOTICES. Any notice or other communication required or permitted to be
delivered to any party under this Stockholder Tender Agreement shall be in
writing and shall be deemed properly delivered, given and received when actually
delivered (by hand, by registered mail, by courier or express delivery service
or by facsimile) to the address or facsimile telephone number set forth beneath
the name of such party below (or to such other address or facsimile telephone
number as such party shall have specified in a written notice given to the other
parties hereto); PROVIDED, HOWEVER, that a written notice delivered via
facsimile shall be deemed delivered only if at the time of, or shortly after,
such facsimile transmission the party giving the notice confirms by telephone
the actual receipt by the other party of such facsimile transmission:
IF TO PARENT:
The Titan Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Facsimile No. (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq., General Counsel
WITH A COPY TO (WHICH COPY SHALL NOT CONSTITUTE NOTICE):
Xxxx X. Xxxxxxx, Esq.
Xxxxxx Godward llp
0000 Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Facsimile No. (000) 000-0000
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IF TO THE STOCKHOLDER:
at the address set forth below Stockholder's signature on
the signature page hereof
WITH COPIES TO (WHICH COPIES SHALL NOT CONSTITUTE NOTICE):
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxx White & XxXxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Facsimile No. (000) 000-0000
4.4 WAIVER OF APPRAISAL RIGHTS. Stockholder hereby irrevocably and
unconditionally waives, and agrees to cause to be waived and to prevent the
exercise of, any rights of appraisal, any dissenters' rights (including under
Section 262 of the Delaware General Corporations Law) and any similar rights
relating to the Merger or any related transaction that Stockholder or any other
Person may have by virtue of the ownership of any outstanding shares of Company
Common Stock Owned by Stockholder.
4.5 NO SOLICITATION. Stockholder agrees that, during the period from the
date of this Stockholder Tender Agreement through the Expiration Date,
Stockholder shall not, directly or indirectly, and Stockholder shall ensure that
his Representatives (as defined in the Merger Agreement) do not, directly or
indirectly: (i) solicit, initiate, encourage or induce the making, submission or
announcement of any Company Acquisition Proposal (as defined in the Merger
Agreement) or take any action that could reasonably be expected to lead to a
Company Acquisition Proposal; (ii) furnish any information regarding the Company
or any direct or indirect subsidiary of the Company to any Person in connection
with or in response to a Company Acquisition Proposal; or (iii) engage in
discussions or negotiations with any Person with respect to any Company
Acquisition Proposal. Stockholder shall immediately cease and discontinue, and
Stockholder shall ensure that his Representatives immediately cease and
discontinue, any existing discussions with any Person that relate to any Company
Acquisition Proposal.
4.6 SEVERABILITY. If any provision of this Stockholder Tender Agreement or
any part of any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Stockholder Tender
Agreement. Each provision of this Stockholder Tender Agreement is separable from
every other provision of this Stockholder Tender Agreement, and each part of
each provision of this Stockholder Tender Agreement is separable from every
other part of such provision.
4.7 ENTIRE AGREEMENT. This Stockholder Tender Agreement, the Proxy and any
other documents delivered by the parties in connection herewith constitute the
entire agreement between the parties with respect to the subject matter hereof
and thereof and supersede all prior agreements and understandings between the
parties with respect thereto. No addition to or modification of any provision of
this Stockholder Tender Agreement shall be binding upon either party unless made
in writing and signed by both parties.
4
4.8 ASSIGNMENT; BINDING EFFECT. Except as provided herein, neither this
Stockholder Tender Agreement nor any of the interests or obligations hereunder
may be assigned or delegated by Stockholder or Parent without the prior written
consent of the non-assigning party, which consent shall not be unreasonably
withheld, and any attempted or purported assignment or delegation of any of such
interests or obligations shall be void. Subject to the preceding sentence, this
Stockholder Tender Agreement shall be binding upon, and inure to the benefit of,
Stockholder and its heirs, estate, executors, personal representatives,
successors and assigns (as the case may be), and shall be binding upon, and
inure to the benefit of, Parent and its successors and assigns. Without limiting
any of the restrictions set forth in Section 2 or elsewhere in this Stockholder
Tender Agreement, this Stockholder Tender Agreement shall be binding upon any
Person to whom any Subject Securities are Transferred. Nothing in this
Stockholder Tender Agreement is intended to confer on any Person (other than
Parent and its successors and assigns) any rights or remedies of any nature.
