EXHIBIT 4
------------------------------------------
------------------------------------------
AGREEMENT AND PLAN OF MERGER,
DATED AS OF MAY 5, 1998,
BETWEEN
ANALOG ACQUISITION CORP.
AND
ALLIED DIGIT L TECHNOLOGIES CORP.
------------------------------------------
------------------------------------------
AGREEMENT AND PLAN OF MERGER
TABLE OF CONTENTS
PAGE
1. Definitions......................................................1
2. Transactions....................................................10
(a) The Merger................................................10
(b) The Closing...............................................10
(c) Effect of Merger..........................................10
(d) Certificate of Incorporation..............................10
(e) Bylaws....................................................10
(f) Directors and Officers....................................11
(g) Conversion of Securities..................................11
(h) Employee Stock Options; Warrants..........................12
(i) Dissenting Shares.........................................12
(j) Surrender of Shares; Stock Transfer Books.................13
3. Representations and Warranties of the Company...................14
(a) Organization, Qualification, and Corporate Power..........14
(b) Capitalization............................................15
(c) Authorization of Transactions.............................15
(d) Noncontravention..........................................16
(e) Filings with the SEC......................................16
(f) Financial Statements......................................16
(g) Events Subsequent to Most Recent Fiscal Year End..........17
(h) No Undisclosed Liabilities................................17
(i) Brokers' Fees.............................................17
(j) Absence of Certain Changes................................17
(k) Litigation................................................18
(l) Taxes.....................................................18
(m) Compliance with Laws......................................19
(n) Permits...................................................19
(o) Contracts.................................................20
(p) Intellectual Property Rights..............................20
(q) Board Recommendation......................................21
(r) ERISA.....................................................21
(s) Labor and Employment Matters..............................23
(t) Real Estate...............................................24
(u) Environmental Matters.....................................24
i
PAGE
4. Representations and Warranties of AAC...........................26
(a) Organization..............................................26
(b) Debt Financing............................................27
(c) Authorization of the Transactions.........................27
(d) Noncontravention..........................................27
(e) Brokers' Fees.............................................28
(f) ..........................................................28
5. Covenants.......................................................28
(a) Further Assurances........................................28
(b) Notices and Consents......................................28
(c) Regulatory Matters and Approvals..........................29
(d) Securities Act, Securities Exchange Act, and State
Securities Laws ..........................................29
(e) DGCL; Special Meeting.....................................29
(f) Accounting Treatment......................................30
(g) Debt Financing............................................30
(h) Operation of the Company's Business.......................30
(i) Full Access...............................................31
(j) Notice of Developments....................................32
(k) No Solicitation...........................................32
(l) Insurance and Indemnification.............................34
(m) Joint Disclosure Documents................................34
(n) Comfort Letters...........................................34
(o) Options...................................................34
6. Conditions to Obligation to Close...............................35
(a) Conditions to Closing by AAC..............................35
(b) Conditions to Closing by the Company......................36
7. Termination.....................................................38
(a) Termination of Agreement..................................38
(b) Effect of Termination.....................................39
8. Miscellaneous...................................................39
(a) Press Releases and Public Announcement....................39
(b) No Third Party Beneficiaries..............................39
(c) Entire Agreement..........................................39
(d) Succession and Assignment.................................40
(e) Counterparts..............................................40
(f) General Interpretive Principles...........................40
(g) Notices...................................................41
ii
PAGE
(h) Governing Law.............................................42
(i) Waiver of Jury Trial......................................42
(j) Amendments and Waivers....................................42
(k) Severability..............................................42
(l) Expenses..................................................43
(m) Incorporation of Exhibits and Schedules...................43
(n) Transfer Taxes............................................43
(o) Limited Recourse..........................................43
(p) Parties in Interest.......................................43
(q) Specific Performance......................................43
(r) Headings..................................................43
(s) Counterparts..............................................43
iii
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger (the "Agreement"), dated as of May 5,
1998, between Analog Acquisition Corp., a Delaware corporation ("AAC"), and
Allied Digital Technologies Corp., a Delaware corporation (the "Company"). AAC
and the Company are sometimes referred to collectively herein as the "Parties."
WITNESSETH:
WHEREAS, the Boards of Directors of AAC and the Company have each
determined that it is in the best interests of its shareholders for AAC to
acquire the Company and consummate the transactions contemplated by the
Agreement (the "Transactions") upon the terms and subject to the conditions set
forth herein; and
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of AAC and the Company have each approved the merger (the "Merger") of
AAC with and into the Company in accordance with the General Corporation Law of
the State of Delaware ("DGCL") upon the terms and subject to the conditions set
forth herein; and
WHEREAS, AAC is unwilling to enter into this Agreement unless,
contemporaneously with the execution and delivery of this Agreement, certain
beneficial and record stockholders of the Company have entered into certain
voting agreements, substantially in the form of Exhibit A-1 (the "Voting
Agreements") and certain rollover agreements, substantially in the form of
Exhibit A-2 (the "Rollover Agreements"), or combination thereof, in each case
providing for certain actions relating to certain of the shares ("Shares") of
common stock, par value $.01 per Share, of the Company ("Company Common Stock")
or Options (as hereinafter defined) owned or controlled by them;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows:
1. DEFINITIONS.
"399" means 399 Venture Partners Inc., a Delaware corporation.
"AAC" has the meaning set forth in the preamble.
"Acquisition Proposals" has the meaning set forth in Section 5(k)(i).
"Acquisition Transaction" has the meaning set forth in Section 5(k)(i).
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Agreement" has the meaning set forth in the preamble.
"AMEX" means the American Stock Exchange.
"Anchor Bay Option" has the meaning set forth in Section 2(h).
"Bankruptcy Code" has the meaning set forth in Section 6(b).
"Benefit Plan" means any Plan, other than a Multiemployer Plan, existing
at the Closing Date or within the 5 years prior thereto, established or to which
contributions have at any time been made by the Company or any Subsidiary
thereof, or any predecessor of the Company or any Subsidiary thereof, under
which any employee, former employee or director of the Company or any Subsidiary
thereof, or any beneficiary thereof is covered, is eligible for coverage or has
benefit rights in respect of service to the Company or any Subsidiary thereof.
"Business Day" means any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings or, in the case of determining a
date when any payment is due, any day other than a day on which banks in New
York, New York are required or authorized to be closed.
"Capital Lease" means a Lease with respect to which the lessee is required
concurrently to recognize the acquisition of an asset and the incurrence of a
Liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a Liability on a
balance sheet of such Person.
"Certificate of Merger" has the meaning set forth in Section 2(c).
"Certificates" has the meaning set forth in Section 2(j).
"Class A Common Stock" has the meaning set forth in Section 2(g)(iv).
