EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
among
DRS TECHNOLOGIES, INC.,
MMC3 CORPORATION
and
INTEGRATED DEFENSE TECHNOLOGIES, INC.
Dated as of August 15, 2003
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
August 15, 2003, among DRS Technologies, Inc., a Delaware corporation
("Parent"), MMC3 Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and Integrated Defense Technologies,
Inc., a Delaware corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Merger
Sub and the Company each have determined that it is in the best interests of
their respective companies and stockholders to enter into and consummate this
Agreement, providing for the merger of Merger Sub with and into the Company
with the Company as the surviving corporation, and subject to the conditions
set forth herein;
WHEREAS, as a condition to and inducement to Parent's and
Merger Sub's willingness to enter into this Agreement, simultaneously with the
execution of this Agreement, Veritas Capital Management, L.L.C., a Delaware
limited liability company ("Capital Management"), IDT Holding, L.L.C.
("Holding"), a Delaware limited liability company and a stockholder of the
Company, and The Veritas Capital Fund, L.P. ("Capital Fund"), a Delaware
limited partnership and a parent of Holding, are entering into a Voting
Agreement substantially in the form attached hereto as Exhibit A (the "Voting
Agreement") and Capital Management, Holding, Capital Fund and Xxxxxx X. XxXxxx
are entering into a Standstill Agreement substantially in the form attached
hereto as Exhibit B (the "Standstill Agreement") with Parent and Merger Sub;
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
1. The Merger.
1.1 The Merger. At the Effective Time (as defined in Section 1.3),
subject to the terms and conditions of this Agreement and the applicable
provisions of the General Corporation Law of the State of Delaware (the
"DGCL"), Merger Sub shall be merged with and into the Company and the separate
corporate existence of Merger Sub shall thereupon cease (the "Merger"). The
Company shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation"). The Merger shall have
the effects specified in the DGCL.
1.2 The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at the
offices of Winston & Xxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00
a.m., local time, as soon as practicable but in no event later than the
Outside Date (as defined in Section 7.1(b)(i)). The date on which the Closing
occurs is hereinafter referred to as the "Closing Date."
1.3 Effective Time. If all the conditions to the Merger set forth
in Article 6 shall have been fulfilled or waived in accordance herewith and
this Agreement shall not have been terminated as provided in Article 7, the
parties hereto shall cause a Certificate of Merger meeting the requirements of
Section 251 of the DGCL (the "Certificate of Merger") to be properly executed
and filed in accordance with such Section on the Closing Date. The Merger
shall become effective at the time of filing of the Certificate of Merger with
the Secretary of State of the State of Delaware in accordance with the DGCL or
at such later time which the parties hereto shall have agreed upon and
designated in such filing as the effective time of the Merger (the "Effective
Time").
1.4 Certificate of Incorporation, By-Laws, Directors and Officers
of the Surviving Corporation. (a) The Certificate of Incorporation of the
Company as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation, from and after the
Effective Time, until duly amended in accordance with applicable Law and the
terms thereof.
(b) The By-Laws of Merger Sub as in effect immediately prior to
the Effective Time shall be the By-Laws of the Surviving Corporation from and
after the Effective Time, until duly amended in accordance with applicable
Law, the terms thereof, and the Surviving Corporation's Certificate of
Incorporation.
(c) The officers of the Company immediately prior to the Effective
Time shall be the officers of the Surviving Corporation from and after the
Effective Time, until their successors are duly appointed or elected in
accordance with applicable Law and the Surviving Corporation's Certificate of
Incorporation and By-Laws.
(d) The directors of Merger Sub immediately prior to the Effective
Time shall be the directors of the Surviving Corporation from and after the
Effective Time, until their successors are duly appointed or elected in
accordance with applicable Law and the Surviving Corporation's Certificate of
Incorporation and By-Laws.
ARTICLE 2
2. Effect of the Merger on Securities of Merger Sub and the
Company. At the Effective Time by virtue of the Merger and without any action
on the part of Merger Sub, the Company or the holders of any of the securities
of Merger Sub or the Company:
2.1 Merger Sub Stock. Each share of common stock, $0.01 par value
per share, of Merger Sub that is issued and outstanding immediately prior to
the Effective Time shall be converted into and exchanged for one validly
issued, fully paid and nonassessable share of common stock, $0.01 par value
per share, of the Surviving Corporation.
2.2 Common Stock. (a) Each share of common stock, par value $0.01
per share, of the Company (the "Common Stock") issued and outstanding
immediately prior to the Effective Time (other than shares of Common Stock
owned by Parent or Merger Sub or held by the Company, all of which shall be
cancelled, and other than the shares of Dissenting Common Stock (as defined in
Section 2.5)) shall be converted into the right to receive (i) the amount of
$12.25 in cash without interest (the "Cash Consideration") and (ii) a fraction
of a fully paid and nonassessable share (the "Parent Stock Consideration") of
the common stock, $.01 par value per share, of Parent ("Parent Stock") equal
to one share of Parent Stock multiplied by the Exchange Ratio (as defined
below). "Exchange Ratio" means $5.25 divided by the lesser of (i) $28.00 and
(ii) the greater of (A) the Parent Common Stock Value (as defined below) and
(B) $25.90. "Parent Common Stock Value" means the average closing sale prices
for a share of Parent Stock on the New York Stock Exchange, Inc. (the "NYSE")
Composite Transactions Tape (as reported by The Wall Street Journal (Northeast
edition), or, if not reported thereby, as reported by any other authoritative
source) for each of the ten consecutive trading days ending with the second
complete trading day prior to the Closing Date (not counting the Closing
Date). The Parent Stock Consideration using the Exchange Ratio shall be
calculated to the nearest one-ten thousandth of a share of Parent Stock and
the Parent Common Stock Value shall be calculated to the nearest one-tenth of
one cent. The Cash Consideration and the Parent Stock Consideration to be
received by the holders of Common Stock hereunder (together with the cash in
lieu of fractional shares of Parent Stock as specified below) are referred to
herein collectively as the "Merger Consideration".
(b) All shares of Common Stock (other than shares to be cancelled
in accordance with Section 2.2(c)) shall cease to be outstanding and shall be
cancelled and shall cease to exist, and each holder of shares of Common Stock
(other than Merger Sub and Parent) shall thereafter cease to have any rights
with respect to such shares of Common Stock, except, subject to Section 2.4,
the right to receive, without interest, the Merger Consideration in accordance
with Section 2.3 upon the surrender of a certificate or certificates (a
"Certificate") representing such shares of Common Stock.
(c) Each share of Common Stock issued and held in the Company's
treasury at the Effective Time, or held by Merger Sub or Parent, shall, by
virtue of the Merger, cease to be outstanding and shall be cancelled without
payment of any consideration therefor.
2.3 Exchange of Certificates Representing Common Stock. (a) Prior
to the Effective Time, Parent shall appoint a commercial bank or trust
company, subject to the reasonable satisfaction of the Company, to act as
Exchange Agent hereunder for the purpose of paying, in accordance with this
Article 2, the Cash Consideration and exchanging, in accordance with this
Article 2, Certificates for the Parent Stock Consideration (the "Exchange
Agent"). Parent shall take all steps necessary to cause the Surviving
Corporation to provide the Exchange Agent with the Merger Consideration to be
delivered in exchange for all the shares of Common Stock pursuant to Section
2.2(a) as and when such amounts are needed by the Exchange Agent.
(b) As promptly as possible after the Effective Time, Parent shall
instruct the Exchange Agent to mail to each holder of record of shares of
Common Stock: (i) a letter of transmittal which shall specify that delivery
shall be effected, and risk of loss and title to such Certificate(s) shall
pass, only upon delivery of such Certificate(s) to the Exchange Agent and
which letter shall be in such form and have such other provisions as are
customary for letters of this nature and (ii) instructions for effecting the
surrender of such Certificate(s) in exchange for the Merger Consideration
(which shall provide that, at the election of the surrendering holder, such
Certificate(s) may be surrendered, and payment therefor collected, by hand
delivery). Upon surrender of such Certificate(s) to the Exchange Agent
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may be
reasonably required by the Exchange Agent, the holder of such Certificate(s)
shall be entitled to receive in exchange therefor a certificate representing
that number of whole shares of Parent Stock and the amount of cash, without
interest, into which shares of Common Stock formerly represented by such
Certificate(s) shall have been converted into the right to receive pursuant to
Section 2.2 after giving effect to any required Tax withholdings, and the
shares formerly represented by the Certificate(s) so surrendered shall
forthwith be cancelled. If any portion of the Parent Stock Consideration is to
be registered in the name of a person other than the person in whose name the
applicable surrendered Certificate is registered, it shall be a condition to
the registration of such shares constituting such Parent Stock Consideration
that the surrendered Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such delivery of such
shares shall pay to the Exchange Agent any transfer or other Taxes required by
reason of such registration in the name of a person other than the registered
holder of such Certificate or establish to the reasonable satisfaction of the
Exchange Agent that such Tax has been paid or is not applicable. No interest
will be paid or will accrue on the cash payable upon surrender of any
Certificate(s), including in lieu of any fractional shares of Parent Stock. In
the event of a transfer of ownership of Common Stock that is not registered in
the transfer records of the Company, payment may be made with respect to such
Common Stock to such a transferee if such Certificate(s) representing such
shares of Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence that
any applicable transfer or other Taxes have been paid. Until surrendered as
contemplated by this Section 2.3(b), each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the amount of Parent Stock and cash, without interest, into which
the shares of Common Stock theretofore represented by such Certificate(s)
shall have been converted pursuant to this Article 2. Parent, Merger Sub or
the Exchange Agent shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable pursuant to this Agreement to any holder of
shares of Common Stock of the Company such amounts as Parent, Merger Sub or
the Exchange Agent are required to deduct and withhold under the Internal
Revenue Code of 1986, as amended and the regulations promulgated thereunder
(the "Code"), or any provision of state, local or foreign Tax Law, with
respect to the making of such payment. To the extent the amounts are so
withheld by Parent, Merger Sub or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of shares of Common Stock of the Company in respect of whom such
deduction and withholding was made by Parent, Merger Sub or the Exchange
Agent.
(c) All shares of Parent Stock issued and all cash paid upon
surrender of Certificates in accordance with the terms of this Article 2 shall
be deemed to have been issued and paid in full satisfaction of all rights
pertaining to the shares of Common Stock theretofore represented by such
Certificates. At or after the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the shares of Common Stock that
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation, they
shall be cancelled and exchanged as provided in this Article 2.
(d) No dividends or other distributions with respect to Parent
Stock with a record date after the Effective Time shall be paid to the holder
of any unsurrendered Certificate, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 2.3(e) until the
surrender of such Certificate in accordance with this Article 2. Subject to
the effect of applicable laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificate representing whole shares
of Parent Stock issued in exchange therefor, without interest, (i) at the time
of such surrender, the amount of any cash payable in lieu of a fractional
share of Parent Stock to which such holder is entitled pursuant to Section
2.3(e) and the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
Parent Stock and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior
to such surrender and a payment date subsequent to such surrender payable with
respect to such whole shares of Parent Stock.
(e) No certificates or script representing fractional shares of
Parent Stock shall be issued upon the surrender for exchange of Certificates,
and such fractional share interests will not entitle the owner thereof to vote
or to any other rights of a stockholder of Parent. Each holder of Common Stock
exchanged pursuant to the Merger who would otherwise be entitled to receive a
fraction of a share of Parent Stock shall receive, upon surrender of such
holder's Certificates in accordance with this Section 2.3, an amount in cash
(without interest) equal to the product obtained by multiplying (i) such
fractional share interest to which such holder (after taking into account all
fractional share interests then held by such holder) would otherwise be
entitled by (ii) the average of the per share closing sales prices of shares
of Parent Stock as reported on the NYSE Composite Transactions reporting
system (as reported in The Wall Street Journal or, in the absence thereof, by
another authoritative source) during the five (5) consecutive trading days
ending on (and including) the trading day immediately preceding the date of
the Effective Time. As promptly as practicable after the determination of the
amount of cash, if any, to be paid to holders of fractional share interests,
the Exchange Agent shall so notify Parent, and Parent shall deposit such
amount with the Exchange Agent and shall cause the Exchange Agent to forward
payments to such holders of fractional share interests subject to and in
accordance with the terms of Section 2.3(b).
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.3(a) (including the proceeds of any
interest and other income received by the Exchange Agent in respect of all
such funds) that remains undistributed to the former stockholders of the
Company six (6) months after the Effective Time shall be delivered to Parent,
upon demand. Any former stockholders of the Company who have not theretofore
complied with this Article 2 shall thereafter look only to the Parent for
payment of any Merger Consideration, without any interest thereon, that may be
payable in respect of each share of Common Stock such stockholder held as of
the Effective Time as determined pursuant to this Agreement.
(g) None of Parent, the Company, the Surviving Corporation, the
Exchange Agent or any other Person shall be liable to any former holder of
shares of Common Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar Laws.
(h) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such Person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
which may be made against it with respect to such Certificate, the Exchange
Agent will issue in exchange for such lost, stolen or destroyed Certificate
the Merger Consideration payable in respect thereof pursuant to this
Agreement.
(i) Parent or Merger Sub shall pay all of the Exchange Agent's
fees in connection with the exchange of the Merger Consideration for
Certificates.
