Exhibit 7.02
AGREEMENT AND PLAN OF MERGER
by and between
NORTHROP GRUMMAN SPACE & MISSION SYSTEMS CORP.,
EAGLE TRANSACTION CORPORATION,
and
ESSEX CORPORATION
DATED AS OF NOVEMBER 8, 2006
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................2
Section 1.1 Certain Definitions...................................2
Section 1.2 Other Defined Terms...................................8
ARTICLE II THE MERGER............................................10
Section 2.1 The Merger...........................................10
Section 2.2 Closing..............................................10
Section 2.3 Effective Time.......................................10
Section 2.4 Subsequent Actions...................................10
Section 2.5 Effects of the Merger................................11
Section 2.6 Articles of Incorporation; Bylaws....................11
Section 2.7 Directors and Officers...............................11
ARTICLE III EFFECT OF THE MERGER ON CAPITAL STOCK.................11
Section 3.1 Effect on Capital Stock..............................11
Section 3.2 Surrender of Certificates............................12
Section 3.3 Adjustments to Prevent Dilution......................14
Section 3.4 Treatment of Stock Options...........................14
Section 3.5 Treatment of ESPP....................................14
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........15
Section 4.1 Organization; Power; Qualification...................15
Section 4.2 Corporate Authorization; Enforceability..............16
Section 4.3 Capitalization; Options..............................16
Section 4.4 Subsidiaries and Company Joint Ventures..............18
Section 4.5 Governmental Concerns................................18
Section 4.6 Non-Contravention....................................19
Section 4.7 Voting...............................................19
Section 4.8 Financial Reports and SEC Documents..................19
Section 4.9 No Undisclosed Liabilities...........................21
Section 4.10 Absence of Certain Changes or Events.................21
Section 4.11 Litigation...........................................22
Section 4.12 Contracts............................................22
Section 4.13 Employee Compensation and Benefit Plans; ERISA.......26
Section 4.14 Labor Matters........................................28
Section 4.15 Taxes................................................29
Section 4.16 Environmental Liability..............................30
Section 4.17 Title to Real Properties.............................31
Section 4.18 Permits; Compliance with Laws........................31
Section 4.19 Takeover Statutes....................................32
Section 4.20 Interested Party Transactions........................32
Section 4.21 Information Supplied.................................32
Section 4.22 Opinion of Financial Advisor.........................33
Section 4.23 Brokers and Finders..................................33
Section 4.24 Intellectual Property................................33
Section 4.25 Foreign Corrupt Practices Act........................35
Section 4.26 Export/Import Compliance.............................35
Section 4.27 Security Obligations.................................36
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGERCO..............................................36
Section 5.1 Organization.........................................36
Section 5.2 Corporate Authorization..............................36
Section 5.3 Enforceability.......................................36
Section 5.4 Governmental Authorizations..........................37
Section 5.5 Non-Contravention....................................37
Section 5.6 Information Supplied.................................37
Section 5.7 Capital Resources....................................37
Section 5.8 Operations of MergerCo...............................38
ARTICLE VI COVENANTS.............................................38
Section 6.1 Conduct of Business Prior to the Closing.............38
Section 6.2 Certain Limitations..................................41
Section 6.3 Access to Information; Confidentiality...............41
Section 6.4 No Solicitation......................................42
Section 6.5 Notices of Certain Events............................44
Section 6.6 Proxy Material; Shareholder Meeting..................45
Section 6.7 Employees; Benefit Plans.............................46
Section 6.8 Directors' and Officers' Indemnification and
Insurance............................................48
Section 6.9 All Reasonable Efforts...............................49
Section 6.10 Public Announcements.................................50
Section 6.11 Stock Exchange Listing...............................51
Section 6.12 Fees and Expenses....................................51
Section 6.13 Takeover Statutes....................................51
Section 6.14 Resignations.........................................51
Section 6.15 Shareholder Litigation...............................51
Section 6.16 Rule 16b-3...........................................51
ARTICLE VII CONDITIONS............................................52
Section 7.1 Mutual Conditions to Closing.........................52
Section 7.2 Conditions to Obligation of Parent and MergerCo......52
Section 7.3 Conditions to Obligation of the Company..............53
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.....................53
Section 8.1 Termination by Mutual Consent........................53
Section 8.2 Termination by Either Parent or the Company..........53
Section 8.3 Termination by Parent................................54
Section 8.4 Termination by the Company...........................55
Section 8.5 Effect of Termination................................55
Section 8.6 Company Termination Fee..............................55
Section 8.7 Parent Termination Fee...............................56
Section 8.8 Amendment............................................57
Section 8.9 Extension; Waiver....................................57
ARTICLE IX MISCELLANEOUS.........................................57
Section 9.1 Interpretation.......................................57
Section 9.2 Survival.............................................58
Section 9.3 Governing Law........................................58
Section 9.4 Waiver of Jury Trial.................................58
Section 9.5 Notices..............................................58
Section 9.6 Entire Agreement.....................................59
Section 9.7 No Third-Party Beneficiaries.........................59
Section 9.8 Severability.........................................59
Section 9.9 Rules of Construction................................60
Section 9.10 Assignment...........................................60
Section 9.11 Remedies.............................................60
Section 9.12 Specific Performance.................................60
Section 9.13 Counterparts; Effectiveness..........................60
Exhibit A - Amended and Restated Articles of Incorporation of the Surviving
Corporation
Exhibit B - Amended and Restated Bylaws of the Surviving Corporation
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into
as of November 8, 2006, between Northrop Grumman Space & Mission Systems
Corp., an Ohio corporation ("Parent"), Eagle Transaction Corporation
("MergerCo"), a Virginia corporation, and Essex Corporation, a Virginia
corporation (the "Company").
RECITALS
WHEREAS, the parties intend that MergerCo be merged with and into the
Company, with the Company surviving that merger, on the terms and subject
to the conditions set forth herein, and in accordance with the Virginia
Stock Corporation Act (the "VSCA");
WHEREAS, the Board of Directors of the Company has unanimously (i)
determined that this Agreement and the transactions contemplated hereby,
including the Merger, are advisable, fair to and in the best interests of
the Company and its shareholders, (ii) approved and adopted this Agreement
and the transactions contemplated hereby, including the Merger, and (iii)
recommended approval of this Agreement and the transactions contemplated
hereby, including the Merger, by the shareholders of the Company;
WHEREAS, the Boards of Directors of Parent and MergerCo have
unanimously approved and adopted this Agreement;
WHEREAS, concurrently with the execution of this Agreement, as a
condition and inducement to Parent's and MergerCo's willingness to enter
into this Agreement, the Company, Parent, and MergerCo and certain
shareholders of the Company are entering into voting agreements, of even
date herewith (the "Voting Agreements") pursuant to which such shareholders
have agreed, subject to the terms thereof, to vote all shares of common
stock of the Company (the "Common Stock") held by them in favor of the
Merger and this Agreement;
WHEREAS, concurrently with the execution and delivery of this
Agreement, certain executives of the Company have executed and delivered
employment/retention agreements with the Company, to be effective upon the
consummation of the Merger; and
WHEREAS, the Company, Parent and MergerCo desire to make certain
representations, warranties, covenants and agreements in connection with
the Merger and the transactions contemplated by this Agreement and also to
prescribe certain conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and of the
representations, warranties, covenants and agreements contained in this
Agreement, the parties, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Definitions. For purposes of this Agreement,
the following terms will have the following meanings when used herein with
initial capital letters:
"Acceptable Confidentiality Agreement" means a confidentiality and
standstill agreement that contains confidentiality and standstill
provisions that are no less favorable in the aggregate to the Company than
those contained in the Confidentiality Agreement; provided, however, that
an Acceptable Confidentiality Agreement may include provisions that are
less favorable to the Company than those contained in the Confidentiality
Agreement so long as the Company offers to amend the Confidentiality
Agreement, concurrently with execution of such Acceptable Confidentiality
Agreement, to include substantially similar provisions.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common
control with, such first Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that Person, whether
through the ownership of voting securities, by Contract or otherwise.
"Business Day" means any day, other than Saturday, Sunday or a day on
which banking institutions in the City of New York are generally closed.
"Code" means the Internal Revenue Code of 1986, as amended, and any
rules and regulations promulgated thereunder.
"Company Benefit Plan" means each "employee benefit plan" within the
meaning of Section 3(3) of ERISA, including multiemployer plans within the
meaning of Section 3(37) of ERISA, and each other stock purchase, stock
option, restricted stock, severance, retention, employment, consulting,
change-of-control, collective bargaining, bonus, incentive, deferred
compensation, employee loan, fringe benefit and other benefit plan,
agreement, program, policy, commitment or other arrangement, whether or not
subject to ERISA (including any related funding mechanism now in effect or
required in the future), whether formal or informal, oral or written, in
each case under which any past or present director, officer, or employee of
the Company or any of its Subsidiaries has any present or future right to
benefits.
"Company Certificate" means the Articles of Incorporation of the
Company, as amended.
"Company Intellectual Property Rights" means all Intellectual Property
Rights owned by the Company and any of its Subsidiaries.
"Company Joint Venture" means, with respect to the Company, any Person
in which the Company, directly or indirectly, owns an equity interest that
does not have voting power under ordinary circumstances to elect a majority
of the board of directors or other Person performing similar functions but
in which the Company has substantial rights with respect to the management
of such Person.
"Company Material Adverse Effect" means any event, state of facts,
circumstance, development, change or effect (including those affecting or
relating to any Company Joint Venture) that, individually or in the
aggregate with all other events, states of fact, circumstances,
developments, changes and effects, (i) is materially adverse to the
business, assets, liabilities, financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole or (ii) would prevent
or materially impair or materially delay the ability of the Company to
perform its obligations under this Agreement or to consummate the
transactions contemplated hereby; provided, however, that none of the
following shall give rise to or constitute a Company Material Adverse
Effect for any purpose under this Agreement: (A) changes in general
economic, capital market or industry conditions except to the extent such
changes have a disproportionate impact on the Company and its Subsidiaries,
taken as a whole, relative to other participants in the industry in which
the Company conducts its businesses; (B) any failure, in and of itself, by
the Company to meet any internal or published projections, forecasts or
revenue or earnings predictions or projections (it being understood that
any change in the Company underlying or contributing to such failure may be
taken into account in determining whether there exists a Company Material
Adverse Effect); (C) effects of the announcement of this Agreement or the
pendency or consummation of the transactions contemplated hereby; (D) any
Law or Order enacted, promulgated, issued, entered, amended or enforced by
any Governmental Entity (or the threat thereof) after the date of this
Agreement enjoining, restraining, preventing, delaying or prohibiting
consummation of the transactions contemplated by this Agreement or making
the consummation of the transactions contemplated by this Agreement illegal
pursuant to applicable Law; or (E) as set forth on Section 1.1(b) of the
Company Disclosure Letter.
"Company Organizational Documents" means the articles of incorporation
and bylaws (or the equivalent organizational documents) of the Company and
each of its Subsidiaries, in each case as in effect on the date of this
Agreement.
"Confidentiality Agreement" means that certain confidentiality
agreement by and between the Company and Parent, dated September 1, 2006.
"Contracts" means any contracts, agreements, licenses, notes, bonds,
mortgages, indentures, commitments, leases or other instruments or
obligations, whether written or oral (including, without limitation, any
employment, severance, change in control, or other similar agreement with
employees and/or directors of the Company).
"Credit Facility" means that certain Amended and Restated Revolving
Line of Credit Loan and Security Agreement, dated as of June 30, 2005, as
amended, between the Company and its Subsidiaries and Bank of America, N.A.
"Environmental Claims" means, in respect of any Person, any and all
administrative, regulatory or judicial actions, suits, orders, decrees,
demands, directives, claims, liens, proceedings or written notices of
noncompliance or violation by any Governmental Entity, alleging (i)
liability with respect to the potential presence or Release of, or exposure
to, any Hazardous Materials at any location, whether or not owned,
operated, leased or managed by such Person, (ii) indemnification, cost
recovery, compensation or injunctive relief resulting from the presence or
Release of, or exposure to, any Hazardous Materials, or (iii) any other
liability arising under Environmental Laws.
"Environmental Laws" means all applicable federal, state, local and
foreign laws (including international conventions, protocols and treaties),
common law, rules, regulations, orders, decrees, judgments, binding
agreements or Environmental Permits issued, promulgated or entered into, by
or with any Governmental Entity, relating to pollution, Hazardous
Materials, natural resources or the protection, investigation or
restoration of the environment as in effect on or prior to the date of this
Agreement.
"Environmental Permits" means all permits, licenses, registrations and
other governmental authorizations required under applicable Environmental
Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any rules and regulations promulgated thereunder.
"Export and Import Control Laws" means any United States Law or any
Order involving or regulating the import or export of the Company or its
Subsidiaries products or services, including but not limited to the Tariff
Act of 1930 as amended, the Export Administration Act of 1979 as amended,
the Export Administration Regulations, the International Emergency Economic
Powers Act as amended, the Arms Export Control Act, the International
Traffic in Arms Regulations, the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001, Executive Orders of the President regarding embargoes and
restrictions on transactions with designated entities (including countries,
terrorists, organizations and individuals), and the embargoes and
restrictions administered by the United States Office of Foreign Assets
Control and the Money Laundering Control Act ss. 120.16.
"Fixed Price Contract" means any firm-fixed-price Contract,
fixed-price Contract with prospective price adjustment, fixed-price
incentive Contract or fixed-price Contract with prospective price
redetermination, but does not include time and materials fixed-labor-rate
Contracts.
"Foreign person" means any natural person who is not a lawful
permanent resident as defined by 8 U.S.C. 1101(a)(20) or who is not a
protected individual as defined by 8 U.S.C. 1324b(a)(3). It also means any
foreign corporation, business association, partnership, trust, society or
any other entity or group that is not incorporated or organized to do
business in the United States, as well as international organizations,
foreign governments and any agency or subdivision of foreign governments
(e.g., diplomatic missions).
"Hazardous Materials" means (i) any substance that is listed,
classified or regulated under any Environmental Laws; (ii) any petroleum
product or by-product, asbestos-containing material, lead-containing paint
or plumbing, polychlorinated biphenyls, radioactive material, toxic molds,
or radon; or (iii) any other substance that is the subject of regulatory
action, or that could give rise to liability, under any Environmental Laws.
"Intellectual Property Rights" means all of the following: (i)
patents, patent rights, patent applications and patent disclosures, (ii)
trademarks, trademark rights, trade names, trade name rights, service
marks, service xxxx rights, logos, corporate names and Internet domain
names, together with all goodwill associated with each of the foregoing,
(iii) copyrights and copyrightable works, (iv) computer software (including
source code, object code, data, databases and documentations), (v)
inventions, trade secrets, mask work, confidential information, know-how
(whether or not patentable and whether or not reduced to practice) and (vi)
other proprietary information and intellectual property.
"Joint Venture Agreements" means such Contracts with respect to
Company Joint Ventures as the Company has made available to Parent prior to
the date of this Agreement.
"Knowledge" means, when used with respect to the Company, the actual
knowledge of the Persons set forth in Section 1.1(a) of the Company
Disclosure Letter.
"Laws" means any domestic or foreign laws, statutes, ordinances, rules
(including rules of common law), regulations, codes, executive orders or
legally enforceable requirements enacted, issued, adopted, promulgated or
applied by any Governmental Entity.
"Liens" means any mortgages, deeds of trust, liens (statutory or
other), pledges, security interests, collateral security arrangements,
conditional and installment agreements, claims, covenants, conditions,
restrictions, reservations, options, rights of first offer or refusal,
charges, easements, rights-of-way, encroachments, third party rights or
other encumbrances or title imperfections or defects of any kind or nature.
"Loss Contract" means any Contract or subcontract that (i) has
generated revenues for the Company during the Company's current fiscal year
and for which the cost of performing such Contract or subcontract since the
start of the Company's current fiscal year through September 30, 2006 has
exceeded the monies paid to the Company under such Contract or subcontract
since the start of the Company's current fiscal year through September 30,
2006 or (ii) to the Knowledge of the Company, has an estimate at completion
that exceeds the Contract or subcontract value. For purposes of this
definition, "costs" means all costs to the Company of performing under such
Contract or subcontract consistent with the Company's past practices, and
including all allocations of general and administrative expenses to such
Contract or subcontract.
"Orders" means any orders, judgments, injunctions, decrees or writs
handed down, adopted or imposed by, including any consent decree,
settlement agreement or similar written agreement with, any Governmental
Entity.
"Parent Material Adverse Effect" means any event, state of facts,
circumstance, development, change or effect that, individually or in the
aggregate with all other events, states of fact, circumstances,
developments, changes and effects, would prevent or materially impair or
materially delay the ability of Parent or MergerCo to perform their
obligations under this Agreement or to consummate the transactions
contemplated hereby.
"Permitted Liens" means (i) liens for Taxes not yet due and payable or
that are being contested in good faith and by appropriate proceedings; (ii)
mechanics', materialmen's or other liens or security interests that secure
a liquidated amount that are being contested in good faith and by
appropriate proceedings; or (iii) any other liens, security interests,
easements, rights-of-way, encroachments, restrictions, conditions and other
encumbrances that do not secure a liquidated amount, that have been
incurred or suffered in the ordinary course of business and that would not,
individually or in the aggregate, have a material effect on the assets or
properties to which they relate.
"Person" means any individual, corporation, limited or general
partnership, limited liability company, limited liability partnership,
trust, association, joint venture, Governmental Entity and other entity and
group (which term will include a "group" as such term is defined in Section
13(d)(3) of the Exchange Act).
"Release" means any actual or threatened release, spill, emission,
leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into the environment.
"Representatives" means, when used with respect to Parent or the
Company, the directors, officers, employees, consultants, accountants,
legal counsel, investment bankers, agents and other representatives of
Parent or the Company, as applicable, and its Subsidiaries.
"Requisite Company Vote" means the approval of this Agreement, the
Merger and the other transactions contemplated hereby by the holders of
more than two-thirds of the voting power of the Shares entitled to vote
thereon, voting together as a single class.
"SCC" means the State Corporation Commission of the Commonwealth of
Virginia.
"Subsidiary" means, when used with respect to Parent, MergerCo or the
Company, any other Person (whether or not incorporated) that Parent,
MergerCo or the Company, as applicable, directly or indirectly owns or has
the power to vote or control 50% or more of any class or series of capital
stock or other equity interests of such Person.
"Superior Proposal" means any bona fide written Takeover Proposal that
the Company Board determines in good faith (after consultation with its
financial advisor) to be reasonably capable of being consummated and to be
more favorable (taking into account (i) all financial and strategic
considerations, including relevant legal, financial, regulatory and other
aspects of such Takeover Proposal and the Merger and the other transactions
contemplated by this Agreement deemed relevant by the Board of Directors,
and (ii) the anticipated timing, conditions and prospects for completion of
such Takeover Proposal, including the prospects for obtaining regulatory
approvals and financing, and any third party shareholder approvals) to the
Company's shareholders than the Merger and the other transactions
contemplated by this Agreement (taking into account all of the terms of any
proposal by Parent to amend or modify the terms of the Merger and the other
transactions contemplated by this Agreement), except that the reference to
"15%" in the definition of "Takeover Proposal" shall be deemed to be a
reference to "50%".
