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AGREEMENT AND PLAN OF MERGER
Among
L-3 COMMUNICATIONS CORPORATION,
X-X ACQUISITION CORPORATION
and
MICRODYNE CORPORATION
Dated as of December 3, 1998
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TABLE OF CONTENTS
ARTICLE I
THE OFFER....................................................................2
SECTION 1.1 The Offer..............................................2
SECTION 1.2 Company Action.........................................3
ARTICLE II
THE MERGER...................................................................5
SECTION 2.1 The Merger.............................................5
SECTION 2.2 Effective Time.........................................5
SECTION 2.3 Effects of the Merger..................................6
SECTION 2.4 Articles of Amendment and Restatement; By-Laws.........6
SECTION 2.5 Directors and Officers.................................6
SECTION 2.6 Conversion of Securities...............................6
SECTION 2.7 Treatment of Employee Options..........................7
SECTION 2.8 Appraisal Rights.......................................7
SECTION 2.9 Surrender of Shares; Stock Transfer Books..............8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................9
SECTION 3.1 Organization and Qualification; Subsidiaries..........10
SECTION 3.2 Articles and By-Laws..................................10
SECTION 3.3 Capitalization........................................10
SECTION 3.4 State Takeover Statutes; Authority Relative to
This Agreement........................................11
SECTION 3.5 No Conflict; Required Filings and Consents............12
SECTION 3.6 Compliance............................................13
SECTION 3.7 SEC Filings; Financial Statements.....................13
SECTION 3.8 Absence of Certain Changes or Events..................14
SECTION 3.9 Absence of Litigation.................................15
SECTION 3.10 Employee Benefit Plans...............................15
SECTION 3.11 Tax Matters..........................................17
SECTION 3.12 Offer Documents; Proxy Statement.....................18
SECTION 3.13 Environmental Matters................................19
SECTION 3.14 Brokers..............................................19
SECTION 3.15 Year 2000............................................19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER........................................................20
SECTION 4.1 Corporate Organization................................20
SECTION 4.2 Authority Relative to This Agreement..................20
SECTION 4.3 No Conflict; Required Filings and Consents............20
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Page
SECTION 4.4 Offer Documents; Proxy Statement......................21
SECTION 4.5 Brokers...............................................22
SECTION 4.6 Financing.............................................22
SECTION 4.7 Operations of Purchaser...............................22
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER......................................23
SECTION 5.1 Conduct of Business of the Company Pending the
Merger................................................23
ARTICLE VI
ADDITIONAL AGREEMENTS.......................................................26
SECTION 6.1 Stockholders Meeting..................................26
SECTION 6.2 Proxy Statement.......................................27
SECTION 6.3 Company Board Representation; Section 14(f) ..........27
SECTION 6.4 Access to Information; Confidentiality................28
SECTION 6.5 No Solicitation of Transactions.......................29
SECTION 6.6 Employee Benefits Matters.............................30
SECTION 6.7 Directors' and Officers' Indemnification and
Insurance.............................................31
SECTION 6.8 Notification of Certain Matters.......................33
SECTION 6.9 Further Action; Reasonable Good Faith Efforts.........33
SECTION 6.10 Public Announcements.................................34
SECTION 6.11 Disposition of Litigation............................34
SECTION 6.12 State Takeover Statutes..............................34
SECTION 6.13 Stop Transfer Order..................................34
ARTICLE VII
CONDITIONS OF MERGER........................................................35
SECTION 7.1 Conditions to Obligation of Each Party to
Effect the Merger.....................................35
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER...........................................35
SECTION 8.1 Termination...........................................35
SECTION 8.2 Effect of Termination.................................37
SECTION 8.3 Fees..................................................37
SECTION 8.4 Amendment.............................................38
SECTION 8.5 Waiver................................................38
ARTICLE IX
GENERAL PROVISIONS..........................................................38
SECTION 9.1 Non-Survival of Representations, Warranties and
Agreements............................................38
SECTION 9.2 Notices...............................................39
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SECTION 9.3 Certain Definitions...................................39
SECTION 9.4 Severability..........................................41
SECTION 9.5 Entire Agreement; Assignment..........................41
SECTION 9.6 Parties in Interest...................................41
SECTION 9.7 Governing Law.........................................42
SECTION 9.8 Headings..............................................42
SECTION 9.9 Counterparts..........................................42
Annex A - Offer Conditions
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 3, 1998
(the "Agreement"), among L-3 COMMUNICATIONS CORPORATION, a Delaware corporation
("Parent"), X-X ACQUISITION CORPORATION, a Maryland corporation and a wholly
owned subsidiary of Parent ("Purchaser"), and MICRODYNE CORPORATION, a Maryland
corporation (the "Company").
WHEREAS, as promptly as practicable (but in no event later
than five business days after the public announcement of the execution hereof),
the Purchaser shall commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) an offer (the
"Offer") to purchase for cash all of the issued and outstanding shares of
Common Stock, par value $0.10 per share (referred to herein as either the
"Shares" or "Company Common Stock"), of the Company at a price of $5.00 per
Share, net to the seller in cash, subject to there being validly tendered and
not withdrawn prior to the expiration of the Offer, that number of Shares of
the Company beneficially owned by Parent or the Purchaser which represent at
least a majority of the Shares outstanding on a fully diluted basis and to the
other conditions set forth in Annex A hereto.
WHEREAS, as a condition to their willingness to enter into
this Agreement and consummate the transactions contemplated hereby, Parent and
Purchaser have required that Xxxxxx X. Xxxxxxxxxx and the Successor Trust to
Xxxxxx X. Xxxxxxxxxx Grantor Retained Annuity Trust #1, Xxxxxx X.
Xxxxxxxxxx-Grantor Retained Annuity Trust #2, Xxxxx Xxxxxx, Xxxxxxxxx
Xxxxxxxxxx and Xxxx Xxxxxxx as agent for Xxxxx Xxxxxx and Gallerie Nissl
(collectively, the "Stockholders") agree to tender Shares (as hereinafter
defined) owned by them in accordance with the Tender Agreement, dated as of the
date hereof (the "Tender Agreement"), among Parent and the Stockholders; and in
order to induce Parent and Purchaser to enter into this Agreement, the
Stockholders have agreed to execute and deliver the Tender Agreement.
WHEREAS, the Board of Directors of the Company has (i)
determined that the consideration to be paid for each Share in the Offer and in
the Merger (as defined below) is fair to and in the best interests of the
stockholders of the Company, (ii) exempted the transactions contemplated by
this Agreement and the transactions contemplated pursuant to this Agreement and
the Tender Agreement and the transactions contemplated thereby and any other
transactions entered into after the date hereof between the Company and Parent
or any of its subsidiaries or between Parent or any of its subsidiaries and the
Stockholders with the approval of the Board of Directors of the Company (a
"Consensual Transaction") so as to render inapplicable Section 3-602 of the
Maryland General Corporation Law (the "MGCL") to the transactions contemplated
hereby and thereby), (iii) amended the By-laws of the Company so as to render
inapplicable Section 3-702(a)(i) of
the MGCL to the transactions contemplated by this Agreement and the Tender
Agreement, including, without limitation, the Offer, and to any Consensual
Transaction, and (iv) resolved to recommend acceptance of the Offer and the
Merger and approval of this Agreement by such stockholders; and
WHEREAS, the Board of Directors of the Company and Purchaser
have each approved the merger (the "Merger") of Purchaser with and into the
Company in accordance with the MGCL upon the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer. (a) Provided that this Agreement shall
not have been terminated in accordance with Section 8.1 and no event shall have
occurred and no circumstance shall exist which would result in a failure to
satisfy any of the conditions or events set forth in Annex A hereto (the "Offer
Conditions"), Purchaser shall commence the Offer as soon as practicable after
the date hereof, and in any event within five business days from the date
hereof. The obligation of Purchaser to accept for payment Shares tendered shall
be subject to the satisfaction of the Offer Conditions. Purchaser expressly
reserves the right, in its sole discretion, to waive any such condition and
make any other changes in the terms and conditions of the Offer, provided that,
unless previously approved by the Company in writing, (i) Purchaser may not
amend or waive the Minimum Condition, (ii) no change may be made which
decreases the price per Share payable in the Offer, (iii) there shall be no
change to the form of consideration payable in the Offer (other than by adding
consideration), (iv) there shall be no reduction in the maximum number of
Shares to be purchased in the Offer, or (v) there shall be no imposition of any
condition to the Offer in addition to those set forth herein which is
materially adverse to holders of the Shares. Purchaser covenants and agrees
that, subject to the terms and conditions of this Agreement, including the
Offer Conditions, it will accept for payment and pay for Shares validly
tendered and not withdrawn pursuant to the Offer as promptly as reasonably
practicable; provided, that (x) at each scheduled expiration date of the Offer
prior to the date 90 days from the date hereof, if any of the Offer Conditions
shall not be satisfied or waived, Purchaser shall extend the Offer until the
date on which such conditions are then reasonably expected by Purchaser to be
satisfied, (y) Purchaser shall extend the Offer for any period required by any
rule, regulation, interpretation
or position of the SEC or the staff thereof applicable to the Offer and (z)
Purchaser may extend the Offer up to the tenth business day beyond the latest
expiration date that would otherwise be permitted under clause (x) or (y) of
this sentence. The initial expiration date of the Offer shall be 20 business
days from the commencement of the Offer in accordance with applicable law.
Subject to the foregoing, it is agreed that the Offer Conditions are for the
benefit of Purchaser and may be asserted by Purchaser regardless of the
circumstances giving rise to any such condition (including any action or
inaction by Purchaser or Parent not inconsistent with the terms hereof) or,
except with respect to the Minimum Condition, may be waived by Purchaser, in
whole or in part at any time and from time to time, in its sole discretion.
(b) As soon as reasonably practicable after the date hereof,
and in any event within five business days from the date hereof, Purchaser and
Parent shall file their Tender Offer Statement on Schedule 14D-1 (the "Schedule
14D-1") with respect to the Offer with the Securities and Exchange Commission
(the "SEC"). The Schedule 14D-1 will contain an Offer to Purchase and forms of
the related letter of transmittal (which Schedule 14D-1, Offer to Purchase and
other documents, together with any further supplements or amendments thereto,
are referred to herein collectively as the "Offer Documents"). Parent,
Purchaser and the Company each agrees promptly to correct any information
provided by it for use in the Offer Documents that shall have become false or
misleading in any material respect, and Parent and Purchaser further agree to
take all steps necessary to cause the Schedule 14D-1 as so corrected to be
filed with the SEC and the other Offer Documents as so corrected 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
prior to their filing with the SEC. Parent and Purchaser agree to provide the
Company with any comments that may be received from the SEC or its staff with
respect to the Offer Documents promptly after receipt thereof.
(c) Notwithstanding any other provision contained herein, the
Offer shall terminate upon termination of this Agreement pursuant to Section
8.1.
