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AGREEMENT AND PLAN OF MERGER
AMONG
XXXXXX CORPORATION
MANATEE MERGER CORP.
AND
EXIGENT INTERNATIONAL, INC.
DATED APRIL 2, 2001
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TABLE OF CONTENTS
THE OFFER.........................................................................................................2
1.01. THE OFFER...............................................................................................2
1.02. TARGET ACTION...........................................................................................3
THE MERGER........................................................................................................5
2.01. THE MERGER..............................................................................................5
2.02. EFFECTIVE TIME; CLOSING.................................................................................5
2.03. EFFECT OF THE MERGER....................................................................................5
2.04. ARTICLES OF INCORPORATION; BYLAWS.......................................................................6
2.05. DIRECTORS AND OFFICERS..................................................................................6
2.06. CONVERSION OF SECURITIES................................................................................6
2.07. EMPLOYEE STOCK OPTIONS..................................................................................7
2.08. DISSENTING SHARES.......................................................................................7
2.09. SURRENDER OF SHARES; STOCK TRANSFER BOOKS...............................................................7
2.10. ADJUSTMENTS............................................................................................10
2.11. LOST CERTIFICATES......................................................................................10
REPRESENTATIONS AND WARRANTIES OF THE TARGET.....................................................................10
3.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES...........................................................10
3.02. CERTIFICATE OF INCORPORATION AND BYLAWS................................................................11
3.03. CAPITALIZATION.........................................................................................11
3.04. AUTHORITY RELATIVE TO THIS AGREEMENT...................................................................12
3.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.............................................................12
3.06. PERMITS; COMPLIANCE....................................................................................13
3.07. SEC FILINGS; FINANCIAL STATEMENTS......................................................................13
3.08. ABSENCE OF CERTAIN CHANGES OR EVENTS...................................................................14
3.09. ABSENCE OF LITIGATION..................................................................................15
3.10. EMPLOYEE BENEFIT PLANS.................................................................................15
3.11. LABOR MATTERS..........................................................................................17
3.12. TAXES..................................................................................................17
3.13. ENVIRONMENTAL MATTERS..................................................................................18
3.14. OPINION OF FINANCIAL ADVISOR...........................................................................19
3.15. BROKERS................................................................................................20
3.16. MATERIAL CONTRACTS.....................................................................................20
3.17. OFFER DOCUMENTS; SCHEDULE 14D-9........................................................................21
3.18. XXXX XXXXXXX 000, XXXXX TAKEOVER LAWS..................................................................21
3.19. BOARD RECOMMENDATION...................................................................................21
3.20. LEASED PROPERTIES......................................................................................21
3.21. INTELLECTUAL PROPERTY..................................................................................22
3.22. VOTE REQUIRED..........................................................................................22
3.23. AMENDMENT TO THE TARGET'S RIGHTS PLAN..................................................................23
3.24. TITLE TO PROPERTIES, ABSENCE OF LIENS AND ENCUMBRANCES; LEASES; CONDITION TO FACILITIES AND
MACHINERY AND EQUIPMENT................................................................................23
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3.25. ABSENCE OF SENSITIVE PAYMENTS..........................................................................23
3.26. CHANGE OF CONTROL......................................................................................23
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND ACQUIROR SUB......................................................24
4.01. EXISTENCE; GOOD STANDING, CORPORATE AUTHORITY..........................................................24
4.02. AUTHORITY RELATIVE TO THIS AGREEMENT...................................................................24
4.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.............................................................24
4.04. OFFER DOCUMENTS; PROXY STATEMENT.......................................................................25
4.05. BROKERS................................................................................................26
4.06. FINANCIAL RESOURCES....................................................................................26
4.07. INTERIM OPERATIONS OF ACQUIROR SUB.....................................................................26
4.08. ACQUIROR OWNED SHARES..................................................................................26
CONDUCT OF BUSINESS PENDING THE ELECTION OF DIRECTORS............................................................26
5.01. CONDUCT OF BUSINESS BY THE TARGET PENDING THE ACQUIROR SUB'S ELECTION DATE.............................26
ADDITIONAL AGREEMENTS............................................................................................28
6.01. SHAREHOLDER'S MEETING..................................................................................29
6.02. PROXY STATEMENT........................................................................................29
6.03. TARGET BOARD REPRESENTATION; SECTION 14(F).............................................................29
6.04. ACCESS TO INFORMATION; CONFIDENTIALITY.................................................................30
6.05. NO SOLICITATION OF TRANSACTIONS........................................................................31
6.06. DIRECTORS' AND OFFICERS' INDEMNIFICATION...............................................................32
6.07. OBLIGATIONS OF ACQUIROR SUB............................................................................33
6.08. PUBLIC ANNOUNCEMENTS...................................................................................33
6.09. DELIVERY OF SEC DOCUMENTS..............................................................................34
6.10. NOTIFICATION OF CERTAIN MATTERS........................................................................34
6.11. FURTHER ACTION.........................................................................................34
6.12. EMPLOYEE BENEFITS......................................................................................34
6.13. APPROPRIATE ACTION: CONSENTS; FILINGS..................................................................35
6.14. PAYMENTS IN RESPECT OF TARGET OPTIONS..................................................................36
CONDITIONS TO THE MERGER.........................................................................................37
7.01. CONDITIONS TO THE MERGER...............................................................................37
TERMINATION, AMENDMENT AND WAIVER................................................................................37
8.01. TERMINATION............................................................................................37
8.02. FEES AND EXPENSES......................................................................................39
8.03. AMENDMENT..............................................................................................39
8.04. WAIVER.................................................................................................40
GENERAL PROVISIONS...............................................................................................40
9.01. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.............................................40
9.02. NOTICES................................................................................................40
9.03. CERTAIN DEFINITIONS....................................................................................41
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9.04. SEVERABILITY...........................................................................................42
9.05. ASSIGNMENT; BINDING EFFECT; BENEFIT....................................................................42
9.06. INCORPORATION OF SCHEDULES.............................................................................42
9.07. SPECIFIC PERFORMANCE...................................................................................42
9.08. GOVERNING LAW..........................................................................................42
9.09. HEADINGS...............................................................................................43
9.10. COUNTERPARTS...........................................................................................43
9.11. WAIVER OF JURY TRIAL...................................................................................43
9.12. ENTIRE AGREEMENT.......................................................................................43
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 2, 2001 (this
"AGREEMENT"), by and among Xxxxxx Corporation, a Delaware corporation
("ACQUIROR"), Manatee Merger Corp., a Delaware corporation and a direct, wholly
owned subsidiary of Acquiror ("ACQUIROR SUB"), and Exigent International, Inc.,
a Delaware corporation (the "TARGET").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Acquiror, Acquiror Sub and the
Target have each determined that it is advisable and in the best interests of
their respective companies and shareholders for Acquiror, through Acquiror Sub,
to acquire the Target upon the terms and subject to the conditions set forth
herein;
WHEREAS, in furtherance of such acquisition, it is proposed that
Acquiror will cause Acquiror Sub to make a cash tender offer (as it may be
amended from time to time as permitted by this Agreement, the "OFFER") to
acquire all of the issued and outstanding shares of common stock, par value
$0.01 per share, of the Target ("TARGET COMMON STOCK") including the associated
rights ("RIGHTS") to purchase shares of Series B Junior Participating Preferred
Stock issued pursuant to the Target's Rights Plan (as hereinafter defined) (the
shares of Target Common Stock, together with the associated Rights being
hereinafter individually referred to as a "SHARE" and being hereinafter
collectively referred to as the "SHARES") for $3.55 per Share (such amount, or
any greater amount per Share paid pursuant to the Offer being hereinafter
referred to as the "PER SHARE AMOUNT") net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions of this
Agreement, including ANNEX A hereto, and the Offer;
WHEREAS, the Board of Directors of Acquiror and Acquiror Sub have
approved the making of the Offer and the transactions related thereto;
WHEREAS, the Board of Directors of the Target has (a) approved this
Agreement and the transactions contemplated hereby, including the Offer and (b)
declared the advisability and fairness of this Agreement and resolved and
agreed, subject to the terms and conditions contained herein, to recommend that
holders of Shares tender their Shares pursuant to the Offer;
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Acquiror, Acquiror Sub and the Target have each approved the merger
(the "MERGER") of Acquiror Sub with and into the Target in accordance with the
Delaware General Corporation Act ("DELAWARE LAW") following the consummation of
the Offer pursuant to which each issued and outstanding Share not owned by the
Acquiror or the Target and not constituting Dissenting Shares (as hereinafter
defined) will be converted into the right to receive the per Share consideration
paid pursuant to the Offer and upon the terms and subject to the conditions set
forth herein;
WHEREAS, in order to induce Acquiror and Acquiror Sub to enter into
this Agreement, concurrently herewith Acquiror and a certain shareholder of the
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Target (the "Tendering Shareholder") are entering into a Voting and Tender
Agreement dated as of the date hereof (the "VOTING AND TENDER AGREEMENT") in the
form attached hereto as EXHIBIT A; and
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection herewith.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Acquiror, Acquiror Sub and the Target hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. THE OFFER. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 8.01 and none of the events set
forth in ANNEX A hereto shall have occurred or be existing (unless such event
shall have been waived by Acquiror Sub), Acquiror shall cause Acquiror Sub to
commence, and Acquiror Sub shall commence, the Offer at the Per Share Amount as
prompt as reasonably practicable after the date hereof, but in no event later
than fifteen (15) days after the date hereof. The initial expiration date for
the Offer (the "INITIAL OFFER EXPIRATION DATE") shall be no longer than twenty
(20) business days following the commencement of the Offer. The obligation of
Acquiror Sub to accept for payment and pay for Shares tendered pursuant to the
Offer shall be subject only to (i) the condition (the "MINIMUM CONDITION") that
at least the number of Shares that, when combined with the Shares, if any,
already owned by Acquiror and its direct and indirect subsidiaries, constitute
fifty-one percent (51%) of the "Voting Shares" shall have been validly tendered
and not withdrawn prior to the expiration of the Offer and (ii) the satisfaction
or waiver of the other conditions set forth in ANNEX A hereto and to the terms
and conditions of this Agreement. "VOTING SHARES" means the then outstanding
Shares, together with all of the then issued and outstanding shares of Class A
Preferred Stock, par value $.01 per share (the "Class A Preferred Stock") and
all of the Shares issuable under Options (as defined in Section 2.07) that are
or may become exercisable between the Tender Offer Acceptance Date (as defined
below) and the Effective Time (as defined in Section 2.02) or under any other
option, warrant, convertible security or right or other commitment or
arrangement in effect on the Tender Offer Acceptance Date. Acquiror Sub
expressly reserves the right to waive any such condition (other than the Minimum
Condition), to increase the price per Share payable in the Offer, and to make
any other changes in the terms and conditions of the Offer; provided, however,
that (notwithstanding Section 8.03) no change may be made which (A) decreases
the price per Share payable in the Offer, (B) reduces the maximum number of
Shares to be purchased in the Offer, (C) imposes conditions to the Offer in
addition to those set forth in ANNEX A hereto, (D) amends or changes the terms
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and conditions of the Offer in any manner materially adverse to the holders of
Shares (other than Acquiror and its subsidiaries) or (E) changes or waives the
Minimum Condition without the consent of the Target. Notwithstanding the
foregoing sentence, Acquiror Sub may, without the consent of the Target (x)
extend the Offer for one or more subsequent offering periods of up to an
additional 20 business days in the aggregate, if at the scheduled or extended
expiration date of the Offer any of the conditions to Acquiror Sub's obligations
to purchase the Shares have not been satisfied or waived, (y) extend the Offer
for any period required by any rule, regulation, interpretation or position of
the Securities and Exchange Commission (the "SEC") or the staff thereof
applicable to the Offer or any period required by applicable law, and (z) extend
the Offer for one or more subsequent offering periods of up to an additional 20
business days in the aggregate pursuant to Rule 14d-11 of the Exchange Act (as
hereinafter defined). For purposes of this Agreement, the "MC OFFER EXPIRATION
DATE" shall mean the expiration date of the Offer, including any extension
occurring pursuant to clause (x) or clause (y) of the immediately preceding
sentence and the "Tender Offer Acceptance Date" means the date on which Acquiror
Sub shall have first paid for Shares validly tendered and not withdrawn pursuant
to the Offer. Notwithstanding the foregoing, the Offer may not be extended
beyond the date of termination of this Agreement pursuant to Section 8. The Per
Share Amount shall, subject to applicable withholding of taxes, be net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions of the Offer. Subject to the terms and conditions of the Offer
(including, without limitation, the Minimum Condition), Acquiror Sub shall
accept for payment and pay, as promptly as practicable after expiration of the
Offer, for all Shares validly tendered and not withdrawn.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, Acquiror Sub shall file with the SEC and disseminate to holders of
Shares to the extent required by law a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto, the "SCHEDULE TO") with
respect to the Offer and the other Transactions (as hereinafter defined). The
Schedule TO shall contain or shall incorporate by reference an offer to purchase
(the "OFFER TO PURCHASE") and forms of the related letter of transmittal and any
other appropriate documents (the Schedule TO, the Offer to Purchase and such
other documents, together with all supplements and amendments thereto, being
referred to herein collectively as the "OFFER DOCUMENTS"). Acquiror, Acquiror
Sub and the Target agree to correct promptly any information provided by any of
them for use in the Offer Documents which shall have become false or misleading
in any material respect, and Acquiror and Acquiror Sub further agree to take all
steps necessary to cause the Schedule TO as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. The Target and its counsel shall be given an opportunity to
review and comment on the Offer Documents and any amendments thereto prior to
the filing thereof with the SEC. Acquiror and Acquiror Sub will provide the
Target and its counsel with a copy of any written comments or telephonic
notification of any verbal comments Acquiror or Acquiror Sub may receive from
the SEC or its staff with respect to the Offer Documents promptly after the
receipt thereof and will provide the Target and its counsel with a copy of any
written responses and telephonic notification of any verbal response of
Acquiror, Acquiror Sub or their counsel. In the event that the Offer is
terminated or withdrawn by Acquiror Sub, Acquiror and Acquiror Sub shall cause
all tendered Shares to be returned to the registered holders of the Shares
represented by the certificate or certificates surrendered to the Paying Agent
(as defined herein).