"Takeover Proposal" means any inquiry, proposal or offer from any
Person or group of Persons other than Parent or MergerCo or their
Affiliates relating to any direct or indirect acquisition or purchase of a
business or division (or more than one of them) that in the aggregate
constitutes 15% or more of the net revenues, net income or assets of the
Company and its Subsidiaries, taken as a whole, or 15% or more of the
equity interest in the Company (by vote or value), any tender offer or
exchange offer that if consummated would result in any Person or group of
Persons beneficially owning 15% or more of the equity interest (by vote or
value) in the Company, or any merger, reorganization, consolidation, share
exchange, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company (or any Subsidiary or
Subsidiaries of the Company whose business constitutes 15% or more of the
net revenues, net income or assets of the Company and its Subsidiaries,
taken as a whole).
"Tax Returns" means any and all reports, returns, declarations, claims
for refund, elections, disclosures, estimates, information reports or
returns or statements required to be supplied to a taxing authority in
connection with Taxes, including any schedule or attachment thereto or
amendment thereof.
"Tax(es)" means (i) any and all federal, state, provincial, local,
foreign and other taxes, levies, fees, imposts, duties, and similar
governmental charges (including any interest, fines, assessments, penalties
or additions to tax imposed in connection therewith or with respect
thereto) including (x) taxes imposed on, or measured by, income, franchise,
profits or gross receipts, and (y) ad valorem, value added, capital gains,
sales, goods and services, use, real or personal property, capital stock,
license, branch, payroll, estimated, withholding, employment, social
security (or similar), unemployment, compensation, utility, severance,
production, excise, stamp, occupation, premium, windfall profits, transfer
and gains taxes, and customs duties, (ii) any liability for payment of
amounts described in clause (i) whether as a result of transferee
liability, joint and several liability for being a member of an affiliated,
consolidated, combined, unitary or other group for any period, or otherwise
by operation of law, and (iii) any liability for the payment of amounts
described in clause (i) or (ii) as a result of any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied
agreement to pay or indemnify any other Person.
"Treasury Regulations" means the Treasury regulations promulgated
under the Code.
Section 1.2 Other Defined Terms. The following terms have the
meanings defined for such terms in the Sections set forth below:
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2005 SEC Documents Article IV
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Affiliate Transaction Section 4.20
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Agreement Preamble
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Antitrust Division Section 6.9(a)
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Articles of Merger Section 2.3
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Bid Section 4.12(c)
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Certificate Section 3.1(c)
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Closing Section 2.2
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Closing Date Section 2.2
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COBRA Section 4.13(f)
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Common Stock Recitals
------------------------------------------- --------------------------------
Company Preamble
------------------------------------------- --------------------------------
Company Adverse Recommendation Change Section 6.4(d)(iv)
------------------------------------------- --------------------------------
Company Assets Section 4.6
------------------------------------------- --------------------------------
Company Board Section 4.2(a)
------------------------------------------- --------------------------------
Company Board Recommendation Section 4.2(a)
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Company Disclosure Letter Article IV
------------------------------------------- --------------------------------
Company Financial Advisor Section 4.22
------------------------------------------- --------------------------------
Company Government Contract Section 4.12(c)
------------------------------------------- --------------------------------
Company Government Subcontract Section 4.12(c)
------------------------------------------- --------------------------------
Company Permits Section 4.18(a)
------------------------------------------- --------------------------------
Company Proxy Statement Section 4.5
------------------------------------------- --------------------------------
Company Rights Agreement Section 4.19(b)
------------------------------------------- --------------------------------
Company SEC Documents Section 4.8(a)
------------------------------------------- --------------------------------
Company Termination Fee Section 8.6(a)
------------------------------------------- --------------------------------
Company Stock Award Plan(s) Section 4.3(e)
------------------------------------------- --------------------------------
Continuation Period Section 6.7(a)
------------------------------------------- --------------------------------
Contract Section 4.12(a)
------------------------------------------- --------------------------------
Dissenting Shares Section 3.2(g)
------------------------------------------- --------------------------------
Dissenting Shareholder Section 3.2(g)
------------------------------------------- --------------------------------
EC Merger Regulation Section 4.5
------------------------------------------- --------------------------------
Effective Time Section 2.3
------------------------------------------- --------------------------------
Employees Section 6.7(a)
------------------------------------------- --------------------------------
ESPP Section 3.5
------------------------------------------- --------------------------------
Exchange Act Section 4.5
------------------------------------------- --------------------------------
Excluded Share(s) Section 3.1(b)
------------------------------------------- --------------------------------
Expenses Section 6.12
------------------------------------------- --------------------------------
FTC Section 6.9(a)
------------------------------------------- --------------------------------
GAAP Section 4.8(b)
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Governmental Entity Section 4.5
------------------------------------------- --------------------------------
HSR Act Section 4.5
------------------------------------------- --------------------------------
Indemnified Parties Section 6.8(a)
------------------------------------------- --------------------------------
IRS Section 4.13(b)
------------------------------------------- --------------------------------
Legal Action Section 4.11
------------------------------------------- --------------------------------
Material Contract Section 4.12(a)
------------------------------------------- --------------------------------
Maximum Premium Section 6.8(b)
------------------------------------------- --------------------------------
Measurement Date Section 4.3(a)
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Merger Section 2.1
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MergerCo Preamble
------------------------------------------- --------------------------------
Merger Consideration Section 3.1(b)
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Multiemployer Plan Section 4.13(d)
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Multiple Employer Plan Section 4.13(a)
------------------------------------------- --------------------------------
National Security Regulations Section 4.26
------------------------------------------- --------------------------------
New Plans Section 6.7(c)
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Old Plans Section 6.7(c)
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Other Filings Section 4.21
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Parent Preamble
------------------------------------------- --------------------------------
Parent Expenses Section 8.6(b)
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Paying Agent Section 3.2(a)
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Payment Fund Section 3.2(a)
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PBGC Section 4.13(d)
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Permits Section 4.18(a)
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SEC Section 4.5
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Securities Act Section 4.8(a)
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Share(s) Section 3.1(b)
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SOX Section 4.8(a)
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Stock Options Section 3.4(a)
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Surviving Corporation Section 2.1
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Termination Date Section 8.2(a)
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Termination Fee Section 8.6(a)
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Vetoing Counsel Section 6.2
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Voting Agreement Recitals
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VSCA Recitals
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WARN Act Section 4.14(b)
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Withdrawal Liability Section 4.13(d)
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ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the VSCA, at the
Effective Time, MergerCo shall be merged with and into the Company (the
"Merger") and the separate corporate existence of MergerCo shall thereupon
cease. The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation"), and the
separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by
the Merger except as otherwise provided herein. The Merger shall have the
effects specified in Article II hereof and the VSCA.
Section 2.2 Closing. The closing of the Merger (the "Closing") shall
take place (a) at the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
LLP, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M. on the
first Business Day after the day on which the last to be fulfilled or
waived of the conditions set forth in Article VII hereof (other than those
conditions that by their nature are to be satisfied at the Closing, but
subject to the fulfillment or waiver of those conditions) shall be
satisfied or waived in accordance with this Agreement, or (b) at such other
place and time and/or on such other date as the Company and Parent may
agree in writing (the date such Closing actually occurs, the "Closing
Date").
Section 2.3 Effective Time. On the Closing Date, the Company,
MergerCo and Parent will cause the Merger to be consummated by filing
articles of merger, in customary form (the "Articles of Merger") with the
SCC and by making all other filings or recordings required under the VSCA
in connection with the Merger, in such form as is required by, and executed
in accordance with the relevant provisions of, the VSCA. The Merger shall
become effective upon the issuance of a certificate of merger by the SCC or
at such later time as may be agreed to by Parent and the Company in writing
and specified in the Articles of Merger (the effective time of the Merger
being referred to herein as the "Effective Time").
Section 2.4 Subsequent Actions. If at any time after the Effective
Time the Surviving Corporation will consider or be advised that any deeds,
bills of sale, assignments, assurance or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise
in the Surviving Corporation its right, title or interest in, to or under
any of the rights, properties or assets of either of the Company or
MergerCo acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with, the Merger or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of either the
Company or MergerCo, all such deeds, bills of sale, instruments of
conveyance, assignments and assurances and to take and do, in the name and
on behalf of each of such corporations or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any
and all right, title and interest in, to and under such rights, properties
or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
Section 2.5 Effects of the Merger. The Merger will generally have the
effects set forth in this Agreement and the applicable provisions of the
VSCA.
Section 2.6 Articles of Incorporation; Bylaws. At the Effective Time,
(a) the Articles of Incorporation of the Surviving Corporation, as in
effect immediately prior to the Effective Time, shall be amended as of the
Effective Time so as to read in its entirety in the form of Exhibit A
hereto and (b) the bylaws of the Surviving Corporation shall be amended so
as to read in their entirety in the form of Exhibit B hereto.
Section 2.7 Directors and Officers . The directors of MergerCo and the
officers of the Company, in each case, as of the Effective Time shall, from
and after the Effective Time, be the directors and officers, respectively,
of the Surviving Corporation until their successors have been duly elected
or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Articles of Incorporation or bylaws of the
Surviving Corporation.
ARTICLE III
EFFECT OF THE MERGER ON CAPITAL STOCK
Section 3.1 Effect on Capital Stock. At the Effective Time, as a result
of the Merger and without any action on the part of Parent, MergerCo or the
Company or the holder of any capital stock of Parent, MergerCo or the
Company:
(a) Cancellation of Certain Common Stock. Each share of
Common Stock that is owned by Parent, MergerCo, the Company (as treasury
stock or otherwise) or any of their respective direct or indirect wholly
owned Subsidiaries (other than Shares held on behalf of third parties) will
automatically be cancelled and will cease to exist, and no consideration
will be delivered in exchange therefor.
(b) Conversion of Common Stock. Each share of Common
Stock (each, a "Share" and collectively, the "Shares") issued and
outstanding immediately prior to the Effective Time (other than (i) Shares
to be cancelled in accordance with Section 3.1(a) and (ii) Dissenting
Shares, if any (each, an "Excluded Share" and collectively, the "Excluded
Shares")) will be converted into the right to receive $24 in cash, without
interest (the "Merger Consideration").
(c) Cancellation of Shares. At the Effective Time, all
Shares will no longer be outstanding and all Shares will be cancelled and
will cease to exist, and, subject to Section 3.3, each holder of a
certificate formerly representing any such Shares (each, a "Certificate")
will cease to have any rights with respect thereto, except the right to
receive the Merger Consideration, without interest, in accordance with
Section 3.2.
(d) Conversion of MergerCo Capital Stock. Each share of
common stock, par value $0.01 per share, of MergerCo issued and outstanding
immediately prior to the Effective Time will be converted into one share of
common stock, par value $0.01 per share, of the Surviving Corporation.
Section 3.2 Surrender of Certificates. (a) Paying Agent. Prior to
the Effective Time, for the benefit of the holders of Shares (other than
Excluded Shares) Parent will designate, or cause to be designated, a bank
or trust company that is reasonably acceptable to the Company (the "Paying
Agent") to act as agent for the payment of the Merger Consideration in
respect of Certificates upon surrender of such Certificates (or effective
affidavits of loss in lieu thereof) in accordance with this Article III
from time to time after the Effective Time. Promptly after the Effective
Time, Parent will deposit, or cause to be deposited, with the Paying Agent
cash in amounts and at the times necessary for the payment of the Merger
Consideration pursuant to Section 3.1(b) upon surrender of such
Certificates (such cash being herein referred to as the "Payment Fund").
The Paying Agent will invest the Payment Fund as directed by Parent.
(b) Payment Procedures. As promptly as practicable after
the Effective Time, the Surviving Corporation will instruct the Paying
Agent to mail to each holder of record of Shares (other than Excluded
Shares) a letter of transmittal in customary form as reasonably agreed by
the parties specifying that delivery will be effected, and risk of loss and
title to Certificates will pass, only upon proper delivery of Certificates
(or effective affidavits of loss in lieu thereof) to the Paying Agent and
instructions for use in effecting the surrender of the Certificates (or
effective affidavits of loss in lieu thereof) in exchange for the Merger
Consideration. Upon the proper surrender of a Certificate (or effective
affidavit of loss in lieu thereof) to the Paying Agent, together with a
properly completed letter of transmittal, duly executed, and such other
documents as may reasonably be requested by the Paying Agent, the holder of
such Certificate will be entitled to receive in exchange therefor cash in
the amount (after giving effect to any required tax withholdings) that such
holder has the right to receive pursuant to this Article III, and the
Certificate so surrendered will forthwith be cancelled. No interest will be
paid or accrued on any amount payable upon due surrender of the
Certificates. In the event of a transfer of ownership of Shares that is not
registered in the transfer records of the Company, cash to be paid upon due
surrender of the Certificate may be paid to such a transferee if the
Certificate formerly representing such Shares is presented to the Paying
Agent, accompanied by all documents required to evidence and effect such
transfer and to evidence that any applicable stock transfer Taxes have been
paid or are not applicable.
(c) Withholding Taxes. Parent and the Paying Agent will
be entitled to deduct and withhold from amounts otherwise payable pursuant
to this Agreement to any holder of Shares or holder of Stock Options any
amounts required to be deducted and withheld with respect to such payments
under the Code and the rules and Treasury Regulations promulgated
thereunder, or any provision of state, local or foreign Tax law. Any
amounts so deducted and withheld will be treated for all purposes of this
Agreement as having been paid to the holder of the Shares or holders of
Stock Options, as the case may be, in respect of which such deduction and
withholding was made.
(d) No Further Transfers. After the Effective Time, there
will be no transfers on the stock transfer books of the Company of Shares
that were outstanding immediately prior to the Effective Time other than to
settle transfers of Shares that occurred prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Paying Agent,
they will be cancelled and exchanged for the Merger Consideration as
provided in this Article III.
(e) Termination of Payment Fund. Any portion of the
Payment Fund that remains undistributed to the holders of the Certificates
12 months after the Effective Time will be delivered to Parent, on demand,
and any holder of a Certificate who has not theretofore complied with this
Article III will thereafter look only to Parent for payment of his or her
claims for Merger Consideration. Notwithstanding the foregoing, none of
Parent, MergerCo, the Company, the Surviving Corporation, the Paying Agent
or any other Person will be liable to any former holder of Shares for any
amount delivered to a public official pursuant to applicable abandoned
property, escheat or similar Laws.
(f) Lost, Stolen or Destroyed Certificates. In the event
any Certificate has 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 customary amount and upon such terms as
Parent may determine are necessary as indemnity against any claim that may
be made against it with respect to such Certificate, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration pursuant to this Agreement.
(g) Dissenting Shares. Parent and Company do not believe
that the provisions of Article 15 of the VSCA will be applicable to the
Merger. However, in the event such Article becomes applicable, then
notwithstanding any provision of this Agreement to the contrary, any Shares
outstanding immediately prior to the Effective Time that are held by a
shareholder (a "Dissenting Shareholder") who has neither voted in favor of
the adoption of this Agreement nor consented thereto in writing and who has
demanded properly in writing appraisal for such Shares and otherwise
properly perfected and not withdrawn or lost his or her rights (the
"Dissenting Shares") in accordance with Article 15 of the VSCA will not be
converted into, or represent the right to receive, the Merger
Consideration. Such Dissenting Shareholders will be entitled to receive
payment of the appraised value of Dissenting Shares held by them in
accordance with the provisions of Article 15 of the VSCA, except that all
Dissenting Shares held by shareholders who have failed to perfect or who
effectively have withdrawn or lost their rights to appraisal of such
Dissenting Shares pursuant to Article 15 of the VSCA will thereupon be
deemed to have been converted into, and represent the right to receive, the
Merger Consideration in the manner provided in Article III and will no
longer be Excluded Shares. Notwithstanding anything to the contrary
contained in this Section 3.2(g), if the Merger is rescinded or abandoned,
then the right of any shareholder to be paid the fair value of such
shareholder's Dissenting Shares pursuant to Article 15 of the VSCA will
cease. The Company will give MergerCo prompt notice of any written demands
for appraisal, attempted withdrawals of such demands, and any other
instruments served pursuant to applicable Law received by the Company
relating to shareholders' rights of appraisal. The Company will give
MergerCo the opportunity to participate in and direct all negotiations and
proceedings with respect to demands for appraisal to the extent permitted
by applicable Law. The Company will not, except with the prior written
consent of MergerCo or unless and to the extent required to do so under
applicable Law, make any payment with respect to any demands for appraisals
of Dissenting Shares, offer to settle or settle any such demands or approve
any withdrawal or other treatment of any such demands.
Section 3.3 Adjustments to Prevent Dilution. In the event that, after
the date hereof and prior to the Effective Time, the Company changes the
number of Shares, or securities convertible or exchangeable into or
exercisable for Shares, issued and outstanding prior to the Effective Time
as a result of a reclassification, stock split (including a reverse stock
split), stock dividend or distribution, recapitalization, merger,
subdivision, issuer tender or exchange offer, or other similar transaction,
the Merger Consideration will be equitably adjusted to reflect such change;
provided, that nothing herein shall be construed to permit the Company to
take any action with respect to its securities that is prohibited by the
terms of this Agreement.
Section 3.4 Treatment of Stock Options. (a) Each option to purchase
Shares, other than rights to acquire Shares pursuant to the ESPP,
(collectively, the "Stock Options") outstanding immediately prior to the
Effective Time pursuant to the Company Benefit Plans (whether or not then
vested or exercisable) will at the Effective Time be cancelled and the
holder of such Stock Option will, in full settlement of such Stock Option
and in exchange for the surrender to the Company of any certificate or
other document evidencing such Stock Option, receive from the Company an
amount (subject to any applicable withholding tax) in cash, without
interest, equal to the product of (x) the excess, if any, of the Merger
Consideration over the exercise price per Share of such Stock Option
multiplied by (y) the number of Shares subject to such Stock Option (with
the aggregate amount of such payment rounded up to the nearest whole cent).
All Stock Options shall terminate as of the Effective Time and the holders
of Stock Options will have no further rights in respect of any Stock
Options from and after the Effective Time.
(b) Prior to the Effective Time, the Company will adopt
such resolutions and will take such other actions as shall be required to
effectuate the actions contemplated by this Section 3.4, without paying any
consideration or incurring any debts or obligations on behalf of the
Company or the Surviving Corporation. Parent and the Company will cooperate
with each other in establishing such procedures as may be necessary to
provide for the timely payment of the amounts payable pursuant to Section
3.4(a) and for the timely and accurate calculation of, and payment to the
applicable taxing authority of, all amounts required to be withheld in
respect of such amounts.