"Class A Warrants" has the meaning set forth in Section 2(h).
"Class B Warrants" has the meaning set forth in Section 2(h).
"Class C Warrants" has the meaning set forth in Section 2(h).
2
"Closing" has the meaning set forth in Section 2(b).
"Closing Date" has the meaning set forth in Section 2(b).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" has the meaning set forth in the preamble.
"Company Comfort Letter" has the meaning set forth in Section 5(n).
"Company Common Stock" has the meaning set forth in the recitals.
"Company Preferred Stock" has the meaning set forth in Section 3(b).
"Company Stockholder" means any Person who or which holds any Shares of
Company Common Stock.
"Confidential Information" means any information concerning the businesses
and affairs of the Company and its Subsidiaries that is not (i) already
generally available to the public, (ii) otherwise required to be disclosed by
law or court order, or (iii) already within the possession of the party to whom
the information is proposed to be delivered without violating the terms of any
confidentiality agreement governing such information.
"Confidentiality Agreement" means the confidentiality agreement, dated as
of January 16, 1998, between CVC and the Company.
"Contracts" means, with respect to any Person, any agreement, contract,
obligation, note, bond, mortgage, indenture, option, Lease, promise or
undertaking that is legally binding on such Person or to which such Person is a
party.
"CVC" means Citicorp Venture Capital, Ltd., a New York corporation.
"Debt" with respect to any Person means, at any time, without duplication,
(a) Liabilities for borrowed money and its redemption obligations in respect of
mandatorily redeemable preferred stock; (b) Liabilities for the deferred
purchase price of property acquired by such Person (excluding accounts payable
arising in the Ordinary Course of Business but including all Liabilities created
or arising under any conditional sale or other title retention agreement with
respect to any such property); (c) Capital Lease Obligations of such Person; (d)
Liabilities for borrowed money secured by any Lien with respect to any property
owned by such Person (whether or not such Person has assumed or otherwise become
liable for such Liabilities); (e) Liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account by
banks and other financial institutions (whether or not representing
3
obligations for borrowed money); (f) Swap Obligations of such Person; and (g)
any Guaranty of such Person with respect to Liabilities of a type described in
any of clauses (a) through (f) hereof.
"Debt Financing" has the meaning set forth in Section 4(b).
"Definitive Proxy Materials" means the definitive proxy materials relating
to the Special Meeting.
"DGCL" has the meaning set forth in the recitals.
"Dissenting Shares" has the meaning set forth in Section 2(i).
"Effective Time" has the meaning set forth in Section 2(c).
"Environment" means all air, surface water, groundwater or land, including
land surface or subsurface, including all fish, wildlife, biota and all other
natural resources.
"Environmental Claim" means any and all administrative or judicial
actions, suits, orders, claims, Liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
communication (written or, to the Knowledge of the Company or any Subsidiary
thereof, oral), whether criminal or civil pursuant to or relating to any
applicable Environmental Law by any Person (including but not limited to any
Governmental or Regulatory Body, private Person and citizens' group) based upon,
alleging, asserting or claiming any actual or potential (i) violation of or
Liability under any Environmental Law, (ii) violation of any Environmental
Permit, or (iii) Liability for investigatory costs, cleanup costs, removal
costs, remedial costs, response costs, natural resource damages, property
damage, personal injury, fines or penalties arising out of, based on, resulting
from or related to the presence, Release or threatened Release into the
Environment, of any Hazardous Materials at any location, including but not
limited to any off-Site location to which Hazardous Materials or materials
containing Hazardous Materials were sent for handling, storage, treatment or
disposal.
"Environmental Clean-up Site" means any location which is listed or
proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or on any
similar state list of sites requiring investigation or cleanup, or which is the
subject of any pending or threatened action, suit, proceeding or investigation
related to or arising from any alleged violation of any Environmental Law.
"Environmental Law" means any and all current and future, federal, state,
local, provincial and foreign, civil and criminal laws, statutes, ordinances,
orders, codes, rules, regulations, Environmental Permits, policies, guidance
documents, judgments, decrees, injunctions or agreements with any Governmental
or Regulatory Body, relating to the protection of health and the Environment,
and/or governing the handling, use, generation, treatment, storage,
transportation, disposal, manufacture, distribution, formulation, packaging,
labeling or
4
Release of Hazardous Materials, whether now existing or subsequently amended or
enacted, including but not limited to: the Clean Air Act, 42 U.S.C. Section 7401
ET SEQ.; the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. Section 9601 ET SEQ.; the Federal Water Pollution Control
Act, 33 U.S.C. Section 1251 ET SEQ.; the Hazardous Material Transportation Act,
49 U.S.C. Section 1801 ET SEQ.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Section 136 ET SEQ.; the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 ET SEQ.; the Toxic Substances
Control Act, 15 U.S.C. Section 2601 ET SEQ.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 ET SEQ.; and the state analogies thereto, all as amended or
superseded from time to time; and any common law doctrine, including but not
limited to, negligence, nuisance, trespass, personal injury or property damage
related to or arising out of the presence, Release or exposure to a Hazardous
Material.
"Environmental Permit" means any federal, state, local, provincial or
foreign permits, licenses, approvals, consents or authorizations required by any
Governmental or Regulatory Body under or in connection with any Environmental
Law and includes any and all orders, consent orders or binding agreements issued
or entered into by a Governmental or Regulatory Body under any applicable
Environmental Law.
"Equity Financing Commitment" has the meaning set forth in Section 4(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA Affiliate" means any Person who is, or was, a member of a
controlled group (within the meaning of Section 412(n)(6) of the Code) that
includes, or at any time included, the Company or any Subsidiary thereof, or any
predecessor of any of the foregoing.
"Fixed Amount" has the meaning set forth in Section 5(k).
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, consistently applied.
"Governmental or Regulatory Body" means any government or political
subdivision thereof, whether foreign or domestic, federal, state, provincial,
county, local, municipal or regional, or any other governmental entity, any
agency, authority, department, division or instrumentality of any such
government, political subdivision, or other governmental entity, any court,
arbitral tribunal or arbitrator, and any nongovernmental regulating body, to the
extent that the rules, regulations or orders of such body have the force of law.
"Guaranties" by any Person means all obligations (other than endorsements
in the Ordinary Course of Business of negotiable instruments for deposit or
collection) of such Person guaranteeing, or in effect guaranteeing, any Debt,
cash dividend or other monetary obligation of
5
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (i) to purchase such Debt or
obligation or any property or assets constituting security therefor; (ii) to
advance or supply funds for the purchase or payment of such Debt or obligation;
(iii) to lease property or to purchase securities or other property or services
primarily for the purpose of assuring the owner of such Debt or obligation of
the ability of the primary obligor to make payment of the Debt or obligation; or
(iv) otherwise to assure the owner of the Debt or obligation of the primary
obligor against loss in respect thereof. For the purposes of all computations
made under this Agreement, a Guaranty in respect of any Debt for borrowed money
shall be deemed to be Debt equal to the principal amount of such Debt for
borrowed money which has been guaranteed, and a Guaranty in respect of any other
obligation or Liability or any dividend shall be deemed to be Debt equal to the
maximum aggregate amount of such obligation, Liability or dividend unless such
Guaranty is limited.