SECTION 1.2 Company Action. (a) The Company hereby approves
of and consents to the Offer and represents and warrants that: (i) its Board of
Directors, acting upon the unanimous recommendation of the independent
directors (the "Special Committee") of the Board of Directors, at a meeting
duly called and held on December 2, 1998, has unanimously (A) determined that
this Agreement and the transactions contemplated hereby, including each of the
Offer and the Merger, are fair to and in the best interests of the holders of
Shares, (B) exempted the Offer, the Merger, this Agreement and the Tender
Agreement and
the transactions contemplated hereby and thereby so as to render Section 3-602
of the MGCL inapplicable thereto and to any Consensual Transaction, (C) amended
the By-laws of the Company so as to render inapplicable Section 3-702(a)(i) of
the MGCL to the transactions contemplated by this Agreement and the Tender
Agreement, including, without limitation, the Offer, and to any Consensual
Transaction,(D)declared the Merger to be advisable and directed that the Merger
be submitted for consideration at a special meeting of the stockholders of the
Company and (E) resolved to recommend that the stockholders of the Company
accept the Offer, tender their Shares to Purchaser thereunder and approve this
Agreement and the transactions contemplated hereby; and (ii) The
Xxxxxxxx-Xxxxxxxx Company, LLC (the "Financial Adviser") has delivered to the
Board of Directors of the Company and the Special Committee its written opinion
(or oral opinion to be confirmed in writing) that the consideration to be
received by holders of Shares pursuant to each of the Offer and the Merger is
fair to such holders from a financial point of view. The Company has been
authorized by the Financial Adviser to permit, subject to prior review and
consent by such Financial Adviser (such consent not to be unreasonably
withheld), the inclusion of such fairness opinion (or a reference thereto) in
the Offer Documents and in the Schedule 14D-9 referred to below and the Proxy
Statement referred to in Section 3.12. The Company hereby consents to the
inclusion in the Offer Documents of the recommendations of the Company's Board
of Directors described in this Section 1.2(a).
(b) The Company shall file with the SEC, contemporaneously
with Schedule 14D-1 pursuant to Section 1.1, a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "Schedule 14D-9"), containing the recommendations of the
Company's Board of Directors described in Section 1.2(a)(i) and shall promptly
mail the Schedule 14D-9 to the stockholders of the Company; provided, that in
the event of a proposed Third Party Acquisition (as defined in Section 8.3),
the Company shall not be required to make such filing with such recommendations
or make such mailing if a majority of the Special Committee Members (as defined
below) conclude in good faith based on advice of independent outside legal
counsel to the Special Committee that taking any such action would constitute a
breach of the fiduciary duties of the Board of Directors of the Company under
applicable law. "Special Committee Members" shall mean directors of the Company
who are (a) members of the Special Committee (as constituted on the date
hereof) or (b) nominees of such Special Committee who are not (1) employees of
the Company or any of its subsidiaries, (2) Xxxxxx X. Xxxxxxxxxx or (3)
affiliates and associates of Xxxxxx X. Xxxxxxxxxx. The Schedule 14D-9 and all
amendments thereto will comply in all material respects with the Exchange Act
and the rules and regulations promulgated thereunder. The Company, Parent and
Purchaser each agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 that
shall have become false or misleading in any material respect, and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and disseminated to holders of Shares, in
each case as and to the extent required by applicable federal securities laws.
(c) In connection with the Offer, if requested by Purchaser,
the Company shall promptly furnish Purchaser with mailing labels, security
position listings, any non-objecting beneficial owner lists and any available
listings or computer files containing the names and addresses of the record
holders of Shares, each as of a recent date, and shall promptly furnish
Purchaser with such additional information (including but not limited to
updated lists of stockholders, mailing labels, security position listings and
non-objecting beneficial owner lists) and such other assistance as Parent,
Purchaser or their agents may reasonably require in communicating the Offer to
the record and beneficial holders of Shares.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the MGCL, at the Effective
Time (as defined in Section 2.2), Purchaser shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"). At Parent's election
(provided, that such election shall not adversely affect the ability of the
Company to consummate the transactions contemplated hereby, and provided,
further, that the Company shall not be deemed to have breached any of its
representations or warranties herein if and to the extent such breach results
from such election), the Merger may alternatively be structured so that (i) the
Company and/or its subsidiaries are merged with and into Parent, Purchaser or
any other direct or indirect subsidiary of Parent or (ii) any direct or
indirect subsidiary of Parent other than Purchaser is merged with and into the
Company. In the event of such an election, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect such election.
SECTION 2.2 Effective Time. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article VII, the parties
hereto shall cause the Merger to be consummated by filing articles of merger
(the "Articles of Merger") with the State Department of Assessments and
Taxation of the State of Maryland, in such form as required by and executed in
accordance with the relevant provisions of the MGCL (the date and time of the
acceptance of record of the Articles of Merger by
the State Department of Assessments and Taxation of the State of Maryland (or
such later time as is specified in the Articles of Merger) being the "Effective
Time").
SECTION 2.3 Effects of the Merger. The Merger shall have the
effects set forth in the applicable provisions of the MGCL. Without limiting
the generality of the foregoing and subject thereto, at the Effective Time all
the property, rights, privileges, immunities, powers and franchises of the
Company and Purchaser shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Purchaser shall become the debts,
liabilities and duties of the Surviving Corporation.
SECTION 2.4 Articles of Amendment and Restatement; By-Laws.
(a) At the Effective Time and without any further action on the part of the
Company and Purchaser, the Articles of Amendment and Restatement of the Company
(as amended, the "Articles") as in effect immediately prior to the Effective
Time shall be the charter of the Surviving Corporation until thereafter and
further amended as provided therein and under the MGCL.
(b) At the Effective Time and without any further action on
the part of the Company and Purchaser, the By-Laws of Purchaser shall be the
By-Laws of the Surviving Corporation and thereafter may be amended or repealed
in accordance with their terms or the Articles of the Surviving Corporation and
as provided by law.
SECTION 2.5 Directors and Officers. The directors of
Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the Articles and By-Laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors
are duly elected or appointed (as the case may be) and qualified.
SECTION 2.6 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to
the Effective Time (other than any Shares to be cancelled pursuant to Section
2.6(b) and any Dissenting Shares (as defined in Section 2.8(b)) shall be
cancelled, extinguished and converted into the right to receive $5.00 in cash
or any higher price that may be paid pursuant to the Offer (the "Merger
Consideration") payable to the holder thereof, without interest, upon surrender
of the certificate formerly representing such
Share in the manner provided in Section 2.9, less any required withholding
taxes.
(b) Each share of Company Common Stock owned by Parent or
Purchaser, in each case immediately prior to the Effective Time, shall be
cancelled and retired without any conversion thereof and no payment or
distribution shall be made with respect thereto.
(c) Each share of common stock of Purchaser issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one validly issued, fully paid and nonassessable share of identical
common stock of the Surviving Corporation.
SECTION 2.7 Treatment of Employee Options. Immediately prior
to the Effective Time, each outstanding employee stock option and any related
stock appreciation right (together, an "Employee Option"), whether or not then
exercisable, shall be cancelled by the Company (provided that with respect to
the 3,300 Shares (the "1988 Options") subject to stock options issued pursuant
to the Incentive Stock Option Plan of 1988, such 1988 Options, to the extent
permitted, shall be cancelled by the Company and otherwise the Company shall
use its reasonable good faith efforts to cancel the 1988 Options), and the
holder thereof shall be entitled to receive at the Effective Time or as soon as
practicable thereafter from the Surviving Corporation in consideration for such
cancellation an amount in cash equal to the product of (a) the number of Shares
previously subject to such Employee Option and (b) the excess, if any, of the
Merger Consideration over the exercise price per Share previously subject to
such Employee Option.
SECTION 2.8 Appraisal Rights. (a) So long as the Company
Common Stock is listed on the National Market System of NASDAQ on the record
date for the determination of stockholders entitled to vote on the Merger with
respect to mergers other than mergers pursuant to Section 3-106 of the MGCL or
a merger of a 90 percent owned subsidiary with or into its parent or the date
notice is given or waived under Section 3-106 of the MGCL in connection with a
merger of a 90 percent owned subsidiary with or into its parent as the case may
be (as applicable, the "Appraisal Date"), no stockholder of the Company shall
have any rights under Title 3, Subtitle 2 of the MGCL as a result of the
transactions contemplated by this Agreement or the Tender Agreement.
(b) If the Company Common Stock is not listed on the National
Market System of NASDAQ on the Appraisal Date, shares of Company Common Stock
that are issued and outstanding immediately prior to the Effective Time and
which are held by stockholders who have not voted in favor of or consented to
the Merger and shall have delivered a written demand for appraisal of such
shares of Company Common Stock in the time and manner provided in
Section 3-203 of the MGCL and shall not have failed to perfect or shall not
have effectively withdrawn or lost their rights to appraisal and payment under
the MGCL (the "Dissenting Shares") shall not be converted into the right to
receive the Merger Consideration, but shall be entitled to receive the
consideration as shall be determined pursuant to Title III, Subtitle 2 of the
MGCL; provided, however, that if such holder shall have failed to perfect or
shall have effectively withdrawn or lost his, her or its right to appraisal and
payment under the MGCL, such holder's shares of Company Common Stock shall
thereupon be deemed to have been converted, at the Effective Time, into the
right to receive the Merger Consideration set forth in Section 2.6(a) of this
Agreement, without any interest thereon.
(c) The Company shall give Parent (i) prompt notice of any
written objection to the transactions contemplated by this Agreement or any
demands for appraisal pursuant to Section 3-203 of the MGCL received by the
Company, withdrawals of such demands, and any other instruments served pursuant
to the MGCL and received by the Company and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal under the
MGCL. The Company shall not, except with the prior written consent of Parent,
make any payment with respect to any such demands for appraisal or offer to
settle or settle any such demands.
SECTION 2.9 Surrender of Shares; Stock Transfer Books. (a)
Prior to the Effective Time, Purchaser shall designate a bank or trust company
to act as agent for the holders of Shares in connection with the Merger (the
"Paying Agent") to receive the Merger Consideration to which holders of Shares
shall become entitled pursuant to Section 2.6(a). When and as needed, Parent or
Purchaser will make available to the Paying Agent sufficient funds to make all
payments pursuant to Section 2.9(b). Such funds shall be invested by the Paying
Agent as directed by Purchaser or, after the Effective Time, the Surviving
Corporation, provided that such investments shall be in obligations of or
guaranteed by the United States of America, in commercial paper obligations
rated A-1 or P-1 or better by Xxxxx'x Investors Service, Inc. or Standard &
Poor's Corporation, respectively, or in certificates of deposit, bank
repurchase agreements or banker's acceptances of commercial banks with capital
exceeding $500 million. Any net profit resulting from, or interest or income
produced by, such investments will be payable to the Surviving Corporation or
Parent, as Parent directs.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each record holder, as of the Effective
Time, of an outstanding certificate or certificates which immediately prior to
the Effective Time represented Shares (the "Certificates"), a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss
and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates for payment of the Merger Consideration therefor.
Upon surrender to the Paying Agent of a Certificate, together with such letter
of transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each Share formerly
represented by such Certificate, and such Certificate shall then be cancelled.
No interest shall be paid or accrued for the benefit of holders of the
Certificates on the Merger Consideration payable upon the surrender of the
Certificates. If payment of the Merger Consideration is to be made to a person
other than the person in whose name the surrendered Certificate is registered,
it shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form for transfer and that
the person requesting such payment shall have paid any transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not applicable.
(c) At any time following twelve months after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent
to deliver to it any funds (including any interest received with respect
thereto) which had been made available to the Paying Agent and which have not
been disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect
to the Merger Consideration payable upon due surrender of their Certificates.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(d) At the Effective Time, the stock transfer books of the
Company shall be closed and thereafter there shall be no further registration
of transfers of shares of Company Common Stock on the records of the Company.