4.9 SPECIFIC PERFORMANCE. The parties agree that irreparable damage would
occur in the event that any provision of this Stockholder Tender Agreement or
the Proxy was, or is, not performed in accordance with its specific terms or
was, or is, otherwise breached. Stockholder agrees that, in the event of any
breach or threatened breach by Stockholder of any covenant or obligation
contained in this Stockholder Tender Agreement or in the Proxy, Parent shall be
entitled (in addition to any other remedy that may be available to it, including
monetary damages) to (a) a decree or order of specific performance to enforce
the observance and performance of such covenant or obligation, and (b) an
injunction restraining such breach or threatened breach. Stockholder further
agrees that neither Parent nor any other Person shall be required to obtain,
furnish or post any bond or similar instrument in connection with or as a
condition to obtaining any remedy referred to in this Section 4.9, and
Stockholder irrevocably waives any right he may have to require the obtaining,
furnishing or posting of any such bond or similar instrument.
4.10 NON-EXCLUSIVITY. The rights and remedies of Parent under this
Stockholder Tender Agreement are not exclusive of or limited by any other rights
or remedies which it may have, whether at law, in equity, by contract or
otherwise, all of which shall be cumulative (and not alternative). Without
limiting the generality of the foregoing, the rights and remedies of Parent
under this Stockholder Tender Agreement, and the obligations and liabilities of
Stockholder under this Stockholder Tender Agreement, are in addition to their
respective rights, remedies, obligations and liabilities under common law
requirements and under all applicable statutes, rules and regulations. Nothing
in this Stockholder Tender Agreement shall limit any of Stockholder's
obligations, or the rights or remedies of Parent, under any agreement between
Parent and Stockholder; and nothing in any such agreement shall limit any of
Stockholder's obligations, or any of the rights or remedies of Parent, under
this Stockholder Tender Agreement.
4.11 GOVERNING LAW; VENUE.
(a) This Stockholder Tender Agreement and the Proxy shall be construed
in accordance with, and governed in all respects by, the laws of the State
of California (without giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this
Stockholder Tender Agreement or the Proxy or the enforcement of any
provision of this Stockholder Tender Agreement or the Proxy may be brought
or otherwise commenced in any state or federal court located in the State of
California. Stockholder and Parent each:
(i) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in the State of
California (and each appellate court located in the State of California),
in connection with any such legal proceeding;
5
(ii) agrees that service of any process, summons, notice or document
by U.S. mail addressed to him at the address set forth in Section 4.3
shall constitute effective service of such process, summons, notice or
document for purposes of any such legal proceeding;
(iii) agrees that each state and federal court located in the State of
California, shall be deemed to be a convenient forum; and
(iv) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any state or
federal court located in the State of California, any claim by either
Stockholder or Parent that it is not subject personally to the
jurisdiction of such court, that such legal proceeding has been brought
in an inconvenient forum, that the venue of such proceeding is improper
or that this Stockholder Tender Agreement or the subject matter of this
Stockholder Tender Agreement may not be enforced in or by such court.
Nothing contained in this Section 4.11 shall be deemed to limit or otherwise
affect the right of either party to commence any legal proceeding or otherwise
proceed against the other party in any other forum or jurisdiction.
(c) STOCKHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS STOCKHOLDER TENDER
AGREEMENT OR THE PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS
STOCKHOLDER TENDER AGREEMENT OR THE PROXY.
4.12 COUNTERPARTS. This Stockholder Tender Agreement may be executed by
the parties in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
4.13 CAPTIONS. The captions contained in this Stockholder Tender Agreement
are for convenience of reference only, shall not be deemed to be a part of this
Stockholder Tender Agreement and shall not be referred to in connection with the
construction or interpretation of this Stockholder Tender Agreement.