2.4 Adjustment of Merger Consideration. In the event that,
subsequent to the date of this Agreement but prior to the Effective Time, the
outstanding shares of Common Stock or Parent Stock shall have been changed
into a different number of shares or a different class as a result of a stock
split, reverse stock split, stock dividend, subdivision, reclassification,
split, combination, exchange, recapitalization or other similar transaction,
the Exchange Ratio and Cash Consideration shall be appropriately adjusted.
2.5 Dissenting Company Stockholders. Notwithstanding any provision
of this Agreement to the contrary, shares of Common Stock that are issued and
outstanding immediately prior to the Effective Time and which are held by
holders of such shares of Common Stock who have properly exercised appraisal
rights with respect thereto in accordance with Section 262 of the DGCL (the
"Dissenting Common Stock") will not be exchangeable for the right to receive
the Merger Consideration, and holders of such shares of Dissenting Common
Stock will be entitled to receive payment of the appraised value of such
shares of Common Stock in accordance with the provisions of such Section 262
unless and until such holders fail to perfect or effectively withdraw or lose
their rights to appraisal and payment under the DGCL. If, after the Effective
Time, any such holder fails to perfect or effectively withdraws or loses such
right, such shares of Common Stock will thereupon be treated as if they had
been converted into and have become exchangeable for, at the Effective Time,
the right to receive the Merger Consideration, without any interest thereon.
The Company shall give Parent: (i) prompt notice of any demands for payment
received by the Company pursuant to Section 262 of the DGCL, withdrawals of
such demands and any other instruments served pursuant to the DGCL and
received by the Company and (ii) the opportunity to participate in all
negotiations and proceedings with respect to any such demand for appraisal
under the DGCL. The Company shall not, except with the prior written consent
of Parent, make any payment with respect to any demands for appraisal or offer
to settle or settle any such demands.
ARTICLE 3
3. Representations and Warranties of the Company. Except as set
forth in the corresponding sections of the disclosure letter, dated this date,
delivered by the Company to Parent (the "Company Disclosure Letter"), provided
that the listing of an item in one section of the Company Disclosure Letter
shall be deemed to be a listing in each section of the Company Disclosure
Letter and to apply to any other representation and warranty of the Company in
this Agreement to the extent that it is reasonably apparent from a reading of
such disclosure item that it would also qualify or apply to such other
schedule or representation and warranty, the Company hereby represents and
warrants to Parent and Merger Sub as of the date of this Agreement as follows:
3.1 Existence; Good Standing; Corporate Authority. Each of the
Company and each of its subsidiaries (the "Subsidiaries") is: (i) a
corporation duly organized, validly existing and in good standing under the
Laws of its jurisdiction of incorporation and (ii) is duly licensed or
qualified to do business as a foreign corporation and is in good standing
under the Laws of any state of the United States or any country in which the
character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary, except where the failure
to be so organized, existing, licensed or qualified or to be in good standing,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect (as defined in Section 8.7). Each of the
Company and each of its Subsidiaries has all requisite corporate power and
authority to own or lease and operate its properties and carry on its business
as now conducted, except where the failure to have such power and authority,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. The Company has heretofore delivered to
Parent true, correct and complete copies of: (i) the Certificate of
Incorporation and By-Laws, as currently in effect, of the Company and each of
its Subsidiaries and (ii) all minute books of the Company and each of its
Subsidiaries since August 1, 2001.
3.2 Authorization, Validity and Effect of Agreements. (a) The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and all agreements and documents contemplated hereby (the
"Ancillary Documents"), to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby (subject to
the Company Stockholder Approval (as defined in Section 3.2(b)) with respect
to the Merger). The execution and delivery of this Agreement and the Ancillary
Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors of the Company, and no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement and the Ancillary Documents or to consummate the transactions
contemplated hereby and thereby (other than the Company Stockholder Approval
and the filing and recordation of appropriate merger documents required by the
DGCL). This Agreement has been, and any Ancillary Document at the time of
execution will have been, duly and validly executed and delivered by the
Company, and (assuming this Agreement and such Ancillary Documents each
constitutes a valid and binding obligation of Parent and Merger Sub)
constitutes and will constitute the valid and binding obligations of the
Company, enforceable against the Company in accordance with their respective
terms (except insofar as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting
creditors' rights generally, or by principles governing the availability of
equitable remedies).
(b) The only vote of holders of any class or series of capital
stock of the Company or any of its Subsidiaries necessary to adopt or approve
this Agreement and the transactions contemplated hereby is the adoption of
this Agreement by the holders of a majority of the outstanding shares of the
Company entitled to vote thereon (the "Company Stockholder Approval").
3.3 Compliance with Laws. To the Company's knowledge, neither the
Company nor any of its Subsidiaries is in violation of any order of any
foreign, federal, state or local judicial, legislative, executive,
administrative or regulatory body or authority or any arbitration board or
tribunal ("Governmental Entity"), or any foreign, federal, state or local law,
statute, ordinance, rule, regulation, order, judgment or decree ("Laws")
applicable to the Company or its Subsidiaries or any of their respective
properties or assets (provided that no representation or warranty is made in
this Section 3.3 relating to Environmental Matters (as defined in Section
3.16)), except (a) as described in any Company SEC Report (as defined in
Section 3.7) and (b) where the failure to be in compliance, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect.
3.4 Capitalization. (a) The authorized capital stock of the
Company consists of 200,000,000 shares of Common Stock and 20,000,000 shares
of preferred stock, par value $0.01 per share (the "Preferred Stock"). As of
August 8, 2003: (i) 21,327,931 shares of Common Stock were issued and
outstanding; (ii) no shares of Preferred Stock were issued and outstanding;
and (iii) no shares of Common Stock were held by the Company in its treasury.
The Company has no outstanding bonds, debentures, notes or other obligations
entitling the holders thereof to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
the Company on any matter. All issued and outstanding shares of Common Stock
are duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. There are no existing or outstanding options, warrants,
calls, subscriptions, convertible securities, "phantom" stock rights, SARs,
stock-based performance units or other rights, agreements or commitments of
any kind to which the Company or any of its Subsidiaries is a party or which
obligate the Company or any of its Subsidiaries to issue, transfer or sell or
cause to be issued, transferred or sold, additional shares of capital stock or
other voting securities or ownership interests of the Company or any of its
Subsidiaries or obligate the Company or any of its Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call,
subscription, convertible security, right, agreement or commitment. There are
no outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire or provide preemptive rights with
respect to, any shares of capital stock of the Company or any of its
Subsidiaries. No Subsidiary of the Company holds any share, stock, security,
option, warrant, call, right, or convertible or exchangeable security of the
Company.
(b) Other than the Voting Agreement, there are no voting trusts,
proxies or other agreements, commitments or understandings of any character to
which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound with respect to the voting of any
shares of capital stock of the Company or any of its Subsidiaries, or with
respect to the registration of the offering, sale or delivery of any shares of
capital stock of the Company or any of its Subsidiaries under the Securities
Act of 1933, as amended (the "Securities Act").
3.5 Subsidiaries. The Company owns, directly or indirectly, all of
the outstanding shares of capital stock of each of its Subsidiaries. All of
the outstanding shares of capital stock of each Subsidiary of the Company are
duly authorized, validly issued, fully paid and nonassessable, and are owned,
directly or indirectly, by the Company free and clear of all liens, pledges,
security interests, claims, options or other encumbrances (collectively,
"Encumbrances") except as set forth in Section 3.5 of the Company Disclosure
Letter. Section 3.5 of the Company Disclosure Letter sets forth all of the
Subsidiaries of the Company and for each Subsidiary: (i) its authorized
capital stock, share capital or other equity interest; (ii) the number of
issued and outstanding shares of capital stock, share capital or other equity
interest; and (iii) the holder or holders of such shares or other equity
interest. Except for the Company's interests in the Subsidiaries, neither the
Company nor any of its Subsidiaries owns, directly or indirectly, any interest
or investment (whether equity or debt) in any corporation, partnership, joint
venture, business, trust or entity.
3.6 Consents and Approvals; No Violation. Except as set forth in
Section 3.6 of the Company Disclosure Letter and subject to obtaining the
Company Stockholder Approval, neither the execution, delivery and performance
by the Company of this Agreement or any of the Ancillary Documents nor the
consummation by the Company of the transactions contemplated hereby or thereby
will: (i) violate, conflict with or result in a breach of any provision of the
Certificate of Incorporation or By-Laws of the Company or of any of its
Subsidiaries; (ii) violate any Laws applicable to the Company or any of its
Subsidiaries or their respective properties or assets, except for violations
which, individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect; (iii) result in a breach of any
provision of, constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or impair the Company's
rights or alter the rights or obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
result in the creation of any Encumbrance upon any of the material properties
or assets of the Company or any of its Subsidiaries under any Company Material
Contract (as defined in Section 3.19), except for any of the foregoing matters
specified in the foregoing clause which, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect; or
(iv) other than: (A) the filings provided for in Section 1.3 hereof, (B) the
filings required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Securities Act, any applicable state securities or "blue
sky" Laws or the rules and regulations of the NYSE and (C) the filing of a
premerger notification and report form by the Company under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act") or any applicable foreign or supranational antitrust and competition
Laws, require any consent, approval, order or authorization of, or
declaration, filing or registration with, any Governmental Entity or any other
Person, the lack of which, individually or in the aggregate, would reasonably
be expected to have a Company Material Adverse Effect.
3.7 Company SEC and Other Governmental Reports. Since February 26,
2002, the Company and its Subsidiaries have prepared in accordance with
applicable Law and timely filed, as the case may be, all required forms,
registrations, prospectuses, reports, schedules, statements and other
documents (including exhibits and any amendments thereto) required to be filed
with the Securities and Exchange Commission of the United States (the "SEC")
(collectively, the "Company SEC Reports") or any other Governmental Entity.
The Company has delivered to Parent all Company SEC Reports filed since
February 26, 2002. As of their respective dates, the Company SEC Reports: (i)
complied in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations thereunder and
(ii) did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading. Each of the consolidated balance sheets of the
Company included in the Company SEC Reports (including the notes thereto)
fairly presented in all material respects the consolidated financial position
of the Company and its Subsidiaries as of its date, and each of the
consolidated statements of operations, cash flows and shareholders' equity of
the Company included in the Company SEC Reports (including the notes thereto)
fairly presented in all material respects the results of operations, cash
flows and shareholders' equity of the Company and its Subsidiaries for the
periods set forth therein, in each case in accordance with generally accepted
accounting principles as applied in the United States ("GAAP"), consistently
applied during the periods involved, except as may be noted therein.
3.8 Litigation. Except as set forth in the Company SEC Reports
filed prior to the date hereof or as set forth in Section 3.8 of the Company
Disclosure Letter: (i) there are no claims, actions, suits, proceedings,
arbitrations, investigations or audits by a Governmental Entity pending or, to
the knowledge of the Company through the receipt of written notice, threatened
against the Company or any of its Subsidiaries, at Law or in equity other than
those in the ordinary course of business that, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect; (ii) there are no claims, actions, suits, proceedings, arbitrations,
investigations or audits by a non-Governmental Entity third party pending or,
to the knowledge of the Company through the receipt of written notice,
threatened against the Company or any of its Subsidiaries, at Law or at equity
other than those in the ordinary course of business that, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect; and (iii) there are no outstanding or unsatisfied orders,
writs, injunctions, decrees or arbitration rulings, judgments, rules, awards
or other findings against the Company or any of its Subsidiaries, at Law or at
equity, other than those in the ordinary course of business that, individually
or in the aggregate, would not reasonably be expected to have a Company
Material Adverse Effect.
3.9 Absence of Certain Changes. Except as set forth in the Company
SEC Reports or as set forth in Section 3.9 of the Company Disclosure Letter,
since December 31, 2002, the Company and its Subsidiaries have conducted their
business only in the ordinary course of such business consistent with past
practices, and there has not been: (i) any event or state of fact that,
individually or in the aggregate, would reasonably be expected to have a
Company Material Adverse Effect; (ii) any declaration, setting aside or
payment of any dividend or other distribution with respect to the capital
stock of the Company or any of its Subsidiaries or any repurchase, redemption
or any other acquisition by the Company or its Subsidiaries of any outstanding
shares of capital stock or other securities of, or other ownership interests
in, the Company or any of its Subsidiaries; (iii) any material change by the
Company in its accounting methods, principles or practices; (iv) any
revaluation by the Company or any of its Subsidiaries of any of their
respective assets, including, without limitation, writing down the value of
inventory or writing off notes or accounts receivable other than in the
ordinary course of business; (v) any damage, destruction or loss (whether or
not covered by insurance) of any of the material properties or assets of the
Company and its Subsidiaries; (vi) any increase in indebtedness for borrowed
money other than an increase as a result of borrowings incurred in the
ordinary course of business; (vii) any split, combination or reclassification
of any capital stock of the Company or any issuance or the authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for shares of the capital stock of the Company; or (viii) any
agreement or commitment (contingent or otherwise) to take any of the actions
set forth in clauses (i) through (vii) above.