From and after the Effective Time, the holders of Certificates evidencing
ownership of Shares outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares except as otherwise
provided for herein or by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and
Purchaser that, except as specifically set forth on the corresponding Schedule
of the Disclosure Schedules delivered by the Company to the Parent and
Purchaser prior to the execution of this Agreement (the "Disclosure Schedules")
with respect to such representation and warranty:
SECTION 3.1 Organization and Qualification; Subsidiaries.
Each of the Company and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted. Each of the Company and each of its subsidiaries
is duly qualified or licensed as a foreign corporation to do business, and is
in good standing, in each jurisdiction where the character of its properties
owned, leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing which would not, individually or in
the aggregate, have a Material Adverse Effect (as defined below). When used in
connection with the Company or any of its subsidiaries, the term "Material
Adverse Effect" means any change or effect that would be materially adverse to
the business, operations, assets, financial condition or results of operations
of the Company and its subsidiaries taken as a whole.
SECTION 3.2 Articles and By-Laws. The Company has heretofore
furnished to Parent a complete and correct copy of the Articles and the By-Laws
of the Company and its subsidiaries as currently in effect. Such Articles and
By-Laws are in full force and effect and no other organizational documents are
applicable to or binding upon the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries is in violation of any provisions of
its Articles or By-Laws or other constitutive documents.
SECTION 3.3 Capitalization. The authorized capital stock of
the Company consists of 50,000,000 shares of Company Common Stock. As of
November 30, 1998, (i) 13,111,201 shares of Company Common Stock were issued
and outstanding, all of which were validly issued, fully paid and nonassessable
and were issued free of preemptive (or similar) rights, and (ii) an aggregate
of 1,571,302 shares of Company Common Stock were reserved for issuance and
issuable upon or otherwise deliverable in connection with the exercise of
outstanding Employee Options issued pursuant to the Company Plans (as defined
in Section 3.10). Since November 30, 1998, no options to purchase shares of
Company
Common Stock have been granted and no shares of Company Common Stock have been
issued except for shares issued pursuant to the exercise of Employee Options
outstanding as of November 30, 1998. Except (i) as set forth above, and (ii) as
a result of the exercise of Employee Options outstanding as of November 30,
1998, there are outstanding or authorized (a) no shares of capital stock or
other voting securities of the Company, (b) no securities of the Company
convertible into or exchangeable for shares of capital stock or voting
securities of the Company, (c) no options or other rights to acquire from the
Company, and no obligation of the Company to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Company and (d) no equity equivalents, interests in
the ownership or earnings of the Company or other similar rights (collectively,
"Company Securities"). There are no outstanding obligations of the Company or
any of its subsidiaries to repurchase, redeem or otherwise acquire any Company
Securities. There are no other options, calls, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of the Company or any of its subsidiaries to which
the Company or any of its subsidiaries is a party. All shares of Company Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and nonassessable and free
of preemptive (or similar) rights. There are no outstanding contractual
obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or the capital stock of
any subsidiary or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any such subsidiary or any other
entity. Each of the outstanding shares of capital stock of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and all such shares are owned by the Company or another wholly
owned subsidiary of the Company and are owned free and clear of all security
interests, liens, claims, pledges, agreements, limitations in voting rights,
charges or other encumbrances of any nature whatsoever, except where the
failure to own such shares free and clear would not, individually or in the
aggregate, have a Material Adverse Effect. The Company has delivered to Parent
prior to the date hereof a list of all subsidiaries and other persons in which
the Company, directly or indirectly, owns in excess of 10% of the stock or
other equity interests of such person ("Associated Entity") which evidences,
among other things, the amount of capital stock or other equity interests owned
by the Company, directly or indirectly, in such subsidiaries or Associated
Entities. No entity in which the Company owns, directly or indirectly, less
than a 50% equity interest is, individually or when taken together with all
such other entities, material to the business of the Company and its
subsidiaries taken as a whole.
SECTION 3.4 State Takeover Statutes; Authority Relative to
This Agreement. The Company has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions so contemplated (other than, with respect to the
Merger, the approval of this Agreement by the holders of at least a majority of
the outstanding shares of Company Common Stock if and to the extent required by
applicable law, and the filing of appropriate merger documents as required by
the MGCL). This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery hereof
by Parent and Purchaser, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing. The Board of Directors of the Company has (i) approved the Offer,
the Merger, this Agreement, the Tender Agreement and the transactions
contemplated hereby and thereby to render Section 3-602 of the MGCL (or any
similar provision) inapplicable to the Offer, the Merger, this Agreement, the
Tender Agreement, the other transactions contemplated hereby and thereby and
any Consensual Transaction, and (ii) amended the By-laws of the Company so as
to render inapplicable Section 3-702(a)(i) of the MGCL (or any similar
provision) to the transactions contemplated by this Agreement and the Tender
Agreement, including, without limitation, the Offer, and to any Consensual
Transaction. As a result of the foregoing actions, the only vote required to
authorize the Merger is the affirmative vote of a majority of the outstanding
Shares.
SECTION 3.5 No Conflict; Required Filings and Consents. (a)
The execution, delivery and performance of this Agreement by the Company do not
and will not: (i) conflict with or violate the Articles or By-Laws of the
Company or the equivalent organizational documents of any of its subsidiaries;
(ii) assuming that all consents, approvals and authorizations contemplated by
clauses (i), (ii) and (iii) of subsection (b) below have been obtained and all
filings described in such clauses have been made, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to the Company or
any of its subsidiaries or by which its or any of their respective properties
are bound or affected; or (iii) result in any breach or violation of or
constitute a default (or an event
which with notice or lapse of time or both could become a default) or result in
the loss of a material benefit under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
are bound or affected, except, in the case of clauses (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, have a Material Adverse Effect or
prevent or materially delay the consummation of the Offer or the Merger or
otherwise prevent the Company from performing its obligations under this
Agreement.
(b) The execution, delivery and performance of this Agreement
by the Company and the consummation of the Merger by the Company do not and
will not require any consent, approval, authorization or permit of, action by,
filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except for (i) applicable requirements, if any, of the
Exchange Act and the rules and regulations promulgated thereunder, the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), state securities, takeover and Blue Sky laws, (ii) the filing and
recordation of appropriate merger or other documents as required by the MGCL
and (iii) such consents, approvals, authorizations, permits, actions, filings
or notifications the failure of which to make or obtain would not (x) prevent
or materially delay consummation of the Offer or the Merger, (y) otherwise
prevent or materially delay the Company from performing its obligations under
this Agreement or (z) have a Material Adverse Effect.
SECTION 3.6 Compliance. Neither the Company nor any of its
subsidiaries is in conflict with, or in default or violation of, (i) any law,
rule, regulation, order, judgment or decree applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties are
bound or affected, or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
are bound or affected, except for any such conflicts, defaults or violations
which would not, individually or in the aggregate, have a Material Adverse
Effect. The Company and its subsidiaries have all permits, licenses,
authorizations, exemptions, orders, consents, approvals and franchises from
governmental and regulatory agencies required to conduct their respective
businesses as now being conducted, except for such permits, licenses,
authorizations, exemptions, orders, consents, approvals, and franchises the
absence of which
would not individually or in the aggregate have a Material Adverse Effect.
SECTION 3.7 SEC Filings; Financial Statements. (a) The
Company and, to the extent applicable, each of its then or current
subsidiaries, has filed all forms, reports, statements and documents required
to be filed with the SEC since September 29, 1996 (collectively, the "SEC
Reports"), each of which has complied as to form in all material respects with
the applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act") and the rules and regulations promulgated thereunder, or the
Exchange Act and the rules and regulations promulgated thereunder, each as in
effect on the date so filed. The Company has heretofore delivered or promptly
will deliver to Parent, in the form filed with the SEC (including any
amendments thereto), the SEC Reports. None of such SEC Reports contained, when
filed, any untrue statement of a material fact or omitted to state a material
fact required to be stated or incorporated by reference therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Except to the extent revised or
superseded by a subsequent filing with the SEC (a copy of which has been
provided to Parent prior to the date hereof), none of the SEC Reports filed by
the Company since September 28, 1997 and prior to the date hereof contains any
untrue statement of a material fact or omits to state a material fact required
to be stated or incorporated by reference therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the audited consolidated financial statements of
the Company (including any related notes thereto) included in its Annual
Reports on Form 10-K for each of the two fiscal years ended September 29, 1996
and September 28, 1997 filed with the Commission, which have previously been
furnished to Parent, complies as to form in all material respects with all
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, has been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto) and fairly
presents in all material respects the consolidated financial position of the
Company and its subsidiaries at the respective date thereof and the
consolidated results of its operations and changes in cash flows for the
periods indicated.
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Company and its subsidiaries at September 30, 1998,
including the notes thereto, neither the Company nor any of its subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) which would be required to be reflected on a balance
sheet or in the notes thereto prepared in accordance with
generally accepted accounting principles, except for liabilities or obligations
incurred in the ordinary course of business since September 30, 1998 which
would not, individually or in the aggregate, have a Material Adverse Effect.
(d) The Company has heretofore furnished to Parent a complete
and correct copy of any amendments or modifications which have not yet been
filed with the SEC to agreements, documents or other instruments which
previously had been filed by the Company with the SEC pursuant to the
Securities Act and the rules and regulations promulgated thereunder or the
Exchange Act and the rules and regulations promulgated thereunder.
SECTION 3.8 Absence of Certain Changes or Events. Since
September 30, 1998, except as contemplated by this Agreement, disclosed in the
SEC Reports filed and publicly available prior to the date of this Agreement,
the Company and its subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and, since such
date, there has not been (i) any changes in the financial condition, results of
operations, assets, business or operations of the Company or any of its
subsidiaries that would reasonably likely materially delay or impair the
ability of the Company to effect the closing of the transactions contemplated
hereby, (ii) any condition, event or occurrence, other than such conditions or
events or occurrences which, individually or in the aggregate, have not had and
would not have a Material Adverse Effect, (iii) any damage, destruction or loss
(whether or not covered by insurance) with respect to any assets of the Company
or any of its subsidiaries individually or in the aggregate in excess of $1.0
million, (iv) any labor, dispute or any labor union organizing activity, or any
actual or threatened strike, work stoppage, slowdown or lockout, or any
material change in its relationship with employees, customers, distributors or
suppliers,(v) any revaluation by the Company of any of its material assets,
including but not limited to writing down the value of inventory or writing off
notes or accounts receivable other than in the ordinary course of business,
(vi) any entry by the Company or any of its subsidiaries into any commitment or
transactions material to the Company and its subsidiaries taken as a whole
other than in the ordinary course of business,(vii) receipt of any notice of
termination or the occurrence of a default or the breach of any material
contract, lease or other agreement, or (viii) any other action which, if it had
been taken after the date hereof, would have required the consent of Parent
under Section 5.1 hereof.