4.14 WAIVER. No failure on the part of Parent to exercise any power,
right, privilege or remedy under this Stockholder Tender Agreement, and no delay
on the part of Parent in exercising any power, right, privilege or remedy under
this Stockholder Tender Agreement, shall operate as a waiver of such power,
right, privilege or remedy; and no single or partial exercise of any such power,
right, privilege or remedy shall preclude any other or further exercise thereof
or of any other power, right, privilege or remedy. Parent shall not be deemed to
have waived any claim available to Parent arising out of this Stockholder Tender
Agreement, or any power, right, privilege or remedy of Parent under this
Stockholder Tender Agreement, unless the waiver of such claim, power, right,
privilege or remedy is expressly set forth in a written instrument duly executed
and delivered on behalf of Parent; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given.
4.15 CONSTRUCTION.
(a) For purposes of this Stockholder Tender Agreement, whenever the
context requires: the singular number shall include the plural, and vice
versa; the masculine gender shall include the feminine and neuter genders;
the feminine gender shall include the masculine and neuter genders; and the
neuter gender shall include masculine and feminine genders.
(b) The parties agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Stockholder Tender
Agreement.
6
(c) As used in this Stockholder Tender Agreement, the words "include"
and "including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this Stockholder
Tender Agreement to "Sections" and "Exhibits" are intended to refer to
Sections of this Stockholder Tender Agreement and Exhibits to this
Stockholder Tender Agreement.
4.16 STOCKHOLDER CAPACITY. No person executing this Stockholder Tender
Agreement who is a director or officer of the Company makes any agreement or
understanding herein in his capacity as such director or officer. Without
limiting the generality of the foregoing, Stockholder executes this Stockholder
Tender Agreement solely in its capacity as Owner of Subject Securities and
nothing herein shall limit or affect any actions taken by Stockholder in its
capacity as an officer or director of the Company in exercising the Company's
rights under the Merger Agreement, PROVIDED, that no obligation of Stockholder
to the Company as an officer or director of the Company shall affect, impair or
impede Stockholder's obligations under this Stockholder Tender Agreement
including the obligation to vote the Subject Securities in accordance with
Section 1.2 hereof.
4.17 OBLIGATION TO EXERCISE OPTIONS. The Stockholder shall not be required
to exercise options, warrants or other rights to acquire shares of Company
Common Stock which are vested as of the date of this Stockholder Tender
Agreement or which become vested prior to the Offer Acceptance Time (the
"SUBJECT OPTIONS"); PROVIDED, HOWEVER, the Stockholder hereby covenants and
agrees to immediately exercise all Subject Options and immediately tender all
Company Common Stock received upon such exercise if (x) the number of Shares
validly tendered and not withdrawn in accordance with the terms of the Offer two
business days prior to the expiration date of the Offer (as it may be extended
from time to time), together with the Shares then owned by Parent and Merger Sub
(if any) (the "TENDERED SHARES"), do not satisfy the Minimum Condition, and
(y) the aggregate number of shares of Company Common Stock issuable upon
exercise of the Subject Options Owned collectively by the officers and directors
of the Company who are parties to Stockholder Tender Agreements, together with
the Tendered Shares, would satisfy the Minimum Condition. Notwithstanding
anything in this Section 4.17 to the contrary, the Stockholder shall not be
required to exercise any Subject Option unless the Subject Option is considered
to be "in the money." A Subject Option shall be considered to be "in the money"
if the price of Parent Common Stock multiplied by the Exchange Ratio exceeds the
exercise price of such Subject Option on the Price Determination Date. At the
request of the Stockholder in connection with any exercise of Subject Options
pursuant to this Section 4.17, Parent or its designees will provide to the
Stockholder a loan on commercially reasonable terms equal to the exercise price
of the Subject Options exercised pursuant to this Section 4.17 which loan shall
be secured solely by the shares of Company Common Stock received by the
Stockholder in such exercise of any Subject Options.