3.10 Taxes. (a) Each of the Company and each of its Subsidiaries
has timely filed with the appropriate Governmental Entities (taking into
account extensions) all material Tax Returns (as defined below) required to be
filed by any of them and such Tax Returns are true, correct and complete in
all material respects, except to the extent any failure to file or failure to
be true, correct and accurate would not, individually or in the aggregate,
have a Company Material Adverse Effect. (b) Except as, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect and except for those Taxes (as defined below) for which adequate
reserves have been established in the financial statements included in the
Company SEC Reports, each of the Company and each of its Subsidiaries has
timely paid all Taxes due and owing by it. (c) There are no federal, state,
local or foreign audits or other administrative proceedings or court
proceedings presently pending or proposed in writing with respect to any Taxes
or Tax Returns of the Company or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries has received written notice of any pending
or proposed claims, audits or proceedings with respect to Taxes. (d) Each of
the Company and each of its Subsidiaries has withheld and paid over to the
relevant taxing authority all Taxes required to have been withheld and paid in
connection with payments to employees, independent contractors, creditors,
stockholders or other third parties, except for such Taxes which, individually
or in the aggregate, would not reasonably be expected to have a Company
Material Adverse Effect. (e) There are no material Encumbrances for Taxes upon
any property or assets of the Company or any of its Subsidiaries, except for
Encumbrances for Taxes not yet due. (f) Neither the Company nor any of its
Subsidiaries has requested an extension of time within which to file any Tax
Return which has not since been filed, and no currently effective waivers,
extensions, or comparable consents regarding the application of the statute of
limitations with respect to Taxes or Tax Returns has been given by or on
behalf of the Company or any of its Subsidiaries. (g) Neither the Company nor
any of its Subsidiaries is a party to any agreement providing for the
allocation, sharing or indemnification of Taxes. (h) Neither the Company nor
any of its Subsidiaries has been included in any "consolidated," "unitary" or
"combined" Tax Return (other than Tax Returns which include only the Company
and any of its Subsidiaries) provided for under the Laws of the United States,
any foreign jurisdiction or any state or locality with respect to Taxes. (i)
Neither the Company nor any of its Subsidiaries has constituted either a
"distributing corporation" or a "controlled corporation" (within the meaning
of Section 355(a)(1)(A) of the Code) in a distribution of stock to which
Section 355 of the Code (or so much of Section 356 of the Code as relates to
Section 355 of the Code) applies and which occurred within two (2) years of
the date of this Agreement. (j) Neither the Company nor any of its
Subsidiaries has received any notice of deficiency or assessment from any
Governmental Entity for any amount of Tax, and no such deficiency or
assessment is proposed. (k) The Company is not currently nor has ever been a
United States real property holding company within the meaning of Section
897(c)(2) of the Code. (l) For purposes of this Agreement: (i) "Tax" (and,
with correlative meaning, "Taxes") means any and all federal, state, local or
foreign income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, premium, withholding, alternative or added
minimum, ad valorem, value added, estimated, stamp, occupation, services,
service use, intangible, net worth, transfer or excise tax, recording or any
other tax, custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or penalty, imposed by any
Governmental Entity and (ii) "Tax Return" means any return, document,
declaration, election, report or similar statement required to be filed with
respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, request for extension of
time, amended return or declaration of estimated Tax.
3.11 Employee Benefit Plans. (a) Section 3.11(a) of the Company
Disclosure Letter lists all (i) employee benefit plans (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended and
the rules and regulations promulgated thereunder ("ERISA")), (ii) bonus, stock
option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other or similar fringe or employee benefit plans,
programs and arrangements, and (iii) employment, consulting, termination,
change-in-control or severance arrangements sponsored, maintained or
contributed to or required to be contributed to by the Company or any of its
Subsidiaries or pursuant to which the Company or any of its Subsidiaries may
have any material liability (the "Plans").
(b) With respect to each Plan, the Company has heretofore
delivered or made available to Parent true and complete copies of the Plan and
any amendments thereto, any related trust or other funding vehicle, any
reports or summaries required under ERISA or the Code and the most recent
determination letter received from the Internal Revenue Service with respect
to each Plan intended to be "qualified" within the meaning of Section 401(a)
of the Code.
(c) No liability under Title IV of ERISA has been incurred by the
Company or any of its Subsidiaries since the effective date of ERISA that has
not been satisfied in full and no condition exists that presents a material
risk to the Company or any of its Subsidiaries or Parent or any of its
subsidiaries of incurring any liability under such Title IV.
(d) Each of the Plans that is intended to be "qualified" within
the meaning of Section 401(a) of the Code is so qualified. Any fund
established under an ERISA Plan that is intended to satisfy the requirements
of Section 501(c)(9) of the Code has so satisfied such requirements.
(e) No Plan is a "multi-employer pension plan," as such term is
defined in Section 3(37) of ERISA.
(f) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Laws, including but not
limited to ERISA and the Code.
(g) No amounts payable under any of the Plans or any other
contract, agreement or arrangement with respect to which the Company or any of
its Subsidiaries may have any liability could fail to be deductible for
federal income Tax purposes by virtue of Section 162(m) or 280G of the Code.
(h) Except as disclosed in Section 3.11(h) of the Company
Disclosure Letter, no Plan provides benefits, including, without limitation,
death or medical benefits (whether or not insured), with respect to current or
former employees of the Company or any of its Subsidiaries after retirement or
other termination of service other than coverage mandated by applicable Laws.
(i) There are no pending or, to the Company's knowledge,
threatened or anticipated claims by or on behalf of any Plan, by any employee
or beneficiary under any such Plan or otherwise involving any such Plan (other
than routine claims for benefits).
3.12 Labor and Employment Matters. (a) Except as disclosed in
Section 3.12 of the Company Disclosure Letter, neither the Company nor any of
its Subsidiaries is a party to, or bound by, any collective bargaining
agreement or other Contract or understanding with a labor union or labor
organization or other representative of any of the employees of the Company or
any of its Subsidiaries. Except for such matters which, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect, there is no: (i) unfair labor practice, labor dispute (other than
routine individual grievances) or labor arbitration proceeding pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries relating to their business; (ii) to the knowledge of the Company,
activity or proceeding by a labor union or representative thereof to organize
any employees of the Company or any of its Subsidiaries; or (iii) lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to
such employees and during the last three (3) years there has not been any such
action.
(b) During the last five (5) years, neither the Company nor any of
its Subsidiaries has effectuated a "plant closing" or a "mass layoff" (as such
terms are defined in the Worker Adjustment and Retraining Notification Act
(the "WARN Act")). Neither the Company nor any of its Subsidiaries has been
affected by any transaction or engaged in layoffs or employment terminations
sufficient in number to trigger application of any state, local or foreign Law
or regulation which is similar to the WARN Act. None of the employees of the
Company or any of its Subsidiaries has suffered an "employment loss" (as
defined in the WARN Act) during the ninety (90) day period prior to the date
of this Agreement.
3.13 Brokers. Except for Bear, Xxxxxxx & Co. Inc. (the "Company
Financial Advisor") and Xxxxxxxx Xxxxx (as defined in Section 3.22), no
broker, finder or financial advisor is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by
this Agreement that is based upon any arrangement made by or on behalf of the
Company or any of its Subsidiaries. The Company's fee arrangements with the
Company Financial Advisor and with Xxxxxxxx Xxxxx have been disclosed to
Parent.
3.14 Intellectual Property Rights. (a) Except as would not have a
Company Material Adverse Effect, to the knowledge of the Company: (i) the
Company and its Subsidiaries solely own or have the right to use pursuant to a
license, sub license, agreement or permission, all of its Intellectual
Property (as defined below) free and clear of all Encumbrances (other than
Permitted Liens (as defined in Section 3.17) licenses granted to third
parties); (ii) the Intellectual Property is valid and enforceable and is all
of the intellectual property necessary for the conduct of the respective
businesses of the Company and its Subsidiaries as currently conducted; (iii)
no current or former stockholder, partner, director, officer or employee of
the Company or any of its Subsidiaries (or any of their respective
predecessors in interest) holds any right, title or interest, directly or
indirectly, in whole or in part, in or to any Intellectual Property owned by
the Company or any of its Subsidiaries; (iv) the consummation of the Merger or
any of the other transactions contemplated herein will not result in the loss
or impairment of the right of the Company or any of its Subsidiaries to own or
use any of the material Intellectual Property; and (v) neither the Company nor
any of its Subsidiaries have licensed or sublicensed its rights in any
material Intellectual Property other than pursuant to the License Agreements.
(b) Except as would not have a Company Material Adverse Effect, to
the knowledge of the Company: (i) neither the Company nor any of its
Subsidiaries has interfered with, infringed upon, misappropriated or otherwise
violated any intellectual property rights of third parties in any way, and no
third party has interfered with, infringed upon, misappropriated or otherwise
violated any Intellectual Property owned by the Company or any of its
Subsidiaries; (ii) the Company and its Subsidiaries have maintained the
confidentiality of Trade Secrets (as defined below) owned by the Company or
any of its Subsidiaries; and (iii) the activities of the Company's or any of
its Subsidiaries' present and former employees, contractors or consultants on
behalf of the Company or any of its Subsidiaries have not violated any
agreement or arrangements pertaining to the protection or non-use of any third
Person's Trade Secrets, during the term of their employment or engagement with
the Company or any of its Subsidiaries.
(c) "Intellectual Property" means all: (i) trademarks, service
marks, logos, trade names and corporate names, Internet domain names, designs,
slogans and general intangibles of like nature, including, without limitation,
all goodwill, registrations and applications related to the foregoing; (ii)
copyrights and mask works, including, without limitation, all registrations
and applications related to the foregoing; (iii) patents and industrial
designs (and the inventions embodied by the foregoing), including, without
limitation, all continuations, divisionals, continuations-in-part, renewals,
reissues and applications related to the foregoing; (iv) computer software and
management information systems, including, without limitation, any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code form, databases and compilations, including,
without limitation, data and collections of data, and all documentation,
including, without limitation, user manuals and training materials related to
the foregoing ("Software"); and (v) trade secrets, technology, know-how,
proprietary processes, formulas, algorithms, models, methodologies and other
confidential information ("Trade Secrets"); in each case, used or held for use
in the business of the Company as currently conducted. All federal and state
and all foreign registrations of and applications for Intellectual Property
that are owned or licensed by the Company or any of its Subsidiaries as of the
date hereof are set forth in Section 3.14(c) of Company Disclosure Letter,
indicating which registrations and applications are owned or licensed, as the
case may be.
3.15 Permits. The Company and its Subsidiaries are in possession
of, and no default has occurred under, all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
notices, approvals and orders of any court, governmental or regulatory
authority, foreign or domestic, necessary for the Company and its Subsidiaries
to own, lease and operate its properties and assets or to carry on its
business as it is now being conducted (the "Company Permits") (provided that
no representation or warranty is made in this Section 3.15 relating to
Environmental Matters), except where the failure to have any of the Company
Permits, individually or in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. As of the date hereof, no suspension
or cancellation of any of the Company Permits is pending or, to the knowledge
of the Company threatened, except where the suspension or cancellation of any
of the Company Permits, individually or in the aggregate, would not reasonably
be expected to have a Company Material Adverse Effect.
3.16 Environmental Compliance. (a) Except as disclosed in Section
3.16 of the Company Disclosure Letter and except for any non-compliance which,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect, (i) the Company and its Subsidiaries are in
compliance with all applicable Laws relating to Environmental Matters (as
defined below); (ii) the Company and its Subsidiaries have obtained, and are
in compliance with, all permits, licenses, authorizations, registrations and
other governmental consents required by applicable Laws relating to
Environmental Matters, including those relating to the use, storage,
treatment, transportation, release, emission and disposal of raw materials,
by-products, wastes and other substances used or produced by or otherwise
relating to the operations of the Company or its Subsidiaries; and (iii) to
the Company's knowledge, there are no past or present events, conditions, or
activities by the Company or its Subsidiaries that would prevent compliance or
continued compliance with any Law relating to Environmental Matters or give
rise to any Environmental Liability (as defined below) or Environmental Claim
(as defined in Section 8.7) and no such Environmental Claim is pending or
threatened against the Company or its Subsidiaries.
(b) As used in this Agreement, the term "Environmental Matters" means any
matter arising out of or relating to pollution or protection of the
environment, human safety or health, or sanitation, including matters relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, or Hazardous Substances or toxic materials or wastes into
ambient air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or Hazardous Substances or
toxic materials or wastes. "Environmental Liability" shall mean any liability
or obligation arising under any Law, including Laws relating to Environmental
Matters, or under any current theory of Law or equity (including, without
limitation, any liability for personal injury, property damage or remediation)
that results from, or is based upon or related to, the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, chemical, or industrial, toxic or
Hazardous Substance or waste.