SECTION 3.9 Absence of Litigation. Except as disclosed with
reasonable specificity in the SEC Reports filed and publicly available prior to
the date of this Agreement, there are no suits, claims, actions, proceedings or
investigations pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries, or any properties or rights of the
Company or any of its subsidiaries, other than such suits, claims, actions,
proceedings or investigations that (i) individually or in the aggregate, have
not had and would not have a Material Adverse Effect or (ii) seek to delay or
prevent the consummation of the transactions contemplated hereby and are not
reasonably likely to succeed. As of the date hereof, neither the Company nor
any of its subsidiaries nor any of their respective properties is or are
subject to any order, writ, judgment, injunction, decree, determination or
award having, or which would have, a Material Adverse Effect or would prevent
or materially delay the consummation of the transactions contemplated hereby.
SECTION 3.10 Employee Benefit Plans. Except as set forth in
the SEC Reports and except as would not, individually or in the aggregate, have
a Material Adverse Effect:
(a) Schedule 3.10 of the Disclosure Schedule contains a true
and complete list of each "employee benefit plan" (within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including, without limitation, multiemployer plans within the
meaning of ERISA section 3(37)), stock purchase, stock option, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or required in
the future as a result of the transactions contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or
not, under which any employee or former employee of the Company or any of its
subsidiaries has any present or future right to benefits or under which the
Company or any of its subsidiaries has any present or future liability. All
such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "Company Plans".
(b) With respect to each Company Plan, the Company has
delivered to the Parent a current, accurate and complete copy (or, to the
extent no such copy exists, an accurate description) thereof and, to the extent
applicable: (i) any related trust agreement or other funding instrument; (ii)
the most recent determination letter, if applicable; (iii) any summary plan
description and other written communications (or a description of any oral
communications) by the Company or any of its subsidiaries to their employees
concerning the extent of the benefits provided under a Company Plan; and (iv)
for the two most recent years (A) the Form 5500 and attached schedules, (B)
audited financial statements, (C) actuarial valuation reports and (D)
attorney's response to an auditor's request for information.
(c) (i) Each Company Plan has been established and
administered in accordance with its terms, and in compliance with
the applicable provisions of ERISA, the Internal Revenue Code as of 1986, as
amended (the "Code") and other applicable laws, rules and regulations; (ii)
each Company Plan which is intended to be qualified within the meaning of Code
section 401(a) is so qualified and has received a favorable determination
letter as to its qualification, and nothing has occurred, whether by action or
failure to act, that would cause the loss of such qualification; (iii) no event
has occurred and no condition exists that would subject the Company or any of
its subsidiaries, either directly or by reason of their affiliation with any
member of their "Controlled Group" (defined as any organization which is a
member of a controlled group of organizations within the meaning of Code
sections 414(b), (c), (m) or (o)), to any tax, fine, lien or penalty imposed by
ERISA, the Code or other applicable laws, rules and regulations; (iv) for each
Company Plan with respect to which a Form 5500 has been filed, no material
change has occurred with respect to the matters covered by the most recent Form
since the date thereof; and (v) no "reportable event" (as such term is defined
in ERISA section 4043), "prohibited transaction" (as such term is defined in
ERISA section 406 and Code section 4975) that is not exempt or "accumulated
funding deficiency" (as such term is defined in ERISA section 302 and Code
section 412 (whether or not waived)) has occurred with respect to any Company
Plan.
(d) With respect to each of the Company Plans that is not a
multiemployer plan within the meaning of section 4001(a)(3) of ERISA but is
subject to Title IV of ERISA, as of the Effective Time, the assets of each such
Company Plan are at least equal in value to the present value of the accrued
benefits (vested and unvested) of the participants in such Company Plan on a
termination and projected benefit obligation basis, based on the actuarial
methods and assumptions indicated in the most recent actuarial valuation
reports.
(e) With respect to any multiemployer plan (within the
meaning of ERISA section 4001(a)(3)) to which the Company, any of its
subsidiaries or any member of their Controlled Group has any liability or
contributes (or has at any time contributed or had an obligation to
contribute): (i) none of the Company, any of its subsidiaries or any member of
their Controlled Group has incurred any withdrawal liability under Title IV of
ERISA or would be subject to such liability if, as of the Effective Time, the
Company, any of its subsidiaries or any member of their Controlled Group were
to engage in a complete withdrawal (as defined in ERISA section 4203) or
partial withdrawal (as defined in ERISA section 4205) from any such
multiemployer plan; and (ii) no such multiemployer plan is in reorganization or
insolvent (as those terms are defined in ERISA sections 4241 and 4245,
respectively).
(f) With respect to any Company Plan, (i) no actions, suits
or claims (other than routine claims for benefits in the ordinary course) are
pending or threatened, and (ii) no facts or
circumstances exist that could give rise to any such actions, suits or claims.
(g) No Company Plan exists that would result in the payment
to any present or former employee of the Company or any of its subsidiaries of
any money or other property or accelerate or provide any other rights or
benefits to any present or former employee of the Company or any of its
subsidiaries as a result of the transaction contemplated by this Agreement,
whether or not such payment would constitute a parachute payment within the
meaning of Code section 280G.
SECTION 3.11 Tax Matters. The Company and each of its
subsidiaries, and any consolidated, combined, unitary or aggregate group for
tax purposes of which the Company or any of its subsidiaries is or has been a
member has timely filed all Tax Returns required to be filed by it in the
manner provided by law, has paid all Taxes shown thereon to be due and has
provided adequate reserves in its financial statements for any Taxes that have
not been paid, whether or not shown as being due on any Tax Returns. All such
Tax Returns were true, correct and complete in all material respects when
filed. No (i) material claim for unpaid Taxes has become a lien or encumbrance
of any kind against the property of the Company or any of its subsidiaries or
is being asserted against the Company or any of its subsidiaries; (ii) audit of
any Tax Return of the Company or any of its subsidiaries is being conducted by
a Tax authority; and (iii) extension of the statute of limitations on the
assessment of any Taxes is currently in effect with respect to the Company or
any of its subsidiaries. For purposes of this Agreement, "Taxes" shall mean any
taxes of any kind, including but not limited to those on or measured by or
referred to as income, gross receipts, capital, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value added, property or windfall
profits taxes, customs, duties or similar fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax
or additional amounts imposed by any governmental authority, domestic or
foreign. For purposes of this Agreement, "Tax Return" shall mean any return,
report or statement required to be filed with any governmental authority with
respect to Taxes, including any schedule or attachment thereto or amendment
thereof.
SECTION 3.12 Offer Documents; Proxy Statement. Neither the
Schedule 14D-9, nor any of the information supplied by the Company for
inclusion in the Offer Documents, shall, at the respective times such Schedule
14D-9, the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to stockholders, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light
of the circumstances under which they were made, not misleading. Neither the
proxy statement to be sent to the stockholders of the Company in connection
with the Stockholders Meeting (as defined in Section 6.1) nor the information
statement to be sent to such stockholders, as appropriate (such proxy statement
or information statement, as amended or supplemented, is herein referred to as
the "Proxy Statement"), shall, at the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to stockholders and at
the time of the Stockholders Meeting and at the Effective Time, be false or
misleading with respect to any material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders Meeting which
has become false or misleading. Notwithstanding the foregoing, the Company
makes no representation or warranty with respect to any information supplied by
Parent or Purchaser or any of their respective representatives which is
contained in the Schedule 14D-9 or the Proxy Statement. The Schedule 14D-9 and
the Proxy Statement will comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder.
SECTION 3.13 Environmental Matters. Except as set forth in
the SEC Reports, neither the Company nor any of its subsidiaries is in
violation of any applicable law, rule, regulation, decree or order of any
governmental or regulatory authority applicable to the Company or its
subsidiaries, except for violations which would not have a Material Adverse
Effect. Without limiting the foregoing, except for matters which would not have
a Material Adverse Effect and those matters disclosed in the SEC Reports, (a)
businesses of the Company and its subsidiaries are being conducted in
compliance with applicable Environmental Laws (as defined below), (b) the
businesses of the Company and its subsidiaries (past or present) have not made,
caused or contributed to any material release of any hazardous or toxic waste
or substance into the environment at any facility now or formerly owned or
operated by the Company or its past or present subsidiaries and (c) neither the
Company nor any of its subsidiaries is subject to any compliance agreement or
settlement agreement from an alleged violation of Environmental Laws. For
purposes hereof, "Environmental Laws" shall mean all applicable laws relating
to pollution or protection of the environment, including, without limitation,
the Resource Conservation and Recovery Act, the Federal Water Pollution Control
Act, the Toxic Substances Control Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Federal Clean Air Act, the
Federal Toxic Substance Control Act and any state law equivalents thereof.
SECTION 3.14 Brokers. No broker, finder or investment banker
(other than the Financial Adviser) is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by and on behalf of the Company.
The Company has heretofore furnished to Parent a complete and correct copy of
all agreements between the Company and the Financial Adviser pursuant to which
such firm would be entitled to any payment relating to the transactions
contemplated hereby.
SECTION 3.15 Year 2000. All the computer-based systems of the
Company and its subsidiaries, including its information data bases, accounting
systems and data processing systems, will not be materially adversely affected
by, and will continue to operate in the same manner as such systems currently
operate notwithstanding, Year 2000; provided that the Company does not
represent or warrant that the databases and systems of its material suppliers
and customers will not be adversely affected due to the Year 2000. None of the
Intellectual Property or other assets of the Company and its subsidiaries used
in their current products will be materially adversely affected by, and each
thereof will continue to operate in the same manner as it currently operates
notwithstanding, Year 2000. As used herein, the term "Year 2000" means the
occurrence of or calculation involving the Year 2000 A.D., or other calendar
dates occurring through December 31, 2010.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent
and warrant to the Company that:
SECTION 4.1 Corporate Organization. Each of Parent and
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority and any necessary governmental
authority to own, operate or lease its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power, authority and governmental
approvals could not, individually or in the aggregate, reasonably be expected
to prevent the consummation of the Offer or the Merger.
SECTION 4.2 Authority Relative to This Agreement. Each of
Parent and Purchaser has all necessary corporate power and authority to enter
into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by each of Parent and Purchaser and the consummation by each of
Parent and Purchaser of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and
Purchaser other than filing and recordation of appropriate merger documents as
required by the MGCL. This Agreement has been duly executed and delivered by
Parent and Purchaser and, assuming due authorization, execution and delivery by
the Company, constitutes a legal, valid and binding obligation of each such
corporation enforceable against such corporation in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
SECTION 4.3 No Conflict; Required Filings and Consents. (a)
The execution, delivery and performance of this Agreement by Parent and
Purchaser do not and will not: (i) conflict with or violate the respective
certificates or articles of incorporation or by-laws of Parent or Purchaser;
(ii) assuming that all consents, approvals and authorizations contemplated by
clauses (i), (ii) and (iii) of subsection (b) below have been obtained and all
filings described in such clauses have been made, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to Parent or
Purchaser or by which either of them or their respective properties are bound
or affected; or (iii) result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both could become a
default) or result in the loss of a material benefit under, or give rise to any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the property or assets of
Parent or Purchaser pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or Purchaser is a party or by which Parent or Purchaser or any
of their respective properties are bound or affected, except, in the case of
clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults
or other occurrences which could not, individually or in the aggregate,
reasonably be expected to prevent the consummation of the Offer or the Merger.