SECTION 1.02. TARGET ACTION. (a) The Target hereby approves of and
consents to the Offer and represents that (i) the Target's Board of Directors,
at a meeting duly called and held on April 2, 2001, has (A) determined that this
Agreement, the Voting and Tender Agreement and the transactions contemplated
hereby and thereby, including, without limitation, the terms of the Offer and
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entering into the Merger (collectively, the "TRANSACTIONS"), are fair to and in
the best interests of the holders of Shares (other than Acquiror and its
Subsidiaries), (B) approved, adopted and declared the advisability of this
Agreement and the Transactions and (C) resolved to recommend, subject to the
conditions set forth herein, that the shareholders of the Target accept the
Offer and approve this Agreement and the Transactions; (D) acknowledged that
such approval is effective for purposes of Section 203 of the Delaware Law and
for purposes of subsection 2(d)(7) of Section 607.0902 of the Florida Statutes
(the "FLORIDA CONTROL-SHARE ACQUISITION LAW"), (E) approved and adopted an
amendment to the Rights Plan (as defined in Section 3.03) providing that the
execution of this Agreement or the Voting and Tender Agreement, or consummation
of the Transactions, will not cause (a) the Rights to become exercisable under
the Rights Plan or to separate from the stock certificates, (b) a Distribution
Date or Share Acquisition Date each as defined in the Rights Plan to occur or
(c) Acquiror, Acquiror Sub or any of their Affiliates to be deemed an Acquiring
Person (as defined in the Rights Plan), and (ii) CIBC World Markets Corp.
("TARGET BANKER") has delivered to the Target's Board of Directors an opinion to
the effect that, as of the date of this Agreement, the consideration to be
received in the Offer and the Merger by the holders of Shares (other than the
Acquiror and its affiliates) is fair, from a financial point of view, to such
holders. The Target has been authorized by Target Banker, subject to prior
review and approval of Target Banker, to include a reproduced copy of such
opinion (or references thereto) in the Offer to Purchase and in the Schedule
14D-9 (as defined in paragraph (b) of this Section 1.02) and the Proxy Statement
referred to in Section 6.02. The Target hereby consents to the inclusion in the
Offer Documents of the recommendation of the Target's Board of Directors
described above; provided, however, that subject to the provisions of Section
6.05, such recommendation may be withdrawn, modified or amended in connection
with a Superior Proposal (as defined in Section 6.05).
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Target shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (together with all amendments and supplements
thereto, the "SCHEDULE 14D-9") containing, (subject to the right to withdraw,
amend or modify such recommendation in accordance with Section 6.05), the
recommendation of the Target's Board of Directors described in Section 1.02(a)
and shall disseminate the Schedule 14D-9 to the extent required by Rule 14d-9
promulgated under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and any other applicable federal securities laws. The Target, Acquiror
and Acquiror Sub agree to correct promptly any information provided by any of
them for use in the Schedule 14D-9 which shall have become false or misleading,
and the Target further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. The Schedule 14D-9 shall comply in all material respects with
the applicable provisions of the securities laws. Acquiror, Acquiror Sub and
their counsel shall be given an opportunity to review and comment on the
Schedule 14D-9 and any amendments thereto prior to the filing thereof with the
SEC. The Target will provide Acquiror and Acquiror Sub and their counsel with a
copy of any written comments or telephonic notification of any verbal comments
the Target may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt thereof and will provide Acquiror and Acquiror
Sub and their counsel with a copy of any written responses and telephonic
notification of any verbal response of the Target or its counsel.
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(c) The Target shall promptly furnish Acquiror Sub with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of the
most recent date reasonably practicable. The Target shall furnish Acquiror Sub
with such additional information, including, without limitation, updated
listings and computer files of shareholders, mailing labels and security
position listings, and such other assistance as Acquiror, Acquiror Sub or their
agents may reasonably request. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Offer or the Merger,
Acquiror and Acquiror Sub shall hold in confidence the information contained in
such labels, listings and files, shall use such information only in connection
with the Offer and the Merger, and, if this Agreement shall be terminated in
accordance with Section 8.01, shall deliver promptly to the Target all copies of
such information then in their possession and shall certify in writing to the
Target its compliance with this Section 1.02(c).
ARTICLE II
THE MERGER
SECTION 2.01. THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement (including Article VII), and in accordance with
Delaware Law, at the Effective Time (as hereinafter defined), Acquiror Sub shall
be merged with and into the Target. As a result of the Merger, the separate
corporate existence of Acquiror Sub shall cease and the Target shall continue as
the surviving corporation of the Merger (the "SURVIVING CORPORATION"). The name
of the Surviving Corporation shall be Xxxxxx-Exigent, Inc.. At the election of
the Acquiror, any direct or indirect wholly owned subsidiary of Acquiror may be
substituted for Acquiror Sub as a constituent corporation in the Merger. In such
event, this Agreement shall be deemed modified to reflect the foregoing, and if
requested by Acquiror, the Target agrees to execute an appropriate amendment to
this Agreement in order to reflect the foregoing.
SECTION 2.02. EFFECTIVE TIME; CLOSING. As promptly as practicable and
in no event later than ninety (90) days after consummation of the Offer, the
satisfaction or waiver of the conditions set forth in Article VII, (or such
other date as may be agreed by each of the parties hereto), the parties hereto
shall cause the Merger to be consummated by filing a certificate of merger (the
"CERTIFICATE OF MERGER") with the Secretary of State of the State of Delaware
(the "SECRETARY") in such form as is required by, and executed in accordance
with the relevant provisions of, Delaware Law. The term "EFFECTIVE TIME" means
the date and time of the filing of the Certificate of Merger with the Secretary
(or such later time as may be agreed in writing by each of the parties hereto
and specified in the Certificate of Merger). Immediately prior to the filing of
the Certificate of Merger, a closing will be held at the Miami, Florida offices
of Xxxxx & XxXxxxxx (or such other place and time as the parties may agree).
SECTION 2.03. EFFECT OF THE MERGER. The effect of the Merger shall be
as provided in the applicable provisions of Delaware Law.
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SECTION 2.04. ARTICLES OF INCORPORATION; BYLAWS. (a) At the Effective
Time, the Certificate of Incorporation of the Acquiror Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as permitted
by Delaware Law provided that the name shall be changed to Xxxxxx-Exigent, Inc.
(b) At the Effective Time, the Bylaws of Acquiror Sub, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter amended as provided by law, the Certificate of
Incorporation of the Surviving Corporation and such Bylaws.
SECTION 2.05. DIRECTORS AND OFFICERS. The directors of Acquiror Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation until a successor is
elected or appointed and has qualified or until the earliest of such director's
death, resignation, removal or disqualification, and the officers of the
Acquiror Sub immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified, or as otherwise provided
in the Bylaws of the Surviving Corporation.
SECTION 2.06. CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Acquiror Sub, the
Target or the holders of any of the following shares of capital stock:
(a) Each Share and each share of Class A Preferred Stock issued and
outstanding immediately prior to the Effective Time (other than any Shares to be
canceled pursuant to Section 2.06(b) and any Dissenting Shares (as hereinafter
defined)) shall be canceled and shall be converted automatically into the right
to receive an amount equal to the Per Share Amount in cash (the "MERGER
CONSIDERATION") payable, without interest, to the holder of such Share, upon
surrender, in the manner provided in Section 2.09, of the certificate that
formerly evidenced such Share. All such Shares and such shares of Class A
Preferred Stock when so converted shall no longer be outstanding and shall
automatically be cancelled and retired and each holder of a certificate
representing such Shares shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration, without interest;
(b) Each Share held in the treasury of the Target and each Share owned
by Acquiror Sub, Acquiror or any direct or indirect wholly owned subsidiary of
Acquiror or of the Target immediately prior to the Effective Time shall be
cancelled without any conversion thereof and no payment or distribution shall be
made with respect thereto; and
(c) Each share of Common Stock, par value $0.01 per share, of Acquiror
Sub 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, par value $0.01 per share, of the Surviving
Corporation and shall constitute the only outstanding shares of capital stock of
the Surviving Corporation.
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SECTION 2.07. EMPLOYEE STOCK OPTIONS. Immediately after the Effective
Time, each outstanding option to purchase Shares (in each case, an "OPTION")
granted under the Target's (a) Incentive Stock Option Plan 1Q (Non-Qualified),
(b) Incentive Stock Option Plan 2Q, (c) Incentive Stock Option Plan 3Q, (d)
Incentive Stock Option Plan 4Q, (e) Independent Directors Stock Option Plan
(5NQ), (f) Stock Option Plan 6NQ and (g) Exigent International, Inc. Omnibus
Stock Option and Incentive Plan (such plans (a) - (g) being hereinafter
collectively referred to as the `Target Option Plans"), that is then exercisable
and vested, shall, subject to the Target's receipt of any required consent of
the holders of such Options, be cancelled by the Target, and each holder of a
cancelled Option shall be entitled to receive from Acquiror Sub at the same time
as payment for Shares is made by Acquiror Sub in connection with the Merger, in
consideration for the cancellation of such Option, an amount in cash equal to
the product of (i) the number of Shares previously subject to such Option and
(ii) the excess, if any, of the Per Share Amount over the exercise price per
Share previously subject to such Option. Each Option that is not canceled as
described above shall continue to have, and be subject to, the same terms and
conditions set forth in the applicable Target Option Plan and agreement pursuant
to which such Option was issued as in effect immediately prior to the Effective
Time, except that (i) each of the Shares for which such Option is exercisable
shall at the Effective Time be converted into the right to receive an amount in
cash equal to the Per Share Amount, and (ii) such Option shall therefore be
exercisable for an amount in cash equal to the product of (x) the excess, if
any, of the Per Share Amount over the per-share exercise price for such Option,
multiplied by (y) the number of shares of Target Common Stock previously subject
to such Option.
SECTION 2.08. DISSENTING SHARES. Notwithstanding any provision of this
Agreement to the contrary, Shares and shares of Class A Preferred Stock that are
outstanding immediately prior to the Effective Time and which are held by
shareholders who shall not have voted in favor of this Agreement or consented
thereto in writing and who shall have timely demanded appraisal rights in
accordance with Section 262 of Delaware Law (collectively, the "DISSENTING
SHARES") shall not be converted into or represent the right to receive the
Merger Consideration. Such shareholders shall be entitled to receive payment of
such consideration as may be determined to be due in respect of such Dissenting
Shares held by them in accordance with the provisions of Delaware Law, except
that all Dissenting Shares held by shareholders who effectively shall have
withdrawn or lost their rights to demand appraisal of such Dissenting Shares
under Delaware Law shall thereupon be deemed to have forfeited such appraisal
rights and converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration, without any
interest thereon, upon surrender, in the manner provided in Section 2.09, of the
certificate or certificates that formerly evidenced such Shares or such shares
of Class A Preferred Stock. The Target shall give Acquiror (i) prompt notice of
any written notice of intent to seek dissenters' rights received by the Target
and (ii) the opportunity to direct all negotiations and proceedings with respect
to any such notices. The Target shall not, without the prior written consent of
Acquiror, voluntarily make any payment with respect to, or settle, offer to
settle, or otherwise negotiate with respect to, any such notices or demands.
SECTION 2.09. SURRENDER OF SHARES; STOCK TRANSFER BOOKS. (a) Prior to
the Effective Time, Acquiror Sub shall designate a bank or trust company or
other institution reasonably satisfactory to the Target to act as agent (the
"PAYING AGENT") for the holders of Shares and the holders of the shares of Class
A Preferred Stock in connection with the Merger to receive the funds to which
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holders of Shares and shares of Class A Preferred Stock shall become entitled
pursuant to Section 2.06(a). At the Effective Time, Acquiror shall cause the
Surviving Corporation to have sufficient funds to deposit, and shall cause the
Surviving Corporation to deposit in trust with the Paying Agent, cash in the
aggregate amount equal to the product of (i) the sum of the number of Shares and
shares of Class A Preferred Stock, that are in each case outstanding immediately
prior to the Effective Time (other than Shares or shares of Class A Preferred
Stock owned by Acquiror or Acquiror Sub) and (ii) the Per Share Amount. Such
funds shall be invested by the Paying Agent as directed by the Surviving
Corporation, provided that such investments shall be in obligations of or
guaranteed by the United States of America or of any agency thereof and backed
by the full faith and credit of the United States of America, in commercial
paper obligations rated A-1 or P-1 or better by Xxxxx'x Investors Services, Inc.
or Standard & Poor's Corporation, respectively, or in deposit accounts,
certificates of deposit or banker's acceptances of, repurchase or reverse
repurchase agreements with, or Eurodollar time deposits purchased from,
commercial banks with capital, surplus and undivided profits aggregating in
excess of $150 million (based on the most recent financial statements of such
bank which are then publicly available at the SEC or otherwise); PROVIDED,
HOWEVER, that no loss on any investment made pursuant to this Section 2.09 shall
relieve Acquiror or the Surviving Corporation of its obligation to pay the Per
Share Amount for each Share outstanding immediately prior to the Effective Time.
Any and all interest and earnings on such funds shall be paid to Acquiror.
(b) Promptly after the Effective Time, Acquiror shall cause the
Surviving Corporation to mail to each person who was, at the Effective Time, a
holder of record of Shares or shares of Class A Preferred Stock entitled to
receive the Merger Consideration pursuant to Section 2.06(a) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates evidencing such Shares or shares of Class A
Preferred Stock (together, the "CERTIFICATES") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, and such Certificate shall then be canceled.
Until surrendered as contemplated by this Section, each Certificate (other than
Certificates representing Dissenting Shares) shall be deemed at any time after
the Effective Time to represent only the right to receive upon such surrender
the amount of cash, without interest, into which the Shares or shares of Class A
Preferred Stock therefore represented by such Certificate shall have been
converted pursuant to Section 2.6. No interest shall accrue or be paid on the
Merger Consideration payable upon the surrender of any Certificate for the
benefit of the holder of such Certificate. If payment of the Merger
Consideration is to be made to a person other than the person in whose name the
surrendered Certificate is registered on the stock transfer books of the Target,
it shall be a condition of payment that the Certificate so surrendered shall be
endorsed properly or otherwise be in proper form for transfer and that the
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person requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such taxes
either have been paid or are not applicable. The Surviving Corporation shall pay
all charges and expenses, including those of the Paying Agent, in connection
with the distribution of the Merger Consideration.
(c) Any portion of the Merger Consideration made available to the
Paying Agent to pay for Shares or shares of Class A Preferred Stock as to which
appraisal rights have been perfected shall be returned to the Surviving
Corporation upon demand. At any time following 6 months after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it) and, thereafter, such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable without interest upon due surrender of the Certificates held
by them. Notwithstanding the foregoing, neither the Surviving Corporation nor
the Paying Agent shall be liable to any holder of a Share or a share of Class A
Preferred Stock for any Merger Consideration delivered in respect of such Share
or share of Class A Preferred Stock to a public official pursuant to any
abandoned property, escheat or other similar law. All cash paid upon surrender
of Certificates in accordance with the terms of this Article II shall be deemed
to have been paid in full satisfaction of all rights pertaining to the Shares
and the shares of Class A Preferred Stock previously represented by such
Certificates. If any Certificates have not been surrendered prior to three (3)
years after the Effective Date (or prior to such time on which any payment in
respect thereof would otherwise escheat or become the property of any
governmental unit or agency), the payment in respect of such Certificate shall
become the property of the Surviving Corporation free and clear of all liens or
claims or interest of any person previously entitled thereto.