"Hazardous Material" means petroleum, petroleum hydrocarbons or petroleum
products, petroleum by-products, radioactive materials, asbestos or
asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea
formaldehyde, lead or lead-containing materials, polychlorinated biphenyls and
any other chemicals, materials, substances or wastes in any amount or
concentration which are now or hereafter become defined as or included in the
definition of "HAZARDOUS SUBSTANCES," "HAZARDOUS MATERIALS," "HAZARDOUS WASTES,"
"EXTREMELY HAZARDOUS WASTES," "RESTRICTED HAZARDOUS WASTES," "TOXIC SUBSTANCES,"
"TOXIC POLLUTANTS," "POLLUTANTS," "REGULATED SUBSTANCES," "SOLID WASTES" or
"CONTAMINANTS" or words of similar import, under any Environmental Law.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Intellectual Property" shall mean all trademarks and trademark rights,
trade names and trade name rights, service marks and service ▇▇▇▇ rights,
service names and service name rights, copyrights and copyright rights, patents
and patent rights, brand names, trade dress, business and product names, logos,
slogans, trade secrets, inventions, processes, formulae, industrial models,
processes, designs, specifications, data, technology, methodologies, computer
programs (including all source codes), confidential and proprietary information,
whether or not subject to statutory registration, and all related technical
information, manufacturing, engineering and technical drawings, know-how and all
pending applications for and registrations of patents, trademarks, service marks
and copyrights, and the right to ▇▇▇ for past payment, if any, in connection
with any of the foregoing, and all documents, disks and other media on which any
of the foregoing is stored.
"Joint Disclosure Documents" means the disclosure document combining the
Schedule 13E-3 and the Definitive Proxy Materials.
6
"Knowledge" means actual or constructive knowledge without independent
investigation of any current director or current executive officer.
"Liability" means all indebtedness, obligations and other liabilities (or
contingencies that have not yet become liabilities) of a Person (whether
absolute, accrued, contingent (or based upon any contingency), fixed or
otherwise, or whether due or to become due).
"Lease" means all oral and written leases, subleases, license agreements
and other use and occupancy agreements (and any amendments, renewals,
supplements, modifications or extensions thereto), in each case affecting or
relating to real property under which the Company or any Subsidiary thereof is a
party or to what it or any of its property is bound.
"Lien" means any lien, claim, restriction, security interest, preemptive
right, covenant, easement, mortgage, other encumbrance or any claim of any Third
Party other than mechanic's, materialman's and similar liens.
"Material Adverse Effect" means any material adverse effect on the
financial condition or operations, business, prospects, assets or results of
operations of the Company and its Subsidiaries taken as a whole, or AAC, as the
context in this Agreement requires.
"Merger" has the meaning set forth in the recitals.
"Merger Consideration" has the meaning set forth in Section 2(g).
"Most Recent Fiscal Year End" has the meaning set forth in Section 3(f).
"Multiemployer Plan" means a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA with respect to which the Company or any ERISA
Affiliate has an obligation to contribute or has or could have withdrawal
liability under Section 4201 of ERISA.
"Options" has the meaning set forth in Section 2(h).
"Option Plan" means Allied Digital Technologies Corp. Amended and Restated
1994 Long Term Incentive Plan.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Parties" has the meaning set forth in the preamble.
"Paying Agent" has the meaning set forth in Section 2(j).
7
"Permits" means each material license (other than with respect to
Intellectual Property), franchise, permit, certificate, approval, consent or
other similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries.
"Per Share Amount" has the meaning set forth in Section 2(g).
"Person" means an individual, a partnership, a limited liability company,
a corporation, an association, a joint stock company, a trust, an estate, a
joint venture, an unincorporated organization or other entity or a Governmental
or Regulatory Body.
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, or whether for the benefit of a single
individual or more than one individual including, without limitation, any
"employee benefit plan" within the meaning of Section 3(3) of ERISA (whether or
not subject thereto).
"Preliminary Proxy Materials" has the meaning set forth in Section
5(d)(i).
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of a
Hazardous Material into the Environment.
"Requisite Stockholder Approval" means the affirmative vote of at least a
majority, but less than the 66 2/3% of the Shares in favor of this Agreement and
the Merger in accordance with the DGCL.
"Requisite Super-Majority Stockholder Approval" means the affirmative vote
of at least 66 2/3% of the Shares in favor of the Merger and this Agreement in
accordance with the DGCL.
"Restricted Parties" has the meaning set forth in Section 5(k).
"Revolving Credit Facility" has the meaning set forth in Section 5(g).
"Rollover Agreements" has the meaning set forth in the recitals.
"Rollover Stockholders" has the meaning set forth in Section 2(g)(iii).
"Schedule 13E-3" has the meaning set forth in Section 3(y).
"SEC" means the Securities and Exchange Commission.
8
"SEC Reports" has the meaning set forth in Section 3(e).
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Share(s)" has the meaning set forth in the recitals.
"Site" means any of the real properties currently or previously owned,
leased or operated by the Company or any Subsidiary thereof, including all soil,
subsoil, surface water and groundwater thereat.
"Special Meeting" has the meaning set forth in Section 3(y).
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Superior Acquisition Proposal" has the meaning set forth in Section
7(a)(iv).
"Surviving Corporation" has the meaning set forth in Section 2(a).
"Surviving Corporation Common Stock" has the meaning set forth in Section
2(g)(iv).
"Swap Obligations" means, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
any Swap Obligation shall be the amount determined in respect thereof as of the
end of the then most recently ended fiscal quarter of such Person, based on the
assumption that such Swap Obligation had terminated at the end of such fiscal
quarter, and, in making such determination, if any agreement relating to such
Swap Obligation provides for the netting of amounts payable by and to such
Person thereunder or if any such agreement provides for the simultaneous payment
of amounts by and to such Person, then, in each such case, the amount of such
obligation shall be the net amount so determined.
"Taxes" means all federal, state, local and foreign income, profits,
franchise, gross receipts, environmental, customs duty, capital stock,
severance, stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever together with all
interest, penalties, fines and additions to tax imposed with respect to such
amounts and any interest in respect of such penalties and additions to tax.
9
"Tax Returns" means all returns and reports (including elections, claims,
declarations, disclosures, schedules, estimates, computations and information
returns) required to be supplied to a Tax authority in any jurisdiction relating
to Taxes.