3.17 Title to Assets. The Company and its Subsidiaries have good
title to all of their material properties and assets (including, without
limitation, all real property owned by the Company and its Subsidiaries (the
"Owned Real Property") and all Leases (as defined below)) reflected in the
audited consolidated balance sheet of the Company as of December 31, 2002 (the
"2002 Balance Sheet") (other than assets disposed of since December 31, 2002
in the ordinary course of business), in each case free and clear of all
Encumbrances except for: (i) Encumbrances which secure indebtedness reflected
in the Company SEC Reports; (ii) liens for Taxes accrued but not yet payable;
(iii) liens arising as a matter of Law in the ordinary course of business with
respect to obligations incurred after the date of the 2002 Balance Sheet,
provided that the obligations secured by such liens are not delinquent; and
(iv) such imperfections of title and Encumbrances, if any, as would not
reasonably be expected to have a Company Material Adverse Effect (each of the
items referred to in clauses (i) through (iv), collectively, the "Permitted
Liens"). The Company and its Subsidiaries own, or have valid leasehold
interests in, all material properties and assets used in the conduct of their
business except where the absence of such ownership or leasehold interest
would not, individually or in the aggregate, have a Company Material Adverse
Effect. The Company and its Subsidiaries have good and marketable title to all
of the Owned Real Property. Neither the Company nor any of its Subsidiaries
has received any written notice of any adverse claim to the title to any
properties owned by them or with respect to any Lease under which any
properties are held by them, other than any claims that, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. True and complete copies of all leases, subleases, licenses
and other occupancy agreements (the "Leases," and such property, the "Leased
Real Property") and all amendments, modifications, assignments, subleases,
renewals, extensions and agreements relating thereto have been made available
to Parent. Section 3.17 of the Company Disclosure Letter sets forth a true,
accurate and complete list of all Owned and Leased Real Property.
3.18 Insurance Policies. The Company and its Subsidiaries have
obtained and maintained in full force and effect insurance with insurance
companies or associations in such amounts, with such deductibles, on such
terms and covering such risks and losses, as is customarily carried by
reasonably prudent Persons conducting businesses or owning or leasing assets
similar to those conducted, owned or leased by the Company and its
Subsidiaries.
3.19 Material Contracts. Section 3.19 of the Company Disclosure
Letter sets forth a list of all: (i) Contracts for borrowed money or
guarantees thereof involving a current outstanding principal amount in excess
of $100,000; (ii) Contracts containing non-compete covenants by the Company or
its Subsidiaries; (iii) other Contracts which involve the payment or receipt
of $5,000,000 or more per year; (iv) Contracts containing any covenant: (A)
limiting the right of the Company or its Subsidiaries to engage in any
material line of business or make use of any material Intellectual Property
(via License Agreement or otherwise) or (B) otherwise having an adverse effect
on the right of the Company and its Subsidiaries to sell, distribute or
manufacture any material products or services or to purchase or otherwise
obtain any material Software, components, parts or subassemblies; and (v) all
Contracts entered into between the Company or any of its Subsidiaries on the
one hand and any department, agency or instrumentality of the United States,
on the other hand (the Contracts in clauses (i) through (v), collectively, the
"Material Contracts"). All Material Contracts to which the Company or any of
its Subsidiaries is a party, or by which any of their respective assets are
bound, are valid and binding, in full force and effect and enforceable against
the Company or its Subsidiaries, as the case may be, and to the Company's
knowledge, the other parties thereto in accordance with their respective
terms, subject to applicable bankruptcy, insolvency or other similar Laws
relating to creditors' rights and general principles of equity. Neither the
Company nor any of its Subsidiaries has violated any provision of, or
committed or failed to perform any act which, with or without notice, lapse of
time or both would constitute a default under the provisions of, any Material
Contract except as would not reasonably be expected to have a Company Material
Adverse Effect.
3.20 No Undisclosed Liabilities. Except as set forth in Section
3.20 of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature, whether or not
absolute, accrued, contingent or otherwise, except: (i) liabilities or
obligations reflected in any of the Company SEC Reports; (ii) liabilities
incurred after December 31, 2002 in the ordinary course of business consistent
with past practice; (iii) the obligations to pay fees and expenses to the
Company's attorneys, accountants, the Company Financial Advisor and Xxxxxxxx
Xxxxx (as defined in Section 3.22) relating to the transactions contemplated
by this Agreement; and (iv) liabilities or obligations which, individually or
in the aggregate, would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect.
3.21 Certain Business Practices. None of the Company, any of its
Subsidiaries or any director, officer or employee of the Company or any of its
Subsidiaries has, in furtherance of any business of the Company or any of its
Subsidiaries: (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political activity or
(ii) made any unlawful payment to any foreign or domestic government official
or employee or to any foreign or domestic political party or campaign or
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended.
3.22 Fairness Opinion. The Board of Directors of the Company has
received the written opinion of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Financial
Advisors, Inc. ("Xxxxxxxx Xxxxx") to the effect that, as of the date hereof,
the consideration to be received by the public stockholders of the Company
pursuant to the Merger is fair to such stockholders from a financial point of
view (the "Company Fairness Opinion"). The Company has been authorized by
Xxxxxxxx Xxxxx to permit the inclusion of the Company Fairness Opinion (and,
subject to prior review and consent by Xxxxxxxx Xxxxx, a reference thereto) in
the Proxy Statement (as defined in Section 5.3(b)).
3.23 Rights Agreement. On or before the date hereof, the Company
or the Board of Directors of the Company, as the case may be, has: (i) taken
all necessary actions so that the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not result in a
Distribution Date (as defined in the Rights Agreement between the Company and
the Bank of New York as Rights Agent, dated as of February 5, 2002 (the
"Rights Agreement")) and (ii) amended the Rights Agreement to render it
inapplicable to this Agreement and the transactions contemplated hereby.
3.24 Information Supplied. The information supplied or to be
supplied by the Company for inclusion or incorporation by reference in the
Registration Statement (as defined in Section 5.3(b)) and the Proxy Statement
shall not, at (i) the time the Registration Statement is declared effective,
(ii) the time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the stockholders of the Company and Parent and
(iii) the time of the Company Stockholders' Meeting (as defined in Section
5.3(b)), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. All documents that the Company is responsible for filing
with the SEC in connection with the Merger or the other transactions
contemplated by this Agreement will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and
the rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder. Notwithstanding the foregoing, no representation or
warranty is made by the Company with respect to statements made or
incorporated by reference therein based on information supplied by Parent or
Merger Sub for inclusion or incorporation by reference in the Registration
Statement or Proxy Statement.
3.25 Export Licenses and Agreements. (a) Section 3.25(a) of the
Company Disclosure Letter sets forth a true, correct and complete list of: (i)
each export license, technical assistance agreement, manufacturing license
agreement or other form of export approval to which the Company or any of its
Subsidiaries is a party or which apply to the Company or any of its
Subsidiaries or any of their operations or assets (collectively, "Export
Approvals") which is in effect as of the date of this Agreement and (ii) each
application for an Export Approval for which the Company of any of its
Subsidiaries has requested an Export Approval.
(b) Except when the following matters, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect: (i) the Company and its Subsidiaries have complied with each Export
Approval as required; (ii) the Company and its Subsidiaries have complied with
the requirements of any applicable Law pertaining to any Export Approval;
(iii) as of the effective date of each Export Approval, all representations
and certifications made by the Company and its Subsidiaries with respect to
any Export Approval were accurate and the Company and its Subsidiaries have
fully complied with all such representations and certifications; and (iv)
based on its export activities, including those involving foreign nationals in
the United States and abroad, the Company and its Subsidiaries have no
knowledge of any violation by them of the Arms Export Control Act, the
International Traffic In Arms Regulations, the Export Administration Act, the
Export Administration Regulations or any other United States export
regulation.
(c) To the knowledge of the Company and its Subsidiaries: (i)
there are no pending audits or investigations of the Company or its
Subsidiaries or any of their respective officers, employees or representatives
and (ii) within the five (5) years prior to the date of this Agreement, there
has not been any audit or investigation with respect to any Export Approval
directed or requested by any Governmental Entity of the Company or its
Subsidiaries or any of their respective officers, employees or representatives
resulting in findings materially adverse to the Company. During the five (5)
years prior to the date of this Agreement, the Company and its Subsidiaries
have not made any voluntary disclosure to any Governmental Entity with respect
to any irregularity, misstatement or omission arising under United States
trade or transaction controls or otherwise relating to the export activities
of the Company and its Subsidiaries.
3.26 Government Contracts. (a) Except where, individually or in
the aggregate, the following matters would not reasonably be expected to have
a Company Material Adverse Effect, with respect to each Government Contract
(as defined below) to which the Company or any of its Subsidiaries is a party
or Bid (as defined below): (i) the Company or its Subsidiary that is a party
to such Government Contract or Bid has complied with all material terms and
conditions and all applicable requirements of statute, rule, regulation, order
or agreement, whether incorporated expressly, by reference or by operation of
Law; (ii) all representations and certifications were current, accurate and
complete in all material respects when made; (iii) to the knowledge of the
Company, no allegation has been made, either orally or in writing, that the
Company or its Subsidiary that is a party to such Government Contract or Bid
is in breach or violation of any statutory, regulatory or contractual
requirement; (iv) no termination for convenience, termination for default,
cure notice or show cause notice has been issued and received by the Company
or its Subsidiaries; (v) no cost incurred by the Company or any of its
Subsidiaries or any of their respective subcontractors has been questioned or
disallowed; and (vi) no money due to the Company or any of its Subsidiaries
has been (or, to the knowledge of the Company, has threatened to be) withheld
or set off.
(b) Except where, individually or in the aggregate, the following
matters would not reasonably be expected to have a Company Material Adverse
Effect, neither the Company, any of its Subsidiaries nor any of their current
or, to the Company's knowledge, former employees is (or for the three (3)
years prior to the date of this Agreement has been): (i) under administrative,
civil or criminal investigation, indictment or information, audit or internal
investigation with respect to any alleged irregularity, misstatement or
omission regarding a Government Contract or Bid or (ii) suspended or debarred
from doing business with the U.S. Government (as defined below) or any state
or local government or declared nonresponsible or ineligible for government
contracting. Neither the Company nor any of its Subsidiaries has made a
voluntary disclosure to any U.S. Government, state or local government entity
with respect to any alleged irregularity, misstatement or omission arising
under or relating to any Government Contract or Bid. The Company does not have
knowledge of any circumstances that would warrant the institution of
suspension or debarment proceedings or the finding of nonresponsibility or
ineligibility on the part of the Company or any of its Subsidiaries or any of
the current employees in the future.
(c) Neither the U.S. Government, any state or local government nor
any prime contractor, subcontractor or vendor has asserted any claim or
initiated any dispute proceeding against the Company or any of its
Subsidiaries or any of their current employees, nor has the Company or any of
its Subsidiaries asserted any claim or initiated any dispute proceeding,
directly or indirectly, against any such party, concerning any Government
Contract or Bid.
(d) For purposes of this Section 3.26, the following terms shall
have the meanings set forth below:
(i) "Bid" means any quotation, bid or proposal by the Company
or any of its Subsidiaries which, if accepted or awarded, would lead to a
contract with the U.S. Government or any other entity, including a prime
contractor or a higher tier subcontractor to the U.S. Government, for the
design, manufacture or sale of products or the provision of services by the
Company or any of its Subsidiaries;
(ii) "Government Contract" means any prime contract,
subcontract, teaming agreement or arrangement, joint venture, basic ordering
agreement, letter contract, purchase order, delivery order, Bid, change order,
arrangement or other commitment of any kind relating to the business of the
Company or any of its Subsidiaries between the Company or any of its
Subsidiaries and: (A) the U.S. Government, (B) any prime contractor to the
U.S. Government or (C) any subcontractor with respect to any contract
described in clause (A) or (B); and
(iii) "U.S. Government" means the United States government
including any and all agencies, commissions, branches, instrumentalities and
departments thereof.
3.27 State Takeover Statutes. The restrictions on "business
combinations" (as defined in Section 203 of the DGCL) set forth in Section 203
of the DGCL are not applicable to the transactions contemplated by this
Agreement. No other "fair price," "moratorium," "control share acquisition,"
"business combination," or other state takeover statute or similar statute or
regulation applies to the Company, Parent, Merger Sub, the Merger, this
Agreement, the Voting Agreement and the Standstill Agreement or the
transactions contemplated hereby and thereby.
EXCEPT FOR THE SPECIFIC REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
ARTICLE 3, THE COMPANY MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER,
EXPRESS OR IMPLIED, CONCERNING ANY SUBJECT MATTER.
ARTICLE 4
4. Representations and Warranties of Parent and Merger Sub. Parent
and Merger Sub hereby represent and warrant to the Company as of the date of
this Agreement as follows:
4.1 Existence; Good Standing; Corporate Authority. Each of Parent
and Merger Sub is a corporation duly incorporated, validly existing and in
good standing under the Laws of its jurisdiction of incorporation, and has all
requisite corporate power and authority to own, operate and lease its
properties and carry on its business as now conducted, except where the
failure to have such power and authority would not, individually or in the
aggregate, reasonably be expected be a Parent Material Adverse Effect (as
defined in Section 8.7).
4.2 Authorization Validity and Effect of Agreements. Each of
Parent and Merger Sub has all requisite corporate power and authority to
execute and deliver this Agreement and the Ancillary Documents, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Ancillary Documents and the consummation by Parent and Merger Sub of
the transactions contemplated hereby and thereby have been duly and validly
authorized by the respective Boards of Directors of Parent and Merger Sub, and
no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement and the Ancillary Documents or to
consummate the transactions contemplated hereby and thereby. This Agreement
has been, and any Ancillary Documents at the time of execution will have been,
duly and validly executed and delivered by Parent and Merger Sub, and
(assuming this Agreement and such Ancillary Documents each constitutes a valid
and binding obligation of the Company) constitutes and will constitute the
valid and binding obligations of each of Parent and Merger Sub, enforceable
against Parent and Merger Sub in accordance with their respective terms
(except insofar as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting creditors'
rights generally, or by principles governing the availability of equitable
remedies).