(d) Acquiror, Acquiror Sub or the Surviving Corporation, as the case
may be, shall be entitled to deduct and withhold from the consideration
otherwise payable to any holder of Target Common Stock or Class A Preferred
Stock pursuant to this Agreement such amounts as may be required to be deducted
and withheld with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended, or under any provision of state, local or
foreign tax law. If such amounts are withheld, such amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the Shares
or shares of Class A Preferred Stock in respect of which the Surviving
Corporation or Acquiror, as applicable, made such deduction and withholding.
(e) At the close of business on the day of the Effective Time, the
stock transfer books of the Target shall be closed and, thereafter, there shall
be no further registration of transfers of Shares or shares of Class A Preferred
Stock on the records of the Target. From and after the Effective Time, the
holders of Shares or shares of Class A Preferred Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares or shares of class A Preferred Stock except as otherwise provided herein
or by applicable law.
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SECTION 2.10. ADJUSTMENTS. If during the period between the date of
this Agreement and the Effective Time, any change in the outstanding Shares or
shares of Class A Preferred Stock shall occur by reason of any reclassification,
recapitalization, stock dividend, stock split or combination, exchange or
readjustment of Shares or shares of Class A Preferred Stock, or any stock
dividend thereon with a record date during such period, the price per share to
be paid to holders of Shares or shares of Class A Preferred Stock in the Offer,
the Merger Consideration and any other amounts payable pursuant to this
Agreement, as the case may be, shall be appropriately adjusted.
SECTION 2.11. LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent will pay, in exchange for such affidavit claiming such
Certificate is lost, stolen or destroyed, the Merger Consideration to be paid in
respect to the Shares or the shares of Class A Preferred Stock represented by
such Certificate, as contemplated by this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE TARGET
Except as set forth in the Disclosure Schedule delivered by the Target
and signed by the Target and Acquiror for identification prior to the execution
and delivery of this Agreement (the "TARGET DISCLOSURE SCHEDULE"), the Target
hereby represents and warrants to Acquiror and Acquiror Sub that:
SECTION 3.01. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Target
is a corporation, and each subsidiary of the Target (a "SUBSIDIARY") is a
corporation, in each case duly incorporated and organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted. The Target
and each Subsidiary are duly qualified or licensed as a foreign corporation to
do business, and are in good standing, in each jurisdiction where the character
of the properties owned, leased or operated by them or the nature of their
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that would not,
individually or in the aggregate, have a Material Adverse Effect on the Target.
As used in this Agreement, the term "Material Adverse Effect" means with respect
to any person, any event, change or effect, individually or together with any
other event, change or effect, that is or is reasonably likely to be materially
adverse (i) to the financial condition, business or results of operations of
such person and its subsidiaries, taken as a whole, or (ii) the ability of the
Target to perform its obligations under this Agreement or to consummate any of
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the Transactions. The following, however, shall not be deemed in themselves,
either alone or in combination, to constitute, a Material Adverse Effect (A) any
change in the market price or trading volume of the Target's Shares after the
date hereof; (B) any adverse change, effect, event, occurrence, state of facts
or developments attributable to or caused by the deterioration in performance of
the Acquiror or its affiliates in its capacity as a customer or supplier of
Target; (C) any adverse change, effect, event, occurrence, state of facts or
developments directly caused by the announcement or pendency of the Offer or the
Merger (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees); (D) any adverse change, effect, event,
occurrence state of facts or developments directly caused by, resulting from, or
attributable to conditions affecting the technology and space industries
("TARGET INDUSTRIES") as a whole or the United States or world economies as a
whole; and not having a materially disproportionate effect on the Target; (E)
any adverse change, effect, event, occurrence state of facts or developments
resulting from or attributable or relating to out-of-pocket fees and expenses
(including legal, accounting, investment banking and other fees and expenses)
incurred in connection with the transactions contemplated by this Agreement; or
(F) any adverse change, effect, event, occurrence state of facts or developments
directly caused by compliance with the terms of, or the taking of any action
required by, this Agreement; and provided further, that with respect to any
dispute regarding whether any adverse change, effect, event, occurrence state of
facts or developments is "directly caused" by any of the foregoing, Acquiror and
Acquiror Sub shall have the burden of proof by a preponderance of the evidence.
As of the date hereof, a true and correct list of all Subsidiaries, together
with the jurisdiction of organization of each Subsidiary and the percentage of
the outstanding capital stock or other equity interests of each Subsidiary owned
by the Target and each other Subsidiary, is set forth in Section 3.01 of the
Target Disclosure Schedule. Except as disclosed in Section 3.01 of the Target
Disclosure Schedule, the Target does not directly or indirectly own any equity
or similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
joint venture or other business association or entity.
SECTION 3.02. CERTIFICATE OF INCORPORATION AND BYLAWS. The Target has
heretofore furnished or made available to Acquiror a complete and correct copy
of the Certificate of Incorporation and Bylaws, each as amended to date, of the
Target and each Subsidiary.
SECTION 3.03. CAPITALIZATION. The authorized capital stock of the
Target consists of 40,000,000 shares of Common Stock, par value $0.01 per share,
and 5,000,000 shares of Preferred Stock, par value $0.01 per share, 700,000
shares of Class A Preferred Stock, par value $0.01 per share and 40,000 shares
of Series B Junior Participating Preferred Stock (the "Series B Preferred
Stock"), (which shares of Series B Preferred Stock are authorized under that
certain Rights Agreement dated as of October 27, 1998, between the Target and
Reliance Trust Company, as amended (the "RIGHTS PLAN")). At March 30, 2001,
6,035,428 shares of Target Common Stock and 15,132 shares of Target Class A
Preferred Stock were issued and outstanding, all of which are validly issued,
fully paid and nonassessable and free of preemptive rights. As of the same date
2,621,797, shares of Target Common Stock were issuable pursuant to outstanding
Options under the Target Option Plans and there are no shares of treasury stock.
Except as set forth in this Section 3.03 or Section 3.03 of the Target
Disclosure Schedule, as of the date of this Agreement, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of, or other equity
interests in, the Target or any Subsidiary obligating the Target or any
Subsidiary to issue, sell or otherwise transfer any shares of capital stock of,
or other equity interests in, the Target or any Subsidiary. Section 3.03 of the
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Target Disclosure Schedule sets forth the holder, date of grant, exercise price
and whether immediately prior to the execution of this Agreement each such
option, warrant or other agreement is vested and exercisable. There are no
outstanding contractual obligations of the Target or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of Target Common Stock or any
capital stock of any Subsidiary. The Target has delivered to Acquiror complete
and correct copies of all option plans and forms of option agreements. Except as
described in Section 3.03 of the Target Disclosure Schedule, each outstanding
share of capital stock of, or other equity interest in, each Subsidiary is duly
authorized, validly issued, fully paid and nonassessable and is owned by the
Target or a wholly-owned Subsidiary free and clear of any lien or other adverse
claim. None of the outstanding shares of capital stock of the Target or any
Subsidiary has been issued in violation of any preemptive rights of the current
or past shareholders of the Target or any of the Subsidiaries.
SECTION 3.04. AUTHORITY RELATIVE TO THIS AGREEMENT. The Target has all
necessary corporate power and authority to execute and deliver this Agreement
and, with respect to the Merger, and subject, if required under Delaware Law
with respect to the consummation of the Merger, to the approval of the holders
of the Shares and the holders of the Class A Preferred Stock, to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Target and the consummation by the Target of the Transactions have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Target are necessary to authorize this
Agreement or to consummate the Transactions (other than, with respect to the
Merger, the approval of this Agreement and the Merger by the Target's
shareholders in accordance with Delaware Law, if required, and the filing and
recordation of appropriate Certificate of Merger with the Secretary in
accordance with this Agreement and Delaware Law). This Agreement has been duly
and validly executed and delivered by the Target and, assuming the due
authorization, execution and delivery of this Agreement by Acquiror and Acquiror
Sub, constitutes a legal, valid and binding obligation of the Target,
enforceable against the Target in accordance with its terms.
SECTION 3.05. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by the Target do not, and the
performance of this Agreement by the Target will not, subject to (x) with
respect to the Merger, obtaining the requisite approval of this Agreement and
the Merger by the Target's shareholder in accordance with this Agreement and
Delaware Law, and (y) obtaining the consents, approvals, authorizations and
permits and making the filings described in Section 3.05(a) and Section 3.05(b)
of the Target Disclosure Schedule, (i) conflict with or violate the Certificate
of Incorporation or Bylaws of the Target or any Subsidiary, (ii) conflict with
or violate any law applicable to the Target or any Subsidiary or by which any
property or asset of the Target or any Subsidiary is bound or affected, or (iii)
except as specified in Section 3.05(a)(iii) of the Target Disclosure Schedule,
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
right of termination, unilateral amendment, acceleration or cancellation of, or
result in the creation of a lien or other encumbrance on any property or asset
of the Target or any Subsidiary, or require the consent of any third party
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
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license, permit, franchise or other instrument or obligation to which the Target
or any Subsidiary is a party or by which the Target or any Subsidiary or any
property or asset of the Target or any Subsidiary is bound or affected, except
with respect to clause (iii) above for such conflicts, violations, breaches,
defaults or other occurrences which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect on the Target.
(b) The execution and delivery of this Agreement by the Target do not,
and the performance of this Agreement by the Target will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
pursuant to the Exchange Act, state securities or "blue sky" laws ("Blue Sky
Laws"), and filing and recordation of appropriate Certificate of Merger with the
Secretary as required by Delaware Law, (ii) as specified in Section 3.05(b) of
the Target Disclosure Schedule and (iii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay consummation of the Merger, or otherwise prevent the
Target from performing its obligations under this Agreement and would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 3.06 PERMITS; COMPLIANCE. Except as disclosed in Section 3.06
of the Target Disclosure Schedule, each of the Target and the Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any United States (federal, state or local) or foreign government, or
governmental, regulatory or administrative authority, agency or commission or
court of competent jurisdiction ("GOVERNMENTAL AUTHORITY") necessary for the
Target or any Subsidiary to own, lease and operate its properties or to carry on
its business as it is now being conducted, except for those which the failure to
possess would not individually or in the aggregate reasonably be expected to
have a Material Adverse Effect on the Target (the "TARGET PERMITS") and, as of
the date hereof, no suspension or cancellation of any of the Target Permits is
pending or, to the knowledge of the Target, threatened, except such suspensions
or terminations as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on the Target. Except as disclosed
in Section 3.06 of the Target Disclosure Schedule or as would not reasonably be
expected to have a Material Adverse Effect on the Target, the Target and each
Subsidiary has at all times since January 1, 1996 and is in compliance with all
applicable laws, regulations and orders and neither the Target nor any
Subsidiary is in conflict with, or in default or violation of, or, with the
giving of notice or the passage of time, would be in conflict with, or in
default or violation of, (a) any law applicable to the Target or any Subsidiary
or by which any property or asset of the Target or any Subsidiary is bound or
affected, (b) any of the Target Permits, or (c) any of the provisions of its
Certificate of Incorporation or Bylaws (or other organizational or governing
instruments).
SECTION 3.07. SEC FILINGS; FINANCIAL STATEMENTS. (a) The Target has
timely filed and previously made available to Acquiror and Acquiror Sub true and
complete copies of all reports, schedules, forms, registration statements and
other documents required to be filed by the Company with the SEC since its
initial public offering (collectively, the "TARGET SEC REPORTS"). The Target SEC
Reports (i) were prepared in all material respects in accordance with the
requirements of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and the Exchange Act, as the case may be, and the rules and regulations
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thereunder and (ii) did not, at the time they were filed (or at the effective
date thereof in the case of registration statements or on the date of mailing in
the case of a proxy statement), contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. No Subsidiary is currently required
to file any form, report or other document with the SEC under Section 12 of the
Exchange Act.
(b) Each of the financial statements (including, in each case, any
notes thereto) contained in the Target SEC Reports was prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis ("U.S. GAAP") throughout the periods indicated (except as may
be indicated in the notes thereto and except that financial statements included
with interim reports do not contain all U.S. GAAP notes to such financial
statements) and each fairly presented in all material respects the financial
position, results of operations and changes in shareholders' equity and cash
flows of the Target as at the respective dates thereof and for the respective
periods indicated therein (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments which were not and are not expected,
individually or in the aggregate, to be material in amount or effect).
(c) Except (i) to the extent set forth on the balance sheet of the
Target and the consolidated Subsidiaries as at December 31, 2001 including the
notes thereto, (ii) as set forth in Section 3.07(c) of the Target Disclosure
Schedule or (iii) as disclosed in any SEC Report filed by the Target after
December 31, 2001, and prior to the date of this Agreement, neither the Target
nor any Subsidiary has any liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise) that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Target,
except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since December 31, 2001, which would not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect on the Target.
SECTION 3.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
contemplated by, or disclosed pursuant to this Agreement, including Section 3.08
of the Target Disclosure Schedule, or disclosed in any Target SEC Report filed
prior to the date of this Agreement, the Target and the Subsidiaries have
conducted their business only in the ordinary course and in a manner consistent
with past practice and, since December 31, 2000, there has not been (a) any
event or events (whether or not covered by insurance), changes or occurrences
that have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the Target, (b) any material change by
the Target in its tax or accounting methods, principles or practices, or systems
of internal accounting controls, except as may be appropriate to conform to
changes in the tax laws or U.S. GAAP, (c) any entry by the Target or any
Subsidiary into any commitment or transaction, except in the ordinary course of
business and consistent with past practice or current industry conditions, (d)
any declaration, setting aside or payment of any dividend or distribution in
respect of any capital stock of the Target or any redemption, purchase or other
acquisition or exchange of any shares, or securities convertible into any
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shares, of the capital stock of the Target or a Subsidiary, (e) any increase in
or establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option, stock purchase or other
employee benefit plan, except in the ordinary course of business consistent with
past practice or as required pursuant to the terms of the Plans (as defined in
Section 3.10), (f) any granting by the Target or any of its Subsidiaries to any
director, employee or officer of the Target or any of its Subsidiaries of any
increases in compensation, severance or termination pay except in the ordinary
course of business consistent with past practice or any entry by the Target or
any of its Subsidiaries into any employment, severance or termination agreement
with any such director, employee or officer, or (g) incurrence of any additional
debt obligations or other obligations for borrowed money (other than
indebtedness of a Subsidiary to the Target or another Subsidiary) in excess of
an aggregate of $1,000,000 except in the ordinary course of the business of the
Target consistent with past practices.
SECTION 3.09. ABSENCE OF LITIGATION. Except as disclosed in Section
3.09 of the Target Disclosure Schedule, there is no claim, action, proceeding or
investigation pending against the Target or any Subsidiary or, to the best
knowledge of the Target or any of the Subsidiaries threatened against the Target
or any Subsidiary, or to the best knowledge of Target or any Subsidiary
threatened or pending against any employee or director for which the Target or a
Subsidiary may be liable or against any property, asset, interest or right of
any of them, before any arbitrator or Governmental Authority which (a)
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on the Target or (b) seeks to and is reasonably likely
to significantly delay or prevent the consummation of the Offer or the Merger.