"Third Party" means any "group," as described in Rule 13d-5(b) promulgated
under the Securities Exchange Act, or Person, other than AAC or any of its
Affiliates.
"Transactions" has the meaning set forth in the recitals.
"Warrants" has the meaning set forth in Section 2(h).
"Voting Agreements" has the meaning set forth in the recitals.
2. TRANSACTIONS.
(a) THE MERGER. Subject to the terms and conditions of this Agreement and
in accordance with the DGCL, AAC will merge with and into the Company at the
Effective Time. Upon the Effective Time, the separate existence of AAC shall
cease and the Company shall be the corporation surviving the Merger and shall
continue under the name Allied Digital Technologies Corp. (the "Surviving
Corporation").
(b) THE CLOSING. The closing of the Transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP in New York City commencing at 9:00 a.m., local time, on the first
Business Day immediately following the satisfaction or waiver of all conditions
to the obligations of the Parties to consummate the Transactions as set forth in
Article 6 (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to satisfaction or waiver of those conditions) or
such other date as the Parties may mutually determine (the "Closing Date").
(c) EFFECT OF MERGER. The Merger shall become effective at the time (the
"Effective Time") the Company duly files a certificate of merger ("Certificate
of Merger") with the Secretary of State of the State of Delaware or at such
later time as is specified in the Certificate of Merger. The Merger shall have
the effect set forth in the DGCL. The Surviving Corporation may, at any time
after the Effective Time, take any action (including executing and delivering
any document) in the name and on behalf of either the Company or AAC in order to
carry out and effectuate the Transactions.
(d) CERTIFICATE OF INCORPORATION. At the Effective Time, the certificate
of incorporation of the Surviving Corporation shall be amended to read in its
entirety as set forth in Exhibit B -1 attached hereto if the Transactions
receive the Requisite Stockholder Approval or Exhibit B-2 attached hereto if the
Transactions receive the Requisite Super-Majority Stockholder Approval, in each
case until thereafter amended as provided by law and such certificate of
incorporation.
10
(e) BYLAWS. At the Effective Time, the bylaws of the Surviving Corporation
shall be amended to read as set forth in Exhibit C attached hereto until
thereafter amended as provided by law and such bylaws.
(f) DIRECTORS AND OFFICERS. The directors of the Company immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the certificate of
incorporation and bylaws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
(g) CONVERSION OF SECURITIES. At the Effective Time, by virtue of the
Merger and without any action on the part of AAC, the Company or the holders of
any of the following securities:
(i) Each Share (or fraction thereof) issued and outstanding
immediately prior to the Effective Time (other than any Shares to be canceled
pursuant to Section 2(g)(ii), any Shares to remain outstanding pursuant to
Section 2(g)(iii) and any Dissenting Shares (as defined in Section 2(i)) shall
be canceled and shall be converted automatically into the right to receive an
amount equal to $5 (the "Per Share Amount") in cash (the "Merger Consideration")
payable, without interest, to the holder of such Share, upon surrender, in the
manner provided in Section 2(j), of the Certificate that formerly evidenced such
Share.
(ii) TREASURY STOCK AND AAC-OWNED SHARES. At and as of the Effective
Time, by virtue of the Merger and without any action on the part of the Company
or AAC or any holder of Shares of Company Common Stock, each Share of Company
Common Stock owned by the Company or any Subsidiary as treasury stock and each
Share owned by AAC held immediately prior to the Effective Time shall be
canceled and cease to exist, and no consideration shall be delivered or
deliverable with respect thereto.
(iii) Certain of the Shares held by and registered in the names of
certain Company Stockholders who are members of management of the Company (the
"Rollover Stockholders"), in each case as set forth in Exhibit D shall not be
canceled as provided above, but shall remain outstanding and become shares of
Class A Common Stock (as defined below).
(iv) CONVERSION OF AAC COMMON AND PREFERRED STOCK AND SHARES HELD BY
399. All of (A) the issued and outstanding shares of common stock, par value
$.01 per share, of AAC, (B) the issued and outstanding shares of preferred
stock, par value $.01 per share, of AAC, and (C) 1,100,110 Shares of Company
Common Stock held by and registered in the name of 399, shall be converted into
74,000 shares of Class A common stock, $.01 par value per share, of the
Surviving Corporation ("Class A Common Stock"), 351,000 shares of Class B Common
Stock, $.01 par value per share, of the Surviving Corporation and 165,000 shares
of Series A preferred stock, par value $.01 per share, of the Surviving
Corporation.
11
(h) EMPLOYEE STOCK OPTIONS; WARRANTS.
(i) Unless otherwise provided in the Rollover Agreements, each
option to purchase Shares that is not a Substitute Option (as defined in the
Option Plan) or the Option held by Anchor Bay Entertainment Inc. issued on
September 15, 1997 pursuant to a Modification Agreement, dated September 12,
1997, between the Company and Anchor Bay Entertainment (the "Anchor Bay Option")
and is outstanding immediately prior to the Effective Time (whether or not
vested or exercisable) shall, at the Effective Time, be canceled, and in
exchange therefor, each holder of each such Option shall receive a cash payment
which, prior to deduction for applicable withholding Taxes, is in an amount
equal to the product of (A) the excess, if any, of the Per Share Amount over the
per share exercise price of such Option and (B) the number of shares subject to
the Option (whether or not vested). If the per share exercise price of any such
Option equals or exceeds the Per Share Amount, such Option shall be canceled
without any payment required thereunder. The Option Plan will not survive the
Effective Time.
(ii) The Class A warrants issued by the Company with an exercise
price of $6.75 per share of the Company Common Stock (the "Class A Warrants"),
Class B warrants issued by the Company with an exercise price of $7.50 per share
of the Company Common Stock (the "Class B Warrants") and Class C warrants issued
by the Company with an exercise price of $9.00 per share of the Company Common
Stock (the "Class C Warrants") (the Class A Warrants, Class B Warrants and Class
C Warrants collectively being referred to herein as the "Warrants") the
Substitute Options, and the Anchor Bay Option will have been adjusted in
accordance with their terms, unless any such Warrants have expired in accordance
with their terms, such that, upon exercise and payment of the exercise price,
any holder thereof shall have the right to receive only $5 per share, and in no
event shall have the right to receive any shares of capital stock of the Company
or the Surviving Corporation.
(i) DISSENTING SHARES. Notwithstanding any provisions of the Agreement to
the contrary, Shares of Company Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by a Company
Stockholder who has not voted such Shares in favor of the Merger, who shall have
delivered a written demand for appraisal of such Shares in the manner provided
by the DGCL and who, as of the Effective Time, shall not have effectively
withdrawn or lost such right to appraisal ("Dissenting Shares") shall not be
converted into a right to receive the Merger Consideration. The holders thereof
shall be entitled only to such rights as are granted by Section 262 of the DGCL.