4.3 Capitalization. The authorized capital stock of Parent
consists of 30,000,000 shares of Parent Stock and 2,000,000 shares of
preferred stock, par value $10.00 per share ("Parent Preferred"). As of August
8, 2003: (i) 22,460,348 shares of Parent Stock were issued and outstanding and
(ii) no shares of Parent Preferred were issued and outstanding. Except for
2,689,484 outstanding options, there are no existing or outstanding options,
warrants, calls, subscriptions, convertible securities, "phantom" stock
rights, SARs, stock-based performance units or other rights, agreements or
commitments of any kind to which Parent is a party or which obligate Parent to
issue, transfer or sell or cause to be issued, transferred or sold, additional
shares of capital stock or other voting securities or ownership interests of
Parent or obligate Parent to issue, grant, extend or enter into any such
security, option, warrant, call, subscription, convertible security, right,
agreement or commitment. All shares of capital stock of Parent to be issued in
connection with the Merger, when issued pursuant to this Agreement, will be
duly authorized, validly issued, fully paid and nonassessable.
4.4 No Violation. Neither the execution, delivery and performance
of this Agreement or any of the Ancillary Documents by Parent and Merger Sub,
nor the consummation by them of the transactions contemplated hereby or
thereby will: (i) violate, conflict with or result in any breach of any
provision of the respective Certificates of Incorporation or By-Laws of Parent
or Merger Sub; (ii) other than: (A) the filings provided for in Section 1.3
hereof, (B) the filings required under the Exchange Act, the Securities Act,
any applicable state securities or "blue sky" Laws or the rules and
regulations of the NYSE and (C) the filing of a premerger notification and
report form by Parent under the HSR Act or any applicable foreign or
supranational antitrust and competition Laws, require any consent, approval,
order or authorization of, or declaration, filing or registration by Parent or
Merger Sub with, any Governmental Entity or any other Person, the lack of
which, individually or in the aggregate, would not reasonably be expected to
have a Parent Material Adverse Effect; (iii) violate any Laws applicable to
Parent or Merger Sub or any of their respective properties or assets, except
for violations which, individually or in the aggregate, would not reasonably
be expected to have a material adverse effect on the ability of Parent or
Merger Sub to consummate the transactions contemplated hereby or have a Parent
Material Adverse Effect; or (iv) violate, conflict with or result in a breach
of any provision of, constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, result in the
termination or in a right of termination of, accelerate the performance
required by or benefit obtainable under, result in the creation of any
Encumbrance upon any of the properties or assets of Parent or Merger Sub
under, or result in there being declared void, voidable, or without further
binding effect, any of the terms, conditions or provisions of any loan or
credit agreement, note, bond, mortgage, indenture, deed of trust or any
License Agreement, franchise, permit, lease, sublease, or other occupancy
agreement, contract, subcontract, agreement or other legally binding
instrument, commitment or obligation, whether written or oral, to which Parent
or Merger Sub is bound, except (i) for any of the foregoing matters which,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect or (ii) in respect of the Credit Agreement,
dated as of September 28, 2001 (the "Parent Credit Agreement"), as amended and
restated as of November 26, 2002, by and among Parent, the Lenders referred to
in the Parent Credit Agreement, Wachovia Bank, National Association, TD
Securities (USA), Inc., Bear Xxxxxxx Corporate Lending, Inc. and Fleet
National Bank.
4.5 Interim Operations of Merger Sub. Merger Sub was formed solely
for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations as
contemplated hereby.
4.6 Financing. Merger Sub has received and furnished a copy to the
Company of a commitment letter pursuant to which Parent has received a
commitment from a nationally-recognized financial institution to make
available funds to Merger Sub for the purpose of consummating the Merger (the
"Commitment Letter"). As of the date hereof, the Commitment Letter has not
been withdrawn and is in full force and effect and there is no breach or
default existing (or which with notice or lapse of time or otherwise may
exist) thereunder. The aggregate proceeds of the financing contemplated by the
Commitment Letter or any alternative financing arrangement contemplated by
Parent, together with cash on hand, are sufficient to pay the cash portion of
the Merger Consideration, to repay the existing indebtedness of the Company
and its Subsidiaries (excluding any indebtedness the parties agree shall not
be repaid) and to pay all fees and expenses to be paid by Parent and Merger
Sub related to the transactions contemplated by this Agreement.
4.7 Interested Stockholder. As of the date hereof and without
taking into account the transactions contemplated hereby, (i) neither Parent
nor Merger Sub nor any of their affiliates is, with respect to the Company, an
"interested stockholder," as such term is defined in Section 203 of the DGCL
and (ii) neither Parent nor Merger Sub nor any of their affiliates
beneficially owns any shares of Common Stock of the Company.
4.8 Parent SEC Reports. Since January 1, 2002, Parent has timely
filed all required forms, registrations, prospectuses, reports, schedules,
statements and other documents (including exhibits and any amendments thereto)
with the SEC required to be filed by it pursuant to the federal securities
Laws and the SEC rules and regulations thereunder (collectively, the "Parent
SEC Reports"). Parent has made available to the Company all Parent SEC Reports
filed since January 1, 2002. As of their respective dates, the Parent SEC
Reports: (i) complied in all material respects with the applicable
requirements of the Securities Act, the Exchange Act and the rules and
regulations thereunder and (ii) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Since December 31,
2002, there has not been any event or state of facts that, individually or in
the aggregate, would reasonably be expected to have a Parent Material Adverse
Effect.
4.9 Information Supplied. The information supplied or to be
supplied by Parent or Merger Sub for inclusion or incorporation by reference
in the Registration Statement and the Proxy Statement shall not, at (i) the
time the Registration Statement is declared effective, (ii) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the stockholders of the Company and Parent and (iii) the time of the Parent
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. All documents that Parent or Merger Sub is
responsible for filing with the SEC in connection with the Merger or the other
transactions contemplated by this Agreement will comply as to form and
substance in all material respects with the applicable requirements of the
Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder. Notwithstanding the foregoing, no
representation or warranty is made by Parent or Merger Sub with respect to
statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference in the
Registration Statement or Proxy Statement.
ARTICLE 5
5. Covenants.
5.1 Alternative Proposals. (a) Neither the Company nor any of its
Subsidiaries shall, and they shall cause their officers, directors and
employees and direct their agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained by the
Company or its Subsidiaries) not to initiate, solicit, or knowingly encourage,
directly or indirectly, any inquiries or the making or implementation of any
Alternative Proposal (as defined below) or participate in any negotiations
concerning, or provide any confidential information or data to, afford access
to the properties, books or records of the Company or its Subsidiaries to, or
have any discussions with, any Person relating to an Alternative Proposal, or
otherwise facilitate any effort or attempt to make or implement an Alternative
Proposal; provided, however, that nothing contained in this Section 5.1 shall
prohibit the Company or its Board of Directors from: (i) at any time prior to
obtaining the Company Stockholder Approval (the "Company Applicable Period"),
participating in discussions or negotiations with, providing confidential
information or data to, or affording access to the properties, books or
records of the Company or its Subsidiaries to, any Person who has made, in the
good faith judgment of the Board of Directors of the Company after
consultation with their financial advisors, a bona fide written Alternative
Proposal that would reasonably be expected to result in a Superior Proposal
(as defined below); provided that: (w) such Alternative Proposal was not
initiated, solicited or knowingly encouraged by the Company, its Subsidiaries
or their agents in violation of this Section 5.1, (x) the Company has complied
with its obligations under this Section 5.1, (y) the Board of Directors of the
Company, after consultation with outside legal counsel, determines in good
faith that the failure to so participate in discussions or negotiations,
provide confidential information or data or afford access would result in a
breach of the fiduciary duty of the Board of Directors of the Company to
stockholders of the Company under applicable Law and (z) a copy of all the
information provided to such Person is delivered simultaneously to Parent if
it has not previously been furnished or made available to Parent or (ii)
making such disclosure to the Company's stockholders, if the Board of
Directors of the Company determines in good faith, after consultation with
outside legal counsel, that the failure to disclose such information would
result in a breach of the fiduciary duty of the Board of Directors of the
Company to the stockholders of the Company under applicable Law. Any actions
permitted under clauses (i) and (ii) above, and taken in compliance with the
foregoing, shall not be deemed a breach of any other covenant or agreement of
such party contained in this Agreement.
"Alternative Proposal" means an inquiry, offer or
proposal regarding any of the following (other than the transactions
contemplated hereby) involving the Company: (i) any merger,
consolidation, share exchange, recapitalization, liquidation,
dissolution, business combination or other similar transaction; (ii)
any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 20% or more of the consolidated assets of the Company
and its Subsidiaries, taken as a whole; (iii) any tender offer
(including a self tender offer) or exchange offer that, if
consummated, would result in any Person or group beneficially owning
more than 20% of the outstanding shares of any class of equity
securities of the Company or its Subsidiaries or the filing of a
registration statement under the Securities Act in connection
therewith; or (iv) any acquisition of 20% or more of the outstanding
shares of capital stock of the Company or the filing of a registration
statement under the Securities Act in connection therewith or any
other acquisition or disposition the consummation of which would
prevent or materially diminish the benefits to Parent of the Merger.
"Superior Proposal" means any proposal made by a third
party to acquire, directly or indirectly, including pursuant to a
tender offer, exchange offer, merger, consolidation, share exchange,
business combination, recapitalization, liquidation, dissolution or
other similar transaction, for 100% of then outstanding shares of
Common Stock or all or substantially all of the consolidated assets of
the Company, which the Board of Directors of the Company determines in
good faith (after consultation with its financial advisor) to be more
favorable to the Company and the Company's stockholders from a
financial point of view than the transactions contemplated by this
Agreement taking into account at the time of determination the ability
of the Person making such proposal to consummate the transactions
contemplated by the proposal (based upon, among other things, the
availability of financing and the expectation of obtaining required
approvals).
(b) Except as expressly permitted by this Section 5.1 and Section
5.3(a)(iii), neither the Board of Directors of the Company nor any committee
thereof shall: (i) withdraw, modify or fail to make, or propose to withdraw,
modify or fail to make its approval or recommendation of the Merger or of this
Agreement and the transactions contemplated hereby; (ii) approve or recommend,
or propose to approve or recommend, any Alternative Proposal; (iii) take any
action to render the provisions of any anti-takeover statute, rule or
regulation inapplicable to any Person (other than Parent, Merger Sub or their
affiliates) or group or to any Alternative Proposal or redeem the rights under
or otherwise modify the Rights Agreement to facilitate any Alternative
Proposal; or (iv) cause the Company to accept such Alternative Proposal and/or
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement (each, an "Acquisition Agreement") related to any
Alternative Proposal; provided, however, that prior to the expiration of the
Company Applicable Period, the Board of Directors of the Company may not
(other than as permitted under Section 5.3(a)(iii)) take any of the actions
detailed in clauses (i) through (iv) above unless it complies with the terms
of this Section 5.1(b) and (A) there is an Alternative Proposal which is a
Superior Proposal, (B) the Board of Directors of the Company, after
consultation with outside legal counsel, determines in good faith that the
failure to do so would result in a breach of the fiduciary duty of the Board
of Directors of the Company to the stockholders of the Company under
applicable Law, (C) the Company has provided Parent at least two (2) business
days prior written notice ("Superior Proposal Notice") advising Parent that
the Board of Directors of the Company has received a Superior Proposal which
it intends to accept, specifying the terms and conditions of such Superior
Proposal and identifying the Person making such Superior Proposal and (D) for
a period of not less than two (2) business days after Parent's receipt from
the Company of each Superior Proposal Notice, the Company shall, if requested
by Parent, negotiate in good faith with Parent to revise this Agreement so
that the Superior Proposal no longer constitutes a Superior Proposal.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) above, the Company shall promptly advise Parent of any
request for information or the submission or receipt of any Alternative
Proposal, or any inquiry with respect to or which would reasonably be expected
to lead to any Alternative Proposal, the material terms and conditions of such
request, Alternative Proposal or inquiry, and the identity of the Person
making any such request, Alternative Proposal or inquiry and its response or
responses thereto. The Company will keep Parent fully informed on a prompt
basis of the status and details (including amendments or proposed amendments)
of any such request, Alternative Proposal or inquiry. The Company shall
promptly provide to Parent copies of all written correspondence or other
written material, including material in electronic form, between the Company
and any Person making any such request, Alternative Proposal or inquiry. The
Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing and will promptly request that all
Persons provided confidential information concerning the Company and its
Subsidiaries pursuant to a confidentiality, non-disclosure or similar
agreement, return to the Company all of such confidential information, without
keeping any copies thereof (if permissible), in accordance with such
confidentiality, non-disclosure or similar agreements.
(d) The Company agrees that it will promptly inform it and its
Subsidiaries' respective officers, directors, employees, representatives and
agents of the obligations undertaken in this Section 5.1.
(e) Nothing contained in this Section 5.1 shall prohibit the
Company from (i) taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) or Item 1012(a) of Regulation M-A promulgated
under the Exchange Act or (ii) making any required disclosure to the
stockholders of the Company if, in the good faith judgment of the Board of
Directors of the Company (after consultation with outside counsel), failure to
so disclose would constitute a violation of applicable Law.