Section 3.5 Treatment of ESPP. Prior to the date hereof, the Company
or the administrator of the Company's 2004 Employee Stock Purchase Plan
(the "ESPP") has taken all such action (and provided Parent evidence
thereof) as may be necessary under the ESPP (a) to provide that in
connection with the Closing, the then effective Purchase Interval (as
defined in the ESPP) will be shortened so that it ends on, and a New
Purchase Date (as defined in the ESPP) is established as of, a date that is
no later than 5 Business Days prior to the Effective Time, (b) to provide
that participants in the ESPP shall purchase Shares on such New Purchase
Date, unless prior to such date the participant has withdrawn from the
Purchase Interval (in accordance with the terms of the ESPP), (c) to
terminate the ESPP as of the Effective Time, and (d) to prohibit (i) any
increase in the rate of payroll deductions being made by participants to
the ESPP, (ii) any further direct payments by participants thereunder that
were not authorized as of the date hereof, and (iii) the acceptance of any
new participants into the ESPP.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and to MergerCo
as follows, except as set forth (i) in the applicable sections (or by
internal cross-reference) of the letter (the "Company Disclosure Letter")
delivered by the Company to Parent concurrently with the execution of this
Agreement (provided that the mere inclusion of an item in the Company
Disclosure Letter as an exception to a representation or warranty shall not
be deemed an admission that such item represents a material exception or
material fact, event or circumstance or that such item has or would have a
Company Material Adverse Effect) or (ii) in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2005 or any Quarterly
Report on Form 10-Q or Current Report on Form 8-K filed by the Company with
the SEC after January 1, 2006 and prior to October 15, 2006 (collectively,
the "2005 SEC Documents") (other than (A) any risk factor disclosure,
including disclosures contained in the "Forward Looking Statements" and
"Risk Factors" sections of the 2005 SEC Documents and (B) any documents
filed as exhibits to such 2005 SEC Documents to the extent that the
information is only set forth in such exhibits); provided however that the
foregoing exception in clause (ii) shall not apply to the representations
and warranties contained in Sections 4.1, 4.2, 4.3, 4.5 and 4.6.
Section 4.1 Organization; Power; Qualification. The Company and
each of its Subsidiaries is a corporation, limited liability company or
other legal entity duly organized, validly existing and in good standing
under the Laws of its jurisdiction of organization. Each of the Company and
its Subsidiaries has the requisite corporate or partnership power and
authority to own, lease and operate its assets and to carry on its business
as now conducted. Each of the Company and its Subsidiaries is duly
qualified or licensed to do business as a foreign corporation, limited
liability company or other legal entity and is in good standing in each
jurisdiction where the character of the assets and properties owned, leased
or operated by it or the nature of its business makes such qualification or
license necessary, except where the failure to be so qualified or licensed
or in good standing does not have and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
Neither the Company nor any Subsidiary nor, to the Company's Knowledge, any
Company Joint Venture, is in violation of its organizational or governing
documents, except for such violations that do not have and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
Section 4.2 Corporate Authorization; Enforceability. (a) The
Company has all requisite corporate power and authority to enter into and
to perform its obligations under this Agreement and, subject to approval of
this Agreement by the Requisite Company Vote, to consummate the
transactions contemplated by this Agreement. The Board of Directors of the
Company (the "Company Board") has unanimously (i) determined that this
Agreement and the transactions contemplated hereby, including the Merger,
are advisable, fair to and in the best interests of the Company and its
shareholders, (ii) approved and adopted this Agreement and the transactions
contemplated hereby, including the Merger, and (iii) resolved to recommend
approval of this Agreement and the transactions contemplated hereby,
including the Merger, by the shareholders of the Company ((i), (ii), and
(iii) collectively, the "Company Board Recommendation"), and directed that
such matter be submitted for consideration of the shareholders of the
Company at the Company Shareholders Meeting. The execution, delivery and
performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated by this Agreement have been duly
and validly authorized by all necessary corporate action on the part of the
Company, subject to the Requisite Company Vote.
(b) This Agreement has been duly executed and delivered
by the Company and, assuming the due authorization, execution and delivery
of this Agreement by Parent and MergerCo, constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms.
Section 4.3 Capitalization; Options. (a) The Company's authorized
capital stock consists solely of 50,000,000 shares of Common Stock and
1,000,000 shares of Preferred Stock (the "Preferred Stock"), of which 2,500
shares of Preferred Stock are designated as Class A Preferred Stock and
500,000 shares of Preferred Stock are designated as Series B Convertible
Preferred Stock. As of the close of business on October 31, 2006 (the
"Measurement Date"), 21,780,467 shares of Common Stock were issued and
outstanding. No shares of Preferred Stock are issued or outstanding. As of
the Measurement Date, no Shares are held in the treasury of the Company.
Since the Measurement Date until the date of this Agreement, other than in
connection with the issuance of Shares pursuant to the exercise of Stock
Options outstanding as of the Measurement Date, there has been no change in
the number of outstanding shares of capital stock of the Company or the
number of outstanding Stock Options. As of the Measurement Date, Stock
Options to purchase 2,653,390 shares of Common Stock were outstanding, with
a weighted average exercise price of $9.26 per share. Section 4.3(a) of the
Company Disclosure Letter sets forth a complete and correct list of all
Stock Options that are outstanding as of the Measurement Date, the exercise
price of each such Stock Option, and with respect to the Persons specified
thereon, the number of Stock Options held by each such Person and the
exercise prices thereof. Except as set forth in this Section 4.3, there are
no shares of capital stock or securities or other rights convertible or
exchangeable into or exercisable for shares of capital stock of the Company
or such securities or other rights (which term, for purposes of this
Agreement, will be deemed to include "phantom" stock, stock appreciation
rights, or other commitments that provide any right to receive value or
benefits similar to such capital stock, securities or other rights). Since
the Measurement Date through the date of this Agreement, there have been no
issuances of any securities of the Company or any of its Subsidiaries that
would have been in breach of Section 6.1 if made after the date of this
Agreement.
(b) All outstanding Shares are duly authorized, validly
issued, fully paid and non-assessable and are not subject to any
pre-emptive rights.
(c) There are no outstanding contractual obligations of
the Company or any of its Subsidiaries (i) to issue, sell, or otherwise
transfer to any Person, or to repurchase, redeem or otherwise acquire from
any Person, any Shares, Preferred Stock, capital stock of any Subsidiary of
the Company, or securities or other rights convertible or exchangeable into
or exercisable for shares of capital stock of the Company or any Subsidiary
of the Company or such securities or other rights or (ii) to provide any
funds to or make any investment in any Subsidiary of the Company that is
not wholly owned by the Company.
(d) Other than the issuance of Shares upon exercise of
Stock Options and other than previously announced regular quarterly
dividends, since January 1, 2006 and through the date of this Agreement,
the Company has not declared or paid any dividend or distribution in
respect of any of the Company's securities.
(e) Each Company Benefit Plan providing for the grant of
Shares or of awards denominated in, or otherwise measured by reference to,
Shares (each, a "Company Stock Award Plan") is set forth (and identified as
a Company Stock Award Plan) in Section 4.13(a) of the Company Disclosure
Letter. The Company has provided to Parent correct and complete copies of
all Company Stock Award Plans and all forms of options and other
stock-based awards (including award agreements) issued under such Company
Stock Award Plans.
(f) As of the date of this Agreement, neither the Company
nor any Subsidiary has entered into any commitment, arrangement or
agreement, or is otherwise obligated, to contribute capital, loan money or
otherwise provide funds or make additional investments in any Person other
than any such commitments, arrangements, or agreements in the ordinary
course of business consistent with past practice, and other than pursuant
to Material Contracts.
(g) The maximum number of Shares authorized for issuance
pursuant to the ESPP is 1,000,000. Not more than 10,000 Shares will be
issuable pursuant to the ESPP with respect to the current Purchase Interval
which is scheduled to end on December 31, 2006. With respect to any
subsequent Purchase Interval and until the Effective Time, (i) not more
than 10,000 Shares will be issuable pursuant to the ESPP during such
Purchase Interval and (ii) the total amount of all contributions by
participants to their respective participant accounts during any 30-day
period during such Purchase Interval shall not exceed the dollar amount
that, when applied to the purchase of Shares under the ESPP on the Purchase
Date (as defined in the ESPP) or New Purchase Date with respect to such
Purchase Interval, would result in the purchase of a total of 3,333 Shares
under the ESPP.
(h) As of the date of this Agreement, (i) the Company and
its Subsidiaries owe $40 million pursuant to outstanding borrowings under
the Credit Facility, (ii) the maximum amount of additional borrowings
possible under the Credit Facility is $55 million and (iii) neither the
Company nor any Subsidiary has any other indebtedness for borrowed money or
guarantees thereof.
Section 4.4 Subsidiaries and Company Joint Ventures. Section 4.4 of the
Company Disclosure Letter sets forth a complete and correct list of all of
the Company's Subsidiaries and all Company Joint Ventures. All equity
interests of the Company's Subsidiaries and the Company Joint Ventures held
by the Company or any other Subsidiary are validly issued, fully paid and
non-assessable and were not issued in violation of any preemptive or
similar rights, purchase option, call or right of first refusal or similar
rights. All such equity interests are free and clear of any Liens or any
other limitations or restrictions on such equity interests (including any
limitation or restriction on the right to vote, pledge or sell or otherwise
dispose of such equity interests) other than any restrictions contained in
the Joint Venture Agreements related thereto. The Company has made
available to Parent complete and correct copies of the Company
Organizational Documents and all organizational documents of the Company
Joint Ventures.
Section 4.5 Governmental Concerns. The execution, delivery and
performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated by this Agreement do not and will
not require any consent, approval or other authorization of, or filing with
or notification to, any international, national, federal, state, provincial
or local governmental, regulatory or administrative authority, agency,
commission, board, court, tribunal, arbitral body, self-regulated entity or
similar body, whether domestic or foreign (each, a "Governmental Entity"),
other than: (i) the filing of the Articles of Merger with the SCC as
required by the VSCA and the issuance of a certificate of merger by the
SCC; (ii) applicable requirements of the Securities Exchange Act of 1934,
as amended and the rules and regulations promulgated thereunder (the
"Exchange Act"); (iii) the filing with the Securities and Exchange
Commission (the "SEC") of a proxy statement (the "Company Proxy Statement")
relating to the special meeting of the shareholders of the Company to be
held to consider the adoption of this Agreement (the "Company Shareholders
Meeting"); (iv) any filings required by, and any approvals required under,
the rules and regulations of The Nasdaq Global Select Market; (v) the
pre-merger notifications required under (A) the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) any applicable
requirements of Council Regulation (EC) No. 139/2004 of the Council of the
European Union (the "EC Merger Regulation"), and (C) the competition or
merger control Laws of any other applicable jurisdiction; (vi) any consent,
approval or other authorization of, or filing with or notification to, any
Governmental Entity identified in Section 4.5(vi) of the Company Disclosure
Letter; (vii) notification to the Defense Secretary in accordance with
National Industrial Security Program Operating Manual section 1-302(g)(1);
(viii) notification to administrative contracting officer(s), if required,
in accordance with Federal Acquisition Regulation 52.215-9; and (ix) in
such other circumstances where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, does not have and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
Section 4.6 Non-Contravention. The execution, delivery and performance
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated by this Agreement, including the Merger, do not
and will not: (i) contravene or conflict with, or result in any violation
or breach of, any provision of (x) the Company Organizational Documents or
(y) any of the organizational or governing documents of the Company Joint
Ventures; (ii) contravene or conflict with, or result in any violation or
breach of, any Laws or Orders applicable to the Company or any of its
Subsidiaries or by which any assets of the Company or any of its
Subsidiaries ("Company Assets") are bound (assuming that all consents,
approvals, authorizations, filings and notifications described in Section
4.5 or Section 4.5(vi) of the Company Disclosure Letter have been obtained
or made and any waiting periods under such filings have been terminated or
expired); (iii) result in any violation or breach of or loss of a benefit
under, or constitute a default (with or without notice or lapse of time or
both) under, any Material Contract; (iv) require any consent, approval or
other authorization of, or filing with or notification to, any Person under
any Material Contract; (v) give rise to any termination, cancellation,
amendment, modification or acceleration of any rights or obligations under
any Material Contract; or (vi) cause the creation or imposition of any
Liens on any Company Assets, except for Permitted Liens, except, in the
cases of clauses (i)(y) and (ii) - (vi), as do not have and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
Section 4.7 Voting. (a) The Requisite Company Vote is the only vote
of the holders of any class or series of the capital stock of the Company
or any of its Subsidiaries necessary (under the Company Organizational
Documents, the VSCA, other applicable Laws or otherwise) to approve this
Agreement, the Merger and the other transactions contemplated hereby.
(b) There are no voting trusts, proxies or similar
agreements, arrangements or commitments to which the Company or any of its
Subsidiaries is a party or of which the Company has Knowledge with respect
to the voting of any shares of capital stock of the Company or any of its
Subsidiaries, other than the Voting Agreements. There are no bonds,
debentures, notes or other instruments of indebtedness of the Company or
any of its Subsidiaries that have the right to vote, or that are
convertible or exchangeable into or exercisable for securities or other
rights having the right to vote, on any matters on which shareholders of
the Company may vote.
Section 4.8 Financial Reports and SEC Documents. (a) The Company
has filed or furnished all forms, statements, reports and documents
required to be filed or furnished by it with the SEC pursuant to applicable
federal securities statutes, regulations and rules since January 1, 2003
(the forms, statements, reports and documents filed or furnished with the
SEC since January 1, 2003 and those filed or furnished with the SEC
subsequent to the date of this Agreement, if any, including any amendments
thereto, the "Company SEC Documents"). Each of the Company SEC Documents
filed or furnished on or prior to the date of this Agreement, at the time
of its filing or furnishing (except as and to the extent such Company SEC
Document has been modified or superseded in any subsequent Company SEC
Document filed or furnished and publicly available prior to the date of
this Agreement), complied, and each of the Company SEC Documents filed or
furnished after the date of this Agreement will comply, in all material
respects with the applicable requirements of each of the Exchange Act and
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act") and complied or will comply,
as applicable, in all material respects with the then-applicable accounting
standards. As of their respective dates, except as and to the extent
modified or superseded in any subsequent Company SEC Document filed or
furnished and publicly available prior to the date of this Agreement, the
Company SEC Documents did not, and any Company SEC Documents filed or
furnished with the SEC subsequent to the date of this Agreement will not,
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not
misleading. The Company SEC Documents filed or furnished on or prior to the
date of this Agreement included, and if filed or furnished after the date
of this Agreement, will include all certificates required to be included
therein pursuant to Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act of 2002,
as amended, and the rules and regulations promulgated thereunder ("SOX"),
and the internal control report and attestation of the Company's outside
auditors required by Section 404 of SOX.
(b) Each of the consolidated balance sheets included in
or incorporated by reference into the Company SEC Documents (including the
related notes and schedules) fairly presents or, in the case of the Company
SEC Documents filed or furnished after the date of this Agreement, will
fairly present in all material respects the consolidated financial position
of the Company and its Subsidiaries as of its date, and each of the
consolidated statements of income, changes in shareholders' equity and cash
flows included in or incorporated by reference into the Company SEC
Documents (including any related notes and schedules) fairly presents or,
in the case of the Company SEC Documents filed or furnished after the date
of this Agreement, will fairly present in all material respects the results
of operations and cash flows, as the case may be, of the Company and its
Subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to the absence of notes and normal year-end audit
adjustments), in each case in accordance with U.S. generally accepted
accounting principles ("GAAP") consistently applied during the periods
involved, except as may be noted therein.
(c) The management of the Company has (x) implemented
disclosure controls and procedures (as defined in Rule 13a-15(e) of the
Exchange Act) that are reasonably designed to ensure that material
information relating to the Company, including its consolidated
Subsidiaries, is made known to the chief executive officer and chief
financial officer of the Company by others within those entities, and (y)
disclosed, based on its most recent evaluation, to the Company's outside
auditors and the audit committee of the Company Board (A) all significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act) which are reasonably likely to adversely affect in any
material respect the Company's ability to record, process, summarize and
report financial data and (B) any fraud, whether or not material, that
involves management or other employees who have a significant role in the
Company's internal controls over financial reporting. Since January 1,
2003, any material change in internal control over financial reporting or
failure or inadequacy of disclosure controls required to be disclosed in
any Company SEC Document has been so disclosed.
(d) Since January 1, 2003, to the Company's Knowledge,
(x) none of the Company or any of its Subsidiaries, or any director,
officer, employee or independent auditor of the Company or any of its
Subsidiaries, has received or otherwise had or obtained Knowledge of any
material complaint, allegation, assertion or claim, whether written or
oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of the Company or any of its Subsidiaries or their
respective internal accounting controls relating to periods after January
1, 2003, including any material complaint, allegation, assertion or claim
that the Company or any of its Subsidiaries has engaged in questionable
accounting or auditing practices (except for any of the foregoing that have
been resolved without any material impact on the Company and its
Subsidiaries, taken as a whole, and except for any of the foregoing which
have no reasonable basis), and (y) no attorney representing the Company or
any of its Subsidiaries, whether or not employed by the Company or any of
its Subsidiaries, has reported evidence of a material violation of
securities Laws, breach of fiduciary duty or similar violation, relating to
periods after January 1, 2003, by the Company or any of its officers,
directors, employees or agents to the Company Board or any committee
thereof or, to the Knowledge of the Company, to any director or officer of
the Company.
Section 4.9 No Undisclosed Liabilities. Except (i) as and to the
extent disclosed or reserved against on the balance sheet of the Company
dated as of June 30, 2006 (including the notes thereto) included in the
Company SEC Documents or (ii) as incurred since the date thereof in the
ordinary course of business consistent with past practice, neither the
Company, any of its Subsidiaries nor, to the Knowledge of the Company, any
Company Joint Venture, has any liabilities or obligations of any nature,
whether known or unknown, absolute, accrued, contingent or otherwise and
whether due or to become due, that have or would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.10 Absence of Certain Changes or Events. (a) Since
December 31, 2005, there has not been any Company Material Adverse Effect
or any change, event or development that, individually or in the aggregate,
has had or would reasonably be expected to have a Company Material Adverse
Effect.
(b) Since December 31, 2005 and through the date of this
Agreement, the Company and each of its Subsidiaries have conducted their
business only in the ordinary course consistent with past practice, and
there has not been any (i) action or event that, if taken on or after the
date of this Agreement without Parent's consent, would violate the
provisions of any of Sections 6.1(a), (b), (c)(i) - (ii), (c)(iv) - (v),
(d)(i) - (iii), (d)(v), (e) (except with respect to mergers or
consolidations between entities that were wholly-owned by the Company at
the time of merger or consolidation), (f), (h), (j), (l), (m), (n) (except
with respect to the Company's Subsidiaries or former Subsidiaries), (o),
(p) or (q) or (ii) agreement or commitment to do any of the foregoing.
Section 4.11 Litigation. There are no claims, actions, suits, demand
letters, judicial, administrative or regulatory proceedings, or hearings,
notices of violation, or, to the Knowledge of the Company, investigations
(each, a "Legal Action") pending or, to the Knowledge of the Company,
threatened, against the Company or any of its Subsidiaries or any executive
officer or director of Company or any of its Subsidiaries in connection
with his or her status as a director or executive officer of the Company or
any of its Subsidiaries which (i) involves an amount in controversy in
excess of $50,000, or (ii) have or would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. There
is no outstanding Order against the Company or any of its Subsidiaries or
by which any property, asset or operation of the Company or any of its
Subsidiaries is bound or affected. To the Knowledge of the Company, as of
the date of this Agreement, neither the Company, any Subsidiary, nor any
officer, director or employee of the Company or any such Subsidiary is
under investigation by any Governmental Entity related to the conduct of
the Company's or any such Subsidiary's business.