Each holder of Dissenting Shares who becomes entitled to payment for such Shares
pursuant to Section 262 of the DGCL shall receive payment therefor from the
Surviving Corporation in accordance with the DGCL; provided, however, that (i)
if any such holder of Dissenting Shares shall have failed to establish his
entitlement to appraisal rights as provided in Section 262 of the DGCL, (ii) if
any such holder of Dissenting Shares shall have effectively withdrawn his demand
for appraisal of such Shares or lost his right to appraisal and payment for his
Shares under Section 262 of the DGCL or (iii) if neither any holder of
Dissenting Shares nor the Surviving Corporation shall have filed a petition
12
demanding a determination of the value of all Dissenting Shares within the time
provided in Section 262 of the DGCL, such holder shall forfeit the right to
appraisal of such Shares and each such Share shall be treated as if such Share
had been converted, as of the Effective Time, into a right to receive the Merger
Consideration, without interest thereon, from the Surviving Corporation as
provided in this Section 2. The Company shall give AAC prompt notice of any
demands received by the Company for appraisal of Shares, and, until the
Effective Time, AAC shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with the
prior written consent of AAC, make any payment with respect to, or settle or
offer to settle, any such demands.
(j) SURRENDER OF SHARES; STOCK TRANSFER BOOKS.
(i) Prior to the Effective Time, AAC shall designate a bank or trust
company (which bank or trust company shall be reasonably acceptable to the
Company) to act as agent (the "Paying Agent") for the holders of Shares in
connection with the Merger to receive the funds to which holders of Shares shall
become entitled pursuant to Section 2(g)(i) and shall deposit with the Paying
Agent the proceeds of the Debt Financing required in order to consummate the
Transactions. Such funds shall be invested by the Paying Agent as directed by
the Surviving Corporation, provided that such investments shall be in
obligations of or guaranteed by the United States of America or of any agency
thereof and backed by the full faith and credit of the United States of America,
in commercial paper obligations rated A-1 or P-1 or better by ▇▇▇▇▇'▇ Investors
Service, Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposit or banker's acceptances of, repurchase or
reverse repurchase agreements with, or Eurodollar time deposits purchased from,
commercial banks with capital, surplus and undivided profits aggregating in
excess of $1.0 billion (based on the most recent financial statements of such
bank which are then publicly available at the SEC or otherwise).
(ii) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each Person who was, at the Effective Time, a holder
of record of Shares entitled to receive the Merger Consideration pursuant to
Section 2(g)(i), a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing Shares (the "Certificates") shall pass, only upon proper delivery of
the Certificates to the Paying Agent) and instructions for use in effecting the
surrender of the Certificates pursuant to such letter of transmittal. Upon
surrender to the Paying Agent of a Certificate, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be required pursuant to
such instructions, the holder of such Certificate shall be entitled to receive
in exchange therefor the Merger Consideration for each Share formerly evidenced
by such Certificate, and such Certificate shall then be canceled. No interest
shall accrue or be paid on the Merger Consideration payable upon the surrender
of any Certificate for the benefit of the holder of such Certificate. If payment
of the Merger Consideration is to be made to a Person other than the Person in
whose name the surrendered Certificate is registered on the stock transfer books
of the Company, it shall be a condition of payment that the Certificate so
surrendered shall be endorsed properly or otherwise
13
be in proper form for transfer and that the Person requesting such payment shall
have paid all transfer and other Taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such Taxes either have been paid or are not
applicable.
(iii) At any time following the sixth month after the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and thereafter such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them to the
fullest extent permitted by law. Notwithstanding the foregoing, to the fullest
extent permitted by law, neither the Surviving Corporation nor the Paying Agent
shall be liable to any holder of a Share for any Merger Consideration delivered
in respect of such Share to a public official pursuant to any abandoned
property, escheat or other similar law.
(iv) Any portion of the Merger Consideration made available to the
Paying Agent to pay for Shares of Company Common Stock for which appraisal
rights have been perfected shall be paid to the Surviving Corporation upon
demand.
(v) At the Effective Time, the stock transfer books of the Company
shall be closed to the extent permitted by applicable law and thereafter there
shall be no further registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by applicable law.
(vi) The Surviving Corporation shall pay all charges and expenses of
the Paying Agent.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to AAC as follows, except as set forth in the disclosure schedule
attached hereto:
(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of the Company
and its Subsidiaries is a corporation duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation. Each of
the Company and its Subsidiaries has full corporate power and authority to carry
on the businesses in which it is engaged and to own and use the properties owned
and used by it. Each of the Company and its Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes
14
such qualification necessary, except for those jurisdictions where the failure
to be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect.
(b) CAPITALIZATION. (i) The authorized capital stock of the Company
consists of 25,000,000 Shares of Company Common Stock and 1,000,000 shares, $.01
par value per share, of preferred stock (the "Company Preferred Stock"). As of
the date of this Agreement: (A) 13,623,394 Shares of Company Common Stock were
issued and outstanding, (B) no shares of Company Preferred Stock were issued or
outstanding, and (C) no Shares of Company Common Stock were held by the Company
in its treasury. All of the issued and outstanding Shares of Company Common
Stock have been duly authorized and are validly issued, fully paid, and
nonassessable. Except as indicated in Schedule 3(b), there are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights or other contracts or commitments that could require the
Company or any Subsidiary thereof to issue, sell, or otherwise cause to become
outstanding any of its capital stock or the capital stock of any Subsidiary
thereof. There are no outstanding or authorized stock appreciation, phantom
stock, profit participation or similar rights with respect to the Company or any
of its Subsidiaries. All shares of capital stock of Subsidiaries of the Company
are wholly owned directly or indirectly by the Company and have been duly
authorized and are validly issued, fully paid and nonassessable.
(ii) Except as provided in Schedule 3(b), there are no voting trusts
or shareholder agreements to which the Company or any Subsidiary thereof is a
party with respect to the voting of the capital stock of the Company or any
Subsidiary thereof.
(iii) The Class A Warrants and Class B Warrants expire on July 28,
1998 and the Class C Warrants expire on January 11, 2000. Upon consummation of
the Transactions, the Warrants, Substitute Options and Anchor Bay Option shall
have been adjusted so that, in the case of each Warrant (other than any Warrant
that has expired in accordance with its terms) or applicable Option, upon
exercise and payment of the exercise price, any holder thereof shall have the
right to receive only $5 per share, and in no event shall have the right to
receive any shares of capital stock of the Company or the Surviving Corporation.