SECTION 5. CERTAIN DEFINITIONS
For purposes of this Stockholder Tender Agreement:
(a) "COMPANY COMMON STOCK" shall mean the common stock, par value $.01
per share, of the Company.
(b) "EXPIRATION DATE" shall mean the earlier of (i) the date upon which
the Merger Agreement is terminated, or (ii) the Offer Acceptance Time.
(c) Stockholder shall be deemed to "OWN" or to have acquired "OWNERSHIP"
of a security if Stockholder is the: (i) record owner of such security; or
(ii) "beneficial owner" (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) of such security; PROVIDED, HOWEVER, that
Stockholder shall not be deemed to Own a security solely because of
Stockholder's status as an executive officer, director, partner or member of
a Person that owns such security.
7
(d) "PERSON" shall mean any (i) individual, (ii) corporation, limited
liability company, partnership or other entity, or (iii) Governmental Body.
(e) "SUBJECT SECURITIES" shall mean: (i) all securities of the Company
(including all shares of Company Common Stock and all options, warrants and
other rights to acquire shares of Company Common Stock) Owned by Stockholder
as of the date of this Agreement; and (ii) all additional securities of the
Company (including all additional shares of Company Common Stock and all
additional options, warrants and other rights to acquire shares of Company
Common Stock) of which Stockholder acquires Ownership during the period from
the date of this Agreement through the Expiration Date.
A Person shall be deemed to have effected a "TRANSFER" of a security if such
Person directly or indirectly: (i) sells, pledges, encumbers, grants an option
with respect to, transfers or disposes of such security or any interest in such
security; (ii) enters into an agreement or commitment contemplating the possible
sale of, pledge of, encumbrance of, grant of an option with respect to, transfer
of or disposition of such security or any interest therein; or (iii) reduces
such Person's beneficial ownership interest in or risk relating to any such
security.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Parent and Stockholder have caused this Stockholder
Tender Agreement to be executed as of the date first written above.
THE TITAN CORPORATION
By:
-----------------------------------------
Name:
--------------------------------------
[NAME]
---------------------------------------------
Address:
------------------------------------
------------------------------------
Facsimile:
-----------------------------------
SHARES HELD OF RECORD OPTIONS WARRANTS AND OTHER RIGHTS ADDITIONAL SECURITIES BENEFICIALLY OWNED
--------------------- --------------------------------- ----------------------------------------
9
IRREVOCABLE PROXY
The undersigned stockholder of DATRON SYSTEMS INCORPORATED, a Delaware
corporation (the "COMPANY"), hereby irrevocably (to the fullest extent permitted
by law) appoints Xxxx XxXxxxx, Xxxxxxxx Xxxxxxxx and THE TITAN CORPORATION, a
Delaware corporation ("PARENT"), and each of them, the attorneys and proxies of
the undersigned with full power of substitution and resubstitution, to the full
extent of the undersigned's rights with respect to (i) the outstanding shares of
Company Common Stock or other securities owned of record by the undersigned as
of the date of this proxy, which shares are specified on the final page of this
proxy, and (ii) any and all other shares of Company Common Stock or other
securities which the undersigned may acquire on or after the date hereof. (The
shares of the Company Common Stock or other securities referred to in clauses
"(i)" and "(ii)" of the immediately preceding sentence, except for shares which
are not Subject Securities (as defined in the Stockholder Tender Agreement), are
collectively referred to in this proxy as the "SHARES"). Upon the execution
hereof, all prior proxies given by the undersigned with respect to any of the
Shares are hereby revoked, and the undersigned agrees that no subsequent proxies
will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted in
connection with the Stockholder Tender Agreement, dated as of the date hereof,
between Parent and the undersigned (the "STOCKHOLDER TENDER AGREEMENT"), and is
granted in consideration of Parent entering into the Agreement and Plan of
Merger and Reorganization, dated as of the date hereof, among Parent, GEM
ACQUISITION CORP., a Delaware Corporation and a wholly owned subsidiary of
Parent, and the Company (the "MERGER AGREEMENT"). Capitalized terms used herein
and not otherwise defined shall have the meanings given to such terms in the
Merger Agreement.