Neither the Target nor any Subsidiary nor any property or asset of the Target or
any Subsidiary is in violation of any order, writ, judgment, injunction, decree,
determination or award having, individually or in the aggregate, a Material
Adverse Effect on the Target. All existing litigation to which the Target or any
Subsidiary is a party as of the date hereof is listed on Schedule 3.09 of the
Target Disclosure Schedule.
SECTION 3.10. EMPLOYEE BENEFIT PLANS. (a) Section 3.10 of the Target
Disclosure Schedule lists (a) all employee benefit plans, programs and
arrangements described in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and all other material employee
benefit plans, programs and arrangements, currently contributed to or maintained
for the benefit of any current or former employee, officer or director of the
Target or any Subsidiary (the "PLANS") and (b) all written contracts and
agreements relating to employment and all severance or change of control
agreements with any of the directors, officers or employees of the Target or any
Subsidiary (other than, in each case, any such contract or agreement that is
terminable by the Target or any Subsidiary at will without penalty or other
adverse consequence) (the "TARGET EMPLOYMENT CONTRACTS"). Section 3.10 of the
Target Disclosure Schedule sets forth the name of each officer or employee of
the Target or any Subsidiary with an annual base compensation greater than
$100,000 and the annual base compensation applicable to each such officer or
employee. The Target has made available to Acquiror a copy, if any, of each
Plan, each material document prepared in connection with each Plan and each
Target Employment Contract. None of the Plans is a multiemployer plan within the
meaning of Section 3(37) of ERISA. Except as set forth in Section 3.10 of the
Target Disclosure Schedule, each Plan has been operated in accordance with its
terms and the requirements of applicable law except where the failure to so
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operate would not have a Material Adverse Effect on the Target. The Target does
not currently have any direct or indirect material liability under, arising out
of or by operation of Title IV of ERISA in connection with the termination of,
or withdrawal from, any Plan or other retirement plan or arrangement and, as of
the date hereof, no fact exists or event has occurred that would reasonably be
expected to give rise to any such liability.
(b) Neither the Target nor any Subsidiary has any liability to the
Pension Benefit Guaranty Corporation ("PBGC") other than routine premium costs,
nor has there been any application for waiver or waiver of the minimum funding
standards imposed by Section 412 of the Internal Revenue Code of 1986, as
amended (the "Code") and except as set forth in Section 3.10 of the Target
Disclosure Schedule, no "accumulated funding deficiency" within the meaning of
Section 412(a) of the Code exists (whether or not waived) with respect to any
Plan. Except as set forth in Section 3.10 of the Target Disclosure Schedule, no
Plan has any material unfunded accrued benefits as determined per U.S. GAAP that
are not fully reflected in the Target financial statements.
(c) Except as set forth in Section 3.10 of the Target Disclosure
Schedule, the Target and any applicable Subsidiary have made full and timely
payment of all amounts required under the terms of each of the Plans that are
employee pension benefit plans as defined in Section 3(2) of ERISA.
(d) Each Plan that is intended to qualify under section 401(a) of the
Code has received a determination from the Internal Revenue Service stating that
it so qualifies and that its trust is exempt from taxation under section 501(a)
of the Code and, except as set forth in Section 3.10 of the Target Disclosure
Schedule, nothing has occurred since the date of such determination that could
materially adversely affect such qualification or exempt status.
(e) Except as set forth in Section 3.10 of the Target Disclosure
Schedule, no breaches of fiduciary duty have occurred with respect to any Plan
that might reasonably be expected to give rise to material liability and no
prohibited transaction (within the meaning of Section 406 of ERISA or section
4975 of the Code) has occurred with respect to any Plan that gives rise to or
might reasonably be expected to give rise to material liability.
(f) Except as set forth in Section 3.10 of the Target Disclosure
Schedule, no Plan that is a "welfare plan" as defined in Section 3(1) of ERISA
provides medical or death benefits with respect to current or former employees
of the Target or any Subsidiary beyond their termination of employment (other
than to the extent required by applicable law).
(g) The Target and all Subsidiaries have complied in material respects
with the continuation coverage requirements of Title X of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA").
(h) Except as set forth in Section 3.10 of the Target Disclosure
Schedule, each Plan can be amended or terminated at any time (subject to any
applicable advance notice provision) and without material liability to the
Target other than for benefits accrued prior to such amendment or termination.
Except as set forth in Section 3.10 of the Target Disclosure Schedule, or as
contemplated by this Agreement, no agreement, commitment, or obligation exists
to increase any benefits under any Plan or to adopt any new Plan.
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(i) Except as set forth in Section 3.10 of the Target Disclosure
Schedule, there are no material claims, lawsuits, or arbitrations pending or, to
the best knowledge of the Target or any of the Subsidiaries, threatened
involving any Plan (other than routine claims for benefits) nor is there any
reasonable basis to anticipate any such claims, lawsuits, or arbitrations
involving any Plans.
SECTION 3.11. LABOR MATTERS. (a) Except as set forth in Section 3.11(a)
of the Target Disclosure Schedule, neither the Target nor any Subsidiary is a
party to, nor does it have any obligation pursuant to, any material oral and
legally binding or written agreement, collective bargaining or otherwise, with
any party regarding the rates of pay or working conditions of any of its
employees, and, except as set forth in Section 3.11(a) of the Target Disclosure
Schedule is obligated under any agreement to recognize or bargain with any labor
organization or union on behalf of its employees.
(b) Except as set forth in Section 3.11(b) of the Target Disclosure
Schedule, the Target and each Subsidiary is in compliance with all applicable
federal, state, local and foreign laws and regulations concerning the
employer-employee relationship and with all agreements relating to the
employment of its employees, including, but not limited to, applicable wage and
hour laws, immigration laws, fair employment laws, safety laws, worker
compensation statutes, unemployment laws and social security laws, except for
such non-compliance as would not have a Material Adverse Effect on the Target
and its Subsidiaries, taken as a whole. Neither the Target nor any of its
Subsidiaries is the subject of any litigation asserting that it has committed an
unfair labor practice within the meaning of the National Labor Relations Act or
comparable foreign, state or local law or seeking to compel the Target or any of
its Subsidiaries to bargain with any labor organization as to wages or
conditions of employment. There is no strike or material labor dispute involving
the Target or any Subsidiary pending or, to the knowledge of the Target or any
of the Subsidiaries, threatened.
SECTION 3.12. TAXES. (a) Except as set forth in Section 3.12 of the
Target Disclosure Schedule, the Target and each of the Subsidiaries have timely
(i) filed all federal, state, local and foreign tax returns required to be filed
by them prior to the date of this Agreement (taking into account extensions),
and all tax returns filed are accurate and complete in all material respects,
(ii) paid or accrued all taxes shown to be due on such returns and paid all
applicable ad valorem and value added taxes as are due and (iii) paid or accrued
all taxes for which a notice of assessment or collection has been received
(other than amounts being contested in good faith by appropriate proceedings).
Except as set forth in Section 3.12 of the Target Disclosure Schedule, neither
the Internal Revenue Service nor any other federal, state, local or foreign
taxing authority has asserted any claim for taxes, or to the best knowledge of
the Target and each of the Subsidiaries, is threatening to assert any claims for
taxes, which claims, individually or in the aggregate, could have a Material
Adverse Effect on the Target. The Target and each Subsidiary has open years for
federal, state and foreign tax returns only as set forth in Section 3.12 of the
Target Disclosure Schedule. The Target and each Subsidiary have, withheld or
collected, and timely paid over to the appropriate governmental authorities (or
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are properly holding for such payment) all taxes required by law to be withheld
or collected, except for amounts which would not, individually or in the
aggregate, have a Material Adverse Effect on the Target. Neither the Target nor
any of the Subsidiaries has made an election under Section 341(f) of the Code.
There are no liens for taxes upon the assets of the Target or any Subsidiary
(other than liens for taxes that are not yet due or that are being contested in
good faith by appropriate proceedings), except for liens which would not,
individually or in the aggregate, have a Material Adverse Effect on the Target.
Except as set forth in Section 3.12 of the Target Disclosure Schedule, neither
the Target nor any of the Subsidiaries has or has had a permanent establishment
in any foreign country, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
(b) Except as set forth in Section 3.12 of the Target Disclosure
Schedules, neither the Target or any Subsidiary has executed an extension or
waiver of any statute of limitations on the assessment or collection of any tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) The provision for any taxes due or to become due for the Target or
any Subsidiary for the period or periods through and including the date of the
Target financial statements filed in the most recent Target SEC Report that has
been made and is reflected on such financial statements is sufficient to cover
all such taxes in all material respects.
(d) The Target and each Subsidiary is in compliance with, and its
records contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting and
tax withholding requirements under federal, foreign, state, and local tax laws,
and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Code, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Target.
SECTION 3.13. ENVIRONMENTAL MATTERS. (a) For purposes of this
Agreement, the following terms shall have the following meanings: (i) "HAZARDOUS
SUBSTANCES" means (A) any hazardous substance, hazardous material, hazardous
waste, regulated substance or toxic substance as defined in or regulated under
any Environmental Laws, including but not limited to the following federal
statutes and their state counterparts, as each may be amended from time to time,
and all regulations thereunder: the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Toxic Substances Control Act and the Clean Air Act; (B) petroleum and
petroleum products, byproducts and breakdown products including crude oil and
any fractions thereof; (C) natural gas, synthetic gas, and any mixtures thereof;
(D) asbestos requiring abatement, removal or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated biphenyls; (E)
any other chemicals, materials or substances defined or regulated as toxic or
hazardous or as a pollutant or contaminant or as a waste under any applicable
Environmental Law; and (F) any substance with respect to which a federal,
foreign, state or local agency requires environmental investigation, monitoring,
reporting or remediation; and (ii) "ENVIRONMENTAL LAWS" means any federal,
state, foreign, or local law, rule or regulation, now or hereafter in effect and
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as amended, and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating to
pollution or protection of the environment, health, safety or natural resources,
including without limitation, those relating to (A) releases or threatened
releases of Hazardous Substances or materials containing Hazardous Substances or
(B) the manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Substances or materials containing Hazardous Substances.
(b) Except as described in Section 3.13 of the Target Disclosure
Schedule or as would not individually or in the aggregate result in or be likely
to result in any fine, tax, assessment, penalty, loss, cost, damage, liability,
expense or other payment related thereto, that would reasonably be expected to
have a Material Adverse Effect on the Target: (i) the Target and each Subsidiary
and any property owned, leased, or operated by the Target or by any of the
Subsidiaries at any time are and have been in compliance with all applicable
Environmental Laws; (ii) the Target and each Subsidiary have obtained all
permits, approvals, identification numbers, licenses or other authorizations
required under any applicable Environmental Laws ("ENVIRONMENTAL PERMITS") and
are and have been in compliance with their requirements; (iii) such
Environmental Permits are transferable to the Surviving Corporation pursuant to
the Merger without the consent of any Governmental Authority; (iv) there are no
underground or aboveground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Substances are being or have
been treated, stored or disposed of on any real property formerly owned, leased
or occupied by the Target or any Subsidiary; (v) there is, to the best knowledge
of the Target, no asbestos or asbestos-containing material on any owned or
leased real property in violation of applicable Environmental Laws; (vi) the
Target and the Subsidiaries have not released, discharged or disposed of
Hazardous Substances on any real property formerly owned or leased by the Target
or any Subsidiary, and none of such property is contaminated with any Hazardous
Substances; (vii) neither the Target nor any of the Subsidiaries is undertaking,
and neither the Target nor any of the Subsidiaries has completed, any
investigation or assessment or remedial or response action relating to any such
release, discharge or disposal of or contamination with Hazardous Substances at
any site, location or operation, either voluntarily or pursuant to the order of
any Governmental Authority or the requirements of any Environmental Law; and
(viii) there are no pending or, to the knowledge of the Target, past or
threatened actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, notices of liability or potential liability,
investigations, proceedings, consent orders or consent agreements relating in
any way to Environmental Laws, any Environmental Permits or any Hazardous
Substances ("ENVIRONMENTAL CLAIMS") against the Target or any Subsidiary and to
the best knowledge of Target there are no circumstances that can reasonably be
expected to form the basis of any such Environmental Claim, including without
limitation with respect to any off-site disposal location presently or formerly
used by the Target or any of the Subsidiaries.
(c) The Target and the Subsidiaries have made available to Acquiror
copies of any environmental reports, studies or analyses in its possession or
under its control relating to the operations of the Target or the Subsidiaries.
SECTION 3.14. OPINION OF FINANCIAL ADVISOR. The Target's Board of
Directors has received the opinion of Target Banker, dated the date of this
Agreement, to the effect that, as of such date, the consideration to be received
by the holders of the Shares in the Offer and the Merger was fair, from a
financial point of view, to such holders (other than Acquiror and its
affiliates).
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SECTION 3.15. BROKERS. No broker, finder or investment banker (other
than Target Banker) is entitled to any brokerage, finders or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Target or any Subsidiary. The Target has heretofore
furnished to Acquiror a correct copy of all agreements between the Target and
Target Banker pursuant to which such firm would be entitled to any payment
relating to the Transactions.
SECTION 3.16. MATERIAL CONTRACTS. (a) Section 3.16 of the Target
Disclosure Schedule lists each contract which is required by its terms or is
currently expected to result in the payment or receipt by the Target or any
Subsidiary of more than $100,000 and which is not terminable by the Target or
any Subsidiary without the payment of any penalty or fine on not more than three
months' notice (a "MATERIAL CONTRACT") to which the Target or any Subsidiary is
a party, other than contracts which have been filed as an exhibit to or have
been incorporated by reference in any Target SEC Report. Each Material Contract
is in full force and effect and is enforceable against the parties thereto
(other than the Target) in accordance with its terms, and no condition or state
of facts exists that, with notice or the passage of time, or both, would
constitute a material default by the Target or, to the knowledge of the Target,
any third party under such Material Contracts. The Target has duly complied in
all material respects with the provisions of each Material Contract to which it
is a party.
(b) Except as disclosed in Section 3.16 of the Target Disclosure
Schedule, with respect to its Government Contracts, there is, as of the date of
this Agreement, (i) to the knowledge of the Target, no civil fraud or criminal
investigation by any Governmental Authority that would have a Material Adverse
Effect on the Target, (ii) no suspension or debarment proceedings (or equivalent
proceeding) against the Target or any of its subsidiaries that would have a
Material Adverse Effect on the Target, (iii) no request by the U.S. Government
for a contract price adjustment based on a claimed disallowance by the Defense
Contract Audit Agency or claim of defective pricing in excess of $100,000, (iv)
no dispute between the Target or any of its subsidiaries and the U.S. Government
which, since August 1, 2000, has resulted in a government contracting officer's
determination and finding final decision where the amount in controversy exceeds
or is expected to exceed $100,000, or (v) no claim or equitable adjustment by
the Target or any of its subsidiaries against the U.S. Government in excess of
$100,000.
(c) For the purposes of this Agreement, with respect to any party,
"GOVERNMENT CONTRACT" means any material 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 such party between such
party and (i) the U.S. Government or (ii) any prime contractor to the U.S.