(c) AUTHORIZATION OF TRANSACTIONS. The Company has, and subject to the
Requisite Stockholder Approval will have, full power and authority to execute
and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery by the Company of this Agreement and the Merger, and the
performance of the Company's obligations hereunder, have been and, subject to
the Requisite Stockholder Approval or Requisite Super-Majority Stockholder
Approval, as the case may be, will be, duly authorized by all requisite
corporate action, and this Agreement has been executed and delivered by the
Company. This Agreement constitutes the valid and legally binding obligation of
the Company, enforceable in accordance with its terms and conditions.
(d) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the Transactions contemplated hereby, will
(i) violate any constitution,
15
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restriction of any Governmental or Regulatory Body or court to which
any of the Company and its Subsidiaries is subject, including, without
limitation, Section 203 of the DGCL, or any provision of the certificate of
incorporation or bylaws of any of the Company and its Subsidiaries or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any Party the right to accelerate, terminate, modify,
or cancel or require any notice under any Contract to which any of the Company
and its Subsidiaries is a party or by which it is bound or to which any of its
assets is subject, except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation or failure to give notice
would not have a Material Adverse Effect or a material adverse effect on the
ability of the Parties to consummate the Transactions. Other than in connection
with the provisions of the HSR Act, the DGCL, the Securities Exchange Act, the
Securities Act, the state securities laws, and as set forth on Schedule 3(d),
none of the Company and its Subsidiaries needs to give any notice to, make any
filing with, or obtain any authorization, consent or approval of any
Governmental or Regulatory Body in order for the Parties to consummate the
Transactions or execute, deliver and perform its obligations under this
Agreement, except where the failure to give notice, to file, or to obtain any
authorization, consent or approval would not have a Material Adverse Effect or a
material adverse effect on the ability of the Parties to consummate the
Transactions.
(e) FILINGS WITH THE SEC. Since July 31, 1994, the Company and its
Subsidiaries have made all filings with the SEC that are required under the
Securities Act and the Securities Exchange Act (collectively, the "SEC
Reports"). Each of the SEC Reports has complied with the applicable provisions
of the Securities Act and the Securities Exchange Act and the rules and
regulations promulgated thereunder in all material respects. None of the SEC
Reports, as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The Company has heretofore furnished or made available to
AAC complete and correct copies of all amendments and modifications that have
not been filed by the Company with the SEC to all agreements, documents and
other instruments that previously had been filed by the Company with the SEC and
are currently in effect.
(f) FINANCIAL STATEMENTS. The Company has delivered to AAC an Annual
Report on Form 10-K of the Company for the fiscal year ended July 31, 1997 (the
"Most Recent Fiscal Year End"). The financial statements included in or
incorporated by reference into such SEC Reports (including the related notes and
schedules) have been prepared in accordance with GAAP and present fairly the
financial condition of the Company and its Subsidiaries as of the indicated
dates and the results of operations of the Company and its Subsidiaries for the
indicated periods.
(g) EVENTS SUBSEQUENT TO MOST RECENT FISCAL YEAR END. Since the Most
Recent Fiscal Year End, there has not been any Material Adverse Effect with
respect to the Company and its Subsidiaries taken as a whole.
16
(h) NO UNDISCLOSED LIABILITIES. Except for (i) liabilities incurred in
connection with the Transactions and (ii) as and to the extent disclosed in the
SEC Reports or as set forth in Schedule 3(h), since July 31, 1997, neither the
Company nor any of its Subsidiaries has incurred any Liabilities of any nature
(whether accrued, absolute, contingent or otherwise) which could reasonably be
expected to be required to be reflected in or reserved against on a consolidated
balance sheet, or in the notes thereto, of the Company and its consolidated
Subsidiaries prepared in accordance with GAAP consistent with past practice.
(i) BROKERS' FEES. Other than fees related to financial advisory services
performed for the Company to be paid to the Persons set forth on Schedule 3(i),
neither the Company nor any of its Subsidiaries has any Liability or obligation
to pay any fees or commissions to any broker, finder or agent with respect to
the Transactions. The Company has furnished to AAC true, correct and complete
copies of engagement letters relating to such services.
(j) ABSENCE OF CERTAIN CHANGES. Except as disclosed in Schedule 3(j),
since July 31, 1997, the Company and its Subsidiaries have conducted their
business in the Ordinary Course of Business and there has not been:
(i) any event, occurrence or development of a state of facts which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company,
or (other than (A) any retirement of, or issuance of Company Common Stock
pursuant to the exercise of Options to acquire Shares of Company Common Stock
granted to employees or directors or other Option holders, or (B) as
contemplated pursuant to this Agreement) any repurchase, redemption or other
acquisition by the Company or any Subsidiary thereof of any outstanding shares
of capital stock or other securities of, or other ownership interests in, the
Company or any Subsidiary thereof;
(iii) any amendment of any material term of any outstanding equity
security of the Company or any Subsidiary thereof;
(iv) any incurrence, assumption or guarantee by the Company or any
Subsidiary thereof of any indebtedness for borrowed money, other than in the
Ordinary Course of Business in amounts and on terms consistent with past
practices;
(v) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary thereof which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect;
(vi) any material change in any method of accounting or accounting
practice by the Company or any Subsidiary thereof which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
17
(vii) any (A) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary thereof, (B)
entering into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any director,
officer or employee of the Company or any Subsidiary thereof, (C) increase in
benefits payable under any existing severance or termination pay policies or
employment agreements or (D) increase in compensation, bonus or other benefits
payable to directors, officers or employees of the Company or any Subsidiary
thereof; in each case, other than in the Ordinary Course of Business; or
(viii)any cancellation of any Permits or Contracts to which the
Company or any Subsidiary thereof is a party, or any written or oral
notification to the Company or any Subsidiary thereof that any party to any such
arrangement intends to cancel or not renew such arrangement beyond its
expiration date as in effect on the date hereof, which cancellation or
notification, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(k) LITIGATION. Except as set forth on Schedule 3(k), there is no action,
suit or proceeding pending against, or, to the Knowledge of the Company or any
Subsidiary thereof, any action, suit, investigation or proceeding threatened
against or affecting, the Company or any Subsidiary thereof or any of their
respective properties before any Governmental or Regulatory Body, (i) which
could reasonably be expected to have a Material Adverse Effect or (ii) which in
any manner challenges or seeks to prevent, enjoin, alter or materially delay the
Merger or any of the other Transactions and has a reasonable likelihood of
success.