The attorneys and proxies named above will be empowered, and may exercise
this proxy, to vote the Shares at any meeting of the stockholders of the
Company, however called, and in any action by written consent of the
Stockholders of the Company at any time until the earlier to occur of (i) the
termination of the Merger Agreement, or (ii) the Offer Acceptance Time:
(i) against any action or agreement that would result in a breach of any
representation, warranty, covenant or obligation of the Company in the Merger
Agreement;
(ii) against any action or agreement that would cause any provision
contained in Section 6 or ANNEX I of the Merger Agreement to not be satisfied;
and
(iii) against the following actions (other than the Offer, the Merger and the
transactions contemplated by the Merger Agreement): (A) any Company Acquisition
Proposal (B) any change in a majority of the members of the board of directors
of the Company, other than any change contemplated by Section 1.3 of the Merger
Agreement; or (C) any other action which is intended, or could reasonably be
expected to, impede, interfere with, delay, postpone, discourage or adversely
affect the consummation of the Offer, the Merger or any of the other
transactions contemplated by the Merger Agreement or this Stockholder Tender
Agreement.
The undersigned may vote the Shares on all other matters.
This proxy shall be binding upon the heirs, estate, executors, personal
representatives, successors and assigns of the undersigned (including any
transferee of any of the Shares).
If any provision of this proxy or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof shall, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other
10
circumstances or in any other jurisdiction, and (c) the invalidity or
unenforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this proxy. Each provision of this
proxy is separable from every other provision of this proxy, and each part of
each provision of this proxy is separable from every other part of such
provision.
[next page is a signature page]
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This proxy shall terminate upon the earlier of the termination of the Merger
Agreement and the Offer Acceptance Time.
Dated: June , 2001.
---------------------------------------------
[NAME]
Number of shares of common stock of the Company owned of
record or beneficially as of the date of this
irrevocable proxy:
---------------------------------------------
12
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, subject to the terms of
the Agreement and Plan of Reorganization to which this ANNEX I is attached (the
"AGREEMENT"), Merger Sub shall not be required to accept for exchange or
exchange or deliver any shares of Parent Common Stock for (subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Merger Sub's obligation to pay for or return tendered
shares of Company Common Stock after the termination or withdrawal of the
Offer)) any Shares tendered, if by the expiration of the Offer (as it may be
extended in accordance with Section 1.1(a) of the Agreement), (1) the Minimum
Condition shall not have been satisfied, (2) the applicable waiting period under
the HSR Act shall not have expired or been terminated, (3) any applicable
waiting periods, consents or clearances under foreign antitrust Laws shall not
have expired, been terminated or been obtained, (4) the Registration Statement
shall not have become effective under the Securities Act or shall be the subject
of any stop order or proceedings seeking a stop order, (5) the shares of Parent
Common Stock to be issued in the Offer and the Merger shall not have been
approved for listing on the NYSE, subject to official notice of issuance,
(6) Parent shall not have received (or Parent shall have received and Xxxxxx
Godward llp shall have subsequently rescinded) an opinion of Cooley Godward llp,
in form and substance reasonably satisfactory to Parent and to the Company, on
the basis of customary facts, representations and assumptions set forth in such
opinion, to the effect that the Transaction will be treated for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code, PROVIDED, HOWEVER, that if Xxxxxx Godward LLP does not render such opinion
or withdraws or modifies such opinion, this condition shall nonetheless be
deemed satisfied if Xxxxxx Xxxxxx White & XxXxxxxxx LLP ("HEWM") renders such
opinion to Parent, (7) the Company shall not have received (or the Company shall
have received, and HEWM shall have subsequently rescinded) an opinion of HEWM in
form and substance reasonably satisfactory to Parent and to the Company, on the
basis of customary facts, representations and assumptions set forth in such