(b) The execution, delivery and performance of this Agreement
by Parent and Purchaser do not and will not require any consent, approval,
authorization or permit of, action by, filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Exchange Act and the rules and
regulations promulgated thereunder, the HSR Act, state securities, takeover and
Blue Sky laws, (ii) the filing and recordation of appropriate merger or other
documents as required
by the MGCL, (iii) the consent of the Required Lenders (having the meaning
assigned to such term under the Credit Agreement and the 364 Day Credit
Agreement referred to below) under (x) the Amended and Restated Credit
Agreement dated as of August 13, 1998 (the "Credit Agreement"), among Parent,
the several lenders from time to time a party thereto, BankAmerica Xxxxxxxxx
Xxxxxxx and Xxxxxx Commercial Paper Inc., as Arrangers (the "Arrangers"), Bank
of America National Trust & Savings Association, as Administrative Agent (the
"Administration Agent"), and Xxxxxx Commercial Paper Inc., as Documentation
Agent and Syndication Agent (the "Documentation Agent"), and (y) the 364 Day
Credit Agreement dated as of August 13, 1998 (the "364 Day Credit Agreement"),
among Parent, the several lenders from time to time a party thereto, the
Arrangers, the Administration Agent and the Documentation Agent, and (iv) such
consents, approvals, authorizations, permits, actions, filings or notifications
the failure of which to make or obtain would not, individually or in the
aggregate, reasonably be expected to prevent the consummation of the Offer or
the Merger.
SECTION 4.4 Offer Documents; Proxy Statement. The Offer
Documents, as filed pursuant to Section 1.1, will not, at the time such Offer
Documents are filed with the SEC or are first published, sent or given to
stockholders, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated or incorporated
by reference therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
information supplied by Parent for inclusion in the Proxy Statement shall not,
on the date the Proxy Statement is first mailed to stockholders, at the time of
the Stockholders Meeting (as defined in Section 6.1) or at the Effective Time,
contain any statement which, at such time and in light of the circumstances
under which it shall be made, is false or misleading with respect to any
material fact, or shall omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders Meeting which
has become false or misleading. Notwithstanding the foregoing, Parent and
Purchaser make no representation or warranty with respect to any information
supplied by the Company or any of its representatives which is contained in or
incorporated by reference in any of the foregoing documents or the Offer
Documents. The Offer Documents, as amended and supplemented, will comply in all
material respects as to form with the requirements of the Exchange Act and the
rules and regulations promulgated thereunder.
SECTION 4.5 Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission from the
Company in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on behalf of
Parent or Purchaser.
SECTION 4.6 Financing. Subject to the consent of the Required
Lenders under the Credit Agreement and the 365 Day Credit Agreement, Parent and
Purchaser have as of the date hereof and will have available to them, upon
consummation of the Offer and at the Effective Time, immediately available
funds necessary to consummate the transactions contemplated by this Agreement.
Parent and Purchaser reasonably believe that such consents of the Required
Lenders will be obtained.
SECTION 4.7 Operations of Purchaser. Purchaser has been
formed solely for the purpose of engaging in the transactions contemplated
hereby and prior to the Effective Time will have engaged in no other business
activities and will have incurred no liabilities or obligations other than as
contemplated herein.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business of the Company Pending the
Merger. The Company covenants and agrees that, during the period from the date
hereof until the time persons nominated by Parent or Purchaser constitute a
majority of the Board of Directors, except pursuant to the terms hereof or as
disclosed in the SEC Reports, or unless Purchaser shall otherwise agree in
writing, the businesses of the Company and its subsidiaries shall be conducted
only in, and the Company and its subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with past
practice and in compliance in all material respects with applicable laws; and
the Company and its subsidiaries shall each use its reasonable good faith
efforts to preserve substantially intact the business organization and assets
of the Company and its subsidiaries, to keep available the services of the
present officers, employees and consultants of the Company and its subsidiaries
and to preserve the present relationships of the Company and its subsidiaries
with customers, suppliers and other persons with which the Company or any of
its subsidiaries has significant business relations. By way of amplification
and not limitation, neither the Company nor any of its subsidiaries shall,
between the date of this Agreement and the time persons nominated by Parent or
Purchaser constitute a majority of the Board of Directors, directly or
indirectly do, or propose or commit to do, any of the following, except as
otherwise contemplated by this Agreement, as previously disclosed in the SEC
Reports filed prior to the date of this Agreement or as set forth in Schedule
5.1 of the Disclosure Schedule, without the prior written consent of Parent:
(a) Amend or otherwise change its Articles or By-Laws
or equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber, or
authorize or commit to the issuance, sale, pledge, disposition or
encumbrance of, (A) any shares of capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind
to acquire any shares of capital stock, or any other ownership
interest (including but not limited to stock appreciation rights or
phantom stock), of the Company or any of its subsidiaries (except for
the issuance of up to 1,571,302 shares of Company Common Stock
issuable in accordance with the terms of Employee Options outstanding
as of November 30, 1998) or (B) any property or assets, whether
tangible or intangible, of the Company or any of its subsidiaries,
except for sales of products in the ordinary course of business and in
a manner consistent with past practice;
(c) Declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) Reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock
or any capital stock of any of its subsidiaries;
(e) (i) Acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof or any material assets, (ii) incur
any indebtedness for borrowed money (other than indebtedness incurred
under the Company's existing revolving credit facility in the ordinary
course of business consistent with past practice to fund working
capital requirements) or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, or make any loans,
advances or capital contributions to, or investments in, any other
person, (iii) make or start any bid or proposal, or enter into or
renew or amend in any material respect any contract or agreement other
than in the ordinary course of business consistent with past practice
that would involve aggregate consideration under such bid, proposal,
contract or agreement in excess of $4.0 million or is bid, proposed or
renewed at an amount at which the Company would expect such bid,
proposal or renewal to result in a loss thereunder to the Company,
(iv) except for expenditures relating to the anticipated acquisition
of Oracle Software in accordance with the Edgemark Systems Proposal
for Microdyne dated September 9, 1998, authorize any single capital
expenditure which is in excess of $250,000 or capital expenditures
which are, in the
aggregate, in excess of $1.0 million for the Company and its
subsidiaries taken as a whole, (v) enter into any transaction,
contract or commitment with any affiliate of the Company, or (vi)
except as contemplated or permitted by clauses (i)-(v) of this Section
5.1(e), enter into or amend any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in this
Section 5.1(e);
(f) Except to the extent required under existing employee and
director benefit plans, agreements or arrangements as in effect on the
date of this Agreement, increase the compensation or fringe benefits
of any of its directors, officers or employees, except for increases
in salary or wages of employees of the Company or its subsidiaries who
are not officers of the Company in the ordinary course of business in
accordance with past practice, or grant any retention, severance or
termination pay not currently required to be paid under existing
severance plans to or enter into any employment, consulting or
severance agreement or arrangement with any present or former
director, officer or other employee of the Company or any of its
subsidiaries, or establish, adopt, enter into or amend or terminate
any collective bargaining agreement or Company Plan, including, but
not limited to, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any directors, officers
or employees;
(g) Except as may be required as a result of a change in law
or in generally accepted accounting principles, change any of the
accounting methods, practices or principles used by it;
(h) Make or change any Tax election, make or change any
method of accounting with respect to Taxes, file any amended Tax
Return or settle or compromise any material Tax liability;
(i) Settle or compromise any pending or threatened suit,
action or claim for an aggregate amount in excess of $100,000 or which
is material or which relates to the transactions contemplated hereby;
(j) Make any change in the key management structure of the
Company or any of its subsidiaries, including, without limitation, the
hiring of additional officers or the termination of existing officers;
(k) Other than in the ordinary course of business, transfer
or grant any rights under any Intellectual
Property, or modify any existing rights with respect thereto; provided
that the Company shall not grant an exclusive license with respect to
any Intellectual Property;
(l) Adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its subsidiaries not
constituting an inactive subsidiary (other than the Merger);
(m) Pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business in accordance with the terms of such
obligation or liability and consistent with past practice of
liabilities reflected or reserved against in the financial statements
of the Company or incurred in the ordinary course of business and
consistent with past practice;
(n) Fail to maintain in full force and effect the existing
insurance policies covering the Company and its subsidiaries and their
respective properties, assets and businesses (provided, that the
Company may substitute therefor policies providing for coverages no
less favorable to the Company and its subsidiaries on terms and
conditions no less favorable to the Company and its subsidiaries); or
(o) Take, or offer or propose to take, or agree to take in
writing or otherwise, any of the actions described in Sections 5.1(a)
through 5.1(n) or any action which would make any of the
representations or warranties of the Company contained in this
Agreement untrue and incorrect as of the date when made if such action
had then been taken, or would result in any of the conditions set
forth in Annex A not being satisfied.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Stockholders Meeting. (a) The Company, acting
through its Board of Directors, shall, if required in accordance with
applicable law and the Company's Articles and By-Laws, (i) duly call, give
notice of, convene and hold a meeting of its stockholders as soon as
practicable following consummation of the Offer for the purpose of considering
and taking action on this Agreement and the transactions contemplated hereby
(the "Stockholders Meeting") and (ii) subject to its fiduciary duties under
applicable law as determined in good faith by a majority of the Disinterested
Directors (as defined in Section 6.3(c)) of the Company based on the advice of
independent outside legal counsel to the Disinterested Directors, (A) include
in the Proxy
Statement the unanimous recommendation of the Board of Directors that the
stockholders of the Company vote in favor of the approval of this Agreement and
the transactions contemplated hereby and, subject to the approval of the
Financial Advisor, the written opinion of the Financial Adviser that the
consideration to be received by the stockholders of the Company pursuant to the
Offer and the Merger is fair to such stockholders and (B) use its reasonable
good faith efforts to obtain the necessary approval of this Agreement and the
transactions contemplated hereby by its stockholders. At the Stockholders
Meeting, Parent and Purchaser shall cause all Shares then beneficially owned by
them and their subsidiaries to be voted in favor of approval of this Agreement
and the transactions contemplated hereby.
(b) Notwithstanding the foregoing, in the event that
Purchaser shall acquire at least 90% of the outstanding Shares, the Company and
Parent agree, subject to Article VII, to take all necessary and appropriate
action to cause the Merger to become effective as soon as reasonably
practicable after such acquisition, without a meeting of the Company's
stockholders, in accordance with Section 3-106 of the MGCL.
(c) Notwithstanding anything to the contrary contained in
this Agreement, the Company shall not be required to hold the Stockholders
Meeting if the Minimum Condition is not satisfied.
SECTION 6.2 Proxy Statement. If required by applicable law,
as soon as practicable following Parent's request, the Company shall file with
the SEC under the Exchange Act and the rules and regulations promulgated
thereunder, and shall use its reasonable good faith efforts to have cleared by
the SEC, the Proxy Statement with respect to the Stockholders Meeting. Parent,
Purchaser and the Company will cooperate with each other in the preparation of
the Proxy Statement. Without limiting the generality of the foregoing, each of
Parent and Purchaser will furnish to the Company the information relating to it
required by the Exchange Act and the rules and regulations promulgated
thereunder to be set forth in the Proxy Statement. The Company agrees to use
its reasonable good faith efforts, after consultation with the other parties
hereto, to respond promptly to any comments made by the SEC with respect to the
Proxy Statement and any preliminary version thereof filed by it and cause such
Proxy Statement to be mailed to the Company's stockholders at the earliest
practicable time.