Section 4.12 Contracts. (a) Section 4.12(a)(i) of the Company
Disclosure Letter lists all Contracts to which the Company or any of its
Subsidiaries is a party and which are in effect as of the date hereof that
fall within any of the following categories: (A) any Contract relating to
indebtedness for borrowed money or any financial guaranty involving amounts
in excess of $1,000,000; (B) any Contract that materially limits the
ability of the Company or any of its Subsidiaries to conduct any activity
or compete in any business line or in any geographic area; (C) any Contract
that is terminable by the other party or parties upon a change in control
of the Company or any of its Subsidiaries that involves anticipated future
expenditures or receipts by the Company or any of its Subsidiaries of more
than $250,000; (D) any Contract that involves anticipated future receipts
by the Company or any of its Subsidiaries of more than $500,000; (E) any
Contract that by its terms limits the payment of dividends or other
distributions by the Company or any of its Subsidiaries; (F) any Joint
Venture Agreement; (G) any Contract that grants any right of first refusal
or right of first offer or similar right; (H) any Fixed Price Contract; (I)
any Loss Contract; (J) any Contract for the lease or purchase of real
property involving aggregate payments in excess of $250,000; (K) any
Company Government Contract that involves anticipated future receipts by
the Company or any of its Subsidiaries of more than $500,000; (L) any
Company Government Subcontract that involves future receipts by the Company
or any of its Subsidiaries of more than $500,000, (M) any Contract with any
director, officer or Affiliate of the Company or any of its Subsidiaries;
(N) any Contract relating to the acquisition, development, license,
transfer or disclosure of Intellectual Property Rights that is material to
the business of the Company or any of its Subsidiaries; and (O) any
Contract pursuant to which the Company or its Subsidiaries have paid any
subcontractor or vendor more than $500,000 during the current fiscal year
(collectively, "Material Contracts"). True and correct copies of all
Material Contracts have been made available to Parent (subject to redaction
if required pursuant to the terms thereof or if required by applicable
Law).
(b) Each Material Contract is a valid and legally binding
arrangement of the Company or a Company Subsidiary that is a party thereto,
as applicable, and is in full force and effect, except where the failure to
be valid, binding and in full force and effect does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company and each of its Subsidiaries has in
all material respects performed all material obligations required to be
performed by it under each Material Contract. Neither the Company nor any
of its Subsidiaries knows of, or has received notice of, the existence of
any material event or condition which constitutes, or, after notice or
lapse of time or both, will constitute, a material default on the part of
the Company or any of its Subsidiaries under any such Material Contract.
(c) With respect to each Contract between the Company or
any of its Subsidiaries and any Governmental Entity and each outstanding
bid, quotation or proposal by the Company or any of its Subsidiaries (each,
a "Bid") that if accepted or awarded could lead to a Contract between the
Company or any of its Subsidiaries and any Governmental Entity, including
any Contract for the use of government-owned facilities (each such Contract
or Bid, a "Company Government Contract"), and each Contract between the
Company or any of its Subsidiaries and any prime contractor or upper-tier
subcontractor relating to a Contract between such Person and any
Governmental Entity and each outstanding Bid that if accepted or awarded
could lead to a Contract between the Company or any of its Subsidiaries and
a prime contractor or upper-tier subcontractor relating to a Contract
between such Person and any Governmental Entity (each such Contract or Bid,
a "Company Government Subcontract"):
(i) (A) each such Company Government Contract or
Company Government Subcontract was legally awarded, is binding on the
parties thereto, and is in full force and effect and (B) each such Company
Government Contract (or, if applicable, each prime Contract under which a
Company Government Subcontract was awarded) is not currently the subject of
bid or award protest proceedings; provided that for purposes of this clause
(i), the terms Company Government Contract and Company Government
Subcontract shall not include any Bids;
(ii) the Company and its Subsidiaries have complied
in all material respects with all terms and conditions of such Company
Government Contract or Company Government Subcontract, including all
clauses, provisions and requirements incorporated expressly by reference
therein and all requirements thereunder relating to the safeguarding of,
and access to, classified information;
(iii) the Company and its Subsidiaries have complied
in all material respects with all requirements of all Laws or Contracts
pertaining to such Company Government Contract or Company Government
Subcontract;
(iv) no claim (including a claim for price
adjustment) has been made against the Company under the False Claims Act,
31 U.S.C. ss. 3729 et seq., or the Truth in Negotiations Act 10 U.S.C. ss.
2306a, or for any other request for a reduction in price, in connection
with any such Company Government Contract or Company Government
Subcontract;
(v) in the last three years, neither the United
States government nor any prime contractor, subcontractor or other Person
has notified the Company or any of its Subsidiaries, in writing or orally,
that the Company or any of its Subsidiaries has, or may have, breached or
violated any Law, certification, representation, clause, provision or
requirement pertaining to such Company Government Contract or Company
Government Subcontract, and all facts set forth or acknowledged by any
representations, claims or certifications submitted by or on behalf of the
Company or any of its Subsidiaries in connection with such Company
Government Contract or Company Government Subcontract were, to the
Knowledge of the Company, current, accurate and complete in all material
respects on the date of submission;
(vi) in the last three years, neither the Company nor
any of its Subsidiaries has received any notice of termination for
convenience, notice of termination for default, cure notice or show cause
notice pertaining to such Company Government Contract or Company Government
Subcontract;
(vii) other than in the ordinary course of business
consistent with past practice, no material cost incurred by the Company or
any of its Subsidiaries pertaining to such Company Government Contract or
Company Government Subcontract has been questioned or challenged by any
Governmental Entity, is the subject of any audit or, to the Knowledge of
the Company, investigation or has been disallowed by any government or
governmental agency; and
(viii) no material payment due to the Company or any
of its Subsidiaries pertaining to such Company Government Contract or
Company Government Subcontract has been withheld or set off, nor has any
claim been made to withhold or set off money, and to the Knowledge of the
Company, the Company and its Subsidiaries are entitled to all progress or
other payments received to date with respect thereto.
(d) Neither the Company nor any of its Subsidiaries, nor
any of the respective directors, officers, employees, consultants or agents
of the Company or any of its Subsidiaries, is, or within the past three
years has been, under administrative, civil or criminal investigation,
indictment or information by any Governmental Entity, the subject of any
actual or, to the Knowledge of the Company, threatened, "whistleblower" or
"qui tam" lawsuit, or the subject of investigation by the Company or any of
its Subsidiaries with respect to any alleged act or omission arising under
or relating to any Company Government Contract or Company Government
Subcontract.
(e) There exist (i) no outstanding material claims
against the Company or any of its Subsidiaries, either by any Governmental
Entity or by any prime contractor, subcontractor, vendor or other Person,
arising under or relating to any Company Government Contract or Company
Government Subcontract, and (ii) no outstanding material claims or requests
for equitable adjustment or disputes between the Company or any of its
Subsidiaries and the United States government under the Contract Disputes
Act, 41 U.S.C. ss.ss.601-613, as amended, or any other Law or between the
Company or any of its Subsidiaries and any prime contractor, subcontractor,
vendor or other Person arising under or relating to any Company Government
Contract or Company Government Subcontract. To the Knowledge of Company,
neither the Company nor any of its Subsidiaries has received any material
adverse past performance evaluations or ratings in connection with any
Company Government Contract, Company Government Subcontract or other
Contract with a Governmental Entity within the past three years. Neither
the Company nor any of its Subsidiaries has (i) any interest in any pending
or potential claim against any Governmental Entity or (ii) any interest in
any pending claim against any prime contractor, subcontractor, vendor or
other person arising under or relating to any Company Government Contract
or Company Government Subcontract.
(f) Within the past three years, none of the Company, any
of its Subsidiaries or any officer, or director of the Company has been
debarred or suspended, or proposed for debarment or suspension, or received
notice of actual or proposed debarment or suspension, from participation in
the award of Contracts with the United States government or any other
Governmental Entity (excluding for this purpose ineligibility to bid on
certain contracts due to generally applicable bidding requirements). To the
Knowledge of the Company, there exist no facts or circumstances that are
reasonably likely to warrant the institution of suspension or debarment
proceedings or the finding of non-responsibility or ineligibility on the
part of the Company, any of its Subsidiaries or any of their respective
directors, officers or employees.
(g) The Company and its Subsidiaries have not submitted
to any Governmental Entity any inaccurate, incomplete, non-current,
untruthful or misleading cost or pricing data, certification, bid,
proposal, report, claim or any other information relating to a Company
Government Contract, Company Government Subcontract, or Bid, in such
circumstances which could give rise to a reasonable belief that such
submission was in violation of applicable Law.
(h) Section 4.12(h) of the Company Disclosure Letter
identifies, by Contract or task order and description, all work or future
business opportunities from which the Company, its Affiliates, Subsidiaries
or other related Person, are currently limited, prohibited or otherwise
restricted from performing or bidding, due to express organizational
conflicts of interest Contract terms or provisions, or due to
organizational conflicts of interest mitigation plans submitted by the
Company, its Affiliates or Subsidiaries in connection with any Company
Government Contract.
(i) To the Knowledge of the Company, all indirect and
general and administrative expense rates have been and are being billed
consistent with Defense Contract Audit Agency approved rates or provisional
rates.
(j) During the last five years, neither the Company nor
any of its Subsidiaries has made any voluntary disclosure in writing to any
Governmental Entity with respect to any material alleged irregularity,
misstatement or omission arising under or relating to a Company Government
Contract, Company Government Subcontract, or Bid, nor is the Company or any
of its Subsidiaries contemplating making any such voluntary disclosure.
(k) Except as set forth in Section 4.12(k) of the Company
Disclosure Letter (setting forth the contracting party, name of contract,
date of contract, total value of contract, and value of any unexercised
options), the Company has no Company Government Contracts or Company
Government Subcontracts that were awarded as small business set aside
contracts.
Section 4.13 Employee Compensation and Benefit Plans; ERISA. (a)
Section 4.13(a) of the Company Disclosure Letter contains a correct and
complete list of each Company Benefit Plan. Each Company Benefit Plan that
is a plan that has two or more contributing sponsors at least two of whom
are not under common control (within the meaning of Section 4063 of ERISA)
(a "Multiple Employer Plan") is denoted as such on Section 4.13(a) of the
Company Disclosure Letter. No business or entity is a member of the
Company's "controlled group" or is under "common control" with the Company
or any of its Subsidiaries (within the meaning of Section 414 of the Code)
other than the Company and its Subsidiaries.
(b) With respect to each Company Benefit Plan, if
applicable, the Company has provided to Parent correct and complete copies
of (i) all plan texts and agreements and related trust agreements (or other
funding vehicles); (ii) the most recent summary plan descriptions and
material employee communications concerning the extent of the benefits
provided under a Company Benefit Plan; (iii) the three most recent annual
reports (including all schedules); (iv) the three most recent annual
audited financial statements and opinions; (v) if the plan is intended to
qualify under Section 401(a) of the Code, the most recent determination
letter received from the Internal Revenue Service (the "IRS"); and (vi) all
material communications with any domestic Governmental Entity given or
received since January 1, 2004. There is no present intention that any
Company Benefit Plan be materially amended, suspended or terminated, or
otherwise modified to adversely change benefits (or the level thereof)
under any Company Benefit Plan at any time within the twelve months
immediately following the date of this Agreement.
(c) Since January 1, 2006, there has not been any
amendment or change in interpretation relating to any Company Benefit Plan
which would, individually or in the aggregate, materially increase the
aggregate cost to the Company of all Company Benefit Plans. The Company and
its Subsidiaries have complied with all obligations with respect to
employee benefits matters required in connection with the Company's
acquisition of Adaptive Optics Associates, Inc.
(d) No Company Benefit Plan is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code. Neither the
Company nor any of its Subsidiaries has, at any time during the last six
years, contributed to or been obligated to contribute to any "multiemployer
plan" (within the meaning of Section 4001(a)(3) of ERISA) (a "Multiemployer
Plan") or Multiple Employer Plan other than a plan listed on Section
4.13(a) of the Company Disclosure Letter. Neither the Company nor any of
its Subsidiaries would be reasonably expected to be liable for any
liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan (as those terms are defined in Part
I of Subtitle E of Title IV of ERISA) (a "Withdrawal Liability") that has
not been satisfied in full.
(e) Each Company Benefit Plan that requires registration
with a Governmental Entity has been properly registered, except where any
failure to register, either individually or in the aggregate, would not
reasonably be expected to result in a material liability to the Company.
Each Company Benefit Plan which is intended to qualify under Section 401(a)
of the Code has been issued a favorable determination letter by the IRS
with respect to such qualification, its related trust has been determined
to be exempt from taxation under Section 501(a) of the Code and no event
has occurred since the date of such qualification or exemption that would
reasonably be expected to materially adversely affect such qualification or
exemption. Each Company Benefit Plan has been established and administered
in material compliance with its terms and with the applicable provisions of
ERISA, the Code and other applicable Laws. No event has occurred and no
condition exists that would subject the Company by reason of its
affiliation with any current or former member of its "controlled group" or
any business or entity that is under "common control" with the Company or
any of its Subsidiaries (in each case within the meaning of Section 414 of
the Code) to any material (i) Tax, penalty, fine, (ii) Lien (other than a
Permitted Lien) or (iii) other liability imposed by ERISA, the Code or
other applicable Laws.
(f) There are no (i) Company Benefit Plans under which
welfare benefits are provided to past or present employees of the Company
and its Subsidiaries beyond their retirement or other termination of
service, other than coverage mandated by the Consolidated Omnibus Budget
Recommendation Act of 1985 ("COBRA"), Section 4980B of the Code, Title I of
ERISA or any similar state group health plan continuation Laws, the cost of
which is fully paid by such employees or their dependents; or (ii) unfunded
Company Benefit Plan obligations with respect to any past or present
employees of the Company and its Subsidiaries that are not fairly reflected
by reserves shown on the most recent financial statements contained in the
Company SEC Documents, except as does not have and would not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
(g) Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will (either
alone or in combination with another event) (i) result in any payment
becoming due, or increase the amount of any compensation or benefits due,
to any current or former employee of the Company and its Subsidiaries or
with respect to any Company Benefit Plan; (ii) increase any benefits
otherwise payable under any Company Benefit Plan; (iii) result in the
acceleration of the time of payment or vesting of any such compensation or
benefits; (iv) result in a non-exempt "prohibited transaction" within the
meaning of Section 406 of ERISA or section 4975 of the Code; or (v) result
in the payment of any amount that would, individually or in combination
with any other such payment, reasonably be expected to constitute an
"excess parachute payment," as defined in Section 280G(b)(1) of the Code.
(h) Neither the Company nor any of its Subsidiaries or
any Company Benefit Plan, nor to the Knowledge of the Company any
"disqualified person" (as defined in Section 4975 of the Code) or "party in
interest" (as defined in Section 3(18) of ERISA), has engaged in any
non-exempt prohibited transaction (within the meaning of Section 4975 of
the Code or Section 406 of ERISA) which, individually or in the aggregate,
has resulted or would reasonably be expected to result in any material
liability to the Company or any of its Subsidiaries. With respect to any
Company Benefit Plan, (i) no Legal Actions (including any administrative
investigation, audit or other proceeding by the Department of Labor or the
IRS but other than routine claims for benefits in the ordinary course) are
pending or, to the Knowledge of the Company, threatened, and (ii) to the
Knowledge of the Company, no events or conditions have occurred or exist
that would reasonably be expected to give rise to any such Legal Actions.
(i) Except as does not have and would not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect, all Company Benefit Plans subject to the Laws of any
jurisdiction outside of the United States (i) have been maintained in
accordance with all applicable requirements, (ii) if they are intended to
qualify for special tax treatment, meet all requirements for such
treatment, and (iii) if they are intended to be funded and/or
book-reserved, are fully funded and/or book reserved, as appropriate, based
upon reasonable actuarial assumptions.
(j) Each "nonqualified deferred compensation plan" (as
defined in Section 409A(d)(1) of the Code) of the Company has been operated
in good faith compliance with Section 409A of the Code and IRS Notice
2005-1. Each Stock Option has been granted with an exercise price no lower
than "fair market value" (within the meaning of Section 409A of the Code)
as of the grant date of such option, and no term of exercise of a Stock
Option has been extended after the grant date of such Stock Option.
Section 4.14 Labor Matters. (a)(i) None of the employees of the
Company or its Subsidiaries is represented by a union and, to the Knowledge
of the Company, within the past three years no union organizing efforts
have been conducted or threatened or are being conducted or threatened,
(ii) neither the Company nor any of its Subsidiaries is a party to or
negotiating any collective bargaining agreement or other labor Contract,
and (iii) there is no pending and, to the Knowledge of the Company, there
is no threatened material strike, picket, work stoppage, work slowdown or
other organized labor dispute affecting the Company or any of its
Subsidiaries.
(b) The Company and each of its Subsidiaries are in
compliance with all applicable Laws relating to the employment of labor,
including all applicable Laws relating to wages, hours, collective
bargaining, employment discrimination, civil rights, safety and health,
workers' compensation, pay equity, classification of employees, and the
collection and payment of withholding and/or social security Taxes, except
for such failures to be in compliance as does not have and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. No material unfair labor practice charge or
complaint is pending or, to the Knowledge of the Company, threatened.
Neither the Company nor any of its Subsidiaries has incurred any material
liability or material obligation under the Worker Adjustment and Retraining
Notification Act (the "WARN Act") or any similar state or local Law which
remains unsatisfied, and neither the Company nor any of its Subsidiaries
has planned or announced any "plant closing" or "mass layoff" as
contemplated by the WARN Act affecting any site of employment or facility
of the Company or any of its Subsidiaries.
Section 4.15 Taxes.
(a) All material Tax Returns required to be filed by or
with respect to the Company or any of its Subsidiaries have been properly
prepared and timely filed, and all such Tax Returns (including information
provided therewith or with respect thereto) are correct and complete in all
material respects.
(b) The Company and its Subsidiaries have fully and
timely paid all material Taxes (whether or not shown to be due on the Tax
Returns) required to be paid by any of them.
(c) As of the date of this Agreement, there are no
material outstanding agreements extending or waiving the statutory period
of limitations applicable to any claim for, or the period for the
collection, assessment or reassessment of, Taxes due from the Company or
any of its Subsidiaries for any taxable period and, to the Knowledge of the
Company, no request for any such waiver or extension is currently pending.
(d) No audit or other proceeding by any Governmental
Entity is pending or, to the Knowledge of the Company, threatened with
respect to any Taxes due from or with respect to the Company or any of its
Subsidiaries, except for such audits and proceedings that do not have and
would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
(e) There are no material Liens on any of the assets of
the Company or any of its Subsidiaries that arose in connection with any
failure (or alleged failure) to pay Taxes, except for Permitted Liens.