(l) TAXES. (i) The Company and each of its Subsidiaries have duly and
timely filed (taking into account any extension of time within which to file)
all material Tax Returns required to be filed by any of them and all such filed
Tax Returns are complete and accurate in all material respects; (ii) except as
set forth on Schedule 3(l), the Company and each of its Subsidiaries have paid
all Taxes required to be paid by it including Taxes that the Company and its
Subsidiaries are obligated to withhold from amounts owing to any employee,
creditor or Third Party, except with respect to matters contested in good faith
or for such amounts that, individually or in aggregate, could not reasonably be
expected to have a Material Adverse Effect; (iii) except as set forth on
Schedule 3(l), there are no pending or, to the Knowledge of the Company,
threatened in writing audits, examinations, investigations or other proceedings
in respect of Taxes or Tax matters relating to the Company or any of its
Subsidiaries which, if determined adversely to the Company or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse Effect;
(iv) there are no deficiencies or claims for any Taxes that have been proposed,
asserted or assessed against the Company or any of its Subsidiaries which, if
such deficiencies or claims were finally resolved against the Company or any of
its Subsidiaries, could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; (v) there are no material Liens
for Taxes upon the assets of the Company or any of its Subsidiaries, other than
Liens for current Taxes not yet due and payable and Liens for Taxes that are
being contested in
18
good faith by appropriate proceedings; (vi) none of the Company or any of its
Subsidiaries has made an election under Section 341(f) of the Code; (vii) except
as set forth in Schedule 3(l), no extension of the statute of limitations on the
assessment of any Taxes has been granted by the Company or any of its
Subsidiaries and is currently in effect; (viii) except as set forth in Schedule
3(l), none of the Company or its Subsidiaries is a party to any agreement or
arrangement that could reasonably be expected to result, separately or in the
aggregate, in the actual or deemed payment by the Company or a Subsidiary of any
"excess parachute payments" within the meaning of Section 280 G or 162(m) of the
Code; (ix) none of the Company or its Subsidiaries has been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code;
(x) all Taxes required to be withheld, collected or deposited by or with respect
to the Company and its Subsidiaries have been timely withheld, collected or
deposited, as the case may be, and, to the extent required, have been paid to
the relevant taxing authority, except, in each case, to the extent that failing
to so withhold, collect, deposit or pay would not have a Material Adverse
Effect; (xi) none of the Company or its Subsidiaries has issued or assumed (A)
any obligations described in Section 279(b) of the Code, (B) any applicable high
yield discount obligations, as defined in Section 163(i) of the Code, or (C) any
registration-required obligations, within the meaning of Section 163(f)(2) of
the Code, that are not in registered form; (xii) there are no requests for
information currently outstanding that could affect the Taxes of the Company and
its Subsidiaries; and (xiii) except as set forth on Schedule 3(l), there are no
proposed reassessments of any property owned by the Company or any of its
Subsidiaries or other proposals that could increase the amount of any Tax to
which the Company, its Subsidiaries or any such Person would be subject.
(m) COMPLIANCE WITH LAWS. Except as set forth on Schedule 3(m), neither
the Company nor any Subsidiary thereof is in violation of, or has since July 31,
1997 violated, and, to the Knowledge of the Company or any Subsidiary thereof,
none of them is under investigation with respect to or has been threatened to be
charged with or given notice of any violation by any Governmental or Regulatory
Body of any applicable law, rule, regulation, judgment, injunction, order or
decree, except for violations that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(n) PERMITS. Except as set forth on Schedule 3(n) and except as could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (i) the Permits are valid and in full force and effect, (ii)
neither the Company nor any Subsidiary thereof is in default under, and no
condition exists that with notice or lapse of time or both would constitute a
default under, the Permits and (iii) none of the Permits will be terminated or
impaired or become terminable, in whole or in part, as a result of the
Transactions. The Company and each of its Subsidiaries have all Permits
necessary to carry on its business as currently conducted or as proposed to be
conducted, except where the failure to have any Permit would not have a Material
Adverse Effect.
19
(o) CONTRACTS. Schedule 3(o) sets forth a list of all material Contracts
to which the Company or any of its Subsidiaries is a party or by or to which it
or its assets are bound or subject, including, without limitation, (i) Contracts
relating to the borrowing of money; (ii) Contracts with any current Affiliate or
current or former officer or director of the Company or any Subsidiary thereof;
(iii) joint venture agreements between the Company or any of its Subsidiaries
and an unaffiliated third party; (iv) any Contracts providing for payments to or
from the Company or any Subsidiary thereof of $100,000 or more per year; (v) any
license agreements, distribution agreements, franchise agreements or agreements
in respect of similar rights granted to or held by the Company or any of its
Subsidiaries; (vi) any Contract that materially limits the freedom of the
Company or any Subsidiary thereof to compete in any line of business or with any
Person or in any geographical area or which would so materially limit the
freedom of the Company or any Subsidiary thereof so to compete after the
Effective Time; (vii) any other Contract not made in the Ordinary Course of
Business which Contract is material to the Company and its Subsidiaries taken as
a whole; (viii) any Tax sharing agreement or other arrangement or (ix) any
Lease. The Company has heretofore made available to AAC true and complete copies
of each of the Contracts set forth in Schedule 3(o). Except for Contracts that
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, all Contracts disclosed in Schedule 3(o) are valid and
binding Contracts of the Company or a Subsidiary thereof, are in full force and
effect (except for those that have terminated or will terminate by their own
terms), and neither the Company, any Subsidiary thereof nor, to the Knowledge of
the Company or any Subsidiary thereof, any other party thereto, is in default in
any material respect under the terms of any such Contract.
(p) INTELLECTUAL PROPERTY RIGHTS. The Company or any Subsidiary thereof
has interests in or uses only the Intellectual Property disclosed in Schedule
3(p) in connection with the conduct of the business as currently conducted or as
proposed to be conducted. Except as set forth on Schedule 3(p), the Company or
any Subsidiary thereof either owns or has a valid and binding license to use
each item of Intellectual Property set forth on Schedule 3(p). No other
Intellectual Property is used or necessary in the conduct of the business as
currently conducted or as proposed to be conducted. Except as disclosed in
Schedule 3(p), (i) the Company or any Subsidiary thereof has the exclusive right
to use the Intellectual Property disclosed in Schedule 3(p), (ii) all
registrations with and applications to any Governmental or Regulatory Body in
respect of such Intellectual Property are valid and in full force and effect and
are not subject to the payment of any Taxes or maintenance fees or the taking of
any other actions by the Company or any Subsidiary thereof to maintain their
validity or effectiveness, (iii) there are no restrictions on the direct or
indirect transfer of any license, or any interest therein, held by the Company
or any Subsidiary thereof in respect of such Intellectual Property, (iv) the
Company or any Subsidiary thereof has delivered to AAC prior to the execution of
this Agreement documentation with respect to any invention, process, design,
computer program or other know-how or trade secret included in such Intellectual
Property, which documentation is accurate in all material respects and
reasonably sufficient in detail and content to identify and explain such
invention, process, design, computer program or other know-how or trade secret
and to facilitate its full and proper use without reliance on the special
knowledge or memory of any Person, (v) the Company
20
or any Subsidiary thereof has taken reasonable security measures to protect the
secrecy, confidentiality and value of its trade secrets in respect of the
business, (vi) the Company or any Subsidiary thereof is not, nor has it received
any notice that it is, in default (or with the giving of notice or lapse of time
or both, would be in default) under any license to use such Intellectual
Property and (vii) the Company or any Subsidiary thereof does not have any
Knowledge that such Intellectual Property is being infringed by any other
Person. Except as set forth on Schedule 3(p), the Company or any Subsidiary
thereof has not received notice that the Company or any Subsidiary thereof is
infringing any Intellectual Property of any other Person in connection with the
conduct of the business as currently conducted or as proposed to be conducted;
no claim is pending or, to the Knowledge of the Company or any Subsidiary
thereof, has been made to such effect that has not been resolved; and, to the
Knowledge of the Company or any Subsidiary thereof, the Company or any
Subsidiary thereof is not infringing any Intellectual Property rights of any
other Person in connection with the conduct of the business as currently
conducted or as proposed to be conducted.