Government. For the purposes of this Agreement, with respect to any party, "BID"
means any quotation, bid, or proposal by such party or any of its affiliates
which, if accepted or awarded, would lead to a contract with the U.S. Government
or any prime contractor to the U.S. Government, for the design, manufacture or
sale of products or the provision of services by such party. For the purposes of
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this Agreement, with respect to any party, "CONTRACTS" means all contracts,
agreements, leases (including leases of real property), licenses, commitments,
sales and purchase orders, intercompany work transfer agreements (with respect
to work by or for another or such party's businesses) and other instruments of
any kind, whether written or oral.
SECTION 3.17. OFFER DOCUMENTS; SCHEDULE 14D-9. Neither the Schedule
14D-9 nor any information supplied by the Target for inclusion in the Offer
Documents shall, at the respective times the Schedule 14D-9, the Offer
Documents, or any amendments or supplements thereto are filed with the SEC or
are first published, sent or given to shareholders of the Target, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading, except that no representation or warranty is made by the
Target with respect to information supplied by Acquiror Sub or Acquiror for
inclusion in the Schedule 14D-9. The Schedule 14D-9 shall comply in all material
respects as to form with the requirements of the Exchange Act and the rules and
regulations thereunder.
SECTION 3.18. DELAWARE LAW SECTION 203; STATE TAKEOVER LAWS. On or
prior to the date hereof, the Target and each Subsidiary has taken all necessary
action (including action by its Board of Directors) to exempt the Transactions
from, or to make inapplicable to the Transactions, any "moratorium," "fair
price," "business combination," "control share," or other anti-takeover Laws,
including without limitation Section 203 of the Delaware Law and the Florida
Control-Share Acquisition Law, that are applicable or purport to be applicable
to the Transactions.
SECTION 3.19. BOARD RECOMMENDATION. The Board of Directors of the
Target, at a meeting duly called and held, has by vote of those directors
present (who constituted all of the directors then in office) (i) determined
that this Agreement and the Transactions, including the Offer and the Merger,
taken together, are fair to and in the best interests of the shareholders of the
Target and (ii) resolved to recommend that the holders of the shares of the
Target Common Stock approve this Agreement.
SECTION 3.20. LEASED PROPERTIES. Section 3.20 of the Target Disclosure
Schedule lists each lease of real or material personal property to which the
Target or any Subsidiary is a party. Except as could not reasonably be expected
to have a Material Adverse Effect or listed on Section 3.20 of the Target
Disclosure Schedule: the Target has received no notice of any intention by any
lessor under a lease to which the Target or any of its Subsidiaries is a party
(a "LEASE") to cancel or terminate the same (nor has the Target canceled or
terminated any Lease), nor has the Target vacated all or any portion of such
leased properties; neither the Target nor any of its Subsidiaries is in default
under any Lease; except as set forth in Section 3.20 of the Target Disclosure
Schedule (i) no Lease has been modified, altered or amended in any respect, (ii)
no condition presently exists which would give any lessor the right to cancel or
terminate its Lease and (iii) the Target has no interest in real property other
than the leasehold possessory interest set forth in such Lease; and each of the
Leases is valid and subsisting in full force and effect in accordance with its
terms and constitutes the legal, valid, binding and enforceable obligation of
the lessor thereunder.
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SECTION 3.21. INTELLECTUAL PROPERTY. (a) Section 3.21 of the Target
Disclosure Schedule sets forth a true and complete list of (i) all United States
and foreign patents, patent applications, trademarks, trademark registrations
and applications, trade names, service marks, and copyright registrations and
applications therefore owned by the Target and its Subsidiaries (the
"INTELLECTUAL PROPERTY RIGHTS") and (ii) all United States and foreign patents,
patent applications, trademarks, trademark registrations and applications, trade
names, service marks, and copyright registrations and applications therefore and
trade secrets licensed to the Target or any of its Subsidiaries (the "LICENSED
RIGHTS").
(b) Except as set forth in Section 3.21 of the Target's Disclosure
Schedule or except to the extent that the inaccuracy of any of the following (or
the circumstances giving rise to such inaccuracy) could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(i) (A) the Intellectual Property Rights are free and clear of any
Encumbrances including Government Purpose Rights and or
Unlimited Rights as defined in the Federal Acquisition
Regulation ("FAR") or the Defense Federal Acquisition
Regulation ("DFAR"), are not subject to any license (royalty
bearing or royalty free) and are not subject to any other
agreement requiring any payment to any person or the
obligation to grant rights to any person in exchange; and (B)
the Licensed Rights are free and clear of any Encumbrances.
(ii) To the knowledge of the Target, the validity of the
Intellectual Property Rights and title thereto, and the
validity of the Licensed Rights, (A) have not been overturned
in any prior litigation; and (B) are not being questioned in
any pending litigation.
(iii) The consummation of the Transaction contemplated hereby will
not result in the loss of any Intellectual Property Rights or
any of the Licensed Rights.
(c) Each of the Target and its Subsidiaries owns, or possesses valid
license rights to, all computer software programs that are material to the
conduct of the business of the Target and its Subsidiaries, except to the extent
that the failure thereof could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect and that all material computer
software programs are "commercial computer software" in accordance with the
FAR/DFAR.
(d) The use of the Intellectual Property Rights does not to the
knowledge of Target conflict with or violate or infringe any intellectual
property rights or (including patents) of any other person except to the extent
that such conflict or violation would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.22. VOTE REQUIRED. The only votes of the holders of any class
or series of the Target's capital stock, if any, necessary to approve the Merger
is the affirmative vote of the holders of a majority of the issued and
outstanding shares of the Target's capital stock.
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SECTION 3.23. AMENDMENT TO THE TARGET'S RIGHTS PLAN. The board of
directors of the Target has taken all necessary action (including any amendment
thereof) under the Rights Plan (without redeeming the Rights) so that none of
the execution or delivery of this Agreement, the making or consummation of the
Offer (including the acquisition of Shares pursuant to the Offer under this
Agreement), the consummation of the Merger or the Voting and Tender Agreement or
any other transaction contemplated hereby or thereby will cause (i) the Rights
to become exercisable under the Rights Plan or to separate from the stock
certificates to which they are attached, (ii) an Acquisition Date (as defined in
the Rights Plan) to occur, or (iii) Acquiror, Acquiror Sub or any of their
affiliates to be deemed an Acquiring Person (as defined in the Rights Plan); and
(b) the Rights Plan will expire immediately prior to the Effective Time; and the
Rights Plan, as so amended, has not been further amended or modified. The Target
has furnished Parent with complete and correct copies of all such actions of the
board of directors of the Target.
SECTION 3.24. TITLE TO PROPERTIES, ABSENCE OF LIENS AND ENCUMBRANCES;
LEASES; CONDITION TO FACILITIES AND MACHINERY AND EQUIPMENT. (a) Except as
described in Section 3.24 of the Target Disclosure Schedule, the Target and the
Subsidiaries have good and saleable title to all their tangible properties and
assets free and clear of all liens, other than (i) statutory liens not yet
delinquent, or (ii) such imperfections or irregularities of title, liens,
easements, charges or encumbrances as do not individually or in the aggregate
would have a Material Adverse Effect on the Target. All material tangible
properties used in the businesses of the Target and the Subsidiaries are in
working condition, reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with past practice.
(b) The accounts receivable of the Target and the Subsidiaries as set
forth on the most recent balance sheet included in the Target financial
statements contained in the Target SEC Reports prior to the date of this
Agreement have been determined in accordance with U.S. GAAP. The allowance for
collection losses on such balance sheet has been determined in accordance with
U.S. GAAP.
(c) The assets of the Target and the Subsidiaries are all material
assets required to operate the business of the Target and the Subsidiaries as
presently conducted.
SECTION 3.25. ABSENCE OF SENSITIVE PAYMENTS. To the knowledge of the
Target, none of the Target, any of its Subsidiaries or affiliates or any officer
or director of any of them, acting alone or together, has performed any of the
following acts: (i) the making of any contribution, payment, remuneration, gift
or other form of economic benefit (a "PAYMENT") to or for the private use of any
governmental official, employee or agent where the Payment or the purpose of the
Payment was illegal under the laws of the United States or the jurisdiction in
which such payment was made, or (ii) the establishment or maintenance of any
unrecorded fund, asset or liability for any purpose or the making of any false
or artificial entries on its books.
SECTION 3.26 CHANGE OF CONTROL. Except as set forth in Section 3.26 or
Section 3.10 of the Target Disclosure Schedule, the Target is not a party to any
Material Contract that contains a "change in control," "potential change in
control" or similar provision, which, as a result of the consummation of the
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Transactions will (either alone or upon the occurrence of any additional acts or
events) result in any payment (whether severance pay or otherwise) becoming due
from the Target to any person, or the acceleration, termination or modification
of any obligations, rights, or contracts under such Material Contract.
SECTION 3.27 CERTAIN MATTERS. Notwithstanding any other representation
or disclosure set forth herein or in the Target Disclosure Schedule, the matter
listed on Section 3.27 of the Target Disclosure Schedule is not reasonably
likely to result in a Material Adverse Effect on the Target.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
ACQUIROR AND ACQUIROR SUB
Acquiror and Acquiror Sub hereby, jointly and severally, represent and
warrant to the Target that:
SECTION 4.01. EXISTENCE; GOOD STANDING; CORPORATE AUTHORITY. Each of
Acquiror and Acquiror Sub is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a material adverse effect on the ability of Acquiror and
Acquiror Sub to perform their obligations hereunder and to consummate the
Transactions contemplated by this Agreement.
SECTION 4.02. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Acquiror
and Acquiror Sub has all necessary corporate power and authority to execute and
deliver this Agreement and all other ancillary agreements, to perform its
obligations hereunder and to consummate the Transactions. The execution and
delivery of this Agreement by Acquiror and Acquiror Sub and the consummation by
Acquiror and Acquiror Sub of the Transactions have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
(including board approvals and votes by shareholders, if necessary) on the part
of Acquiror or Acquiror Sub are necessary to authorize this Agreement or to
consummate the Transactions (other than with respect to the Merger, the filing
and recordation of appropriate Certificate of Merger with the Secretary, as
required by this Agreement and Delaware Law). This Agreement has been duly and
validly executed and delivered by Acquiror and Acquiror Sub and, assuming the
due authorization, execution and delivery of this Agreement by the Target,
constitutes a legal, valid and binding obligation of each of Acquiror and
Acquiror Sub enforceable against each of Acquiror and Acquiror Sub in accordance
with its terms.
SECTION 4.03. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by Acquiror and Acquiror Sub do not,
and the performance of this Agreement by Acquiror and Acquiror Sub will not,
subject to obtaining the consents, approvals, authorizations and permits and
making the filings described in Section 4.03(b) (i) conflict with or violate the
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Certificate of Incorporation or Bylaws of either Acquiror or Acquiror Sub, (ii)
conflict with or violate any law applicable to Acquiror or Acquiror Sub or by
which any property or asset of either of them is bound or affected, or (iii)
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of Acquiror
or Acquiror Sub or require the consent of any third party pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation material to it to which Acquiror or
Acquiror Sub is a party or by which Acquiror or Acquiror Sub or any property or
asset of any of them is bound or affected, except for any such conflicts,
violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, have a Material Adverse Effect on Acquiror or
prevent Acquiror and Acquiror Sub from performing their respective obligations
under this Agreement and consummating the Transactions.
(b) The execution and delivery of this Agreement by Acquiror and
Acquiror Sub do not, and the performance of this Agreement by Acquiror and
Acquiror Sub will not require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) pursuant to the Exchange Act, Blue Sky Laws, the
HSR Act and filing and recordation of appropriate Certificate of Merger with the
Secretary as required by this Agreement and Delaware Law and (ii) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not have a Material Adverse Effect on Acquiror
and would not prevent or delay consummation of the Transactions, or otherwise
prevent Acquiror or Acquiror Sub from performing their respective obligations
under this Agreement.
SECTION 4.04. OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents
will not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to shareholders of the Target, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. The information supplied by Acquiror for inclusion in the proxy
statement to be sent to the shareholders of the Target in connection with the
Target Shareholders Meeting (such proxy statement, as amended and supplemented,
being referred to herein as the "PROXY STATEMENT") and Schedule 14D-9 will not,
on the date the Proxy Statement or Schedule 14D-9 (or any amendment or
supplement thereto) is first mailed to shareholders of the Target, at the time
of the Shareholders Meeting and at the Effective Time, contain any statement
which, at such time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein not false or misleading or necessary to correct any statement
in any earlier communication with respect to the solicitation of proxies for the
Target Shareholders Meeting which shall have become false or misleading;
PROVIDED, HOWEVER, that Acquiror or Acquiror Sub makes no representation or
warranty with respect to information supplied by the Target for inclusion in the
Offer Documents. The Offer Documents shall comply in all material respects as to
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form with the requirements of the Exchange Act and the rules and regulations
thereunder. If at any time prior to the Effective Time either Acquiror or
Acquiror Sub shall obtain knowledge of any facts with respect to itself, any of
its officers or directors or any of its Subsidiaries that would require the
supplement or amendment to any of the foregoing documents in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or to comply with applicable laws, such amendment or
supplement shall be promptly filed with the SEC and, as required by law,
disseminated to holders of the Target's Shares, and in the event the Target
shall advise Acquiror or Acquiror Sub as it its obtaining knowledge of any facts
that would make it necessary to supplement or amend any of the foregoing
documents, Acquiror and Acquiror Sub shall promptly amend or supplement such
document, and such amendment or supplement shall be promptly filed with the SEC,
and as required by law disseminated to the holders of the Target's Shares.
SECTION 4.05. BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of Acquiror
or Acquiror Sub.
SECTION 4.06. FINANCIAL RESOURCES. Acquiror has internal resources or
existing credit facilities or firm commitment letters that provide for adequate
financing to Acquiror ( the "ACQUIROR FINANCING") to enable Acquiror and
Acquiror Sub to timely perform, in full, their obligations under this Agreement,
including to pay in full the aggregate Merger Consideration and all fees and
expenses payable by Acquiror and Acquiror Sub in connection with this Agreement
and the transactions contemplated hereby. Acquiror will make available to
Acquiror Sub the funds to purchase all Shares tendered pursuant to the Offer and
to consummate the Merger.
SECTION 4.07 INTERIM OPERATIONS OF ACQUIROR SUB. Acquiror 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 only as contemplated hereby.