5.2 Interim Operations. (a) From the date of this Agreement until
the Effective Time, except as set forth in Section 5.2(a) of the Company
Disclosure Letter, unless Parent has consented in writing thereto, the Company
shall, and shall cause its Subsidiaries to: (i) conduct its operations
according to its ordinary course of business consistent with past practice and
in compliance in all material respects with all applicable Laws; (ii) use its
commercially reasonable efforts to preserve intact its business organizations
and goodwill, keep available the services of its officers, employees and
consultants, and maintain satisfactory relationships with those Persons having
business relationships with them; (iii) upon the discovery thereof, promptly
notify Parent of the existence of any breach of any representation or warranty
contained herein (or, in the case of any representation or warranty that makes
no reference to Company Material Adverse Effect or materiality, any breach of
such representation or warranty in any material respect) or the occurrence of
any event that would cause any representation or warranty contained herein no
longer to be true and correct (or, in the case of any representation or
warranty that makes no reference to Company Material Adverse Effect or
materiality, to no longer be true and correct in any material respect); (iv)
promptly deliver to Parent true and correct copies of any report, statement or
schedule filed with the SEC subsequent to the date of this Agreement; and (v)
pay its Taxes when due.
(b) From and after the date of this Agreement until the Effective
Time, except as set forth in Section 5.2(b) of the Company Disclosure Letter,
unless Parent has consented in writing thereto (which consent shall not be
unreasonably withheld or delayed), the Company shall not, and shall cause its
Subsidiaries not to: (i) amend its Certificate of Incorporation or By-Laws;
(ii) offer, issue, sell or pledge any shares of its capital stock or other
ownership interest in the Company or its Subsidiaries, or any securities
convertible into or exchangeable for any such shares or ownership interest, or
any rights, warrants or options to acquire or with respect to any such shares
of capital stock, ownership interest, or convertible or exchangeable
securities; (iii) effect any stock split or otherwise change its
capitalization as it exists on the date hereof; (iv) grant, confer or award
any option, warrant, convertible security or other right to acquire any shares
of its or its Subsidiaries' capital stock; (v) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any shares
of its capital stock or other ownership interests (other than such payments by
the Subsidiaries to the Company); (vi) directly or indirectly redeem, purchase
or otherwise acquire any shares of its capital stock or capital stock of its
Subsidiaries or any securities that are convertible into or exchangeable for
any shares of capital stock of, or other equity interests in, or any
outstanding options, warrants or rights of any kind to acquire any shares of
capital stock of, or other equity interests in, the Company or any of its
Subsidiaries; (vii) sell, lease, license, mortgage, pledge, encumber,
transfer, exchange or otherwise dispose of any of its properties or assets,
whether tangible or intangible (including capital stock of its Subsidiaries),
other than the sale or disposition of inventory in the ordinary course of
business consistent with past practice or the sale, lease or other disposition
of assets which individually or in the aggregate, are obsolete or not material
to the Company and its Subsidiaries taken as a whole; (viii) acquire by merger
or consolidation with, by purchase of any equity interest of or by any other
manner, any business or entity or otherwise acquire any assets which would be
material, individually or in the aggregate, to the Company and its
Subsidiaries taken as a whole, except for purchases of inventory, supplies or
capital equipment in the ordinary course of business and except for the
acquisition of any business, entity or assets not having aggregate individual
consideration greater than $50,000 or aggregate consideration greater than
$100,000; (ix) incur or assume any long-term or short-term debt, except for
working capital purposes and the purchase of capital equipment in the ordinary
course of business under the Company's existing credit agreements set forth in
Section 5.2(b) of the Company Disclosure Letter; (x) assume, guarantee or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person except its Subsidiaries;
(xi) make or forgive any loans, advances or capital continuations to, or
investments in, any other Person other than loans and advances to officers or
employees in the ordinary course of business, not to exceed $100,000 in the
aggregate; (xii) increase the compensation (or benefits) payable to or to
become payable to any director, officer or other employee, except for
increases in salary or wages of non-officer employees in the ordinary course
of business and consistent with past practice; (xiii) establish, adopt, enter
into, materially amend, or take any action to accelerate any rights or
benefits under any collective bargaining agreement or any Plan; (xiv) effect
any reorganization or recapitalization; (xv) pay, discharge, settle or satisfy
any claims, liabilities, obligations or litigation (absolute, accrued,
asserted or unasserted, contingent or otherwise) in excess of $250,000
individually and $500,000 in the aggregate, other than the payment, discharge,
settlement or satisfaction in the ordinary course of business or in accordance
with their terms, of liabilities disclosed, reflected or reserved against in
the most recent consolidated financial statements (or the notes thereto) of
the Company included in the Company SEC Reports or incurred since the date of
such financial statements in the ordinary course of business, or cancel any
indebtedness in excess of $10,000 individually and $50,000 in the aggregate;
(xvi) take any action that would reasonably be expected to: (A) prevent,
impair or materially delay the ability of the Company, Parent or Merger Sub to
consummate the Merger or (B) cause any of the conditions to the consummation
of the Merger not to be satisfied; (xvii) make or change any Tax election,
file any amended Tax Return, enter into any closing agreement, settle or
compromise any liability with respect to Taxes, agree to any material
adjustment of any Tax attribute, file any claim for a refund of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
Tax claim or assessment; or (xviii) agree in writing or otherwise to take any
of the foregoing actions.
5.3 Company Stockholder Approval; Proxy Statement; Parent
Registration Statement. (a) The Company, acting through its Board of
Directors, shall: (i) call a meeting of its stockholders (the "Company
Stockholders' Meeting") for the purpose of voting upon this Agreement, (ii)
hold the Company Stockholders' Meeting as soon as practicable following the
date the Proxy Statement (as defined below) is cleared by the SEC, and (iii)
subject to its fiduciary duties under applicable Law, recommend to its
stockholders the approval and adoption of this Agreement and the transactions
contemplated hereby and take all reasonable and lawful action to solicit and
obtain such approval and adoption. The record date for the Company
Stockholders' Meeting shall be a date chosen by the Board of Directors of the
Company.
(b) As soon as practicable after the execution of this Agreement,
(i) the Company shall prepare and file a proxy statement (such proxy
statement, and any amendments or supplements thereto, the "Proxy Statement")
with the SEC with respect to the Company Stockholders' Meeting and (ii) Parent
shall prepare and file with the SEC a registration statement on Form S-4
(together with all amendments thereto, the "Registration Statement") in which
the Proxy Statement shall be included, in connection with the registration
under the Securities Act of the shares of Parent Stock to be issued to the
stockholders of the Company in connection with the Merger. Parent and the
Company will notify each other of the receipt of any comments from the SEC or
its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or the Registration Statement or for
additional information and will supply each other with copies of all
correspondence between each other or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. Each party shall give the other party and its counsel
the opportunity to review the Proxy Statement prior to it being filed with the
SEC and shall give the other party and its counsel the opportunity to review
all amendments and supplements to the Proxy Statement and all responses to
requests for additional information and replies to comments prior to their
being filed with, or sent to, the SEC. Each of the Company and Parent agrees
to use its reasonable best efforts, after consultation with the other parties
hereto, to respond promptly to all such comments of and requests by the SEC.
Parent and the Company shall use their reasonable best efforts to cause the
Registration Statement to become effective as promptly as practicable, and,
prior to the effective date of the Registration Statement, Parent shall take
all or any action required under any applicable federal or state securities
laws in connection with such actions and the preparation of the Registration
Statement. As promptly as practicable after the Registration Statement shall
have become effective, the Company shall mail the Proxy Statement to its
stockholders. If at any time prior to the adoption of this Agreement by the
Company's stockholders there shall occur any event which must be set forth in
an amendment or supplement to the Proxy Statement, the Company will prepare
and mail to its stockholders such an amendment or supplement.
(c) Except for an amendment or supplement (including by
incorporation by reference) relating to an Alternative Proposal, a Superior
Proposal or other withdrawal, qualification or modification of a
recommendation by the Board of Directors of the Company, no amendment or
supplement to the Proxy Statement or the Registration Statement will be made
by Parent or the Company without the approval of the other party (such
approval not to be unreasonably withheld or delayed).
5.4 Filings; Other Action. Subject to the terms and conditions
herein provided, the Company, Parent and Merger Sub shall: (i) use reasonable
efforts to cooperate with one another in: (A) determining which filings are
required to be made prior to the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, Governmental Entities (including all filings and
submissions under the HSR Act) or other third parties in connection with the
execution and delivery of this Agreement and any other Ancillary Documents and
the consummation of the transactions contemplated hereby and thereby and (B)
timely making all such filings and timely seeking all such consents,
approvals, permits, authorizations and waivers; and (ii) use reasonable
efforts to take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary, proper or appropriate to consummate and make
effective the transactions contemplated by this Agreement; provided, however,
that in no event shall Parent or any of its subsidiaries be required to agree
or commit to divest, hold separate, offer for sale, abandon, limit its
operation of or take similar action with respect to any material assets
(tangible or intangible) or any material business interests in connection with
or as a condition to receiving the consent or approval of any Governmental
Entity (including, without limitation, under the HSR Act). If, at any time
after the Effective Time, any further action is necessary or desirable to
carry out the purpose of this Agreement, the proper officers and directors of
Parent and the Surviving Corporation shall take all such necessary action.
5.5 Access to Information. (a) From the date of this Agreement
until the Closing, each party shall, and shall cause its subsidiaries to: (i)
give the other party and its authorized representatives reasonable access
during normal business hours to all books and records (including Tax Returns)
and management of such party and its subsidiaries; (ii) permit the other party
to make such copies and inspections thereof as Parent may reasonably request;
and (iii) furnish the other party with such financial and operating data and
other information with respect to the business and properties of such party
and its subsidiaries as the other party may from time to time reasonably
request; provided that no investigation or information furnished pursuant to
this Section 5.5 shall affect any representation or warranty made herein by
such party or the conditions to the obligations of the other party to
consummate the transactions contemplated by this Agreement. The Company shall
also provide to Parent such information set forth in clauses (i)-(iii) above
as may be reasonably requested by Parent in connection with Parent's financing
of the transactions contemplated by this Agreement.
(b) All such information shall be subject to the terms and
conditions of the letter agreement, dated as of February 27, 2003, between
Parent and the Company (the "Confidentiality Agreement").
5.6 Publicity. Prior to the Effective Time, except as required by
applicable Law or listing agreement with any securities exchange, no party
shall, nor shall any party permit its affiliates to, make any public
announcement in respect of this Agreement or the transactions contemplated
hereby without the prior written consent of the other parties, which consent
shall not be unreasonably withheld or delayed. The parties hereto agree that
the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be issued jointly by the Company and
Parent immediately after the execution of this Agreement. Notwithstanding
anything to the contrary set forth herein or in any other agreement to which
the parties hereto are parties or by which they are bound, the obligations of
confidentiality contained herein and therein, as they relate to the
transactions contemplated by this Agreement, shall not apply to the tax
structure or tax treatment of the transactions contemplated by this Agreement,
and each party hereto (and any employee, representative, or agent of any party
hereto) may disclose to any and all Persons, without limitation of any kind,
the tax structure and tax treatment of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to such party relating to such tax treatment and
tax structure; provided, however, that such disclosure shall not include the
name (or other identifying information not relevant to the tax structure or
tax treatment) of any Person and shall not include information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
5.7 Further Action. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the Merger.
5.8 Insurance; Indemnity. (a) Parent will cause the Surviving
Corporation to maintain in effect for not less than six (6) years after the
Effective Time, the Company's current directors and officers' insurance
policies (or policies of at least the same coverage containing terms and
conditions no less advantageous to the current and all former directors and
officers of the Company) with respect to acts or failures to act prior to the
Effective Time, including acts relating to the transactions contemplated by
this Agreement; provided, however, that Parent and the Surviving Corporation
shall not be required to maintain or obtain policies providing such coverage
except to the extent such coverage can be provided at an annual cost of no
greater than 200% the most recent annual premium paid by the Company prior to
the date hereof (the "Cap"); and provided, further, that if equivalent
coverage cannot be obtained, or can be obtained only by paying an annual
premium in excess of the Cap, Parent or the Surviving Corporation shall only
be required to obtain as much coverage as can be obtained by paying an annual
premium equal to the Cap.
(b) From and after the Effective Time, Parent and the Surviving
Corporation shall jointly and severally indemnify and hold harmless to the
fullest extent permitted under applicable Law, each Person who is, or has been
at any time prior to the date hereof or who becomes prior to the Effective
Time, an officer or director of the Company or any of its Subsidiaries (each,
an "Indemnified Party") against all losses, claims, damages, liabilities,
costs or expenses (including attorneys' fees), judgments, fines, penalties and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation arising out of or pertaining to acts or omissions,
or alleged acts or omissions, by them in their capacities as such, which acts
or omissions occurred prior to the Effective Time, whether asserted or claimed
prior to, at or after the Effective Time. In the event of any such claim,
action, suit, proceeding or investigation (an "Action"), the Surviving
Corporation shall control the defense of such Action with counsel selected by
the Surviving Corporation, which counsel shall be reasonably acceptable to the
Indemnified Party; provided, however, that the Indemnified Party shall be
permitted to participate in the defense of such Action through counsel
selected by the Indemnified Party, at the Indemnified Party's expense.