opinion, to the effect that the Transaction will be treated for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Code; PROVIDED, HOWEVER, that if HEWM does not render such opinion or withdraws
or modifies such opinion, this condition shall nonetheless be deemed satisfied
if Xxxxxx Godward LLP renders such opinion to the Company, or (8) at any time on
or after the date of the Agreement and prior to the acceptance for exchange of
Shares pursuant to the Offer, any of the following conditions exist and are
continuing:
(a) there shall be pending or threatened any Legal Proceeding in which a
Governmental Body is: (i) challenging or seeking to restrain or prohibit the
consummation of the Offer or the Merger or any of the other transactions
contemplated by this Agreement; (ii) relating to the Offer or the Merger and
seeking to obtain from Merger Sub, Parent or any of its Subsidiaries any
damages that may be material to Parent; (iii) seeking to prohibit or limit
in any material respect Merger Sub's or Parent's ability to vote, receive
dividends with respect to or otherwise exercise ownership rights with
respect to the shares of Company Common Stock to be acquired in the Offer or
with respect to the stock of the Surviving Corporation; (iv) which would
materially and adversely affect the right of Parent, the Surviving
Corporation or any Subsidiary of Parent to own the assets or operate the
business of the Acquired Corporations; (v) seeking to compel Parent or the
Company, or any Subsidiary of Parent or the Company, to dispose of or hold
separate any material assets, as a result of the Merger or any of the other
transactions contemplated by this Agreement; (vi) obligating the Company,
Parent or their respective Subsidiaries to pay material damages or otherwise
become subject to material adverse consequences in connection with any of
the transactions contemplated by the Agreement, or (vii) otherwise have or
reasonably be expected
Annex I-1
to have, a Material Adverse Effect on the Acquired Corporations or, as a
result of the transactions contemplated by the Agreement, a Material Adverse
Effect on Parent;
(b) any temporary restraining order, preliminary or permanent injunction
or other Order preventing the consummation of the Offer or the Merger shall
have been issued by any court of competent jurisdiction and remain in
effect, or there shall be any Legal Requirement enacted or deemed applicable
to the Offer or the Merger that makes consummation of the Offer or the
Merger illegal;
(c) the Company shall have materially breached any of its covenants,
obligations or agreements under the Agreement;
(d) (i) the representations and warranties of the Company contained in
this Agreement (except those set forth in Section 2.3) not qualified with
any "materiality" or "Material Adverse Effect" qualifiers shall not have
been accurate in all material respects, or (ii) the representations and
warranties of the Company contained in this Agreement (except those set
forth in Section 2.3) qualified with any "materiality" or "Material Adverse
Effect" qualifiers shall not have been accurate in all respects, in the case
of each of (i) and (ii) above, as of the date of this Agreement and as of
the date of the expiration of the Offer (as it may be extended in accordance
with Section 1.1(a) of this Agreement); EXCEPT to the extent such
representations and warranties speak as of an earlier date, in which case
such representations and warranties shall not have been accurate as of such
date in all material respects, in the case of (i) above, or in all respects,
in the case of (ii) above;
(e) the representations and warranties of the Company contained in
Section 2.3 of the Agreement shall not have been true and correct in all
respects as of the date of the Agreement;
(f) there shall have been (i) a Material Adverse Effect on any of the
Acquired Corporations, or (ii) the occurrence of any event or the existence
of any circumstance, including any Legal Proceeding, that could reasonably
be expected to have a Material Adverse Effect on any of the Acquired
Corporations; or
(g) the Agreement shall have been terminated in accordance with its
terms;
which in the good faith judgment of Parent, in any such case, makes it
inadvisable to proceed with the Offer or the acceptance for payment of or
payment for the Shares.
The foregoing conditions are for the sole benefit of Parent and Merger Sub
and may, subject to the terms of the Agreement, be waived by Parent and Merger
Sub, in whole or in part at any time and from time to time, in the sole
discretion of Parent and Merger Sub. The failure by Parent and Merger Sub at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
Annex I-2