(f) Neither the Company nor any of its Subsidiaries has
ever been a member of an affiliated group of corporations, within the
meaning of Section 1504 of the Code, other than the affiliated group of
which the Company is the common parent.
(g) The Company and its Subsidiaries have withheld and
paid all material Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, shareholder or other third party.
(h) Neither the Company nor any of its Subsidiaries is a
party to any Tax sharing or similar Tax agreement (other than an agreement
exclusively between or among the Company and its Subsidiaries) pursuant to
which it will have any obligation to make any payments after the Closing
Date.
(i) Neither the Company nor any Subsidiary has
constituted a "distributing corporation" or a "controlled corporation"
within the meaning of Section 355(a)(1)(A) of the Code in a distribution of
stock intended to qualify for tax-free treatment under Section 355 of the
Code.
(j) Neither the Company nor any of its Subsidiaries has
engaged in any transaction the IRS has determined to be a "listed
transaction" for purposes of ss. 1.6011-4(b)(2), and the Company and its
Subsidiaries have properly reported any transaction that is the same as, or
substantially similar to, a transaction which is a "reportable transaction"
for purposes of ss. 1.6011-4(b).
(k) The Company has provided or made available to Parent
correct and complete copies of (i) all material Tax Returns filed by the
Company or any of its Subsidiaries for the Company's last three fiscal
years and (ii) all material ruling requests, private letter rulings,
notices of proposed deficiencies, closing agreements, settlement
agreements, and similar documents or communications sent to or received by
the Company or any of its Subsidiaries relating to Taxes to the extent
those items relate to tax years with respect to which the statute of
limitations has not expired. There are no requests for information
currently outstanding from any taxing authority that would reasonably be
expected to affect the Taxes of the Company or any of its Subsidiaries in
any material respect.
(l) Neither the Company nor any of its Subsidiaries will
be required to include any item of income in, or exclude any item of
deduction from, taxable income for any taxable period (or portion thereof)
ending after the Closing Date as a result of any (i) change in method of
accounting for a taxable period ending on or prior to the Closing Date,
(ii) "closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax
Law) executed on or prior to the Closing Date, or (iii) installment sale or
open transaction disposition made on or prior to the Closing Date.
(m) The Company is not and has not been a "United States
real property holding corporation" within the meaning of Section 897(c)(2)
of the Code at any time during the 5-year period ending on the date of this
Agreement.
Section 4.16 Environmental Liability. Except as does not have and
would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect, (i) the Company and each of its
Subsidiaries are and have been in compliance in all respects with all
applicable Environmental Laws and have obtained or applied for all
Environmental Permits necessary for their operations as currently
conducted; (ii) to the Knowledge of the Company, there have been no
Releases of any Hazardous Materials that are reasonably likely to form the
basis of any Environmental Claim against the Company or any of its
Subsidiaries; (iii) there are no Environmental Claims pending or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries; (iv) neither the Company nor any of its Subsidiaries is party
to any agreement, order, judgment, or decree by or with any Governmental
Entity or third party imposing any liability or obligation on the Company
or any Subsidiary under any Environmental Law; and (v) neither the Company
nor any of its Subsidiaries has retained or assumed, either contractually
or by operation of law, any liability or obligation that could reasonably
be expected to have formed the basis of any Environmental Claim against the
Company or any of its Subsidiaries. The Company has delivered, or made
available to Parent, copies of any non-privileged, material reports,
studies, analyses, tests or monitoring possessed by the Company or its
Subsidiaries pertaining to compliance with, or liability under,
Environmental Laws.
Section 4.17 Title to Real Properties. The Company and each of its
Subsidiaries has good and valid title in fee simple to all its owned real
property, as reflected in the most recent balance sheet included in the
audited financial statements included in the Company SEC Documents, except
for properties and assets that have been disposed of in the ordinary course
of business since the date of such balance sheet, free and clear of all
Liens, except for Permitted Liens and for such matters which do not have
and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. The Company and each of its
subsidiaries have good and valid leasehold interests in all real property
leased by them, except for such matters which do not have and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. All leases under which the Company or any of its
subsidiaries lease any real or personal property are in good standing,
valid and effective against the Company and, to the Company's Knowledge,
the counterparties thereto, in accordance with their respective terms, is
not and there is not, under any of such leases, any existing default by the
Company or, to the Company's Knowledge, the counterparties thereto, or
event which, with notice or lapse of time or both, would become a default
by the Company or, to the Company's Knowledge, the counterparties thereto,
other than failures to be in good standing, valid and effective and
defaults under such leases which do not have and would not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
Section 4.18 Permits; Compliance with Laws. (a) Each of the Company
and its Subsidiaries is in possession of all authorizations, licenses,
consents, certificates, registrations, approvals and other permits of any
Governmental Entity ("Permits") necessary for it to own, lease and operate
its properties and assets or to carry on its business as it is now being
conducted in compliance with applicable Laws (collectively, the "Company
Permits"), and all such Company Permits are in full force and effect,
except where the failure to hold such Company Permits, or the failure to be
in full force and effect, do not have and would not be reasonably expected
to have, individually or in the aggregate, a Company Material Adverse
Effect. No suspension or cancellation of any of the Company Permits is
pending or, to the Knowledge of the Company, threatened. The Company and
its Subsidiaries are not in material violation or material breach of, or
material default under, any Company Permit. As of the date of this
Agreement, no event or condition has occurred or exists which would result
in a violation of, breach, default or loss of a benefit under, or
acceleration of an obligation of the Company or any of its Subsidiaries
under, any Company Permit (in each case, with or without notice or lapse of
time or both), except for violations, breaches, defaults, losses or
accelerations that do not have and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
No such suspension, cancellation, violation, breach, default, loss of a
benefit, or acceleration of an obligation will result from the transactions
contemplated by this Agreement.
(b) (i) The businesses of the Company and its
Subsidiaries are, and since January 1, 2003 have been, operated and
conducted solely in compliance in all material respects with all applicable
Laws and (ii) neither the Company nor any of its Subsidiaries is, or since
January 1, 2003, has been, in conflict with, or in default or violation of,
(A) any Laws applicable to the Company or such Subsidiary or by which any
of the Company Assets is bound or (B) any Company Permits.
Section 4.19 Takeover Statutes. (a) Each of the Company and the
Company Board has taken all action required to be taken by it to exempt
this Agreement, the Voting Agreements and the transactions contemplated
hereby and thereby from the requirements of any "moratorium", "control
share", "fair price", "affiliate transaction", "business combination" or
other antitakeover laws and regulations of any state, including, without
limitation, the provisions of Article 14 and Article 14.1 of the VSCA.
(b) The Company has provided to Parent draft resolutions
of the Company Board and related documentation necessary to effectuate the
actions described in this Section 4.19 and has made all changes or
additions thereto reasonably requested by Parent and its Representatives.
Section 4.20 Interested Party Transactions. Except for employment
Contracts entered into in the ordinary course of business consistent with
past practice and filed as an exhibit to a Company SEC Report, Section 4.20
of the Company Disclosure Letter (i) sets forth a correct and complete list
of the contracts or arrangements under which the Company has any existing
or future liabilities of the type required to be reported by the Company
pursuant to Item 404 of Regulation S-K promulgated by the SEC (an
"Affiliate Transaction"), between the Company or any of its Subsidiaries,
on the one hand, and, on the other hand, any (A) present or former officer
or director of the Company or any of its Subsidiaries or any of such
officer's or director's immediate family members, (B) record or beneficial
owner of more than 1% of the Shares, or (C) any Affiliate of any such
officer, director or owner, since January 1, 2003, and (ii) identifies each
Affiliate Transaction that is in existence as of the date of this
Agreement. The Company has provided to Parent correct and complete copies
of each Contract or other relevant documentation (including any amendments
or modifications thereto) providing for each Affiliate Transaction.
Section 4.21 Information Supplied. None of the information included
or incorporated by reference in the Company Proxy Statement or any other
document filed with the SEC in connection with the Merger and the other
transactions contemplated by this Agreement (the "Other Filings") will, in
the case of the Company Proxy Statement, at the date it is first mailed to
the Company's shareholders or at the time of the Company Shareholders
Meeting or at the time of any amendment or supplement thereof, or, in the
case of any Other Filing, at the date it is first mailed to the Company's
shareholders or at the date it is first filed with the SEC, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation is made by the Company with
respect to statements made or incorporated by reference therein based on
information supplied by Parent in connection with the preparation of the
Company Proxy Statement or the Other Filings for inclusion or incorporation
by reference therein. The Company Proxy Statement and the Other Filings
that are filed by the Company will comply as to form in all material
respects with the requirements of the Exchange Act.
Section 4.22 Opinion of Financial Advisor. Xxxxxxxxx Quarterdeck, a
division of Xxxxxxxxx & Company, Inc. (the "Company Financial Advisor") has
delivered to the Company Board its oral opinion, to be promptly provided in
writing, to the effect that, as of the date of this Agreement, the Merger
Consideration is fair to the shareholders of the Company from a financial
point of view. When available, the Company will provide to Parent a correct
and complete copy of such written opinion. The Company has obtained the
authorization of the Company Financial Advisor to include a copy of its
opinion in the Company Proxy Statement.
Section 4.23 Brokers and Finders. Other than the Company Financial
Advisor, no broker, finder or investment banker ("Financial Advisors") is
entitled to any brokerage, finder's or other fee or commission in
connection with the Merger or the other transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company or
any of its Subsidiaries. The Company has provided to Parent a correct and
complete copy of all agreements between the Company and the Company
Financial Advisor under which the Company Financial Advisor would be
entitled to any payment relating to the Merger or such other transactions.
The Company has provided Parent with its good faith estimate of the
aggregate amount of fees, commissions and expenses payable by the Company
and its Subsidiaries in connection with this Agreement and the transactions
contemplated hereby to all Financial Advisors (including, without
limitation, the Company Financial Advisor), attorneys, accountants and
other third parties retained and/or utilized by the Company and/or its
Subsidiaries, in connection therewith.
Section 4.24 Intellectual Property. (a) The Company and its
Subsidiaries own, or are validly licensed or otherwise have the right to
use, all material Intellectual Property Rights which are used in or
necessary for the conduct of the business of the Company and its
Subsidiaries free and clear of all Liens.
(b) Section 4.24(b) of the Company Disclosure Letter sets
forth a description as of the date of this Agreement of all Intellectual
Property Rights (by category) that are material to the conduct of the
business of the Company and its Subsidiaries, taken as a whole (other than
patent applications set forth on Section 4.24(f) of the Company Disclosure
Letter).
(c) No material claims, suits, proceedings or other
actions are pending or, to the Knowledge of the Company, threatened (i)
with regard to the Company's or any of its Subsidiaries' use or ownership
of any Intellectual Property right or (ii) alleging that the Company or any
of its Subsidiaries is infringing on, misappropriating or otherwise
adversely affecting the rights of any Person with regard to any
Intellectual Property Right. To the Knowledge of the Company, no Person is
infringing on the rights of the Company or any of its Subsidiaries with
respect to any Company Intellectual Property Right.
(d) Section 4.24(d) of the Company Disclosure Letter sets
forth a true and complete list as of the date of this Agreement of (i) all
material Intellectual Property Rights licensed to the Company or any of its
Subsidiaries by third parties, other than software licenses for generally
available software and (ii) all material Company Intellectual Property
Rights licensed by the Company or any of its Subsidiaries to any third
party on an exclusive basis.
(e) There are no royalties, fees or other payments
payable under any Contract by the Company or any of its Subsidiaries to any
third party by reason of the ownership, use, license, sale or disposition
of any of the Company Intellectual Property Rights.
(f) The Company and its Subsidiaries have taken all
reasonable steps to protect the Company Intellectual Property Rights. All
registrations which are owned by the Company or any of its Subsidiaries for
Company Intellectual Property Rights are valid and in force (with all
related filing fees due as of the date of this Agreement having been duly
paid). Section 4.24(f) of the Company Disclosure Letter sets forth a true
and complete list as of the date of this Agreement of all applications of
the Company or any of its Subsidiaries to register any unregistered
copyrights, patents or trademarks and all such registrations are pending
and in good standing, without challenge of any kind. There are no ongoing
interferences, oppositions, reissues, reexaminations, cancellations,
challenges or other proceedings involving any material Company Intellectual
Property Rights, including ex parte and post-grant proceedings, in the
United States Patent and Trademark Office or in any foreign patent office
or similar Governmental Entity. With respect to each patent application set
forth on Section 4.24(f) of the Company Disclosure Letter (i) neither the
Company nor any of its Subsidiaries has made any intentional
misrepresentation or misstatement or intentionally failed to disclose
material information during the prosecution of such patent application,
(ii) neither the Company nor any of its Subsidiaries has sought or received
a written opinion of patent counsel specifically opining as to the
likelihood of obtaining or not obtaining patent rights under such patent
application and (iii) such patent application was filed in the name of each
and every inventor, as determined in accordance with applicable Law.
(g) Each Person who has engaged in the development or
creation of Intellectual Property Rights (including each inventor named on
the patent applications listed on Section 4.24(b) and (f) of the Company
Disclosure Letter) on behalf of the Company or any of its Subsidiaries has
executed an agreement assigning such Person's entire right, title and
interest in and to such Intellectual Property Rights, and the inventions
embodied, described or claimed therein, to the Company or any of its
Subsidiaries. Each such Person has executed an agreement with the Company
or any of its Subsidiaries obligating such Person to assign the entire
right, title and interest in and to such Company Intellectual Property
Rights, and inventions embodied, described or claimed therein, to the
Company or such Subsidiary, and, to the Knowledge of the Company, no such
Person has any contractual or other obligation that would preclude or
conflict with any such assignment or otherwise conflict with the
obligations of such Person to the Company or such Subsidiary under such
agreement with the Company or such Subsidiary.
(h) All Company Intellectual Property Rights delivered by
the Company or any of its Subsidiaries in performance of a Company
Government Contract or Company Government Subcontract, other than third
party software, has included the proper restrictive legends, such as
"Restricted Rights," "Government Purpose Rights," "Limited Rights" or
"Special Purpose Rights," within the meaning of the United States Federal
Acquisition Regulations.
(i) There has been no disclosure of proprietary
confidential information or trade secrets of the Company or any of its
Subsidiaries except in the ordinary course of business consistent with past
practice or pursuant to Contracts requiring such third party to keep such
Company Intellectual Property Rights confidential in perpetuity.
(j) Immediately following the Closing, all Intellectual
Property Rights, software systems and applications used by the Company or
any of its Subsidiaries in the operation of their businesses will be
available for use by the Company or such Subsidiary on substantially the
same terms and conditions under which the Company or such Subsidiary used
such Intellectual Property Rights, software systems and applications
immediately prior to the Closing.
Section 4.25 Foreign Corrupt Practices Act. None of the Company, any
Company Subsidiary or, to the Knowledge of the Company, any of their
Affiliates or any other Persons acting on their behalf has, in connection
with the operation of their respective businesses, (i) used any corporate
or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to political
activity to government officials, candidates or members of political
parties or organizations, or established or maintained any unlawful or
unrecorded funds in violation of Section 104 of the Foreign Corrupt
Practices Act of 1977, as amended, or any other similar applicable foreign,
federal or state law, (ii) paid, accepted or received any unlawful
contributions, payments, expenditures or gifts, or (iii) violated or
operated in noncompliance with any export restrictions, anti-boycott
regulations, embargo regulations or other applicable domestic or foreign
laws and regulations.
Section 4.26 Export/Import Compliance. To the Knowledge of the
Company, during the last five (5) years: (i) the Company and its
Subsidiaries have been and are in compliance, in all material respects,
with all Export and Import Control Laws, (ii) the Company and its
Subsidiaries have had and have all necessary authority under the Export and
Import Control Laws to conduct their business as currently conducted in all
material respects including (x) necessary Permits for any export or import
transactions, (y) necessary Permits and clearances for the disclosure of
information to Foreign Persons and (z) necessary registrations with any
Governmental Entity with authority to implement applicable Export and
Import Control Laws; and (iii) the Company and its Subsidiaries have not
participated directly or indirectly in any boycotts or other similar
practices in violation of the regulations of the Export Administration Act
(50 U.S.C. App. Section 2401 et seq.) or Section 999 of the Code.
Section 4.27 Security Obligations. The Company and each of its
Subsidiaries is in compliance with all national security obligations,
including those specified in the National Industrial Security Program
Operating Manual, DOD 5220.22-M, and any supplements, amendments or revised
editions thereof (the "National Security Regulations"). Neither the Company
nor any of its Subsidiaries has been subject to any security audit or
inspection by the United States government during the past three (3) years
(except for routine audits or inspections in the ordinary course of
business). No facts currently exist that, to the Knowledge of the Company,
could reasonably be expected to give rise to the revocation of any facility
security clearance of the Company, any of its Subsidiaries or of any
security clearance held by their respective executive officers, managers,
or persons designated in any Company Government Contract, Company
Government Subcontract, or Bid as a key person.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERCO
Parent and MergerCo hereby represent and warrant to the Company as
follows.
Section 5.1 Organization. Each of Parent and MergerCo (a) is a
corporation, duly organized, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation and (b) has the requisite
power and authority to own, lease and operate its assets and properties and
to carry on its business as now conducted.
Section 5.2 Corporate Authorization. Each of Parent and MergerCo
has all necessary corporate power and authority to enter into and to
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance
of this Agreement by Parent and MergerCo and the consummation by Parent and
MergerCo of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and
MergerCo.
Section 5.3 Enforceability. This Agreement has been duly executed
and delivered by Parent and MergerCo and, assuming the due authorization,
execution and delivery of this Agreement by the Company, constitutes a
legal, valid and binding agreement of Parent and MergerCo, enforceable
against Parent and MergerCo in accordance with its terms.
Section 5.4 Governmental Authorizations. The execution, delivery
and performance of this Agreement by Parent and MergerCo and the
consummation by Parent and MergerCo of the transactions contemplated by
this Agreement do not and will not require any consent, approval or other
authorization of, or filing with or notification to, any Governmental
Entity other than: (i) the filing of the Articles of Merger with the SCC
and the issuance of a certificate of merger by the SCC; (ii) applicable
requirements of the Exchange Act; (iii) the filing with the SEC of the
Company Proxy Statement; (iv) any filings required by, and approvals
required under, the rules and regulations of The Nasdaq Global Select
Market; (v) the pre-merger notification required under (A) the HSR Act, (B)
any applicable requirements of the EC Merger Regulation, and (C) the
competition or merger control Laws of any other applicable jurisdiction;
(vi) notification to the Defense Secretary in accordance with National
Industrial Security Program Operating Manual section 1-302(g)(1); (vii)
notification to administrative contracting officer(s), if required, in
accordance with Federal Acquisition Regulation 52.215-9; and (viii) in such
other circumstances where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would
not, individually or in the aggregate, reasonably be expected to have a
Parent Material Adverse Effect.