Notwithstanding the foregoing, if there is any conflict between the Surviving
Corporation and any Indemnified Parties or there are additional defenses
available to any Indemnified Parties, the Indemnified Parties shall be
permitted to participate in the defense of such Action with counsel selected
by the Indemnified Parties and Parent shall cause the Surviving Corporation to
pay the reasonable fees and expenses of such counsel, as accrued and in
advance of the final disposition of such Action to the fullest extent
permitted by applicable law; provided, however, that the Surviving Corporation
shall not be obligated to pay the reasonable fees and expenses of more than
one counsel (in addition to any necessary local counsel) for all Indemnified
Parties in any single Action except to the extent that Indemnified Parties
have conflicting interests in the outcome of such Action.
(c) Parent shall cause the Surviving Corporation to keep in effect
in its Certificate of Incorporation and By-Laws provisions at least as
favorable as the provisions in the Company's Certificate of Incorporation and
By-Laws that provide for exculpation of director and officer liability and
indemnification (and advancement of expenses related thereto) of the past and
present officers and directors of the Company to the fullest extent permitted
by the DGCL and such provisions shall not be amended except as either required
by applicable Law or to make changes permitted by Law that would enhance the
rights of past or present officers and directors to exculpation,
indemnification or advancement of expenses.
(d) If Parent or the Surviving Corporation or any of their
respective successors or assigns: (i) shall consolidate with or merge into any
other Person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) shall transfer all or
substantially all of its properties and assets to any Person, then and in each
such case, proper provisions shall be made so that the successors and assigns
of Parent or the Surviving Corporation shall assume all of the obligations set
forth in this Section 5.8.
(e) The provisions of this Section 5.8 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties,
their heirs and their representatives, and shall not be deemed exclusive of
any other rights to which an Indemnified Party is entitled, pursuant to Law,
contract or otherwise. The Surviving Corporation shall pay all expenses,
including attorneys' fees, that may be incurred by any Indemnified Party in
enforcing the indemnity obligations provided for in this Section 5.8.
(f) Notwithstanding anything to the contrary in this Section 5.8,
neither Parent nor the Surviving Corporation shall be liable for any
settlement effected without its written consent, which consent shall not be
unreasonably withheld or delayed.
5.9 Company Employee Plans. (a) Except as set forth herein, Parent
shall, or shall cause the Surviving Corporation to, assume, honor, and
continue to perform all obligations of the Company or any Subsidiary under all
Plans pursuant to the terms thereof, provided, however, that nothing herein
shall limit the right of Parent to amend or terminate such Plans in accordance
with their terms.
(b) Parent agrees, for a period of twelve (12) months following
the Effective Time, to provide, or to cause the Surviving Corporation to
provide, employees of Parent and the Surviving Corporation who were employees
of the Company or its Subsidiaries immediately prior to the Effective Time
("Continuing Employees") with benefits (other than equity-based benefits) that
are, in the aggregate, similar to those provided by the Company and its
Subsidiaries prior to the Effective Time. Nothing contained herein shall
require Parent to continue the employment of any employee following the
Effective Time.
(c) Following the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, use all reasonable efforts to give Continuing
Employees full credit for prior service with the Company and its Subsidiaries
for purposes of eligibility and vesting under any employee benefit plan
maintained by Parent except where such crediting would: (i) result in a
duplication of benefits or (ii) otherwise cause Parent or any employee benefit
plan maintained by Parent to accrue or pay for benefits that relate to any
time period prior to the Continuing Employee's participation in such plan.
(d) To the extent permissible under Parent's benefit plans, if a
Continuing Employee participates in a benefit plan, other than a long-term
disability plan, of Parent or any of its subsidiaries after the Effective
Time, Parent shall, or shall cause the Surviving Corporation to, waive any
pre-existing condition exclusions and actively-at-work requirements and
provide that any expenses incurred on or before the Effective Time by the
Continuing Employee or the Continuing Employee's covered dependent shall be
taken into account for purposes of satisfying applicable deductible,
coinsurance and maximum out-of-pocket provisions. The Company agrees to
furnish Parent with any information necessary to meet its obligations under
this Section 5.9(d).
(e) With respect to matters described in this Agreement, the
Company will consult with Parent (and consider in good faith the advice of
Parent) prior to sending any notices or other communication materials to
employees of the Company and its Subsidiaries.
(f) The Company shall terminate any and all 401(k) plans of the
Company, effective not later than the day immediately preceding the date on
which the Effective Time occurs. The Company shall provide Parent with
evidence that such 401(k) plan(s) have been terminated pursuant to a
resolution of the Company's Board of Directors (the form and substance of
which shall be subject to review and approval by Parent) not later than the
day immediately preceding the date on which the Effective Time occurs.
5.10 Supplemental Disclosure. The Company shall give prompt notice
to Parent, and Parent shall give prompt notice to the Company, of: (i) the
occurrence, or non-occurrence, of any event the occurrence, or non-occurrence,
of which would be likely to cause: (A) any representation or warranty
contained in this Agreement to be untrue or inaccurate or (B) any covenant,
condition or agreement contained in this Agreement not to be complied with or
satisfied and (ii) any failure of the Company or Parent, 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 5.10 shall not have any effect for the purpose
of determining the satisfaction of the conditions set forth in Article 6 of
this Agreement or otherwise limit or affect the remedies available hereunder
to any party.
5.11 NYSE Listing. Prior to the Effective Time, Parent shall cause
Parent Stock issuable in connection with the Merger to be approved for listing
on the NYSE, subject to official notice of issuance.
5.12 Payment of Bank Debt. At the Closing, Purchaser will cause
(i) the Surviving Corporation to pay all amounts then due and payable pursuant
to that certain Amended and Restated Credit Agreement, dated as of October 31,
2002 among the Company, as Borrower, the Lenders listed therein, as Lenders,
Canadian Imperial Bank of Commerce, as Administrative Agent, and CIBC World
Markets Corp., as Lead Arranger, and the other parties named therein (the
"Credit Agreement") and the Loan Documents (as defined in the Credit
Agreement) and (ii) the Credit Agreement to be terminated.
5.13 Board Seat. Parent shall use its reasonable efforts to cause
Xxxxxx X. XxXxxx to be elected to its board of directors as a Class I director
of Parent as of the Effective Time. From and after the Closing Date until such
time as Holding, Capital Fund, Capital Management and Xx. XxXxxx "beneficially
own" (as such term is defined under Section 13(d) of the Exchange Act) less
than 3% of the issued and outstanding shares of Parent Stock, Parent shall use
its reasonable efforts to cause Xx. XxXxxx to be renominated as a director for
election at each annual meeting of Parent's stockholders at which the Class I
directors of Parent stand for election.
5.14 Parent Financing.
(a) Parent and Merger Sub will use their reasonable commercial
efforts to obtain the financing required for the consummation of the Merger
and to satisfy all conditions to funding, whether pursuant to the Commitment
Letter or otherwise. To the extent that any portion of the financing
contemplated by the Commitment Letter becomes unavailable or Parent determines
to obtain alternative financing for the Merger, Parent and Merger Sub will use
their reasonable commercial efforts to arrange for alternative financing for
the Merger.
(b) The Company shall use reasonable efforts to provide Parent
with such information, including financial statement information and access to
the Company's independent accountants, regarding the Company as may be
reasonably requested by Parent in connection with Parent's financing of the
transactions contemplated by this Agreement.
(c) The Company hereby acknowledges and agrees that the Parent
Financing Advisor may serve as a financial advisor to Parent in connection
with such Parent financing.
(d) The Company shall cooperate with Parent and Parent's
accountants and other advisors in order to prepare any pro forma financial
statements as may be required in connection with Parent's financing
contemplated by the Commitment Letter or otherwise. The Company shall take
such other actions as are reasonably requested by Parent in order to
consummate Parent's financing contemplated by the Commitment Letter or
otherwise, including, but not limited to, making members of its senior
management reasonably available for meetings with potential investors,
including participation in road-shows, participating in due diligence
sessions, participating in presentations to rating agencies, inclusion of the
Company's financial statements in a private placement or other selling
memorandum, use reasonable efforts to arrange for the Company's accountants to
provide a comfort letter on the Company's financial statements included in any
offering or other selling memorandum, and other efforts customary for an
acquired party in connection with a financing in similar transactions.
ARTICLE 6
6. Conditions.
6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger shall be subject
to the satisfaction or waiver, where permissible, prior to the Effective Time,
of the following conditions:
(a) HSR Approval. Any waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated, and no action shall have been instituted by the Department of
Justice or Federal Trade Commission challenging or seeking to enjoin the
consummation of the Merger, which action shall have not been withdrawn or
terminated.
(b) Stockholder Approval. The Company Stockholder Approval shall
have been obtained.
(c) Effectiveness of Registration Statement. The SEC shall have
declared the Registration Statement effective and no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued by the SEC and no proceeding for that purpose, and no similar
proceeding in respect of the Proxy Statement, shall have been initiated or
threatened in writing by the SEC.
(d) Listing on the NYSE. The shares of Parent Stock to be issued
in the Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
(e) No Order. There shall not have been issued any injunction,
judgment or other order, or issued or enacted any Law, which prohibits or has
the effect of prohibiting the consummation of the Merger or makes such
consummation illegal.
(f) Approvals. Other than the filing of merger documents in
accordance with the DGCL and filings pursuant to the HSR Act, all
authorizations, consents, waivers, orders or approvals of, or declarations or
filings with, or expirations of waiting periods imposed by, any Governmental
Entity, the failure of which to obtain, make or occur would, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect, shall have been obtained, been filed or have occurred.
6.2 Conditions to Obligation of Parent and Merger Sub to Effect
the Merger. The obligations of Parent and Merger Sub to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following additional conditions, unless waived in writing by Parent:
(a) Representations and Warranties. Each of the representations
and warranties of the Company contained in this Agreement (considered
individually) shall be true and correct in all material respects as of the
date of this Agreement and as of the Effective Time as if made at the
Effective Time (except that representations and warranties given as of a
specific date shall be true and correct only as of such date), except as would
not, in the aggregate, have a Company Material Adverse Effect. For purposes of
this Section 6.2(a), the representations and warranties of the Company
contained in this Agreement shall be deemed true and correct in all material
respects, and Company shall not be deemed to have breached any such
representation or warranty as a consequence of the existence of any fact,
event or circumstance, inconsistent with any representation or warranty,
unless such fact, event or circumstance, individually or taken together with
all other facts, events or circumstances inconsistent with any representation
or warranty of the Company contained in this Agreement, has had or would
reasonably be expected to have a Company Material Adverse Effect. Parent shall
have received a certificate signed on behalf of the Company by the chief
executive officer or the chief financial officer of the Company to such
effect.
(b) Performance of Obligations of the Company. Each of the Company
and its Subsidiaries shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Effective Time, and Parent shall have received a certificate signed on
behalf of the Company by the chief executive officer or the chief financial
officer of the Company to such effect.
(c) Company Material Adverse Effect. Since the date of this
Agreement, there shall have been no event, development or state of fact that
results in or would reasonably be expected to result in a Company Material
Adverse Effect.
(d) Consent. The Company shall have obtained the consent of each
Person whose consent shall be required in connection with the transactions
contemplated hereby under any Material Contract except where the failure to
obtain any such consent, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect; provided
that in no event shall the Company or its Subsidiaries modify any terms of any
Material Contract or make any payment to any third party in excess of $25,000,
in connection with obtaining such consents, without the prior written consent
of Parent, which consent shall not be unreasonably withheld or delayed.
6.3 Conditions to Obligation of the Company to Effect the Merger.
The obligation of the Company to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following additional
conditions, unless waived in writing by the Company:
(a) Representations and Warranties. Each of the representations
and warranties of Parent and Merger Sub contained in this Agreement
(considered individually) shall be true and correct in all material respects
as of the date of this Agreement and as of the Effective Time as if made at
the Effective Time (except that representations and warranties given as of a
specific date shall be true and correct only as of such date), except as would
not, in the aggregate, have a Parent Material Adverse Effect. For purposes of
this Section 6.3(a), the representations and warranties of Parent and Merger
Sub contained in this Agreement shall be deemed true and correct in all
material respects, and Parent and Merger Sub shall not be deemed to have
breached any such representation and warranty as a consequence of the
existence of any fact, event or circumstance, inconsistent with any
representation or warranty, unless such fact, event or circumstance,
individually or taken together with all other facts, events or circumstances
inconsistent with any representation or warranty of Parent and Merger Sub
contained in this Agreement, has had or would reasonably be expected to have a
Parent Material Adverse Effect. The Company shall have received a certificate
signed on behalf of Parent by the chief executive officer or the chief
financial officer of Parent to such effect.
(b) Performance of Obligations of Parent and Merger Sub. Each of
Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Effective Time, and the Company shall have received a certificate signed
on behalf of Parent by the chief executive officer or the chief financial
officer of Parent to such effect.