SECTION 4.08. ACQUIROR OWNED SHARES. As of the date of this Agreement,
neither Acquiror, Acquiror Sub nor any of their respective subsidiaries own any
Shares.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE ELECTION OF DIRECTORS
SECTION 5.01. CONDUCT OF BUSINESS BY THE TARGET PENDING THE ACQUIROR
SUB'S ELECTION DATE. The Target covenants and agrees that, between the date of
this Agreement and the date on which Acquiror or Acquiror Sub has the right to
designate members of the Target's Board of Directors pursuant to Section 6.03
upon the purchase by Acquiror Sub of any Shares pursuant to the Offer (the
"ACQUIROR SUB'S ELECTION DATE"), except as set forth in Section 5.01 of the
Target Disclosure Schedule or as contemplated by any other provision of this
Agreement, unless Acquiror shall otherwise agree in writing (which agreement
shall not be unreasonably withheld), (1) the business of the Target and the
Subsidiaries shall be conducted only in, and the Target and the Subsidiaries
shall not take any action except in, the ordinary course of business and in a
manner substantially consistent with past practice or as required to facilitate
the transactions contemplated under this Agreement, (2) the Target shall use all
reasonable efforts to preserve substantially intact its business organization,
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to keep available the services of the current officers, employees and
consultants of the Target and the Subsidiaries and to preserve the current
relationships of the Target and the Subsidiaries with customers, suppliers and
other persons with which the Target or any Subsidiary has significant business
relations, (3) the Target will not, and will not permit any Subsidiary to take
any action that would (i) materially and adversely affect the ability of any
party to obtain any consents required for the Transactions, (ii) cause any of
the conditions to the Offer set forth on Annex A, or any of the conditions to
the Merger set forth in Article VII, not to be satisfied, or (iii) materially
and adversely affect the ability of any party to perform its covenants and
agreements under this Agreement, and (4) the Target will not, and will not
permit any Subsidiary to:
(a) amend or otherwise change its Certificate of Incorporation or
Bylaws or other organizational or governing documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of
capital stock of the Target or any Subsidiary of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest (including,
without limitation, any phantom interest), of the Target or any Subsidiary
(except for shares of the Target Common Stock, if any, issuable under agreements
currently in effect on the date hereof and described in Section 3.03 of the
Target Disclosure Schedule and shares of capital stock pursuant to currently
outstanding Options or required to be issued under Plans currently in effect on
the date hereof and described in Section 3.10 of the Target Disclosure
Schedule), or (ii) any of the Target's or any Subsidiaries' assets, except for
sales in the ordinary course of business and in a manner consistent with past
practice;
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock or sell, lease, mortgage or otherwise dispose of or otherwise
encumber any shares of capital stock of any Subsidiary;
(d) reclassify, combine, split, divide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization or any division thereof or
any assets, other than the acquisition of assets in the ordinary course of
business consistent with past practice; (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for, the obligations of any person, or
make any loans or advances, except for indebtedness incurred in the ordinary
course of business and consistent with past practice with a maturity of not more
than one year in a principal amount not, in the aggregate, in excess of
$1,000,000; (iii) enter into, modify, amend or terminate any contract or
agreement material to the business, results of operations or financial condition
of the Target other than in the ordinary course of business, consistent with
past practice; (iv) authorize any capital expenditure, other than capital
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expenditures set forth in Section 5.01(e)(iv) of the Target Disclosure Schedule;
(v) impose, or suffer the imposition, on any asset of the Target or any
Subsidiary of any lien or permit any such lien to exist (other than in
connection with liens in effect as of the date hereof that are disclosed in
Section 5.01(e)(v) of the Target Disclosure Schedule or for liens incurred in
connection with indebtedness permitted under clause (ii) above); or (vi) enter
into or amend any contract, agreement, commitment or arrangement with respect to
any matter set forth in this subsection (e);
(f) except in the ordinary course of business consistent with past
practice and except in the case of officers for annual increases in compensation
payable or to become payable to any officer of the Target consistent with past
practices of the Target, (i) increase the compensation payable or to become
payable to any director, officer or other employee, or grant any bonus to, or
grant any severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of the Target
or any Subsidiary or enter into or amend any collective bargaining agreement, or
(ii) establish, adopt, enter into or amend any bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation or other plan, trust or fund for the benefit of any director,
officer or class of employees;
(g) commence any litigation other than in accordance with past
practice, or settle or compromise any pending or threatened litigation which is
material or which relates to the Transactions, PROVIDED that nothing in this
Section 5.01(g) will prohibit the Target from settling or compromising any such
litigation if, after consultation with counsel, the Target's Board of Directors
believes that such action is necessary to comply with its fiduciary duties;
(h) grant or convey to any person any rights, including, but not
limited to, by way of sale, license or sublicense, in any of the Target's
Intellectual Property;
(i) make any significant change in any tax or accounting methods,
principles or practices or systems of internal accounting controls, except as
may be appropriate to conform to changes in tax laws or U.S. GAAP; or
(j) after the date of this Agreement, file any material tax return
without the prior consent of Acquiror, which consent will not be unreasonably
withheld.
(k) (i) take any action that would make any representation and warranty
of the Target herein inaccurate in any material respect at the MC Offer
Expiration Date or (ii) omit to take any commercially reasonable course of
action necessary to prevent any such representation or warranty from being
inaccurate in any material respect at such time; or
(l) agree to commit to do any of the foregoing.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. SHAREHOLDERS' MEETING. (a) If required by applicable law
in order to consummate the Merger, the Target shall, in accordance with
applicable law and the Target's Certificate of Incorporation and Bylaws, (a)
duly call, give notice of, convene and hold an annual or special meeting of its
shareholders as soon as practicable following consummation of the Offer for the
purpose of considering and taking action on this Agreement and the transactions
contemplated hereby (the "TARGET SHAREHOLDERS MEETING") and (b) subject to the
fiduciary obligations of the Target's Board of Directors as advised by
independent legal counsel, include in the Proxy Statement the recommendation of
the Target's Board of Directors that the shareholders of the Target approve this
Agreement and the Transactions, including, without limitation, the Merger and
use its reasonable best efforts to obtain such approval. To the extent permitted
by law, Acquiror and Acquiror Sub each agree to vote all Shares beneficially
owned by them in favor of the Merger.
(b) Notwithstanding the provisions of Section 6.01(a), in the event
that Acquiror and Acquiror Sub shall acquire in the aggregate at least 90% of
the outstanding Shares and at least 90% of the then outstanding shares of Class
A Preferred Stock, if any, pursuant to the Offer or otherwise, the parties
hereto shall, at the request of Acquiror, take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of shareholders of the Target, in accordance with
Delaware Law.
SECTION 6.02. PROXY STATEMENT. If required by applicable law in order
to consummate the Merger, as promptly as practicable after the purchase of all
Shares validly tendered and not withdrawn pursuant to the Offer, the Target
shall file the Proxy Statement with the SEC under the Exchange Act, and shall
use its reasonable best efforts to have the Proxy Statement cleared by the SEC.
Acquiror, Acquiror Sub and the Target shall cooperate with each other in the
preparation of the Proxy Statement, and the Target shall notify Acquiror of the
receipt of any comments of the SEC with respect to the Proxy Statement and of
any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Acquiror promptly copies of all
correspondence between the Target or any representative of the Target and the
SEC. The Target shall give Acquiror and its counsel the opportunity to review
the Proxy Statement prior to its being filed with the SEC and shall give
Acquiror 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 Target, Acquiror and Acquiror Sub 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 and to cause
the Proxy Statement and all required amendments and supplements thereto to be
mailed to the holders of Shares entitled to vote at the Target Shareholders
Meeting at the earliest practicable time with the intent being to complete the
Merger as soon as practicable.
SECTION 6.03. TARGET BOARD REPRESENTATION; SECTION 14(F). (a) Promptly
upon the purchase by Acquiror Sub of Shares pursuant to the Offer following
attainment of the Minimum Condition, and from time to time thereafter, Acquiror
Sub shall be entitled to designate up to such number of directors, rounded up to
the next whole number, on the Target's Board of Directors as shall give Acquiror
Sub representation on the Target's Board of Directors equal to the product of
the total number of directors on the Target's Board of Directors (giving effect
to the directors elected pursuant to this sentence) multiplied by the percentage
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that the aggregate number of Shares beneficially owned by Acquiror Sub or any
affiliate of Acquiror Sub at such time bears to the total number of Shares then
outstanding, and the Target shall, at such time, promptly take all actions
necessary to cause Acquiror Sub's designees to be elected as directors of the
Target, including increasing the size of the Target's Board of Directors or
securing the resignations of incumbent directors or both. At such times, the
Target shall use its best efforts to cause persons designated by Acquiror Sub to
constitute the same percentage as persons designated by Acquiror Sub shall
constitute of the Target's Board of Directors of (i) each committee of the
Target's Board of Directors (some of whom may be required to be independent as
required by applicable law), (ii) each board of directors of each domestic
Subsidiary and (iii) each committee of each such board, in each case only to the
extent permitted by applicable law. Notwithstanding the foregoing, until the
time Acquiror Sub acquires a majority of the then outstanding Shares, the Target
shall use reasonable efforts to ensure that all the members of the Target's
Board of Directors and each committee of the Target's Board of Directors and
such boards and committees of the domestic Subsidiaries as of the date hereof
who are not employees of the Target shall remain members of the Target's Board
of Directors and of such boards and committees pursuant to the terms of their
office.
(b) The Target shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.03 and shall include in the
Schedule 14D-9 such information with respect to the Target and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Acquiror or Acquiror Sub shall supply to the Target and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of designees of Acquiror Sub
pursuant to this Section 6.03, prior to the Effective Time, any amendment of
this Agreement or the Certificate of Incorporation or Bylaws of the Target, any
termination of this Agreement by the Target, any extension by the Target of the
time for the performance of any of the obligations or other acts of Acquiror or
Acquiror Sub or waiver of any of the Target's rights hereunder shall require the
concurrence of a majority of the directors of the Target then in office who
neither were designated by Acquiror Sub nor are employees of the Target or if no
such directors are then in office, no such amendment, termination, extension or
waiver shall be effected which is materially adverse to the holders of Shares or
the holders of the Class A Preferred Stock (other than Acquiror and its
subsidiaries).
SECTION 6.04. ACCESS TO INFORMATION; CONFIDENTIALITY. Subject to the
Confidentiality Agreement (as hereinafter defined), from the date hereof to
Acquiror Sub's Election Date, the Target will provide Acquiror, during normal
business hours and upon reasonable notice, access to all financial, operating
and other data and information regarding the business of the Target as Acquiror
reasonably requests, other than information and documents that in the opinion of
Target's counsel may not be disclosed under applicable law. No investigation
pursuant to this Section shall affect any representation or warranty in this
Agreement of any party hereto or any condition to the obligations of the parties
hereto.
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SECTION 6.05. NO SOLICITATION OF TRANSACTIONS.
(a) Target shall not, directly or indirectly, through any officer,
director, employee, agent or otherwise and shall not permit any Subsidiary or
any officer, director, employee or agent to, solicit, initiate or encourage the
submission of any proposal or offer from any person relating to any acquisition
or purchase of all or any material portion of the assets of, or any equity
interest in, the Target or any Subsidiary or any merger, consolidation, share
exchange, business combination or other similar transaction with the Target or
any Subsidiary (a "BUSINESS COMBINATION PROPOSAL") or participate in any
negotiations regarding, or furnish or make available to any other person any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage, any effort or attempt by any other
person to do or seek or provide access to the properties, books or records of
Target or any Subsidiary to any person in connection with, any of the foregoing;
PROVIDED, HOWEVER, that nothing contained in this Section 6.05 shall prohibit
the Target from complying with Rule 14e-2 and Rule 14d-9 under the Exchange Act
or furnishing information to, or entering into discussions or negotiations with
or providing access to the properties, books or records of Target or any
Subsidiary to any person in connection with an unsolicited Business Combination
Proposal by such person received by the Target after the date of the Agreement,
if, and only to the extent that, (a) a majority of the disinterested members of
the Target's Board of Directors, after consultation with Target's independent
financial advisor and based on the advice of outside counsel, determines in good
faith that such action is required in order for the Target's Board of Directors
not to breach its fiduciary duties to shareholders imposed by law and (b) prior
to furnishing such information to, or entering into discussions or negotiations
with, such person, the Target (i) gives Acquiror as promptly as practicable
prior written notice of the Target's intention to furnish such information or
begin such discussions, the identity of such person and the material terms of
such Business Combination Proposal and (ii) receives from such person an
executed confidentiality agreement on terms no less favorable to the Target than
those contained in the Confidentiality Agreement. The Target shall keep Acquiror
informed of the material details of any such Business Combination Proposal or
any significant indication of interest in making any Business Combination
Proposal as promptly as practicable. The Target agrees not to release any third
party from, or waive any provision of, any confidentiality or standstill
agreement to which the Target is a party. The Target immediately shall cease and
cause to be terminated all existing discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing.
(b) Neither the Board of Directors of Target nor any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Acquiror or Acquiror Sub, the approval or recommendation by such
Board of Directors or any such committee of the Offer, this Agreement or the
Merger or (ii) approve or recommend, or propose to approve or recommend, any
Business Combination Proposal. Notwithstanding the foregoing, the Board of
Directors of Target, to the extent required by the fiduciary obligations
thereof, as determined in good faith by a majority of the disinterested members
thereof based on the advice of outside counsel, may approve or recommend (and,
in connection therewith, withdraw or modify its approval or recommendation of
the Offer, this Agreement and the Merger) a Superior Proposal. For purposes of
this Agreement, "SUPERIOR PROPOSAL" means a bona fide Business Combination
Proposal made by a third party to acquire, directly or indirectly, more than
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fifty percent 50% of the Shares then outstanding or all or a material portion of
the assets of Target and its subsidiaries and otherwise on terms that a majority
of the disinterested members of the Board of Directors of Target determines in
its good faith judgment (after consultation with the Target's independent
financial advisor) to be more favorable to the holders of Shares than the Offer
and the Merger from a financial perspective and for which financing, to the
extent required, is then committed or which, in the good faith judgment of a
majority of such disinterested members (after consultation with Target's
independent financial advisor, is reasonably likely to be financed by such third
party.
SECTION 6.06. DIRECTORS' AND OFFICERS' INDEMNIFICATION. (a) The
Certificate of Incorporation and Bylaws of the Surviving Corporation shall
contain provisions no less favorable with respect to indemnification than are
set forth in the Articles of Incorporation and Bylaws of the Target, which
provisions shall not be amended, repealed or otherwise modified for a period of
six (6) years from the Effective Time in any manner that would affect adversely
the rights thereunder of individuals who at any time prior to the Effective Time
were directors, officers or employees of the Target or any of the Subsidiaries,
unless such modification shall be required by Delaware Law.