Section 5.5 Non-Contravention. The execution, delivery and
performance of this Agreement by Parent and MergerCo and the consummation
by Parent and MergerCo of the transactions contemplated by this Agreement
do not and will not:
(i) contravene or conflict with, or result in any
violation or breach of, any provision of the organizational documents of
Parent or MergerCo; or
(ii) contravene or conflict with, or result in any
violation or breach of, any Laws or Orders applicable to Parent or MergerCo
or any of its Subsidiaries or by which any assets of Parent or MergerCo or
any of their respective Subsidiaries are bound (assuming that all consents,
approvals, authorizations, filings and notifications described in Section
5.4), except as would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
Section 5.6 Information Supplied. None of the information supplied
by or on behalf of Parent for inclusion in the Company Proxy Statement, or
the Other Filings will, in the case of the Company Proxy Statement, at the
date it is first mailed to the Company's shareholders or at the time of the
Company Shareholders Meeting or at the time of any amendment or supplement
thereof, or, in the case of any Other Filing, at the date it is first
mailed to the Company's shareholders or at the date it is first filed with
the SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
are made, not misleading.
Section 5.7 Capital Resources. Parent has, and will make available
to MergerCo, the funds necessary to consummate the transactions
contemplated by this Agreement.
Section 5.8 Operations of MergerCo. MergerCo was formed solely for
the purpose of engaging in the transactions contemplated by this Agreement
and has not engaged in any business activities or conducted any operations
other than in connection with the transactions contemplated by this
Agreement.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business Prior to the Closing. Except as
expressly required or expressly contemplated by this Agreement or as set
forth in Section 6.1 of the Company Disclosure Letter, from the date of
this Agreement until the Effective Time, the Company will, and will cause
each of its Subsidiaries to, (x) conduct its operations only in the
ordinary course of business consistent with past practice, (y) use all
reasonable efforts to maintain and preserve intact its business
organization, including the services of its key employees and the goodwill
of its customers, lenders, distributors, suppliers, regulators and other
Persons with whom it has business relationships and (z) use all reasonable
efforts to obtain a signed intellectual property release and assignment in
substantially the form included in the employment/retention agreements
entered into in connection herewith from all employees of the Company or
any of its Subsidiaries who would customarily sign such intellectual
property release and assignment. Without limiting the generality of the
foregoing, except as expressly required or expressly contemplated by this
Agreement or as set forth in Section 6.1 of the Company Disclosure Letter,
or except with the prior written consent of Parent (and Parent agrees not
to unreasonably delay its response to the Company upon the Company's
request for such consent), from the date of this Agreement until the
Effective Time, the Company will not, and will cause each of its
Subsidiaries not to, take any of the following actions:
(a) propose or adopt any changes to the Company
Organizational Documents;
(b) make, declare, set aside, or pay any dividend or
distribution on any shares of its capital stock, other than dividends paid
by a wholly owned Subsidiary to its parent corporation in the ordinary
course of business;
(c) (i) adjust, split, combine or reclassify or otherwise
amend the terms of its capital stock, (ii) repurchase, redeem, purchase,
acquire, encumber, pledge, dispose of or otherwise transfer, directly or
indirectly, any shares of its capital stock or any securities or other
rights convertible or exchangeable into or exercisable for any shares of
its capital stock or such securities or other rights, or offer to do the
same (other than pursuant to the ESPP, subject to the terms of Section 3.5
and the limitations set forth in Section 4.3(g)), (iii) issue, grant,
deliver or sell any shares of its capital stock or any securities or other
rights convertible or exchangeable into or exercisable for any shares of
its capital stock or such securities or rights (other than pursuant to (x)
the ESPP, subject to the terms of Section 3.5 and the limitations set forth
in Section 4.3(g)) and (y) the exercise of Stock Options in accordance with
the terms of the applicable award or plan as in effect on the date of this
Agreement), (iv) enter into any contract, understanding or arrangement with
respect to the sale, voting, pledge, encumbrance, disposition, acquisition,
transfer, registration or repurchase of its capital stock or such
securities or other rights, except in each case as permitted under Section
6.1(d), or (v) register for sale, resale or other transfer any Shares under
the Securities Act on behalf of the Company or any other Person;
(d) (i) increase the compensation or benefits payable or
to become payable to, or make any payment not otherwise due to, any of its
past or present directors, officers, employees, or consultants, except, in
the case of officers and employees, for increases in the ordinary course of
business consistent with past practice in timing and amount, (ii) grant any
severance or termination pay to any of its past or present directors,
officers, employees, or other service providers, other than additional
payments to present employees not exceeding in the aggregate the amount set
forth on Section 6.1(d)(ii) of the Company Disclosure Letter and not to be
payable to any of the individuals listed on such Section 6.1(d)(ii) of the
Company Disclosure Letter, (iii) enter into any severance agreement with
any of its past or present directors, officers, employees, or consultants,
(iv) establish, adopt, enter into, amend or take any action to accelerate
rights under any Company Benefit Plans or any plan, agreement, program,
policy, trust, fund or other arrangement that would be a Company Benefit
Plan if it were in existence as of the date of this Agreement, (v)
contribute any funds to a "rabbi trust" or similar grantor trust, (vi)
change any actuarial assumptions currently being utilized with respect to
Company Benefit Plans, (vii) grant any equity or equity-based awards to
directors, officers or employees (other than pursuant to the ESPP, subject
to the terms of Section 3.5 and the limitations set forth in Section
4.3(g)), or (viii) amend, terminate or waive any provision of any
employment or retention agreement with any officer, director or employee
(including, without limitation, those executed and delivered in connection
herewith);
(e) merge or consolidate the Company or any of its
Subsidiaries with any Person;
(f) sell, lease or otherwise dispose of a material amount
of assets or securities, including by merger, consolidation, asset sale or
other business combination (including formation of a Company Joint
Venture), other than sales of assets in the ordinary course of business;
(g) mortgage or pledge any of its material assets
(tangible or intangible), or create, assume or suffer to exist any Liens
thereupon, other than Permitted Liens;
(h) make any acquisitions, by purchase or other
acquisition of stock or other equity interests, or by merger, consolidation
or other business combination (including formation of a Company Joint
Venture);
(i) enter into, renew, extend, amend or terminate any
Material Contract or other Contract that, if entered into prior to the date
hereof, would be a Material Contract, other than executions, renewals,
extensions, amendments or terminations, (x) of any Fixed Price Contracts
that involve expected receipts or expenditures of less than $500,000 in any
individual case and $2,000,000 in the aggregate or (y) of any other
Contracts that involve expected receipts or expenditures of less than
$5,000,000 in any individual case and $20,000,000 in the aggregate.
(j) (i) incur, assume, guarantee or prepay any
indebtedness for borrowed money or offer, place or arrange any issue of
debt securities or commercial bank or other credit facilities, other than
for amounts borrowed and repaid for working capital purposes in the
ordinary course of business under the Credit Facility, or (ii) amend in any
respect, or waive any provision of, the Credit Facility;
(k) make any loans, advances or capital contributions to,
acquisitions of or investments in, any other Person other than loans,
advances or capital contributions to or among wholly owned Subsidiaries or
as required by customer contracts entered in the ordinary course of
business consistent with past practice;
(l) authorize or make any capital expenditure other than
as set forth in Schedule 6.1(l);
(m) change its financial accounting policies or
procedures in effect as of December 31, 2005, other than as required by Law
or GAAP, or write up, write down or write off the book value of any assets
of the Company and its Subsidiaries, other than (i) in the ordinary course
of business consistent with past practice or (ii) as may be required by Law
or GAAP;
(n) waive, release, assign, settle or compromise any
Legal Actions, other than waivers, releases, assignments, settlements or
compromises in the ordinary course of business consistent with past
practice that involve only the payment of monetary damages not in excess of
$75,000 individually or $150,000 in the aggregate, in any case without the
imposition of equitable relief or any restrictions on the business and
operations of or on, or the admission of any wrongdoing by, the Company or
any of its Subsidiaries;
(o) adopt a plan of complete or partial liquidation or
resolutions providing for a complete or partial liquidation, dissolution,
restructuring, recapitalization or other reorganization of the Company or
any of its Subsidiaries (other than immaterial Subsidiaries);
(p) settle or compromise any material Tax audit or enter
into any material closing agreement other than, in each case, settlements
or closing agreements (i) for which any liabilities thereunder have been
specifically and adequately accrued and reserved for in the balance sheet
most recently included in a Company SEC Document filed prior to the date of
this Agreement, and (ii) which would not have the effect of increasing the
Tax liability of the Company or any of its Subsidiaries for any period
after the Closing Date or decreasing any Tax attribute of the Company or
any of its Subsidiaries existing on the Closing Date;
(q) make or change any material Tax election, file any
material amendment to a material Tax Return, change any annual Tax
accounting period, adopt or change any Tax accounting method, surrender any
right to claim a material refund of Taxes or consent to any extension or
waiver of the limitation period applicable to any material Tax claim or
assessment relating to the Company or its Subsidiaries;
(r) enter into, amend, waive or terminate (other than
terminations in accordance with their terms) any Affiliate Transaction; or
(s) agree or commit to do any of the foregoing.
Section 6.2 Certain Limitations. Nothing contained in this
Agreement is intended to give to Parent or MergerCo, directly or
indirectly, rights to control or direct the operations of the Company prior
to the Effective Time. Prior to the Effective Time, the Company shall
exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision of its and its Subsidiaries' operations.
Notwithstanding the provisions of Section 6.1(i), if Parent's consent is
required to be sought with respect to a matter contemplated by Section 6.1,
then, (A) if the Company believes (based on the advice of counsel) that
providing Parent with disclosure with respect to such matter would violate
applicable Law, or obtaining Parent's consent with respect to such matter
would violate applicable Law, then Company's outside counsel and Parent's
outside counsel shall review the subject matter and jointly determine
whether such disclosure may be made to Parent without violating applicable
Law, or obtaining Parent's consent on such matter may be done without
violating applicable Law, and (B) (1) if such counsel agree that such
disclosure to Parent would violate applicable Law, or obtaining Parent's
consent on such matter would violate applicable Law, then such matter shall
not be disclosed to Parent and the Company shall not need to obtain
Parent's consent to such matter, or (2) if such counsel do not agree that
disclosure of such matter to Parent would violate applicable Law or
obtaining Parent's consent on such matter would violate applicable Law (the
counsel that is advising that such disclosure or obtaining of such consent
would violate applicable Law being referred to as the "Vetoing Counsel"),
then, as long as Parent's counsel was not the Vetoing Counsel, such matter
shall be disclosed to Parent and Parent's consent shall be requested,
provided that Parent shall not withhold its consent to such matter if
Parent's outside counsel advises Parent that withholding its consent would
violate applicable Law.
Section 6.3 Access to Information; Confidentiality. (a) Subject to
applicable Laws relating to the exchange of information, and except as
otherwise agreed to by the parties hereto, the Company will provide and
will cause its Subsidiaries and its and their respective Representatives to
provide Parent and its Representatives, during normal business hours and
upon reasonable advance notice (i) such access to the officers, management
employees, offices, properties, books and records of the Company and such
Subsidiaries (so long as such access does not unreasonably interfere with
the operations of the Company) as Parent reasonably may request and (ii)
all documents that Parent reasonably may request. Notwithstanding the
foregoing, Parent and its Representatives shall not have access to any
books, records and other information the disclosure of which would, in the
Company's good faith opinion, (x) violate any of its obligations with
respect to confidentiality to any third party, provided the Company shall
have used reasonable efforts to obtain the consent of such third party to
such inspection or disclosure without requiring the Company to pay more
than a de minimis amount or waive any rights to obtain such consent; (y)
result in the loss of attorney-client privilege; or (z) violate applicable
Laws; provided, that this Section 6.3(a) shall not obligate the Company to
devote any material resources to create any information that does not
already exist at the time of such request (other than to convert existing
information from one medium to another, such as providing a printout of
information that is sorted in a computer database).
(b) No investigation by any of the parties or their
respective Representatives shall affect the representations, warranties,
covenants or agreements of the other parties set forth herein.
Section 6.4 No Solicitation. (a) From the date of this Agreement
until the Effective Time, except as specifically permitted in Section
6.4(d), the Company agrees that neither it nor any of its Subsidiaries nor
any of the officers or directors of it or its Subsidiaries shall, and that
it shall cause its and its Subsidiaries' Representatives not to, directly
or indirectly:
(i) initiate, solicit or knowingly encourage
(including by way of providing information) or knowingly facilitate any
inquiries, proposals or offers with respect to, or the making, or the
completion of, a Takeover Proposal;
(ii) participate or engage in any discussions or
negotiations with, or furnish or disclose any non-public information
relating to the Company or any of its Subsidiaries to, or otherwise
cooperate with or assist any Person in connection with a Takeover Proposal;
(iii) withdraw, modify, qualify or amend the Company
Board Recommendation in any manner adverse to Parent or MergerCo;
(iv) approve, endorse or recommend any Takeover
Proposal;
(v) enter into any letter of intent, agreement in
principle, merger agreement, acquisition agreement, option agreement or
other similar agreement (other than an Acceptable Confidentiality
Agreement) relating to a Takeover Proposal (each a "Company Acquisition
Agreement"); or
(vi) resolve or agree to do any of the foregoing.
(b) The Company shall, and shall cause each of its
Subsidiaries and Representatives to, immediately cease any existing
solicitations, discussions or negotiations with any Person (other than
Parent and MergerCo) that has made or indicated an intention to make a
Takeover Proposal. The Company shall promptly inform its Representatives of
the Company's obligations under this Section 6.4.
(c) The Company shall notify Parent promptly (and in any
event within 24 hours) upon receipt by it or its Subsidiaries or
Representatives of (i) any Takeover Proposal or indication by any Person
that it is considering making a Takeover Proposal, (ii) any request for
non-public information relating to the Company or any of its Subsidiaries
other than requests for information in the ordinary course of business and
unrelated to a Takeover Proposal or (iii) any inquiry or request for
discussions or negotiations regarding any Takeover Proposal. The Company
shall notify Parent promptly (and in any event within 24 hours) with the
identity of such Person and a copy of such Takeover Proposal, indication,
inquiry or request (or, where no such copy is available, a description of
such Takeover Proposal, indication, inquiry or request), including any
modifications thereto. The Company shall keep Parent reasonably informed on
a current basis (and in any event within 24 hours of the occurrence of any
changes, developments, discussions or negotiations) of the status of any
such Takeover Proposal, indication, inquiry or request (including the
material terms and conditions thereof and of any modification thereto), and
any material developments, discussions and negotiations, including
furnishing copies of any written inquiries, correspondence and draft
documentation, and written summaries of any material oral inquiries or
discussions. Without limiting the foregoing, the Company shall promptly
(and in any event within 24 hours) notify Parent orally and in writing if
it determines to begin providing information or to engage in discussions or
negotiations concerning a Takeover Proposal pursuant to Section 6.4(d). The
Company shall not, and shall cause its Subsidiaries not to, enter into any
confidentiality agreement with any Person subsequent to the date of this
Agreement, and neither the Company nor any of its Subsidiaries is party to
any agreement, which prohibits the Company from providing such information
to Parent. The Company shall not, and shall cause each of its Subsidiaries
not to, terminate, waive, amend or modify any provision of any existing
standstill or confidentiality agreement to which it or any of its
Subsidiaries is a party, and the Company shall, and shall cause its
Subsidiaries to, enforce the provisions of any such agreement.
(d) Notwithstanding the foregoing, the Company shall be
permitted, if it has otherwise complied with its obligations under this
Section 6.4, but only prior to the receipt of the Requisite Company Vote,
to:
(i) engage in discussions or negotiations with a
Person who has made a written Takeover Proposal not solicited in violation
of this Section 6.4 if, prior to taking such action, (A) the Company enters
into an Acceptable Confidentiality Agreement with such Person and (B) the
Company Board determines in good faith (1) (after consultation with its
financial advisors and outside legal counsel) that such Takeover Proposal
constitutes, or is reasonably likely to result in, a Superior Proposal and
(2) (after consultation with its outside legal counsel) that failure to
take such action would be reasonably likely to constitute a breach of its
fiduciary obligations to the shareholders of the Company under applicable
Laws;
(ii) furnish or disclose any non-public information
relating to the Company or any of its Subsidiaries to a Person who has made
a written Takeover Proposal not solicited in violation of this Section 6.4
if, prior to taking such action, the Company Board in good faith makes the
determinations described in Section 6.4(d)(ii), but only so long as the
Company (x) has caused such Person to enter into an Acceptable
Confidentiality Agreement and (y) concurrently discloses the same such
non-public information to Parent if such non-public information has not
previously been made available to Parent; and
(iii) withdraw, modify, qualify or amend the Company
Board Recommendation in a manner adverse to Parent or MergerCo (any such
action being referred to as a "Company Adverse Recommendation Change") if
the Company Board has determined in good faith, after consultation with its
outside legal counsel, that failure to take such action would be reasonably
likely to constitute a breach of its fiduciary obligations to the
shareholders of the Company under applicable Laws; provided, that prior to
any such withdrawal, modification, qualification or amendment to the
Company Board Recommendation, (A) the Company shall have given Parent and
MergerCo prompt written notice advising Parent and MergerCo of (x) the
decision of the Company Board to take such action and (y) in the event the
decision relates to a Takeover Proposal, the material terms and conditions
of the Takeover Proposal, including the identity of the party making such
Takeover Proposal and, if available, a copy of the relevant proposed
transaction agreements with such party and other material documents, (B)
the Company shall have given Parent and MergerCo four Business Days after
delivery of each such notice to propose revisions to the terms of this
Agreement (or make another proposal) and shall have negotiated in good
faith with Parent and MergerCo with respect to such proposed revisions or
other proposal, if any, and (C) the Company Board shall have determined in
good faith, after considering the results of such negotiations and giving
effect to the proposals made by Parent and MergerCo, if any, and after
consultation with outside legal counsel, that failure to withdraw, modify
or amend the Company Board Recommendation would be reasonably likely to
constitute a breach of its fiduciary obligations to the shareholders of the
Company under applicable Laws; provided, that, in the event the Company
Board does not make the determination referred to in clause (C) of this
paragraph but thereafter determines to withdraw, modify, qualify or amend
the Company Board Recommendation pursuant to this Section 6.4(d)(iii), the
procedures referred to in clauses (A), (B) and (C) above shall apply anew
and shall also apply to any subsequent withdrawal, amendment, qualification
or modification.
(e) Nothing in this Section 6.4 shall prohibit the
Company Board from disclosing to the shareholders of the Company a position
contemplated by Rule 14e-2(a) and Rule 14d-9 promulgated under the Exchange
Act; provided, however, that any disclosure other than a "stop, look and
listen" or similar communication of the type contemplated by Rule 14d-9(f)
under the Exchange Act shall be deemed to be a withdrawal, modification,
qualification or amendment of the Company Board Recommendation in a manner
adverse to Parent or MergerCo unless the Company Board (x) expressly
reaffirms its recommendation to its shareholders in favor of adoption of
this Agreement or, (y) rejects such other Takeover Proposal.