SECTION 6.3 Company Board Representation; Section 14(f). (a)
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer, and
from time to time thereafter, Purchaser shall be entitled to designate up to
such number of directors, rounded up to the next whole number, on the Board of
Directors of the Company as shall give Purchaser representation on the Board of
Directors equal to the product of the total number of directors on such Board
(giving effect to the directors
elected pursuant to this sentence) multiplied by the percentage that the
aggregate number of Shares beneficially owned by Purchaser or any affiliate of
Purchaser bears to the total number of Shares then outstanding, and the Company
shall, at such time, promptly take all action necessary to cause Purchaser's
designees to be so elected, including either increasing the size of the Board
of Directors or securing the resignations of incumbent directors or both.
Notwithstanding the foregoing, none of Parent, Purchaser or the Company shall
take any action to remove or replace any member of the Special Committee after
consummation of the Offer and prior to the Effective Time. If at any time prior
to the Effective Time there are less than two members of the Special Committee,
as constituted on the date hereof (other than upon the resignation of both
Disinterested Directors), on the Company's Board of Directors, Parent,
Purchaser and the Company shall use all reasonable efforts to ensure that two
members of the Company's Board of Directors are Disinterested Directors. In the
event that both Disinterested Directors resign from the Special Committee,
Parent, Purchaser and the Company shall either (i) use their reasonable efforts
to appoint successors as aforesaid or (ii) permit the resigning Disinterested
Directors to appoint their successors in their reasonable discretion. The
Company will use its best efforts to cause persons designated by Purchaser to
constitute the same percentage as is on the Board of (i) each committee of the
Board, (ii) each board of directors of each domestic subsidiary of the Company
and (iii) each committee of each such board, in each case only to the extent
permitted by law. Until Purchaser acquires a majority of the outstanding Shares
on a fully diluted basis, the Company shall use its best efforts to ensure that
all the members of the Board and such boards and committees as of the date
hereof who are not employees of the Company shall remain members of the Board
and such boards and committees.
(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-1 promulgated thereunder. The Company shall promptly (subject to the
prompt provision of information by Parent and Purchaser) take all actions
required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 6.3 and shall include in the Schedule 14D-9 or a
separate Rule 14f-1 information statement provided to stockholders such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-1 to fulfill its obligations under
this Section 6.3. Parent or Purchaser will promptly supply to the Company and
be solely responsible for any information with respect to either of them and
their nominees, officers, directors and affiliates required by Section 14(f)
and Rule 14f-1.
(c) Following the election or appointment of Purchaser's
designees pursuant to this Section 6.3 and prior to the Effective Time, any
amendment of this Agreement or the
Articles or By-Laws of the Company, any termination of this Agreement by the
Company, any extension by the Company of the time for the performance of any of
the obligations or other acts of Parent or Purchaser or waiver of any of the
Company's rights hereunder, will require the concurrence of a majority of the
directors of the Company then in office who are (a) either members of the
Special Committee (as constituted on the date hereof) or (b) are neither
designated by Purchaser nor are employees of the Company or any of its
subsidiaries (the "Disinterested Directors").
SECTION 6.4 Access to Information; Confidentiality. (a) From
the date hereof to the Effective Time, the Company shall, and shall cause its
subsidiaries, officers, directors, employees, auditors and other agents to,
afford the officers, employees, auditors and other agents of Parent, and
financing sources who shall agree to be bound by the provisions of this Section
6.4 as though a party hereto, complete access at all reasonable times to its
officers, employees, agents, properties, offices, plants and other facilities
and to all books and records, and shall furnish Parent and such financing
sources with all financial, operating and other data and information as Parent,
through its officers, employees or agents, or such financing sources may from
time to time reasonably request.
(b) Each of Parent and Purchaser will hold and treat and will
cause its officers, employees, auditors and other agents to hold and treat in
confidence all documents and information concerning the Company and its
subsidiaries furnished to Parent or Purchaser in connection with the
transactions contemplated in this Agreement in accordance with the
Confidentiality Agreement, dated November 8, 1998, between the Company and
Parent, which Confidentiality Agreement shall remain in full force and effect
in accordance with its terms.
(c) No investigation pursuant to this Section 6.4 shall
affect any representations or warranties of the parties herein or the
conditions to the obligations of the parties hereto.
SECTION 6.5 No Solicitation of Transactions. The Company, its
affiliates and their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or negotiations, if
any, with any parties conducted heretofore with respect to any acquisition or
exchange of all or any material portion of the assets of, or any equity
interest in, the Company or any of its subsidiaries or any business combination
with the Company or any of its subsidiaries. The Company may, directly or
indirectly, furnish information and access, in each case only in response to a
request for such information or access to any person made after the date hereof
which was not encouraged, solicited or initiated by the Company or any of its
affiliates or any of its or their respective
officers, directors, employees, representatives or agents after the date
hereof, pursuant to appropriate confidentiality agreements, and may participate
in discussions and negotiate with such entity or group concerning any merger,
sale of assets, sale of shares of capital stock or similar transaction
(including an exchange of stock or assets) involving the Company or any
subsidiary or division of the Company, if such entity or group has submitted a
written proposal to the Board relating to any such transaction and the Special
Committee Members, as a result of such proposal, by a majority vote determine,
in their good faith judgment, that based on the advice of independent outside
legal counsel to the Special Committee Members, failing to take such action
would constitute a breach of the Board's fiduciary duty under applicable law.
The Board shall provide a copy of any such written proposal to Parent
immediately after receipt thereof, shall notify Parent immediately if any such
proposal is made and shall keep Parent promptly advised of all developments
which could reasonably be expected to culminate in the Board of Directors
withdrawing, modifying or amending its recommendation of the Offer, the Merger
and the other transactions contemplated by this Agreement. Except as set forth
in this Section 6.5, neither the Company or any of its affiliates, nor any of
its or their respective officers, directors, employees, representatives or
agents, shall, directly or indirectly, encourage, solicit, participate in or
initiate discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent
and Purchaser, any affiliate or associate of Parent and Purchaser or any
designees of Parent or Purchaser) concerning any merger, sale of all or any
material portion of the assets, the sale of more than 10% of the outstanding
shares of capital stock of the Company or any of its subsidiaries or similar
transactions (including an exchange of stock or assets) involving the Company
or any subsidiary or division of the Company; provided, however, that nothing
herein shall prevent the Board from taking, and disclosing to the Company's
stockholders, a position contemplated by Rules 14d-9 and 14e-2 promulgated
under the Exchange Act with regard to any tender offer; provided, further, that
the Board shall not recommend that the stockholders of the Company tender their
Shares in connection with any such tender offer unless the Board by a majority
vote determines in its good faith judgment, based on the advice of independent
outside legal counsel to the Company, that failing to take such action would
constitute a breach of the Board's fiduciary duty under applicable law. The
Company agrees not to release any third party from, or waive any provisions of,
(i) any standstill agreement to which the Company is a party (other than for
the limited purpose of discussions and negotiations permitted by this Section
6.5) and (ii) any confidentiality agreement to which the Company is a party.
SECTION 6.6 Employee Benefits Matters. (a) The
Company shall or Parent shall cause the Company and the Surviving
Corporation to promptly pay or provide when due all compensation
and benefits earned through or prior to the Effective Time as provided pursuant
to the terms of any compensation arrangements, employment agreements and
employee or director benefit plans, programs and policies in existence as of
the date hereof for all employees (and former employees) and directors (and
former directors) of the Company. Parent and the Company agree that the Company
and the Surviving Corporation shall pay promptly or provide when due all
compensation and benefits required to be paid pursuant to the terms of any
individual agreement with any employee, former employee, director or former
director in effect and disclosed to Parent as of the date hereof. Nothing
herein shall require the continued employment of any person or prevent the
Company and/or the Surviving Corporation from taking any action or refraining
from taking any action which the Company could take or refrain from taking
prior to the Effective Time.
(b) Except as contemplated herein, Parent shall cause the
Surviving Corporation, for the period ending on December 31, 1999, to provide
employee benefits under plans, programs and arrangements which, in the
aggregate, will provide benefits to the employees of the Surviving Corporation
(other than employees covered by a collective bargaining agreement) which are
no less favorable than those provided pursuant to the plans, programs and
arrangements of the Company in effect on the date hereof (other than
stock-based plans) and employees covered by collective bargaining agreements
shall be provided with such benefits as shall be required under the terms of
any applicable collective bargaining agreement; provided, however, that nothing
herein shall prevent the amendment or termination of any such plan, program or
arrangement, require that the Surviving Corporation provide or permit
investment in the securities of Parent, the Company or the Surviving
Corporation or interfere with the Surviving Corporation's right or obligation
to make such changes as are necessary to conform with applicable law. On and
after January 1, 2000, Parent shall provide employees of the Surviving
Corporation (other than those covered by collective bargaining agreements) with
benefits, in the aggregate, that are no less favorable than those provided to
similarly situated employees of subsidiaries of Parent.
SECTION 6.7 Directors' and Officers' Indemnification and
Insurance. (a) From the Effective Time through the sixth anniversary of the
date on which the Effective Time occurs, Parent shall, or shall cause the
Surviving Corporation to, indemnify and hold harmless each present and former
officer, director or employee of the Company (the "Indemnified Parties"),
against all claims, losses, liabilities, damages, judgments, fines, reasonable
fees, reasonable costs or reasonable expenses, including, without limitation,
reasonable attorneys' fees and disbursements (collectively, "Costs"), incurred
in connection with any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising out of the
fact that the Indemnified Party is or was a director,
officer or employee or the Company and pertaining to matters existing or
occurring at or prior to the Effective Time (including, without limitation,
this Agreement and the transactions and actions contemplated hereby), whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent permitted under applicable law; provided, that no Indemnified Party may
settle any such claim without the prior approval of Parent or the Surviving
Corporation (such consent not to be unreasonably withheld). Each Indemnified
Party will be entitled to advancement of expenses incurred in the defense of
any claim, action, suit, proceeding or investigation; provided, that any person
to whom expenses are advanced provides an undertaking to repay such advances if
it is ultimately determined that such person is not entitled to
indemnification. Without limiting the foregoing, in the event that any claim,
action, suit, proceeding or investigation is brought against an Indemnified
Party (whether arising before or after the Effective Time), the Indemnified
Parties as a group may retain one counsel (plus appropriate local counsel)
satisfactory to Parent or the Surviving Corporation.
(b) The By-Laws of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in Article VIII of the By-laws of the Company, which provisions shall not be
amended, repealed or otherwise modified for a period of three years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who at the Effective Time were directors, officers or employees
of the Company.
(c) Parent shall, or shall cause the Surviving Corporation to
maintain, at no expense to the beneficiaries, in effect for six years from the
Effective Time the current policies of the directors' and officers' liability
insurance maintained by the Company (provided that Parent or the Surviving
Corporation may substitute therefor policies of at least the same coverage
containing terms and conditions which are not materially less advantageous)
with respect to matters occurring at or prior to the Effective Time to the
extent available; provided, however, that in no event shall Parent or the
Surviving Corporation be required to expend more than an amount per year in
excess of 150% of current annual premiums paid by the Company (which the
Company represents and warrants to be not more than $140,000) to maintain or
procure insurance coverage pursuant hereto; and provided, further, that if the
annual premiums of such insurance coverage would exceed 150% of current annual
premiums, Parent or the Surviving Corporation shall obtain a policy with the
greatest coverage available for a cost not exceeding 150% of current annual
premiums. In the event any claim is made against present or former directors,
officers or employees of the Company (the "Indemnitees") that is covered or
potentially covered by insurance, none of the Surviving Corporation, Parent or
any Indemnitee shall do anything that would forfeit, jeopardize,
restrict or limit the insurance coverage available for that claim until the
final disposition thereof.