(b) From and after the Effective Time, Acquiror and the Surviving
Corporation shall indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date of this Agreement or who becomes prior to
the Effective Time, an officer, director, employee or agent of the Target or any
of the Subsidiaries (collectively, the "INDEMNIFIED PARTIES") against all
losses, expenses (including reasonable attorneys' fees), claims, damages,
liabilities or amounts that are paid in settlement of, with the approval of the
Surviving Corporation (which approval shall not unreasonably be withheld), or
otherwise in connection with, any threatened or actual claim, action, suit,
proceeding or investigation (a "CLAIM"), based in whole or in part on or arising
in whole or in part out of the fact that the Indemnified Party (or the person
controlled by the Indemnified Party) is or was a director, officer, employee or
agent of the Target or any of the Subsidiaries and pertaining to any matter
existing or arising out of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, any Claim arising out of this
Agreement or any of the transactions contemplated hereby), whether asserted or
claimed prior to, at or after the Effective Time, in each case to the fullest
extent permitted under Delaware Law and by Target's Certificate of Incorporation
and Bylaws as in effect on the date hereof, and shall pay any expenses, as
incurred, in advance of the disposition of any such action or proceeding to each
Indemnified Party to the fullest extent permitted under Delaware Law and by
Target's Certificate of Incorporation and Bylaws as in effect on the date
hereof. Without limiting the foregoing, in the event any such Claim is brought
against any of the Indemnified Parties, Acquiror or the Surviving Corporation
shall have the right to assume the defense thereof and neither Acquiror nor the
Surviving Corporation shall be liable to such Indemnified Parties for any legal
expenses of other counsel or any other expenses subsequently incurred by such
Indemnified Parties in connection with the defense thereof, except that if
Acquiror or the Surviving Corporation elects not to assume such defense or
counsel for the Indemnified Parties advises that there are substantive issues
that raise conflicts of interest between Acquiror or the Surviving Corporation
and the Indemnified Parties, such Indemnified Parties may retain counsel
satisfactory to them and which shall be reasonably satisfactory to Acquiror and
the Surviving Corporation and they shall pay all reasonable fees and expenses of
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such counsel for such Indemnified Parties. The Indemnified Parties, or the
Acquiror and the Surviving Corporation, as the case may be, shall use all
reasonable efforts to assist in the defense of any such Claim, provided that the
Acquiror and the Surviving Corporation shall not be liable for any settlement
effected without their written consent, which consent, however, shall not be
unreasonably withheld. The Acquiror and the Surviving Corporation shall be
obligated pursuant to this paragraph to pay only one law firm to represent the
Indemnified Parties with respect to each such Claim unless there is, as
determined by counsel to the Indemnified Parties, under applicable standards of
professional conduct, a conflict or a reasonable likelihood of a conflict on any
significant issue between the positions of any two or more Indemnified Parties
at the expense of the Acquiror and the Surviving Corporation.
(c) Prior to the Effective Time, the Target shall, and after the
Effective Time Surviving Corporation and the Acquiror shall, to the fullest
extent permitted by Delaware Law, make reasonable advances to the Indemnified
parties to cover expenses for which such Indemnified Parties would otherwise be
entitled to indemnification pursuant to this Section 6.06, provided, however,
that the person to whom the expenses are advanced provides an undertaking to
repay such advances if it is determined that such person is not entitled to
indemnification.
(d) Acquiror shall maintain in effect for three years from the
Effective Time, the current directors' and officers' liability insurance
policies maintained by the Target (provided that Acquiror may substitute
therefor policies of at least the same coverage containing terms and conditions
which are not materially less favorable) with respect to matters occurring prior
to the Effective Time; provided, however, that in the event that the annual
premium for such coverage is more than 2.0 times the annual premium for such
coverage as of the date hereof, the Acquiror shall only be obligated to maintain
the best coverage that reasonably can be obtained for an annual premium equal to
the 2.0 times the annual premium in effect as of the date hereof; PROVIDED,
FURTHER, that in no event shall the policy limits of such coverage be less than
2/3 of the policy limits currently in effect.
(e) In the event the Surviving Corporation or the Acquiror
consolidates, liquidates, dissolves or merges into another entity (which events
are in no way prohibited by this Agreement), proper provisions shall be made so
that the successor and assigns of the Surviving Corporation and the Acquiror
satisfy their respective obligations under this Section 6.06.
SECTION 6.07. OBLIGATIONS OF ACQUIROR SUB. To the extent applicable,
Acquiror shall take all action necessary to cause Target, in accordance with
Section 6.03, to designate Acquiror Sub's designees to serve on the Target Board
as well as cause Acquiror Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and subject to the conditions set
forth in this Agreement including, but not limited to, the voting of all its
Shares and shares of Class A Preferred Stock in favor of the Merger.
SECTION 6.08. PUBLIC ANNOUNCEMENTS. (a) Acquiror, Acquiror Sub and the
Target shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement or any
Transaction and shall not issue any such press release or make any such public
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statement prior to such consultation and (b) prior to the Effective Time, the
Target will not issue any other press release or otherwise make any public
statements regarding its business, except as may be required by law or any
listing agreement with the to which the Target is a party.
SECTION 6.09. DELIVERY OF SEC DOCUMENTS. The Target shall promptly
deliver to Acquiror true and correct copies of any report, statement or schedule
filed with the SEC subsequent to the date of this Agreement.
SECTION 6.10. NOTIFICATION OF CERTAIN MATTERS. The Target shall give
prompt notice to Acquiror, and Acquiror shall give prompt notice to the Target,
of (a) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
and (b) any failure of the Target, Acquiror or Acquiror Sub, as the case may be,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; PROVIDED, HOWEVER, that the delivery of any
notice pursuant to this Section 6.10 shall not limit or otherwise affect the
remedies or conditions of Closing available hereunder to the party receiving
such notice.
SECTION 6.11. FURTHER ACTION. At any time and from time to time, each
party to this Agreement agrees, subject to the terms and conditions of this
Agreement, to take such actions and to execute and deliver such documents as may
be necessary to effectuate the purposes of this Agreement at the earliest
practicable time.
SECTION 6.12 EMPLOYEE BENEFITS.
(a) The Target shall terminate the Exigent International, Inc. Employee
401(K) Profit Sharing and Employee Stock Ownership Plan and the Exigent
International, Inc. Money Purchase Pension Plan and Trust prior to the Effective
Time (except as otherwise required with respect to the Exigent International,
Inc. Money Purchase Pension Plan and Trust to comply with the provisions of
Section 204(h) of ERISA) and shall deliver to the Acquiror a written board
resolution effecting such termination on or before the Effective Time (except as
otherwise required with respect to the Exigent International, Inc. Money
Purchase Pension Plan and Trust to comply with the provisions of Section 204(h)
of ERISA). Target shall not allocate forfeitures under the Exigent
International, Inc. Employee 401(K) Profit Sharing and Employee Stock Ownership
Plan or the Exigent International, Inc. Money Purchase Pension Plan and Trust or
make any distributions in respect of the termination of such plans until receipt
of a favorable determination letter from the Internal Revenue Service. The
Target shall suspend purchases and contributions under the Exigent
International, Inc. Employee Stock Purchase Plan, effective as of April 1, 2001
through the Effective Time.
(b) Following the Acquiror Sub's Election Date, Acquiror will cause the
Target (and, after the Merger, the Surviving Corporation) and the Subsidiaries
to honor all accrued benefit obligations to current and former employees and
directors under the Target's or Subsidiaries' employee benefit plans and fringe
benefit plans in existence on the date hereof and disclosed in Section 3.10 of
the Target Disclosure Schedule and all employment or severance agreements
entered into by the Target or any of the Subsidiaries or adopted by the Board of
Directors of the Target prior to the date hereof and disclosed in Sections 3.10
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or 6.12(b) of the Target Disclosure Schedule; PROVIDED, HOWEVER, that nothing
shall prevent Acquiror or the Target (and, after the Merger, the Surviving
Corporation) from taking any action with respect to such plans, obligations or
agreements or refraining from taking any such action which is permitted or
provided for under the terms thereof or under applicable law.
(c) Employees of the Target and its Subsidiaries shall be eligible to
participate in the Acquiror's employee benefit plans and programs as of the
Effective Time in accordance with the terms and conditions of such plans and
programs as applicable to similarly situated employees of the Acquiror or its
subsidiaries, as the case may be, and applicable law. Employees of the Target
and the Subsidiaries (and, after the Merger, the Surviving Corporation) shall be
given credit for their length of service with the Target and any Subsidiaries
under all employee benefit plans, programs and policies of the Surviving
Corporation or Acquiror in which they are eligible to participate or become
participants for all purposes thereunder, except to the extent that such
crediting would produce duplication of benefits or violate any provision of
ERISA or the Code. Any clause excluding coverage for pre-existing conditions in
any of the welfare plans (as defined in section 3(1) of ERISA, applied without
regard to the exceptions from coverage contained in sections 4(b)(3), 4(b)(4)
and 4(b)(5) thereof, a "WELFARE PLAN") included in Acquiror's or the Surviving
Corporation's employee benefit plans and programs (including medical, dental and
disability coverage) shall be waived for employees and former employees of the
Target and its Subsidiaries covered by a Welfare Plan of the Target or its
Subsidiaries as in effect on the date hereof. Acquiror shall cause employees of
the Target and its Subsidiaries to be credited under the applicable Welfare
Plans of Acquiror and the Surviving Corporation with any amounts paid toward
satisfaction of applicable deductibles, coinsurance amounts and out-of-pocket
maximums under Welfare Plans of the Target or its Subsidiaries. Acquiror shall
provide and recognize all accrued but unused vacation and sick days of employees
of the Target and its Subsidiaries as of the Effective Time.
SECTION 6.13. APPROPRIATE ACTION: CONSENTS; FILINGS. (a) The Target and
Acquiror shall use their reasonable best efforts to (i) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable law or required to be taken by
any Governmental Authority or otherwise to consummate and make effective the
Transactions as promptly as practicable, (ii) obtain from any Governmental
Authorities any consents, licenses, permits, waivers, approvals, authorizations
or orders required to be obtained or made by Acquiror or the Target or any of
their subsidiaries in connection with the authorization, execution and delivery
of this Agreement and the consummation of the Transactions, including, without
limitation, the Merger, and (iii) as promptly as practicable, make all necessary
filings, and thereafter make any other required submissions, with respect to
this Agreement and the Merger required under (A) the Exchange Act, and any other
applicable federal or state securities laws, (B) Delaware Law, (C) the HSR Act
and any related governmental request thereunder, and (D) any other applicable
law; PROVIDED that Acquiror and the Target shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior to filing and,
if requested, to accept all reasonable additions, deletions or changes suggested
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in connection therewith. The Target and Acquiror shall use reasonable best
efforts to furnish to each other all information required for any application or
other filing to be made pursuant to the rules and regulations of any applicable
law (including all information required to be included in the Offer Documents
and the Schedule 14D-9) in connection with the transactions contemplated by this
Agreement.
(b) (i) Each of Acquiror and the Target shall give (or shall cause
their respective subsidiaries to give) any notices to third parties, and use,
and cause their respective subsidiaries to use, their reasonable best efforts to
obtain any third party consents (including those set forth in Section
3.05(a)(iii)), (A) necessary to consummate the Transactions, (B) disclosed or
required to be disclosed in the Target Disclosure Schedule or the Acquiror
Disclosure Schedule or (C) required to prevent a Material Adverse Effect from
occurring prior to or after Acquiror Sub's Election Date.
(ii) In the event that Acquiror or the Target shall fail to obtain any
third party consent described in subsection (b)(i) above, it shall use its best
efforts, and shall take any such actions reasonably requested by the other
party, to minimize any adverse effect upon the Target and Acquiror, their
respective subsidiaries, and their respective businesses resulting, or which
could reasonably be expected to result after Acquiror Sub's Election Date, from
the failure to obtain such consent provided nothing in this provision shall
require or imply a waiver of any condition to the Offer or the Merger.
(c) From the date of this Agreement until Acquiror Sub's Election Date,
each party shall promptly notify the other party of any pending, or to the best
knowledge of the first party, threatened in writing, action, proceeding or
investigation by or before any Governmental Authority or any other person (i)
challenging or seeking material damages in connection with the Transactions or
(ii) seeking to restrain or prohibit the consummation of the Transactions or
otherwise limit the right of Acquiror or, to the knowledge of such first party,
any Acquiror Subsidiary to own or operate all or any portion of the businesses
or assets of the Target.
SECTION 6.14. PAYMENTS IN RESPECT OF TARGET OPTIONS.
(a) All amounts payable pursuant to Section 2.07 shall be subject to
any required withholding of taxes and shall be paid without interest. Target
shall use its best efforts to obtain all consents of the holders of the Options
as shall be necessary to effectuate the provisions of this Agreement relating
thereto. Notwithstanding anything to the contrary contained in this Agreement,
payment shall, at Acquiror's request, be withheld in respect of any Option until
all necessary consents are obtained.
(b) The Target Option Plans shall terminate as of the Effective Time,
and the provisions in any other Plan providing for the issuance, transfer or
grant of any capital stock of Target or any interest in respect of any capital
stock of Target shall be deleted as of the Effective Time of the Merger, and
Target shall ensure that following the Effective Time of the Merger no holder of
a Option or any participant in any Target Option Plan or other Plan shall have
any right thereunder to acquire any capital stock of Target or the Surviving
Corporation.
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ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. CONDITIONS TO THE MERGER. The obligations of the Target,
Acquiror, and Acquiror Sub to consummate the Merger are subject to the
satisfaction of the following conditions, and only the following conditions:
(a) this Agreement shall have been approved by the affirmative
vote of the shareholders of the Target to the extent required by Delaware Law,
the Target's Certificate of Incorporation and Bylaws and by the NASD (and its
related entities) and the Chicago Stock Exchange.