Section 6.5 Notices of Certain Events. (a) The Company will notify
Parent and MergerCo promptly of (i) any communication from (x) any
Governmental Entity, (y) any counterparty to any Company Joint Venture or
(z) any counterparty to any Contract that alone, or together with all other
Contracts with respect to which communication is received, is material to
the Company and its Subsidiaries, taken as a whole, alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement (and the response thereto from
the Company, its Subsidiaries or its Representatives), (ii) any
communication from any Governmental Entity in connection with the
transactions contemplated by this Agreement (and the response thereto from
the Company, its Subsidiaries or its Representatives), (iii) any Legal
Actions commenced against or otherwise affecting the Company or any of its
Subsidiaries that are related to the transactions contemplated by this
Agreement (and the response thereto from the Company, its Subsidiaries or
its Representatives), and (iv) any event, change, occurrence, circumstance
or development between the date of this Agreement and the Effective Time
which results in, or is reasonably likely to cause the conditions set forth
in Section 7.2(a) or 7.2(b) of this Agreement not to be satisfied or result
in such satisfaction being materially delayed. With respect to any of the
foregoing, the Company will consult with Parent and its Representatives so
as to permit the Company and Parent and their respective Representatives to
cooperate to take appropriate measures to avoid or mitigate any adverse
consequences that may result from any of the foregoing.
(b) Parent will notify the Company promptly of (i) any
communication from any Governmental Entity alleging that the consent of
such Governmental Entity (or other Governmental Entity) is or may be
required in connection with the transactions contemplated by this Agreement
(and the response thereto from Parent or its Representatives), (ii) any
communication from any Governmental Entity in connection with the
transactions contemplated by this Agreement (and the response thereto from
Parent or its Representatives), or (iii) any event, change, occurrence,
circumstance or development between the date of this Agreement and the
Effective Time which causes or is reasonably likely to cause the conditions
set forth in Section 7.3(a) or 7.3(b) of this Agreement not to be satisfied
or result in such satisfaction being materially delayed.
Section 6.6 Proxy Material; Shareholder Meeting. (a) In connection
with the Company Shareholders Meeting, the Company will (i) as promptly as
reasonably practicable after the date of this Agreement prepare and file
with the SEC the Company Proxy Statement relating to the Merger and the
other transactions contemplated hereby, (ii) respond as promptly as
reasonably practicable to any comments received from the SEC with respect
to such filings and will provide copies of such comments to Parent promptly
upon receipt, (iii) as promptly as reasonably practicable prepare and file
any amendments or supplements necessary to be filed in response to any SEC
comments or as required by Law, (iv) use all reasonable efforts to have
cleared by the SEC and will thereafter mail to its shareholders as promptly
as reasonably practicable, the Company Proxy Statement and all other
customary proxy or other materials for meetings such as the Company
Shareholders Meeting, (v) to the extent required by applicable Law, as
promptly as reasonably practicable prepare, file and distribute to the
Company shareholders (in the case of the Company Proxy Statement) any
supplement or amendment to the Company Proxy Statement if any event shall
occur which requires such action at any time prior to the Company
Shareholders Meeting, and (vi) otherwise use all reasonable efforts to
comply with all requirements of Law applicable to the Company Shareholders
Meeting and the Merger. Parent shall cooperate with the Company in
connection with the preparation and filing of the Company Proxy Statement,
including furnishing the Company upon request with any and all information
as may be required to be set forth in the Company Proxy Statement under the
Exchange Act. The Company will provide Parent a reasonable opportunity to
review and comment upon the Company Proxy Statement, or any amendments or
supplements thereto, prior to filing the same with the SEC. In connection
with the filing of the Company Proxy Statement, the Company and Parent will
cooperate to (i) respond as promptly as reasonably practicable to any
comments received from the SEC with respect to such filing and will consult
with each other prior to providing such response, (ii) as promptly as
reasonably practicable after consulting with each other, prepare and file
any amendments or supplements necessary to be filed in response to any SEC
comments or as required by Law, and (iv) to the extent required by
applicable Law, as promptly as reasonably practicable prepare, file and
distribute to the Company shareholders any supplement or amendment to the
Company Proxy Statement if any event shall occur which requires such action
at any time prior to the Company Shareholders Meeting.
(b) The Company Proxy Statement will include the Company
Board Recommendation unless the Company Board has withdrawn, modified or
amended the Company Board Recommendation to the extent permitted under
Section 6.4(d).
(c) The Company will call and hold the Company
Shareholders Meeting as promptly as practicable following the date of this
Agreement for the purpose of obtaining the Requisite Company Vote. The
Company will (a) take all reasonable actions permitted by Law to solicit or
cause to be solicited from its shareholders proxies in favor of adoption of
this Agreement and (b) subject to Section 6.4(d), take all other reasonable
action necessary to secure the Requisite Company Vote, including, if
requested by Parent (and at Parent's expense) engaging a nationally
recognized proxy solicitor reasonably acceptable to Parent. Notwithstanding
anything herein to the contrary, unless this Agreement is terminated in
accordance with Section 8.1, 8.2, 8.3 or 8.4, the Company will take all of
the actions contemplated by this Section 6.6 regardless of whether the
Company has approved, endorsed or recommended another Takeover Proposal or
has withdrawn, modified or amended the Company Board Recommendation, and
will submit this Agreement for adoption by the shareholders of the Company
at such meeting.
Section 6.7 Employees; Benefit Plans. (a) For a period of one year
following the Closing Date (the "Continuation Period"), the Surviving
Corporation will provide current employees of the Company and its
Subsidiaries (other than those employees covered by a collective bargaining
agreement) as of the Effective Time who continue employment with the
Surviving Corporation ("Employees") with compensation and benefits that are
no less favorable in the aggregate than either (i) those provided under the
Company's compensation and benefit plans, programs, policies, practices and
arrangements (excluding equity-based programs) in effect at the Effective
Time (it being understood that discretionary incentive programs will remain
discretionary) or (ii) those provided to similarly situated employees of
the Surviving Corporation and its Affiliates; provided, however, that
nothing herein will prevent the amendment or termination of any specific
plan, program or arrangement, require that the Surviving Corporation
provide or permit investment in the securities of the Surviving Corporation
or any of its Affiliates or interfere with the Surviving Corporation's
right or obligation to make such changes as are necessary to comply with
applicable Law. Notwithstanding anything to the contrary set forth herein,
nothing herein shall preclude the Surviving Corporation from terminating
the employment of any Employee for any reason for which the Company could
have terminated such Employee prior to the Effective Time.
(b) Subject to Section 3.5, the Surviving Corporation and
its Affiliates will honor all Company Benefit Plans (including any
severance, retention, change of control and similar plans, agreements and
written arrangements) in accordance with their terms as in effect
immediately prior to the Effective Time, subject to any amendment or
termination thereof that may be permitted by such plans, agreements or
written arrangements.
(c) Under the employee benefit plans of the Surviving
Corporation and its Affiliates providing benefits to any Employees after
the Effective Time (the "New Plans"), each Employee will be credited with
his or her years of service with the Company and its Affiliates before the
Effective Time (including predecessor or acquired entities or any other
entities for which the Company and its Affiliates have given credit for
prior service), to the same extent as such Employee was entitled, before
the Effective Time, to credit for such service under the corresponding
Company Benefit Plan, for purposes of eligibility and vesting (but not
benefit accrual), but shall not receive credit for any purpose where
service credit for the applicable period is not provided to participants
generally, and to the extent such credit would result in a duplication of
benefits. In addition, and without limiting the generality of the foregoing
(i) each Employee immediately will be eligible to participate, without any
waiting time, in any and all New Plans to the extent coverage under such
New Plan replaces coverage under a similar or comparable Company Benefit
Plan in which such Employee participated immediately before the Effective
Time (such plans, collectively, the "Old Plans") and (ii) for purposes of
each New Plan providing medical, dental, pharmaceutical and/or vision
benefits to any Employee, the Surviving Corporation will cause all
pre-existing condition exclusions and actively-at-work requirements of such
New Plan to be waived for such Employee and his or her covered dependents,
to the extent any such exclusions or requirements were waived or were
inapplicable under any similar or comparable Company Benefit Plan, and the
Surviving Corporation will cause any eligible expenses incurred by such
Employee and his or her covered dependents during the portion of the plan
year of the Old Plan ending on the date such Employee's participation in
the corresponding New Plan begins to be taken into account under such New
Plan for purposes of satisfying all deductible, coinsurance and maximum
out-of-pocket requirements applicable to such Employee and his or her
covered dependents for the applicable plan year as if such amounts had been
paid in accordance with such New Plan.
(d) No provision of this Section 6.7 will create any
third party beneficiary rights in any current or former employee, director
or consultant of the Company or its Subsidiaries in respect of continued
employment (or resumed employment) or any other matter, nor is any
provision of this Section 6.7 intended to nor shall it be construed as
amending in any way any Company Benefit Plan.
Section 6.8 Directors' and Officers' Indemnification and Insurance.
(a) The Surviving Corporation will (i) maintain in effect for a period of
six years after the Effective Time, if available, the current policies of
directors' and officers' liability insurance maintained by the Company
immediately prior to the Effective Time (provided, that the Surviving
Corporation may substitute therefor policies with reputable and financially
sound carriers, of at least the same coverage and amounts containing terms
and conditions that are no less favorable to the directors and officers of
the Company) or (ii) obtain as of the Effective Time "tail" insurance
policies with a claims period of six years from the Effective Time with at
least the same coverage and amounts and containing terms and conditions
that are no less favorable to the directors and officers of the Company, in
each case with respect to claims arising out of or relating to events which
occurred before or at the Effective Time; provided, however, that in no
event will the Surviving Corporation be required to expend an annual
premium for such coverage in excess of 200% of the last annual premium paid
by the Company for such insurance prior to the date of this Agreement (the
"Maximum Premium"). If such insurance coverage cannot be obtained at all,
or can only be obtained at an annual premium in excess of the Maximum
Premium, the Surviving Corporation will obtain that amount of directors'
and officers' insurance (or "tail" coverage) obtainable for an annual
premium equal to the Maximum Premium.
(b) The provisions of this Section 6.8 will survive the
Closing and are intended to be for the benefit of, and will be enforceable
by, each Indemnified Party and its successors and representatives after the
Effective Time and their rights under this Section 6.8 are in addition to,
and will not be deemed to be exclusive of, any other rights to which an
Indemnified Party is entitled, whether pursuant to Law, Contract, the
Company Organizational Documents (or similar organizational document) of
the Surviving Corporation or any of its Subsidiaries or otherwise.
(c) Following the Effective Time, the Surviving
Corporation and each of its Subsidiaries shall include and maintain in
effect in their respective Articles of Incorporation or bylaws (or similar
organizational document) for a period of six years after the Effective
Time, provisions regarding the elimination of liability of directors (or
their equivalent), indemnification of officers and directors thereof and
advancement of expenses which are, with respect to each such entity, no
less advantageous to the intended beneficiaries than the corresponding
provisions contained in such organizational documents as of the date of
this Agreement.
(d) In the event that the Surviving Corporation or any of
its successors or assigns (i) consolidates with or merges into any other
Persons, or (ii) transfers all or substantially all of its properties or
assets to any Person, then and in each case, proper provision will be made
so that the applicable successors, assigns or transferees assume the
obligations set forth in this Section 6.8.
Section 6.9 All Reasonable Efforts. (a) Upon the terms and subject
to the conditions set forth in this Agreement and in accordance with
applicable Laws, each of the parties to this Agreement will use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable to ensure that
the conditions set forth in Article VII are satisfied and to consummate the
transactions contemplated by this Agreement as promptly as practicable,
including (i) using all reasonable efforts to obtain all necessary actions
or nonactions, waivers, consents and approvals from Governmental Entities
and making all necessary registrations and filings and taking all steps as
may be reasonably necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Entity, (ii) making, as
promptly as practicable (and in any event within 20 Business Days), an
appropriate filing of a Notification and Report Form pursuant to the HSR
Act with respect to the transactions contemplated hereby and not extending
any waiting period under the HSR Act or entering into any agreement with
the U.S. Federal Trade Commission (the "FTC") or the Antitrust Division of
the U.S. Department of Justice (the "Antitrust Division") not to consummate
the transactions contemplated by this Agreement, except with the prior
written consent of the other party hereto, (iii) making, as promptly as
practicable (and in any event within 15 Business Days), appropriate filings
(a) under the EC Merger Regulation, if required, and (b) if required, under
any other antitrust, competition or premerger notification, trade
regulation Law, regulation or Order, (iv) obtaining all consents, approvals
or waivers from, or taking other actions with respect to, third parties
necessary or advisable to be obtained or taken in connection with the
transactions contemplated by this Agreement; provided, however, that
without the prior written consent of Parent, the Company and its
Subsidiaries may not pay or commit to pay any material amount of cash or
other consideration, or incur or commit to incur any material liability or
other obligation, in connection with obtaining such consent, approval or
waiver, (v) subject to first having used all reasonable efforts to
negotiate a resolution of any objections underlying such lawsuits or other
legal proceedings, using reasonable efforts to defend and contest any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated by this Agreement, including using reasonable efforts to seek
to have any stay or temporary restraining order entered by any Governmental
Entity vacated or reversed, and (vi) executing and delivering any
additional instruments necessary to consummate the transactions
contemplated hereby, and to fully carry out the purposes of this Agreement.
(b) Parent and the Company will cooperate and consult
with each other in connection with the making of all such filings,
notifications and any other material actions pursuant to this Section 6.9,
subject to applicable Law, by permitting counsel for the other party to
review in advance, and consider in good faith the views of the other party
in connection with, any proposed material written communication to any
Governmental Entity and by providing counsel for the other party with
copies of all filings and submissions made by such party and all
correspondence between such party (and its advisors) with any Governmental
Entity and any other information supplied by such party and such party's
Affiliates to a Governmental Entity or received from such a Governmental
Entity in connection with the transactions contemplated by this Agreement;
provided, however, that material may be redacted (x) as necessary to comply
with contractual arrangements, and (y) as necessary to address good faith
legal privilege or confidentiality concerns. The Company shall not consent
to any voluntary extension of any statutory deadline or waiting period or
to any voluntary delay of the consummation of the transactions contemplated
by this Agreement at the behest of any Governmental Entity without the
consent of Parent. The parties hereto may, as each deems advisable and
necessary, reasonably designate any competitively sensitive material
provided to the other under this Section 6.9 as "outside counsel only."
Such materials and the information contained therein shall be given only to
the outside legal counsel of the recipient and will not be disclosed by
such outside counsel to employees, officers, or directors of the recipient,
unless express written permission is obtained in advance from the party
delivering the materials.
(c) Each of Parent and the Company will promptly inform
the other party upon receipt of any material communication from the FTC,
the Antitrust Division or any other Governmental Entity regarding any of
the transactions contemplated by this Agreement. If Parent or the Company
(or any of their respective Affiliates) receives a request for additional
information or documentary material from any such Governmental Entity that
is related to the transactions contemplated by this Agreement, then such
party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other party, an
appropriate response in compliance with such request. The parties agree not
to participate, or to permit their Affiliates to participate, in any
substantive meeting or discussion with any Governmental Entity in
connection with the transactions contemplated by this Agreement unless it
so consults with the other party in advance and, to the extent not
prohibited by such Governmental Entity, gives the other party the
opportunity to attend and participate. Each party will advise the other
party promptly of any understandings, undertakings or agreements (oral or
written) which the first party proposes to make or enter into with the FTC,
the Antitrust Division or any other Governmental Entity in connection with
the transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, each party will use all reasonable efforts to
resolve any objections that may be asserted with respect to the
transactions contemplated by this Agreement under any antitrust,
competition or trade regulatory Laws.
(d) Notwithstanding the foregoing, nothing contained in
this Agreement shall require or obligate Parent or its Affiliates to, and
the Company shall not, without the prior written consent of Parent: (i)
agree or otherwise become subject to any restrictions, conditions,
limitations or other understanding on or with respect to the operation of
the business of Parent, any of its Affiliates, or the Company in any
material respect; or (ii) agree or otherwise be required to sell or
otherwise dispose of, hold separate (through the establishment of a trust
or otherwise), or divest itself of any business, assets or operations of
Parent, any of its Affiliates, or the Company.
Section 6.10 Public Announcements. Parent and the Company will
consult with each other before issuing any press release or otherwise
making any public statements about this Agreement or any of the
transactions contemplated by this Agreement. Neither Parent nor the Company
will issue any such press release or make any such public statement prior
to such consultation, except to the extent that the disclosing party
determines in good faith it is required to do so by applicable Laws or
requirements of the New York Stock Exchange or The Nasdaq Global Select
Market, in which case that party will use all reasonable efforts to consult
with the other party before issuing any such release or making any such
public statement. The parties hereto agree that the initial press release
to be issued in connection with the transactions contemplated by this
Agreement shall be in the form heretofore agreed between Parent and the
Company.
Section 6.11 Stock Exchange Listing. Promptly following the
Effective Time, the Surviving Corporation will cause the Shares to be
delisted from The Nasdaq Global Select Market and deregistered under the
Exchange Act.
Section 6.12 Fees and Expenses. Whether or not the Merger is
consummated, all expenses (including those payable to Representatives)
incurred by any party to this Agreement or on its behalf in connection with
this Agreement and the transactions contemplated by this Agreement
("Expenses") will be paid by the party incurring those Expenses, except as
otherwise provided in Sections 8.6 and 8.7 and except that the HSR filing
fee and any filing fee required under the German pre-merger notification
Law shall be paid by Parent.
Section 6.13 Takeover Statutes. If any takeover statute is or
becomes applicable to this Agreement, the Voting Agreements, the Merger or
the other transactions contemplated by this Agreement or the Voting
Agreements, each of Parent and the Company and their respective boards of
directors will (a) take all necessary action to ensure that such
transactions may be consummated as promptly as practicable upon the terms
and subject to the conditions set forth in this Agreement and (b) otherwise
act to eliminate or minimize the effects of such takeover statute.
Section 6.14 Resignations. To the extent requested by Parent in
writing prior to Closing Date, on the Closing Date, the Company shall cause
to be delivered to Parent duly signed resignations, effective as of the
Effective Time, of the directors of the Company Subsidiaries designated by
Parent and shall take such other action as is necessary to accomplish the
foregoing.
Section 6.15 Shareholder Litigation. The Company shall give Parent
the opportunity to participate in the defense or settlement of any
shareholder litigation against the Company and/or its directors relating to
the transactions contemplated hereby, and no such litigation shall be
settled without Parent's prior written consent.
Section 6.16 Rule 16b-3. Prior to the Effective Time, the Company
shall take such steps as may be reasonably requested by any party hereto to
cause dispositions of Company equity securities (including derivative
securities) pursuant to the transactions contemplated by this Agreement by
each individual who is a director or officer of the Company to be exempt
under Rule 16b-3 promulgated under the Exchange Act in accordance with that
certain No-Action Letter dated January 12, 1999 issued by the SEC regarding
such matters.
ARTICLE VII
CONDITIONS
Section 7.1 Mutual Conditions to Closing. The respective obligation
of each party to this Agreement to effect the Merger is subject to the
satisfaction or waiver on or prior to the Closing Date of each of the
following conditions:
(a) Company Shareholder Approval. The Requisite Company
Vote shall have been obtained.
(b) Regulatory Approvals. The waiting periods applicable
to the consummation of the Merger (or any extension thereof) under (i) the
HSR Act and (ii) the German pre-merger notification Law, shall both have
expired or been terminated.