(d) Notwithstanding anything herein to the contrary, if any
claim, action, suit, proceeding or investigation (whether arising before, at or
after the Effective Time) is made against any Indemnified Party, on or prior to
the sixth anniversary of the Effective Time, the provisions of this Section 6.7
shall continue in effect until the final disposition of such claim, action,
suit, proceeding or investigation.
(e) This covenant is intended to be for the benefit of, and
shall be enforceable by, each of the Indemnified Parties and their respective
heirs and legal representatives. The indemnification provided for herein shall
not be deemed exclusive of any other rights to which an Indemnified Party is
entitled, whether pursuant to law, contract or otherwise.
(f) In the event that the Surviving Corporation or Parent or
any of their respective successor or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or surviving corporation
or entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and assets to any person, then, and in each
such case, to the extent necessary to effectuate the purposes of this Section
6.7, proper provision shall be made so that the successors and assigns of the
Surviving Corporation or Parent shall succeed to the obligations set forth in
this Section 6.7.
(g) Parent and Purchaser acknowledge that the Company is a
party to indemnification agreements (the "Indemnification Agreements") with
each of its current directors as set forth on Schedule 3.8 of the Disclosure
Schedule. Parent and Purchaser agree that all rights in favor of such persons
as set forth in the Indemnification Agreements shall survive the Merger and
shall continue in full force and effect and without modification (except for
such modifications which would enlarge the rights) after the Effective Time in
accordance with the provisions of such Indemnification Agreements, and Parent
shall cause the Surviving Corporation to comply fully with its obligations
hereunder and thereunder. The parties acknowledge that nothing in this Section
6.7 shall limit any rights in favor of Indemnified Parties under the
Indemnification Agreements.
SECTION 6.8 Notification of Certain Matters. The Company
shall give reasonably prompt notice to Parent, and Parent shall give reasonably
prompt notice to the Company, in each case, after it becomes aware, of (i) the
occurrence or non-occurrence of any event the occurrence or non-occurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respects at or prior to
the Effective Time and (ii) any material failure of
the Company, Parent or Purchaser, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 6.8 shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
SECTION 6.9 Further Action; Reasonable Good Faith Efforts.
Upon the terms and subject to the conditions hereof, each of the parties hereto
shall use its reasonable good faith efforts to take, or cause to be taken, all
appropriate action, and to do or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement as promptly as
practicable, including but not limited to (i) cooperation in the preparation
and filing of the Offer Documents, the Schedule 14D-9, the Proxy Statement, any
required filings under the HSR Act and any amendments to any thereof and (ii)
using its reasonable good faith efforts to make all required regulatory filings
and applications and to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and
parties to contracts with the Company and its subsidiaries as are necessary for
the consummation of the transactions contemplated by this Agreement and the
Tender Agreement and to fulfill the conditions to the Offer and the Merger;
provided that Purchaser and its affiliates shall not be required to divest, or
agree to any restrictions with respect to, any of its businesses or assets or
the businesses or assets to be acquired in connection with the transactions
contemplated hereby. The Company will use reasonable good faith efforts to
cooperate with Parent and Purchaser as may be reasonably necessary with respect
to consummating the financing for the Offer and the Merger. Parent and
Purchaser will use reasonable good faith efforts to obtain the consents as
promptly as practicable of the Required Lenders under the Credit Agreement and
the 364 day Credit Agreement. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall use their reasonable good faith efforts to take all such necessary
action.
SECTION 6.10 Public Announcements. Parent and the Company
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to the transactions contemplated by
this Agreement, including the Offer or the Merger and the Tender Agreement, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by law or any listing agreement
with its securities exchange.
SECTION 6.11 Disposition of Litigation. (a) The Company
agrees that it will not settle any litigation currently
pending, or commenced after the date hereof, against the Company or any of its
directors by any stockholder of the Company relating to the Offer or this
Agreement, without the prior written consent of Parent.
(b) Except as permitted by Section 6.5 of this Agreement, the
Company will not voluntarily cooperate with any third party which has sought or
may hereafter seek to restrain or prohibit or otherwise oppose the Offer or the
Merger and will cooperate with Parent and Purchaser to resist any such effort
to restrain or prohibit or otherwise oppose the Offer or the Merger.
SECTION 6.12 State Takeover Statutes. During the term of this
Agreement, the Board of Directors of the Company shall not (i) repeal or
otherwise alter the resolutions of the Board of Directors that render Section
3-602 of the MGCL (or any similar provision) inapplicable to the Offer, the
Merger, this Agreement, the Tender Agreement, the other transactions
contemplated hereby and thereby and any Consensual Transaction and (ii) amend
the By-laws of the Company so as to render Section 3-702(a)(i) of the MGCL (or
any similar provision) applicable to the transactions contemplated by this
Agreement and the Tender Agreement, including, without limitation, the Offer,
or to any Consensual Transaction.
SECTION 6.13 Stop Transfer Order. The Company will instruct
the Company's transfer agent that, except as provided in Section 4.3 of the
Tender Agreement, there is a stop transfer order with respect to all of the
Stockholders' Shares and that the Tender Agreement places limits on the
transfer of such Shares.
ARTICLE VII
CONDITIONS OF MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect
the Merger. The respective obligations of each party to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) If required by the MGCL, this Agreement shall have been
approved by not less than the affirmative vote of the stockholders of the
Company by the requisite vote in accordance with the Company's Articles and the
MGCL.
(b) No statute, rule, regulation, executive order, decree,
ruling, injunction or other order (whether temporary, preliminary or permanent)
shall have been enacted, entered, promulgated or enforced by any United States
or state court or
governmental authority which prohibits, restrains, enjoins or restricts the
consummation of the Merger.
(c) Any waiting period applicable to the Merger under the HSR
Act shall have terminated or expired.
(d) Purchaser shall have purchased Shares pursuant to the
Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated and
the Merger contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the stockholders of the
Company:
(a) By mutual written consent of Parent, Purchaser and the
Company, subject in the case of the Company to Section 6.3(c);
(b) By Parent or the Company if any court of competent
jurisdiction or other governmental body located or having jurisdiction within
the United States or any country or economic region in which either the Company
or Parent, directly or indirectly, has material assets or operations, shall
have issued a final order, decree or ruling or taken any other final action
restraining, enjoining or otherwise prohibiting the Offer or the Merger and
such order, decree, ruling or other action is or shall have become final and
nonappealable and, with respect to any court or governmental body located
outside the United States, such order, decree, ruling or other action would
have a Material Adverse Effect or a material adverse effect on the business,
operations, assets, financial condition or results of operations of Parent and
its subsidiaries taken as a whole;
(c) By Parent if due to an occurrence or circumstance which
would result in a failure to satisfy any of the Offer Conditions, Purchaser
shall have (i) terminated the Offer or (ii) failed to pay for Shares pursuant
to the Offer within 120 days following the date hereof, unless such failure to
pay for Shares is a result of the failure of Parent or Purchaser to perform any
of its covenants and agreements contained in this Agreement;
(d) By the Company if (i) (A) Purchaser fails to commence the
Offer as provided in Section 1.1, (B) Purchaser fails to pay for Shares
pursuant to the Offer within 120 days following the date hereof, unless such
failure to pay for Shares is the result of the failure of the Company to
perform any of its covenants and agreements contained in this Agreement, or (C)
Purchaser shall have terminated the Offer or (ii) prior to the
purchase of Shares pursuant to the Offer, any person shall have made a bona
fide offer to acquire the Company as a result of which a majority of the
Special Committee Members conclude in good faith on the advice of independent
outside legal counsel to the Special Committee Members that termination of this
Agreement is necessary in order for the Board of Directors to comply with its
fiduciary obligations under applicable law (provided that such termination
under this clause (d) shall not be effective until the Company has made payment
of the fee, if any, required simultaneous with such termination pursuant to
Section 8.3(a) hereof); or
(e) By Parent prior to the purchase of Shares pursuant to the
Offer, if (i)following any negotiations by the Company with any person (other
than Parent or Purchaser) that has proposed a Third Party Acquisition, there
shall have been a breach of any covenant or agreement on the part of the
Company contained in this Agreement such that the conditions set forth in
clause (f) of Annex A and/or Section 7.1 would not be satisfied which shall not
have been cured prior to the earlier of (A) 10 days following notice of such
breach and (B) two business days prior to the date on which the Offer
expires,(ii) the Board shall have withdrawn or modified (including by amendment
of the Schedule 14D-9) in a manner adverse to Purchaser its approval or
recommendation of the Offer, this Agreement or the Merger or shall have
recommended another offer or transaction, or shall have resolved to effect any
of the foregoing, or (iii) the Minimum Condition shall not have been satisfied
by the expiration date of the Offer and on or prior to such date (A) any person
(other than Parent or Purchaser) shall have made and not withdrawn a bona fide
proposal or public announcement or communication to the Company with respect to
a Third Party Acquisition or (B) any person (including the Company or any of
its affiliates or subsidiaries), other than Parent or any of its affiliates
shall have become the beneficial owner of more than 25% of the Shares.
SECTION 8.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void and there shall be no liability on the part of any party
hereto except as set forth in Section 8.3 and Section 9.1; provided, however,
that nothing herein shall relieve any party from liability for any breach
hereof.
SECTION 8.3 Fees. (a) If (A) the Company terminates this
Agreement pursuant to 8.1(d)(ii) hereof, (B) the Company terminates this
Agreement pursuant to Section 8.1(d)(i)(B) hereof at a time when Parent had a
right to terminate this Agreement pursuant to Section 8.1(e) hereof or (C)
Parent terminates this Agreement pursuant to Section 8.1(e) hereof (each, a
"Fee Termination Event"), then (x) in the event of a termination
pursuant to Section 8(e)(i)or pursuant to Section 8.1(d)(i)(B) at a time when
Parent had a right to terminate this Agreement pursuant to Section 8.1(e)(i),
if the Company or any of its subsidiaries enters into an agreement with respect
to a Third Party Acquisition (an "Acquisition Agreement") within 12 months of
termination, the Company shall pay Parent $1.25 million simultaneously with the
signing of the Acquisition Agreement and an additional $1.25 million on the
consummation of a Third Party Acquisition pursuant to such Acquisition
Agreement or if a Third Party Acquisition occurs within 12 months of
termination without the execution of an Acquisition Agreement, the Company
shall pay Parent $2.5 million on the consummation of the Third Party
Acquisition and (y) in the event of any other Fee Termination Event, the
Company shall pay to Parent a fee, in cash (as a condition and prior to such
Fee Termination Event if such event is a termination by the Company and within
one business day of such termination if such event is a termination by Parent),
of $1.25 million and, if a Third Party Acquisition occurs within 12 months, an
additional $1.25 million on the consummation of such transaction. Parent shall
not be entitled to a fee under this Section 8.3(a) if Parent is in material
breach of this Agreement and such breach has not been cured within 10 days
following notice of such breach. Notwithstanding the foregoing provisions, the
Company in no event shall be obligated to pay to Parent more than $2.5 million
pursuant to this Section 8.3(a).