ARTICLE 7
7. Termination
7.1 Termination. This Agreement, notwithstanding adoption of this
Agreement by the stockholders of the Company, may be terminated at any time
prior to the Effective Time:
(a) by mutual written consent of the Company and Parent;
(b) by Parent or the Company:
(i) if the Effective Time shall not have occurred on or before
December 15, 2003 (the "Outside Date") (provided that the right to
terminate this Agreement pursuant to this clause (i) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the
Effective Time to occur on or before such date); or
(ii) if there shall be any statute, Law, rule or regulation
that makes consummation of the Merger illegal or prohibited, or if any
court of competent jurisdiction in the United States or other
Governmental Entity shall have issued an order, judgment, decree or
ruling, or taken any other action retraining, enjoining or otherwise
prohibiting the Merger and such order, judgment, decree, ruling or other
action shall have become final and non-appealable;
(c) by Parent or the Company if the Company's Board of Directors
authorizes the Company to enter into a definitive Acquisition Agreement with
respect to a Superior Proposal in accordance with the provisions of Section
5.1;
(d) by Parent if the Board of Directors of the Company shall have
failed to recommend, or shall have withdrawn its approval or recommendation of
the Merger or shall have modified its recommendation of the Merger, in a
manner adverse to Parent or Merger Sub or shall fail to recommend against the
acceptance of any tender or exchange offer that constitutes an Alternative
Proposal or shall have resolved to do any of the foregoing;
(e) by Parent if: (i) any representation or warranty of the
Company contained in this Agreement shall not be true and correct at any time
prior to the Effective Time, in each case such that the conditions set forth
in Section 6.2(a) would not be satisfied or (ii) the Company shall not have
performed and complied with each covenant or agreement contained in the
Agreement and required to be performed or complied with by it, in each case
such that the conditions set forth in Section 6.2(b) would not be satisfied,
and which breach, in the case of clause (i) and (ii) above, shall not have
been cured prior to fifteen (15) days following written notice of such breach;
(f) by the Company if: (i) any representation or warranty of
Parent or Merger Sub contained in this Agreement shall not be true and correct
at any time prior to the Effective Time, in each case such that the conditions
set forth in Section 6.3(a) would not be satisfied or (ii) Parent or Merger
Sub shall not have performed or complied with each covenant or agreement
contained in this Agreement and required to be performed or complied with by
it, in each case such that the conditions set forth in Section 6.3(b) would
not be satisfied, and which breach, in the case of clause (i) and clause (ii)
above, shall not have been cured prior to fifteen (15) days following written
notice of such breach;
(g) by Parent if there shall have been entered any injunction,
judgment ruling or decree by the government of the United States or by any
agency or instrumentality thereof that: (i) restrains or otherwise interferes
with the Merger; (ii) imposes limitations on the ability of Parent or Merger
Sub (or any of their affiliates) effectively to acquire or hold, or requires
Parent, Merger Sub or the Company or any of their respective affiliates or
Subsidiaries to dispose of or hold separate, any material portion of the
assets or the business of any one of them; or (iii) limits or prohibits any
material business activity by Parent, Merger Sub or any of their affiliates,
including, without limitation, requiring the prior consent of any Person or
entity (including the government of the United States and any instrumentality
thereof) to future transactions by Parent, Merger Sub or any of their
affiliates;
(h) by Parent or the Company, if the stockholders of the Company
fail to approve and adopt this Agreement and the transactions contemplated
hereby at the Company Stockholders' Meeting; provided, however, that the right
to terminate this Agreement under this Section 7.1(h) shall not be available
to any party whose failure to fulfill any obligations under this Agreement
shall have been the cause of or result in the failure to obtain the
Stockholder Approval; or
(i) by Parent, if the financing contemplated by the Commitment
Letter shall not have become available to Parent on substantially the terms
and conditions identified in the Commitment Letter or on such other terms or
pursuant to other financing arrangements reasonably acceptable to Parent;
provided, however, that the right to terminate this Agreement under this
Section 7.1(i) shall not be available to Parent if its failure to fulfill any
obligations under Section 5.14(a) shall have been the cause of or result in
the failure of such financing becoming available.
7.2 Effect of Termination and Abandonment. In the event of
termination of this Agreement and the abandonment of the Merger pursuant to
this Article 7, all obligations of the parties hereto shall terminate, except
the obligations of the parties pursuant to this Section 7.2 and Sections
5.5(b), 5.6, 7.3, 7.4, 8.5 and 8.6 and except that nothing herein shall
relieve any party from liability for any breach of any covenant or agreement
under this Agreement.
7.3 Termination Fee. If: (i) Parent or the Company, as the case
may be, terminates this Agreement pursuant to Sections 7.1(b)(i), 7.1(c), or
7.1(d) and (ii) in case of a termination pursuant to Section 7.1(b)(i) an
Alternative Proposal with respect to the Company shall have been publicly
announced prior to such termination and any merger or extraordinary
transaction is consummated by the Company within six (6) months following such
termination, then, in any such case, the Company shall pay to Parent a fee
("Termination Fee"), in cash, equal to $12.5 million; provided, however, that
the Company in no event shall be obligated to pay more than once such
Termination Fee with respect to all such agreements and occurrences and such
termination. Any payment required to be made pursuant to this Section 7.3
shall be made to Parent, by wire transfer of immediately available same day
funds to an account designated by Parent, within two (2) business days after
the termination of this Agreement pursuant to Section 7.1(c) or (d) or, if
this Agreement is terminated pursuant to Section 7.1(b)(i), two business days
after the consummation of any merger or extraordinary transaction.
7.4 Termination for Failure to Obtain Financing. If this Agreement
is terminated by Parent pursuant to Section 7.1(i), Parent shall pay to the
Company the sum of $17.5 million in cash as liquidated damages. Parent and the
Company hereby acknowledge that the amount of damages which would be incurred
by the Company as a result of such termination are difficult to ascertain, and
that the amount of liquidated damages provided by this Section 7.4 is
reasonable. Except as provided in this Section 7.4, Parent shall not have any
liability to the Company in the event of a termination pursuant to Section
7.1(i). The payment required to be made by this Section 7.4 shall be made to
the Company by wire transfer of immediately available same day funds to an
account designated by the Company prior to and as a condition to termination
pursuant to Section 7.1(i).
7.5 Amendment. To the extent permitted by applicable Law, this
Agreement may be amended by action taken by or on behalf of the Board of
Directors of the Company and Parent at any time before or after adoption of
this Agreement by the stockholders of the Company but, after any such
stockholder approval, no amendment shall be made which by Law requires the
further approval of such stockholders without such further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of all of the parties.
7.6 Extension; Waiver. At any time prior to the Effective Time,
any party hereto, by action taken by its Board of Directors, may, to the
extent legally allowed: (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto; (ii) waive any
inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto; and (iii) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE 8
8. General Provisions.
8.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement, or in any instrument
delivered pursuant to this Agreement, shall survive after the Effective Time.
This Section 8.1 shall not limit any covenant or agreement of the parties
hereto which by its terms contemplates performance after the Effective Time.
8.2 Notices. All notices and other communications given or made
pursuant hereto shall be in writing (including facsimile or similar writing)
and shall be deemed to have been duly given or made as of the date of receipt
and shall be delivered personally or mailed by registered or certified mail
(postage prepaid, return receipt requested), sent by overnight courier or sent
by facsimile (but only if the appropriate facsimile transmission confirmation
is received), to the applicable party at the following addresses or facsimile
numbers (or at such other address or telecopy number for a party as shall be
specified by like notice):
If to Parent or Merger Sub, to:
DRS Technologies, Inc.
0 Xxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to:
Integrated Defense Technologies, Inc.
000 Xxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chairman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Winston & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8.3 Assignment; Binding Effect. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of Law or
otherwise), without the prior written consent of the other parties. Any
attempt to make any such assignment without such consent shall be null and
void. Subject to the preceding sentences, this Agreement will be binding upon,
inure to the benefit of and be enforceable by, the parties and their
respective successors and permitted assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Article 2 and Sections 5.8, 5.9 and 5.13 which may be enforced directly by the
beneficiaries thereof, nothing in this Agreement, expressed or implied, is
intended to or shall confer on any Person other than the parties hereto or
their respective permitted successors and assigns any rights, benefits,
remedies, obligations or liabilities whatsoever under or by reason of this
Agreement.
8.4 Entire Agreement. This Agreement (including the Company
Disclosure Letter), the Confidentiality Agreement, the Ancillary Documents and
any other documents delivered by the parties in connection herewith constitute
the entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect thereto.
8.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware without regard
to its rules of conflict of Laws. Each of the Company, Parent and Merger Sub
hereby irrevocably and unconditionally: (i) consents to submit to the
exclusive jurisdiction of the state and federal courts located in the State of
Delaware (the "Delaware Courts") for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), (ii) waives
any objection to the laying of venue of any such litigation in the Delaware
Courts and (iii) agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum. Each of
the parties hereto irrevocably waives any and all rights to trial by jury in
any proceedings arising out of or related to this Agreement or the
transactions contemplated hereby.
8.6 Fee and Expenses. Except as otherwise provided herein,
including, but not limited to, in Sections 2.4(i), 7.3 and 7.4, whether or not
the Merger is consummated, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses; provided that Parent will pay the
entirety of the HSR Act filing fee.
8.7 Certain Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
(i) "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;
(ii) "Company Material Adverse Effect" means: (A) any change or
effect that is or would reasonably be expected to be materially adverse to the
business, results of operations, assets, liabilities or financial condition of
the Company and its Subsidiaries, taken as a whole; provided, however, that in
determining whether there has been a Company Material Adverse Effect, any
adverse effect primarily resulting from or arising in connection with the
following shall be disregarded: (w) the taking of any action permitted or
required by this Agreement or the announcement or pendency of the Merger; (x)
changes in economic, financial market, regulatory or political conditions
generally; (y) changes or conditions (including GAAP (as defined in Section
3.7(a)), Law, regulation or other interpretation) affecting the industry in
which the Company or its Subsidiaries operate; or (z) any matters disclosed in
the Company Disclosure Letter or (B) any event, matter, condition or effect
which precludes or delays or would reasonably be expected to preclude or delay
the Company from materially performing its material obligations under this
Agreement or the consummation of the transactions contemplated hereby;
(iii) "Environmental Claim" means any claim, action, cause of
action, investigation or written notice by any Person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries or penalties) arising
out of, based on or resulting from: (i) the presence, or release into the
environment, of any Hazardous Substance at any location, whether or not owned
or operated by the Company or any its Subsidiaries or (ii) circumstances
forming the basis of any violation, or alleged violation, of any Law relating
to Environmental Matters;
(iv) "group" has the meaning ascribed to such term under Rule
13d-5(b)(1) under the Exchange Act;
(v) "Hazardous Substance" means all substances defined as
Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, or
defined as such by, or regulated as such under, any Law relating to
Environmental Matters;
(vi) "knowledge" of any party hereto shall mean the actual
knowledge of any of the executive officers of that party;
(vii) "License Agreements" means all material agreements,
whether oral or written, and whether between the Company, its Subsidiaries and
third parties or intercompany, to which the Company or any of its Subsidiaries
is a party or otherwise bound: (i) granting or obtaining any right to use or
practice any rights under any Intellectual Property (other than licenses for
readily available commercial Software having an acquisition price of less than
$10,000) or (ii) restricting the Company's or any of its Subsidiaries' rights
to use any Intellectual Property, including, without limitation, license
agreements, development agreements, distribution agreements, settlement
agreements, consent to use agreements and covenants not to xxx;
(viii) "Parent Material Adverse Effect" means: (A) any change or
effect that is or would reasonably be expected to be materially adverse to the
business, results of operations, assets, liabilities or financial condition of
Parent and its subsidiaries, taken as a whole; or (B) any event, matter,
condition or effect which precludes or delays or would reasonably be expected
to preclude or delay Parent from materially performing its material
obligations under this Agreement or the consummation of the transactions
contemplated hereby; and
(ix) "Person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization,
entity or group (as defined in the Exchange Act).
8.8 Headings. Headings of the articles and sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever. The table of contents contained
in this Agreement is for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
8.9 Interpretation. In this Agreement, unless the context
otherwise requires, words describing the singular number shall include the
plural and vice versa, words denoting any gender shall include all genders and
words denoting natural Persons shall include corporations and partnerships and
vice versa. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be understood to be followed by the words
"without limitation."
8.10 Waivers. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
nor any failure or delay on the part of any party hereto in the exercise of
any right hereunder, shall be deemed to constitute a waiver by the party
taking such action of compliance of any representations, warranties, covenants
or agreements contained in this Agreement or in any of the Ancillary
Documents. The waiver by any party hereto of a breach of any provision
hereunder shall not operate or be construed as a waiver of any prior or
subsequent breach of the same or any other provision hereunder.
8.11 Severability. Any term or provision of this Agreement that is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
8.12 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any Delaware
Court, this being in addition to any other remedy to which they are entitled
at Law or in equity.
8.13 Counterparts. This Agreement may be executed by the parties
hereto in one or more separate counterparts, each of which, when so executed
and delivered, shall be deemed to be an original. All such counterparts shall
together constitute one and the same instrument. Each counterpart may consist
of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement
and caused the same to be duly delivered on their behalf, on the day and year
first written above.
INTEGRATED DEFENSE TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. XxXxxx
_________________________________
Name: Xxxxxx X. XxXxxx
Title: Chairman
DRS TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxx
_________________________________
Name: Xxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
MMC3 CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
_________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