(c) No Injunctions or Restraints. No Governmental Entity
will have enacted, issued, promulgated, enforced or entered any Laws or
Orders (whether temporary, preliminary or permanent) that enjoin or
otherwise prohibit consummation of the Merger or the other transactions
contemplated by this Agreement.
Section 7.2 Conditions to Obligation of Parent and MergerCo. The
obligations of Parent and MergerCo to effect the Merger are also subject to
the satisfaction or waiver by Parent and MergerCo on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. (i) The
representations and warranties of the Company contained in Sections 4.2
(Corporate Authority), 4.3 (Capitalization), 4.7(a) (Vote Required) and
4.23 (Brokers and Finders) shall be true and correct in all respects
(except, in the case of Section 4.3 for such inaccuracies as are de minimis
and except in the case of Sections 4.2, 4.7(a) and 4.23 for such
inaccuracies as are not material), in each case both when made and at and
as of the Closing Date, as if made at and as of such time (except to the
extent expressly made as of an earlier date, in which case as of such date)
and (ii) all other representations and warranties of the Company set forth
herein shall be true and correct both when made and at and as of the
Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date),
except where the events, states of facts, circumstances, developments,
changes or effects causing the failure of such representations and
warranties to be so true and correct (without giving effect to any
limitation as to "materiality" or Company Material Adverse Effect set forth
therein) do not have, and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
(b) Performance of Covenants. The Company shall have
performed in all material respects all obligations, and complied in all
material respects with the agreements and covenants, required to be
performed by or complied with by it hereunder.
(c) Company Material Adverse Effect. Since the date of
this Agreement, there shall not have been any Company Material Adverse
Effect or any event, state of fact, circumstance, development, change or
effect that would, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.
(d) Officers Certificate. Parent will have received a
certificate, signed by an officer of the Company, certifying as to the
matters set forth in Section 7.2(a), Section 7.2(b) and Section 7.2(c).
(e) Absence of Pending Litigation. No proceeding
instituted by a Governmental Entity seeking any Laws or Orders having the
effects contemplated by Section 7.1(c) shall be pending.
Section 7.3 Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is also subject to the satisfaction or
waiver by the Company on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations
and warranties of Parent and MergerCo set forth herein shall be true and
correct both when made and at and as of the Closing Date, as if made at and
as of such time (except to the extent expressly made as of an earlier date,
in which case as of such date), except where the events, state of facts,
circumstances, developments, changes or effects causing the failure of such
representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or Parent Material Adverse
Effect set forth therein) do not have, and would not reasonably be expected
to have, individually or in the aggregate, a material adverse effect on the
ability of Parent or MergerCo to consummate the transactions contemplated
hereby.
(b) Performance of Covenants. Parent and MergerCo shall
have performed in all material respects all obligations, and complied in
all material respects with the agreements and covenants, required to be
performed by or complied with by them hereunder.
(c) Officers Certificate. The Company will have received
a certificate, signed by the chief executive officer or the chief financial
officer of Parent, certifying as to the matters set forth in Section 7.3(a)
and Section 7.3(b).
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination by Mutual Consent. This Agreement may be
terminated, whether before or after receipt of the Requisite Company Vote,
at any time prior to the Effective Time by mutual written consent of Parent
and the Company.
Section 8.2 Termination by Either Parent or the Company. This
Agreement may be terminated by either Parent or the Company at any time
prior to the Effective Time:
(a) whether before or after receipt of the Requisite
Company Vote, if the Merger has not been consummated by May 8, 2007;
provided, that (i) if, prior to the 10 Business Day period immediately
prior to such date, the condition set forth in Section 7.1(b) has not been
satisfied or waived, then at any time during such 10 Business Day period
Parent may unilaterally extend such date for an additional 90 days by
delivering written notice thereof to the Company, (ii) if Parent has not so
extended pursuant to clause (i), prior to the Company exercising such
termination right, it shall provide Parent with at least five Business Days
prior written notice and, after receipt by Parent of such notice, Parent
shall have the right, exercisable by written notice to the Company, to
unilaterally extend such date for an additional 90 days if the condition to
the parties' obligation to consummate the Merger set forth in Section
7.1(b) has not been satisfied or waived, and (iii) the right to terminate
this Agreement under this clause will not be available to any party to this
Agreement whose failure to fulfill any of its obligations under this
Agreement has been a principal cause of, or resulted in, the failure to
consummate the Merger by such date;
(b) if this Agreement has been submitted to the
shareholders of the Company for adoption at a duly convened Company
Shareholders Meeting and the Requisite Company Vote shall not have been
obtained at such meeting (including any adjournment or postponement
thereof); or
(c) whether before or after receipt of the Requisite
Company Vote, if any Law prohibits consummation of the Merger or if any
Order restrains, enjoins or otherwise prohibits consummation of the Merger,
and such Order has become final and nonappealable.
Section 8.3 Termination by Parent. This Agreement may be terminated
by Parent at any time prior to the Effective Time:
(a) if (i) a Company Adverse Recommendation Change shall
have occurred, or (ii) the Company Board approves, endorses or recommends
any Takeover Proposal other than the Merger, or announces its intention to
do any of the foregoing, in any case whether or not permitted by Section
6.4; or
(b) if the Company (i) materially breaches its
obligations under Sections 6.4, 6.6(b) or 6.6(c), or the Company Board or
any committee thereof shall resolve to do any of the foregoing or (ii) (A)
materially breaches its obligations under Section 6.6(a) and (B) such
breach is not cured within 5 calendar days after the Company's receipt of
written notice asserting such breach or failure from Parent; or
(c) if a breach or failure of any representation,
warranty or covenant of the Company contained in this Agreement shall have
occurred, which breach (i) would give rise to the failure of a condition
set forth in Section 7.2(a) or Section 7.2(b) and (ii) has not been cured
by the Company within 10 calendar days after the Company's receipt of
written notice of such breach or failure from Parent.
Section 8.4 Termination by the Company. This Agreement may be
terminated by the Company at any time prior to the Effective Time:
(a) if a breach or failure of any representation,
warranty or covenant of Parent or MergerCo contained in this Agreement
shall have occurred, which breach (i) would give rise to the failure of a
condition set forth in Section 7.3(a) or Section 7.3(b) and (ii) has not
been cured by Parent or MergerCo within 10 calendar days after Parent's
receipt of written notice of such breach or failure from the Company; or
(b) if prior to obtaining the Requisite Company Vote, (i)
a Company Adverse Recommendation Change has occurred pursuant to and in
accordance with the provisions of Section 6.4, (ii) concurrently with such
termination the Company enters into a definitive agreement providing for
the consummation of a Superior Proposal pursuant to and in accordance with
the provisions of Section 6.4 and (iii) in accordance with Section 8.6, the
Company pays to Parent the Company Termination Fee.
Section 8.5 Effect of Termination. If this Agreement is terminated
pursuant to this Article VIII, written notice thereof shall be given to the
other party or parties, specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall forthwith become void
and of no further force and effect, with no liability on the part of any
party to this Agreement (or any shareholder, director, officer, employee,
agent or Representative of such party); provided, that, nothing in this
Section 8.5 (including termination) shall relieve any party to this
Agreement of liability for willful breach. The provisions of Section 6.12,
this Section 8.5, Section 8.6, Section 8.7 and Article IX will survive any
termination of this Agreement.
Section 8.6 Company Termination Fee. (a) The Company will pay, or
cause to be paid, to an account or accounts designated by Parent, by wire
transfer of immediately available funds an amount equal to $22,500,000 (the
"Company Termination Fee"):
(i) if this Agreement is terminated (A) by Parent
pursuant to Section 8.3(a) or Section 8.3(b), in which event payment will
be made within two Business Days after such termination or (B) by the
Company pursuant to Section 8.4(b), in which event payment will be made
concurrently with such termination; or
(ii) if (A) a Takeover Proposal (or the intention of
any Person to make one), whether or not conditional, shall have been made
known to or proposed to the Company or otherwise publicly announced or
disclosed prior to the receipt of the Requisite Company Vote, (B) this
Agreement is terminated by either Parent or the Company pursuant to Section
8.2(a) (but, only for purposes of this Section 8.6(a)(ii), only if the
Requisite Company Vote has not been received at the time of such
termination) or Section 8.2(b) or by Parent pursuant to Section 8.3(c), and
(C) within 15 months following the date of such termination, the Company
enters into a definitive agreement providing for the implementation of any
Takeover Proposal or consummates any Takeover Proposal (whether or not such
Takeover Proposal was the same Takeover Proposal referred to in the
foregoing clause (A)), in which event payment will be made on or prior to
the date on which the Company enters into such definitive agreement or
consummates such Takeover Proposal, as applicable. For purposes of the
foregoing clause (C) only, references in the definition of the term
"Takeover Proposal" to the figure "15%" will be deemed to be replaced by
the figure "50%."
(b) The Company acknowledges that the agreements
contained in Section 8.6(a) are an integral part of the transactions
contemplated by this Agreement, that without these agreements Parent and
MergerCo would not have entered into this Agreement, and that any amounts
payable pursuant to Section 8.6(a) do not constitute a penalty. If the
Company fails to pay Parent and MergerCo any amounts due to Parent and
MergerCo pursuant to Section 8.6(a) within the time periods specified in
Section 8.6(a), the Company shall pay the costs and expenses (including
reasonable legal fees and expenses) incurred by Parent and MergerCo in
connection with any action, including the filing of any lawsuit, taken to
collect payment of such amounts, together with interest on such unpaid
amounts at the prime lending rate prevailing during such period as
published in The Wall Street Journal, calculated on a daily basis from the
date such amounts were required to be paid until the date of actual
payment.
(c) Except as set forth in this Section 8.6 and in
Section 8.7, all Expenses incurred in connection with this Agreement and
the transactions contemplated hereby will be paid in accordance with the
provisions of Section 6.12.
Section 8.7 Parent Termination Fee.
(a) In the event that (i)(A) this Agreement is terminated
by Parent, on the one hand, or the Company, on the other hand, pursuant to
Section 8.2(a) and (B) at the time of such termination, all conditions to
the obligations of the parties to consummate the Merger have been satisfied
or waived other than those set forth in Section 7.1(b) or Section 7.1(c),
or (ii) this Agreement is terminated by Parent, on the one hand, or the
Company, on the other hand, pursuant to Section 8.2(c), then in either case
Parent shall pay promptly (but in any event within two Business Days)
following receipt of an invoice therefor, all of the Company's actual and
reasonably documented out-of-pocket fees and expenses (including reasonable
legal fees and expenses) actually incurred by the Company and its
Subsidiaries on or prior to the termination of this Agreement in connection
with the transactions contemplated by this Agreement as directed by the
Company in writing, which amount shall not be greater than $1 million.
(b) Parent acknowledges that the agreements contained in
Section 8.7(a) are an integral part of the transactions contemplated by
this Agreement, that without these agreements the Company would not have
entered into this Agreement, and that any amounts payable pursuant to
Section 8.7(a) do not constitute a penalty. If Parent fails to pay the
Company any amounts due to the Company pursuant to Section 8.7(a) within
the time period specified in Section 8.7(a), Parent shall pay the costs and
expenses (including reasonable legal fees and expenses) incurred by the
Company in connection with any action, including the filing of any lawsuit,
taken to collect payment of such amounts, together with interest on such
unpaid amounts at the prime lending rate prevailing during such period as
published in The Wall Street Journal, calculated on a daily basis from the
date such amounts were required to be paid until the date of actual
payment.
Section 8.8 Amendment. This Agreement may be amended by the parties
to this Agreement at any time prior to the Effective Time, whether before
or after shareholder approval hereof, provided that (a) after necessary
approval of this Agreement and the Merger by the shareholders of the
Company, no amendment that requires further shareholder approval under
applicable Laws will be made without such required further approval and (b)
such amendment has been duly authorized or approved by each of Parent,
MergerCo and the Company. This Agreement may not be amended except by an
instrument in writing signed by each of the parties to this Agreement.
Section 8.9 Extension; Waiver. At any time prior to the Effective
Time, Parent and MergerCo, on the one hand, and the Company, on the other
hand, may (a) extend the time for the performance of any of the obligations
of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any
document delivered under this Agreement, or (c) unless prohibited by
applicable Laws, waive compliance with any of the covenants or conditions
contained in this Agreement. Any agreement on the part of a party to any
extension or waiver will be valid only if set forth in an instrument in
writing signed by such party. The failure of any party to assert any of its
rights under this Agreement or otherwise will not constitute a waiver of
such rights.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Interpretation. The headings in this Agreement are for
reference only and do not affect the meaning or interpretation of this
Agreement. Definitions will apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun
will include the corresponding masculine, feminine and neuter forms. All
references in this Agreement and the Company Disclosure Letter to Articles,
Sections and Exhibits refer to Articles and Sections of, and Exhibits to,
this Agreement unless the context requires otherwise. The words "include,"
"includes" and "including" are not limiting and will be deemed to be
followed by the phrase "without limitation." The phrases "herein,"
"hereof," "hereunder" and words of similar import will be deemed to refer
to this Agreement as a whole, including the Exhibits and Schedules hereto,
and not to any particular provision of this Agreement. The word "or" will
be inclusive and not exclusive unless the context requires otherwise.
Unless the context requires otherwise, any agreements, documents,
instruments or Laws defined or referred to in this Agreement will be deemed
to mean or refer to such agreements, documents, instruments or Laws as from
time to time amended, modified or supplemented, including (a) in the case
of agreements, documents or instruments, by waiver or consent and (b) in
the case of Laws, by succession of comparable successor statutes. All
references in this Agreement to any particular Law will be deemed to refer
also to any rules and regulations promulgated under that Law. References to
a Person also refer to its predecessors and successors and permitted
assigns.
Section 9.2 Survival. None of the representations and warranties
contained in this Agreement or in any instrument delivered under this
Agreement will survive the Effective Time. This Section 9.2 does not limit
any covenant of the parties to this Agreement which, by its terms,
contemplates performance after the Effective Time. The Confidentiality
Agreement will (a) survive termination of this Agreement in accordance with
its terms and (b) terminate as of the Effective Time.
Section 9.3 Governing Law. This Agreement will be governed by, and
construed in accordance with, the Laws of the State of Virginia, without
giving effect to any applicable principles of conflict of laws that would
cause the Laws of another State to otherwise govern this Agreement.
Section 9.4 Waiver of Jury Trial. Each party acknowledges and
agrees that any controversy which may arise under this Agreement is likely
to involve complicated and difficult issues and, therefore, each such party
irrevocably and unconditionally waives any right it may have to a trial by
jury in respect of any Legal Action arising out of or relating to this
Agreement or the transactions contemplated by this Agreement. Each party to
this Agreement certifies and acknowledges that (a) no Representative of any
other party has represented, expressly or otherwise, that such other party
would not seek to enforce the foregoing waiver in the event of a Legal
Action, (b) such party has considered the implications of this waiver, (c)
such party makes this waiver voluntarily, and (d) such party has been
induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 9.4.
Section 9.5 Notices. Any notice, request, instruction or other
communication under this Agreement will be in writing and delivered by hand
or overnight courier service or by facsimile:
If to Parent or MergerCo, to:
Northrop Grumman Space & Mission Systems Corp.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Corporate Vice President and
General Counsel
Facsimile: 000 000-0000
with a copy (which will not constitute notice to Parent
or MergerCo) to:
Northrop Grumman Space & Mission Systems Corp.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Director Strategic Transactions
Facsimile: 000-000-0000
and with a copy (which will not constitute notice to
Parent or MergerCo) to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: 212 859-4000
If to the Company, to:
Essex Corporation
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile: 000 000-0000
with a copy (which will not constitute notice to the
Company) to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: A. Xxxxx Xxxxxxx, Esq.
Facsimile: 000 000-0000
or to such other Persons, addresses or facsimile numbers as may be
designated in writing by the Person entitled to receive such communication
as provided above. Each such communication will be effective (a) if
delivered by hand or overnight courier, when such delivery is made at the
address specified in this Section 9.5, or (b) if delivered by facsimile,
when such facsimile is transmitted to the facsimile number specified in
this Section 9.5 and appropriate confirmation is received.
Section 9.6 Entire Agreement. This Agreement (including the Exhibits
to this Agreement), the Company Disclosure Letter, and the Confidentiality
Agreement constitute the entire agreement and supersede all other prior
agreements, understandings, representations and warranties, both written
and oral, among the parties to this Agreement with respect to the subject
matter of this Agreement. No representation, warranty, inducement, promise,
understanding or condition not set forth in this Agreement has been made or
relied upon by any of the parties to this Agreement.
Section 9.7 No Third-Party Beneficiaries. Except as provided in
Section 6.8, this Agreement is not intended to, and shall not, confer any
rights or remedies upon any Person other than the parties to this
Agreement.
Section 9.8 Severability. The provisions of this Agreement are
severable and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of the other provisions of this
Agreement. If any provision of this Agreement, or the application of that
provision to any Person or any circumstance, is invalid or unenforceable,
(a) a suitable and equitable provision will be substituted for that
provision in order to carry out, so far as may be valid and enforceable,
the intent and purpose of the invalid or unenforceable provision and (b)
the remainder of this Agreement and the application of that provision to
other Persons or circumstances will not be affected by such invalidity or
unenforceability, nor will such invalidity or unenforceability affect the
validity or enforceability of that provision, or the application of that
provision, in any other jurisdiction.
Section 9.9 Rules of Construction. The parties to this Agreement have
been represented by counsel during the negotiation and execution of this
Agreement and waive the application of any Laws or rule of construction
providing that ambiguities in any agreement or other document will be
construed against the party drafting such agreement or other document.
Section 9.10 Assignment. This Agreement may not be assigned by
operation of Law or otherwise. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the parties hereto and their respective successors and permitted
assigns. Any purported assignment not permitted under this Section 9.10
will be null and void.
Section 9.11 Remedies. Except as otherwise provided in this Agreement,
any and all remedies expressly conferred upon a party to this Agreement
will be cumulative with, and not exclusive of, any other remedy contained
in this Agreement, at law or in equity. The exercise by a party to this
Agreement of any one remedy will not preclude the exercise by it of any
other remedy.
Section 9.12 Specific Performance. The parties to this Agreement agree
that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed by the Company in accordance with
their specific terms or were otherwise breached. It is accordingly agreed
that prior to the termination of this Agreement in accordance with Article
VIII, the parties will be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms
and provisions of this Agreement in any court of the United States or any
state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 9.13 Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts, all of which will be one and the
same agreement. This Agreement will become effective when each party to
this Agreement will have received counterparts signed by all of the other
parties.
[Signature page follows.]
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the
date first written above.
NORTHROP GRUMMAN SPACE &
MISSION SYSTEMS CORP.
By: /s/Xxxxx X. Xxxxxxx
-------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Treasurer
EAGLE TRANSACTION CORPORATION
By: /s/Xxxxx X. Xxxxxxx
-------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Treasurer
ESSEX CORPORATION
By: /s/Xxxxxxx X. Xxxxxxxxx
-------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chairman, CEO and President