"Third Party Acquisition" means the occurrence of any of the
following events: (i) the acquisition of the Company by merger, tender offer or
otherwise by any person or group of persons acting in concert other than
Parent, Purchaser or any affiliate thereof (a "Third Party"); (ii) the
acquisition by a Third Party of 35% or more of the assets of the Company and
its subsidiaries, taken as a whole, in one transaction or a related series of
transactions; (iii) the acquisition by a Third Party of more than 35% of the
outstanding Shares, in one transaction or a related series of transactions;
(iv) the adoption by the Company of a plan of liquidation or the declaration or
payment of an extraordinary dividend; or (v) the repurchase by the Company or
any of its subsidiaries of 15.0% or more of the outstanding Shares.
(b) If this Agreement is terminated due to the failure to
satisfy the Offer Condition set forth in clause (ii) of Annex A, then Parent
shall pay to the Company a fee, in cash, of $1.25 million within one business
day of such termination; provided that the Company shall not be entitled to a
fee under this Section 8.3(b) if the Company is in material breach of this
Agreement and such breach has not been cured within 10 days following notice of
such breach.
(c) Except as otherwise specifically provided herein, each
party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
SECTION 8.4 Amendment. Subject to Section 6.3, this Agreement
may be amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after approval of the Merger by the stockholders of
the Company, no amendment may be made which would reduce the amount or change
the type of consideration into which each Share shall be converted upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.5 Waiver. Subject to Section 6.3, at any time prior
to the Effective Time, any party hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.1, as the case may be, except that the agreements set
forth in Article II, Section 6.6, Section 6.7, Section 6.10 and Article IX
shall survive the Effective Time and those set forth in Section 6.4(b), Section
8.3 and Article IX shall survive termination of this Agreement.
SECTION 9.2 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
cable, telecopy, telegram or telex or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
if to Parent or Purchaser:
L-3 Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx, Esq.
with an additional copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
if to the Company:
Microdyne Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
with copies to:
McGuire, Woods, Battle & Xxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx, Esq.
and
Xxxxx Xxxxxxxxxx LLP
1301 Avenue of the Americas
New York, N.Y. 10019-6092
Attention: Xxxxxx X. Xxxxxx, Esq.
SECTION 9.3 Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
(b) "beneficial owner" with respect to any Shares means a
person who shall be deemed to be the beneficial owner of such Shares
(i) which such person or any of its affiliates or associates
beneficially owns, directly or indirectly, (ii) which such person or
any of its affiliates or associates (as such term is defined in Rule
12b-2 of the Exchange Act) has, directly or indirectly, (A) the right
to acquire (whether such right is exercisable immediately or subject
only to the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise
of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding or (iii) which are beneficially owned,
directly or indirectly, by any other persons with whom such person or
any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares;
(c) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction
of the management policies of a person, whether through the ownership
of stock, as trustee or executor, by contract or credit arrangement or
otherwise;
(d) "generally accepted accounting principles" shall mean the
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a
significant segment of the accounting profession in the United States,
in each case applied on a basis consistent with the manner in which
the audited financial statements for the fiscal year of the Company
ended September 28, 1997 were prepared;
(e) "knowledge", when used with reference to the Company or
its subsidiaries shall mean the actual knowledge of senior executive
officers of the Company after reasonable investigation.
(f) "Intellectual Property" shall mean intellectual or
property of a similar nature including without limitation trademark
rights, patent rights, copyrights, design rights, proprietary
information and all other intellectual property rights, including,
without limitation, inventions, processes, formulae, technology,
know-how, techniques or other data and information, confidential and
proprietary trade secrets, computer software, technical manuals and
documentation used in connection with any of the foregoing, and
licenses and rights with respect to the foregoing or property of like
nature;
(g) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group
(as defined in Section 13(d)(3) of the Exchange Act); and
(h) "subsidiary" or "subsidiaries" of the Company, the
Surviving Corporation, Parent or any other person means any
corporation, partnership, joint venture or other legal entity of which
the Company, the Surviving Corporation, Parent or such other person,
as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests the holder of which is generally entitled to
vote for the election of the board of directors or other governing
body of such corporation or other legal entity.
SECTION 9.4 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
SECTION 9.5 Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the
subject matter hereof. This Agreement shall not be assigned by operation of law
or otherwise, except that Parent and Purchaser may assign all or any of their
respective rights and obligations hereunder to any direct or indirect wholly
owned subsidiary or subsidiaries of Parent, provided that no such assignment
shall relieve the assigning party of its obligations hereunder if such assignee
does not perform such obligations.
SECTION 9.6 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any rights, benefits or remedies of any nature whatsoever under or
by reason of this Agreement , other than rights conferred upon Indemnified
Parties under Section 6.7.
SECTION 9.7 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York except
to the extent Maryland law is mandatorily applicable.
SECTION 9.8 Headings. The descriptive headings
contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.9 Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
L-3 COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President
X-X ACQUISITION CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: President and Secretary
MICRODYNE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
ANNEX A
Offer Conditions
The capitalized terms used in this Annex A have the meanings
set forth in the attached Agreement, except that the term "Merger Agreement"
shall be deemed to refer to the attached Agreement and the term "Commission"
shall be deemed to refer to the SEC.
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the Commission, including Rule 14e-1(c) under the Exchange
Act (relating to Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for any Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Shares tendered
pursuant to the Offer, and may amend or terminate the Offer (whether or not any
Shares have theretofore been purchased or paid for) if, prior to the expiration
of the Offer, (i) a number of shares of Company Common Stock which, together
with any Shares owned by L-3 Communications Holdings, Inc., Parent or
Purchaser, or any controlled affiliate thereof, constitutes at least a majority
of the voting power (determined on a fully-diluted basis), on the date of
purchase, of all the securities of the Company entitled to vote generally in
the election of directors or in a merger shall not have been validly tendered
and not properly withdrawn prior to the expiration of the Offer (the "Minimum
Condition"), (ii) Purchaser shall have not received the consent of the Required
Lenders (having the meaning assigned to such term under the Credit Agreement
and the 364 Day Credit Agreement) to the transactions contemplated by the
Merger Agreement under (x) the Credit Agreement and (y) the 364 Day Credit
Agreement, or (iii) at any time on or after December 3,1998 and prior to the
acceptance for payment of Shares, any of the following conditions occurs or has
occurred or Purchaser makes a good faith determination that any of the
following conditions has occurred:
(a) there shall have been instituted and pending any action
or proceeding brought by any governmental authority before any federal
or state court, or any order or preliminary or permanent injunction
entered in any action or proceeding before any federal or state court
or governmental, administrative or regulatory authority or agency, or
any other action taken, proposed or threatened, or statute, rule,
regulation, legislation, interpretation, judgment or order proposed,
sought, enacted, entered, enforced, promulgated, amended, issued or
deemed applicable to Parent, Purchaser, the Company or any subsidiary
or affiliate of Purchaser or the Company or the Offer or the Merger,
by any legislative body, court, government or governmental,
administrative or regulatory authority or
agency which could reasonably be expected to have the effect of: (i)
making illegal, materially delaying or otherwise directly or
indirectly restraining or prohibiting or making materially more costly
the making of the Offer, the acceptance for payment of, or payment
for, some of or all the Shares by Purchaser or any of its affiliates,
the consummation of any of the transactions contemplated by the Merger
Agreement or materially delaying the Merger; (ii) prohibiting or
materially limiting the ownership or operation by the Company or any
of its subsidiaries or Parent, Purchaser or any of Parent's affiliates
of all or any material portion of the business or assets of the
Company or any of its subsidiaries or Parent, or any of its
affiliates, or compelling Parent, Purchaser or any of Parent's
affiliates to dispose of or hold separate all or any material portion
of the business or assets of the Company or any of its subsidiaries or
Parent, or any of its affiliates, as a result of the transactions
contemplated by the Offer or the Merger Agreement; (iii) imposing or
confirming limitations on the ability of Parent, Purchaser or any of
Parent's affiliates effectively to acquire or hold or to exercise full
rights of ownership of Shares, including without limitation the right
to vote any Shares acquired or owned by Parent or Purchaser or any of
its affiliates on all matters properly presented to the stockholders
of the Company, including without limitation the adoption and approval
of the Merger Agreement and the Merger or the right to vote any shares
of capital stock of any subsidiary directly or indirectly owned by the
Company; or (iv) requiring divestiture by Parent or Purchaser or any
of their affiliates of any Shares;
(b) there shall have occurred any fact that had or could
reasonably be expected to have a Material Adverse Effect;
(c) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) a decline of at least 25% in either the Dow Xxxxx Average
of Industrial Stocks or the Standard & Poor's 500 index from the date
hereof, (iii) any material adverse change or any existing or
threatened condition, event or development involving a prospective
material adverse change in United States or other material
international currency exchange rates or a suspension of, or
limitation on, the markets therefor, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States, (v) any limitation (whether or not mandatory) by any
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, on, or any other event that, in the
reasonable judgment of Purchaser, could
A-2
reasonably be expected to materially adversely affect the extension of
credit by banks or other lending institutions, (vi) a commencement of
a war or armed hostilities or other national or international calamity
directly or indirectly involving the United States (except for any
such event involving Iraq) or having a Material Adverse Effect or
materially adversely affecting (or material delaying) the consummation
of the Offer or (vii) in the case of any of the foregoing existing at
the time of commencement of the Offer, a material acceleration or
worsening thereof;
(d) (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a manner adverse
to Parent or Purchaser the approval or recommendation of the Offer,
the Merger or the Merger Agreement, or approved or recommended any
takeover proposal or any other acquisition of Shares other than the
Offer and the Merger, or (ii) any such corporation, partnership,
person or other entity or group shall have entered into a definitive
agreement or an agreement in principle with the Company with respect
to a tender offer or exchange offer for any Shares or a merger,
consolidation or other business combination with or involving the
Company or any of its subsidiaries;
(e) any of the representations and warranties of the Company
set forth in the Merger Agreement shall not be true and correct, in
each case as if such representations and warranties were made at the
time of such determination, except where the failure of any such
representations and warranties to be true and correct would not have a
Material Adverse Effect or would make materially more costly the
making of the Offer or the acceptance for payment of, or payment for,
some or all of the Shares by Purchaser or any of its affiliates;
(f) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with
by it under the Merger Agreement;
(g) the Merger Agreement shall have been terminated in
accordance with its terms or the Offer shall have been terminated with
the consent of the Company; or
(h) any waiting periods under the HSR Act applicable to the
purchase of Shares pursuant to the Offer, and any applicable waiting
periods under any material foreign statutes or regulations, shall not
have expired or been terminated, or any material approval, permit,
authorization or consent of any domestic or foreign governmental,
administrative or regulatory agency (federal, state, local, provincial
or otherwise) shall not have been obtained on
A-3
terms satisfactory to the Parent in its reasonable
discretion;
which, in the reasonable judgment of Purchaser with respect to each and every
matter referred to above and regardless of the circumstances (including any
action or inaction by Purchaser or any of its affiliates other than a breach of
the Merger Agreement) giving rise to any such condition, makes it inadvisable
to proceed with the Offer or with such acceptance for payment of or payment for
Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of
Purchaser and may be asserted by Purchaser regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser in whole or in
part at any time and from time to time in its sole discretion (subject to the
terms of the Merger Agreement). The failure by Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
A-4