(b) no Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any law, order, executive order, stay, decree,
judgment, injunction or other order or statute, rule or regulation (each an
"Order") which is in final effect and which has the effect of making the
acquisition of Shares by Acquiror or Acquiror Sub or any affiliate of either of
them illegal or otherwise preventing or prohibiting consummation of the
Transactions; provided, however, that each of the parties shall have used
reasonable best efforts to prevent the entry of any such Order and to appeal the
entry thereof as promptly as possible;
(c) any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated; and
(d) Acquiror Sub or its permitted assignee shall have purchased
all Shares validly tendered and not withdrawn pursuant to the Offer sufficient
to satisfy the Minimum Condition; PROVIDED, HOWEVER, that neither Acquiror nor
Acquiror Sub shall be entitled to assert the failure of this condition if, in
breach of this Agreement or the terms of the Offer, Acquiror Sub fails to
purchase any Shares validly tendered and not withdrawn pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. TERMINATION. This Agreement may be terminated and the
Merger and the other Transactions may be abandoned at any time prior to the
Tender Offer Acceptance Date (or, in the case of a termination pursuant to
Section 8.01(b), the Effective Time), notwithstanding any requisite approval of
this Agreement and the transactions contemplated hereby as follows:
(a) by mutual written consent duly authorized by the boards of
directors of each of Acquiror, Acquiror Sub and the Target prior to the Tender
Offer Acceptance Date; or
(b) by either Acquiror or Target if the Tender Offer Acceptance Date
shall not have occurred on or before June 1, 2001 or the Effective Date shall
not have occurred on or before December 31, 2001; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Tender Offer
Acceptance Date or the Effective Time to occur on or before such date; provided,
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that the passage of the period referred to in this Section 8.01(b) shall be
tolled for any part thereof during which any party to this Agreement shall be
subject to a nonfinal order or other action restraining, enjoining or otherwise
prohibiting the purchase of shares of Target Common Stock pursuant to the Offer
or the consummation of the Merger or the calling or holding of the Target
Shareholders Meeting;
(c) by Acquiror if: (i) due to an occurrence or circumstance that
results in a failure to satisfy any condition set forth in ANNEX A hereto,
Acquiror Sub shall have (A) terminated the Offer without having accepted any
Shares for payment thereunder or (B) failed to pay for Shares pursuant to the
Offer within 90 days following the commencement of the Offer, unless any such
termination or failure listed above shall have been caused by or resulted from
the failure of Acquiror or Acquiror Sub to perform in any material respect any
covenant or agreement of either of them contained in this Agreement or the
material breach by Acquiror or Acquiror Sub of any representation or warranty of
either of them contained in this Agreement; or (ii) prior to the purchase of
Shares pursuant to the Offer, (A) the Target's Board of Directors shall have
failed to recommend or withdraws its approval or recommendation of this
Agreement, the Offer or the Merger or shall have resolved to do so, (B) shall
have recommended to the shareholders of the Target, or entered into, or publicly
announced its intention to consummate, an agreement or agreement in principle
with respect to any Superior Proposal or resolved to do so, or (C) a cash tender
offer or exchange offer for fifty percent (50%) or more of the outstanding
shares of capital stock of the Target is commenced (other than by Acquiror or
its affiliates) and the Target's Board of Directors fails to recommend against
the shareholders of the Target tendering their shares into such tender offer or
exchange offer; (D) the Target shall have breached any of its obligations under
Section 6.05 in any material respect, and such breach shall have had a material
adverse impact on the consummation of the Transactions; (E) the board of
directors of the Target shall exempt any other person from the provisions of
Section 203 of Delaware Law or the Florida Control-Share Acquisition Law; or (F)
any person shall have become an "Acquiring Person" under the Rights Plan, or the
Board of Directors shall have taken action excluding a person from becoming an
Acquiring Person who, in the absence of such Board action, would otherwise be an
Aquiring Person under the Rights Plan; or
(d) by the Target if: (i) Acquiror Sub shall have (A) failed to
commence the Offer within fifteen (15) days following the date of this
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder or (C) failed to pay for Shares pursuant to the terms of the
Offer or as required under the Act, unless any such failure or termination
listed above shall have been caused by or resulted from the failure of the
Target or the Tendering Shareholder to perform in any material respect any
covenant or agreement contained in this Agreement or the Voting and Tender
Agreement, respectively, or the material breach by the Target or the Tendering
Shareholder of any representation or warranty contained in this Agreement or the
Voting and Tender Agreement, respectively; or (ii) the board of directors of the
Target shall approve, and the Target shall enter into, a definitive agreement
providing for the implementation of a Superior Proposal; provided, however, that
(A) the Target is not and has not been in breach of Section 6.05, with respect
to such Superior Proposal in any material respect and (B) the Target's board of
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directors authorizes the Target, subject to complying with the terms of this
Agreement, to enter into a binding written agreement concerning a transaction
that constitutes a Superior Proposal and the Target notifies Acquiror in writing
that it intends to enter into such an agreement, attaching the most current
version of such agreement to such notice;
SECTION 8.02. FEES AND EXPENSES. (a) The Target shall pay or cause to
be paid, in same day funds to the Acquiror, the "Acquiror Expenses" and the
"Termination Fee" in the event this Agreement is terminated pursuant to Section
8.01(c)(ii) or 8.01(d)(ii); provided, however, that in the event this Agreement
is terminated pursuant to clauses (B), (C), (E) or (F) of Section 8.01(c)(ii) or
pursuant to Section 8.01(d)(ii), the Termination Fee shall not be payable unless
the Superior Proposal, tender offer or other transaction giving rise to the
termination is consummated. The "Acquiror Expenses" means the documented
out-of-pocket fees and expenses reasonably incurred and paid by or on behalf of
Acquiror in connection with this Agreement, the Offer, the Merger, the Voting
and Tender Agreement or the consummation of any of the transactions contemplated
hereby and thereby, including, without limitation, all governmental filing fees
and fees and expenses of counsel, commercial banks, printers, paying agents,
dealer managers, accountants, experts, and consultants up to a maximum amount of
$400,000. The Acquiror Expenses shall be payable promptly after the termination
of this Agreement giving rise to the obligation to pay such Acquiror Expenses.
The Termination Fee means an amount equal to $690,000, less any previously paid
Acquiror Expenses. Any Termination Fee payable pursuant to this Section 8.02(a)
shall be payable as promptly as practicable following the consummation of the
Superior Proposal or other transaction or event giving rise to the obligation to
pay such Termination Fee.
(b) In addition, in the event that after the date hereof a
Business Combination Proposal shall have been made to the Target or any of its
Subsidiaries or stockholders or any person shall have announced an intention
(whether or not conditional) to make a Business Combination Proposal and
thereafter this Agreement is terminated pursuant to Section 8.01(c)(i) or
8.01(d)(i) as a result of the Minimum Condition not being satisfied and within
12 months of such termination such person acquires, directly or indirectly, more
than fifty percent (50%) of the Shares then outstanding or all or a material
portion of the assets of Target and its Subsidiaries, then the Target shall pay
Acquiror an amount equal to the Termination Fee, less any amounts, if any, paid
pursuant to Section 8.02(b). Any amounts payable pursuant to this Section
8.02(a) shall be payable upon the consummation of the transaction or the
occurrence of the event giving rise to such obligation.
(c) Except as set forth in this Section, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
SECTION 8.03. AMENDMENT. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective boards of directors
at any time prior to the Effective Time; PROVIDED, HOWEVER, that, after the
approval of this Agreement and the Transactions by the shareholders of the
Target, no amendment may be made which would violate Delaware Law. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
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SECTION 8.04. WAIVER. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any obligation or
other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties of any other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
of any other party or condition benefiting such party contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. The representations, warranties and agreements in this Agreement
shall terminate at the Tender Offer Acceptance Date or upon termination of this
Agreement pursuant to Section 8.01, as the case may be, except that the
agreements set forth in Section 6.01, 6.02 and 6.03 shall survive until the
Effective Date and the agreements set forth in Articles II and IX and Sections
6.03(c), 6.06, 6.07, 6.12, 6.13 and 6.14 shall survive termination indefinitely.
SECTION 9.02. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
facsimile, or telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
if to Acquiror or Acquiror Sub:
Xxxxxx Corporation
0000 Xxxx XXXX Xxxxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
T. Xxxxxxx Xxxxxx, Esq.
Holland & Knight LLP
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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if to the Target:
Exigent International, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
with a copy to:
Xxxx X. Nation, Esq.
Xxxxx & XxXxxxxx
0000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 9.03. CERTAIN DEFINITIONS. For purposes of this Agreement, the
term:
(a) "AFFILIATE" of a specified person means a person who, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified person;
(b) "BENEFICIAL OWNER" with respect to any shares means a person who
shall be deemed to be the beneficial owner of such shares (i) which such person
or any of its affiliates or associates (as such term is defined in Rule 12b-2
promulgated under the Exchange Act) beneficially owns, directly or indirectly,
(ii) which such person or any of its affiliates or associates has, directly or
indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of consideration rights,
exchange rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding, (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates or any person with whom such
person or any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
such shares, or (iv) pursuant to Section 13(d) of the Exchange Act and any rules
or regulations promulgated thereunder;
(c) "BUSINESS DAY" means any day on which the principal offices of the
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in Miami, Florida;
(d) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise;
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(e) "pERSON" means an individual, corporation, partnership, limited
partnership, syndicate, person (including, without limitation, a "person" as
defined in Section 13(d)(3) of the Exchange Act), trust, association or entity
or government, political subdivision, agency or instrumentality of a government;
and
(f) "SUBSIDIARY" or "SUBSIDIARIES" of any person means any corporation,
partnership, joint venture or other legal entity of which such person (either
alone or through or together with any other subsidiary), owns or has rights to
acquire, directly or indirectly, 50% or more of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
SECTION 9.04. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. ASSIGNMENT; BINDING EFFECT; BENEFIT. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns. Notwithstanding
anything contained in this Agreement to the contrary, except for the provisions
of Article II and Sections 6.06 and 6.12, nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
SECTION 9.06. INCORPORATION OF SCHEDULES. The Target Disclosure
Schedule and the Acquiror Disclosure Schedule referred to herein and signed for
identification by the parties hereto are hereby incorporated herein and made a
part hereof for all purposes as if fully set forth herein.
SECTION 9.07. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 9.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD
TO THE RULES OF CONFLICTS OF LAW THEREOF. ALL ACTIONS AND PROCEEDINGS ARISING
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OUT OF OR RELATING TO THIS AGREEMENT SHALL BE HEARD AND DETERMINED IN ANY COURT
SITTING IN THE COUNTY OF BREVARD, FLORIDA.
SECTION 9.09. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. COUNTERPARTS. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.11. WAIVER OF JURY TRIAL. Each of Acquiror, the Target and
Acquiror Sub hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the actions of Acquiror, the
Target or Acquiror Sub in the negotiation, administration, performance and
enforcement thereof.
SECTION 9.12. ENTIRE AGREEMENT. This Agreement, the Target Disclosure
Schedule, the Acquiror Disclosure Schedule, the confidentiality agreement, dated
January 26, 2001, (the "CONFIDENTIALITY AGREEMENT"), and any 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 among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be binding
upon any party hereto unless made in writing and signed by all parties hereto.
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IN WITNESS WHEREOF, Acquiror, Acquiror Sub and the Target have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
XXXXXX CORPORATION
By: /S/Xxxxxx X. Xxxxx
------------------------------------------------
Xxxxxx X. Xxxxx, President, Government
Communications System Division
MANATEE MERGER CORP.
By: /S/Xxxxxx X. Xxxxx
------------------------------------------------
Xxxxxx X. Xxxxx, Vice President
EXIGENT INTERNATIONAL, INC.
By: /S/Xxxxxx Xxxxxxx
------------------------------------------------
Xxxxxx Xxxxxxx, Chairman of the Board and Chief
Executive Officer
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ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Acquiror Sub shall
not be required to accept for payment or pay for any Shares tendered pursuant to
the Offer, if (i) the Minimum Condition shall not have been satisfied by the
expiration date of the Offer; or (ii) any applicable waiting period under the
HSR Act shall not have expired or been terminated prior to the expiration of the
Offer. Furthermore, notwithstanding any other term or provision of the Offer or
this Agreement, Acquiror and Acquiror Sub shall not be required to accept for
payment or purchase any Shares, and may terminate the Offer at any time on or
after the date of this Agreement and prior to the expiration of the Offer:
(a) there shall have been instituted or pending any action or
proceeding brought by any Governmental Authority before any court or
Governmental Authority, agency or tribunal, domestic or foreign: (i) challenging
or seeking to make illegal, to delay materially or otherwise directly or
indirectly to restrain or prohibit the making of the Offer, the acceptance for
payment of or payment for some or all of the Shares by Acquiror or Acquiror Sub,
or the consummation of the Merger, (ii) seeking to obtain material damages or
otherwise directly or indirectly relating to the transactions contemplated by
the Offer or the Merger, (iii) seeking to restrain or prohibit Acquiror's
ownership or operation (or that of its respective Subsidiaries or Affiliates) of
all or any material portion of the business or assets of the Target and its
Subsidiaries, taken as a whole, or of Acquiror and its Subsidiaries, taken as a
whole, or to compel Acquiror or any of its Subsidiaries or Affiliates to dispose
of or hold separate all or any material portion of the business or assets of the
Target and its Subsidiaries, taken as a whole, or of Acquiror and its
Subsidiaries, taken as a whole, (iv) seeking to impose or confirm material
limitations on the ability of Acquiror, Acquiror Sub or any of Acquiror's other
Subsidiaries or Affiliates effectively to exercise full rights of ownership of
the Shares, including the right to vote any Shares acquired or owned by
Acquiror, Acquiror Sub or any of Acquiror's other Subsidiaries or Affiliates on
all matters properly presented to the Target's stockholders or (v) seeking to
require divestiture by Acquiror, Acquiror Sub or any of Acquiror's other
Subsidiaries or Affiliates of any Shares;
(b) there shall have been any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency, domestic or foreign,
other than the application of the waiting period provisions of the HSR Act to
the Offer or the Merger, that, is reasonably likely, directly or indirectly, to
result in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above;
(c) there has been any event, occurrence or development or state of
circumstances or facts which, individually or in the aggregate, has a Material
Adverse Effect on the Target;
(d) the board of directors of the Target shall have failed to
recommend, or shall have withdrawn or modified in a manner materially adverse to
Acquiror its approval or recommendation of, this Agreement, the Offer or the
Merger, or shall have recommended, or entered into, an agreement or an agreement
in principle with respect to a Superior Proposal (or shall have resolved to do
any of the foregoing);
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(e) there shall have occurred and be continuing any general suspension
of trading in, or limitation on prices for, securities on the New York Stock
Exchange or in the over-the-counter market in the United States (other than any
suspension or limitation on trading in any particular security as a result of a
computerized trading limit or any intraday suspension due to "circuit
breakers"), declaration of a banking moratorium by federal or New York
authorities or general suspension of payments in respect of lenders that
regularly participate in the U.S. market in loans to large corporations, any
commencement of a war by or against the United States or any commencement of
armed hostilities or other national or international calamity involving the
United States that has a material adverse effect on bank syndication for
financial markets in the United States or, in the case of any of the foregoing
occurrences existing on or at the time of the commencement of the Offer, a
material acceleration or worsening thereof.
(f) the Target shall have failed to perform or comply in any material
respects with all agreements and covenants required by this Agreement to be
performed or complied with by it at, or any of the representations and
warranties of the Target contained in this Agreement that are qualified as to
materiality shall fail to be true and correct, or any such representations and
warranties that are not so qualified shall fail to be true and correct in all
material respects, each as of the MC Offer Expiration Date as though made on and
as of such date, except that those representations and warranties which address
matters only as of a particular date shall remain true and correct, or true and
correct in all material aspects, as the case may be, as of such date;
(g) this Agreement shall have been terminated in accordance with its
terms;
(h) Acquiror Sub and the Target shall have agreed that Acquiror Sub
shall terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder;
(i) all consents of and notices to or filings with Governmental
Authorities (including specifically those applicable to defense industry
contractors) and third parties required to be obtained prior to the MC Offer
Expiration Date under the Agreement shall not have been obtained or made, other
than those the absence of which, individually or in the aggregate, would not
have a Material Adverse Effect on the Target or prevent or materially delay
consummation of any of the Transactions.
The foregoing conditions are for the sole benefit of Acquiror Sub and
Acquiror and may be asserted by Acquiror Sub or Acquiror regardless of the
circumstances giving rise to any such condition or may be waived by Acquiror Sub
or Acquiror in whole or in part at any time and from time to time in their sole
discretion. The failure by Acquiror or Acquiror Sub at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right: the
waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
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