(q) BOARD RECOMMENDATION. The Board of Directors of the Company, at a
meeting duly called and held and acting on the unanimous recommendation of the
Board of Directors of the Company, has (i) determined that this Agreement and
the Transactions, including the Merger, are fair to, and in the best interests
of, the Company Stockholders, (ii) approved this Agreement and the Transactions,
including the Merger, which approval satisfies in full the requirements of the
DGCL including, without limitation, Section 203 thereof with respect to the
Transactions, and (iii) resolved to recommend approval and adoption of this
Agreement and the Merger by the Company Stockholders. ▇▇▇▇▇▇ ▇▇▇▇ LLC has
delivered to the Company's Board of Directors its opinion that the consideration
to be paid in the Merger is fair to the holders of Shares of Company Common
Stock from a financial point of view.
(r) ERISA. All Benefit Plans and Multiemployer Plans are listed in
Schedule 3(r), and copies of all documentation relating to such Benefit Plans
have been delivered to AAC (including copies of written Benefit Plans, written
descriptions of oral Benefit Plans, summary plan descriptions, trust agreements,
the three most recent annual returns, employee communications, and IRS
determination letters). Except as disclosed in Schedule 3(r):
(i) each Benefit Plan has at all times been maintained and
administered in all material respects in accordance with its terms and with the
requirements of all applicable law, including ERISA and the Code, and each
Benefit Plan intended to qualify under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be qualified under Section 401(a)
of the Code and nothing has occurred since the date of any such determination
which would adversely affect such qualification.
(ii) no Benefit Plan is a "defined benefit plan" within the meaning
of Section 414(j) of the Code, other than a Benefit Plan described in Section
401(a)(1) of ERISA;
21
(iii) no direct, contingent or secondary Liability has been incurred
or is expected to be incurred by the Company or any Subsidiary under Title IV of
ERISA with respect to any Benefit Plan or Multiemployer Plan, or with respect to
any other Plan presently or heretofore maintained or contributed to during the
five (5) year period prior to the Closing Date by any ERISA Affiliate;
(iv) with respect to each Multiemployer Plan, (A) no withdrawal
liability (within the meaning of Section 4201(b) of ERISA) has been incurred by
the Company or any ERISA Affiliate, and the Company has no reason to believe
that any such withdrawal liability will be incurred, prior to the Closing Date,
(B) no such Multiemployer Plan is in "reorganization" (within the meaning of
Section 4241 of ERISA), (C) no notice has been received that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of an excise tax, or that the Multiemployer Plan is or may become
"insolvent" (within the meaning of Section 4241 of ERISA), (D) the Company or
any Subsidiary thereof has no Knowledge that proceedings have been instituted by
the Pension Benefit Guaranty Corporation against the Multiemployer Plan, (E)
neither the Company or any Subsidiary thereof has sold assets in a transaction
intended to satisfy the requirements of Section 4204 of ERISA, and (F) except as
disclosed in Schedule 3(r), if the Company or any ERISA Affiliate were to have a
complete or partial withdrawal under Section 4203 of ERISA as of the Closing, no
withdrawal liability would exist on the part of the Company or any ERISA
Affiliate;
(v) neither the Company nor any ERISA Affiliate has incurred any
Liability for any tax imposed under Sections 4971 through 4980B of the Code or
civil Liability under Section 502(i) or (l) of ERISA;
(vi) Except as set forth in Schedule 3(r), no benefit under any
Benefit Plan, including, without limitation, any severance or parachute payment
plan or agreement, will be established or become accelerated, vested or payable
by reason of any Transaction contemplated under this Agreement;
(vii) no tax has been incurred under Section 511 of the Code with
respect to any Benefit Plan (or trust or other funding vehicle pursuant
thereto);
(viii)no Benefit Plan provides health or death benefit coverage for
claims incurred beyond the termination of an employee's employment, except as
required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the
Code or any State laws requiring continuation of benefits coverage following
termination of employment;
(ix) no suit, actions or other litigation (excluding claims for
benefits incurred in the ordinary course of Plan activities) have been brought
or, to the Knowledge of the Company, threatened against or with respect to any
Benefit Plan and there are no facts or circumstances known to the Company that
could reasonably be expected to give rise to any such suit, action or other
litigation; and
22
(x) all contributions to Benefit Plans and Multiemployer Plans that
were required to be made under such Plans have been made and each of the Company
and each Subsidiary has performed all material obligations required to be
performed under all such Plans.
(s) LABOR AND EMPLOYMENT MATTERS.
(i) Except as set forth on Schedule 3(s), (A) no employee of the
Company or any Subsidiary thereof is represented by a labor union, no labor
union has been certified or recognized as a representative of any such employee,
and neither the Company nor any Subsidiary thereof has any obligation under any
collective bargaining agreement or other agreement with any labor union or any
obligation to recognize or deal with any labor union, and there are no such
Contracts or other agreements pertaining to or which determine the terms or
conditions of employment of any employee of the Company or any Subsidiary
thereof; (B) there are no pending or threatened representation campaigns,
elections or proceedings; (C) the Company has no Knowledge of any strikes,
slowdowns or work stoppages of any kind, or threats thereof, and no such
activities occurred during the 24-month period preceding the date hereof; (D)
neither the Company nor any Subsidiary thereof has engaged in, admitted
committing or been held to have committed any unfair labor practice; and (E)
there are no controversies or grievances between the Company or any Subsidiary
thereof and any of its employees or representatives thereof.
(ii) Schedule 3(s) sets forth all Contracts under which the Company
or any Subsidiary thereof has any obligation to provide compensation or
remuneration of any kind (other than obligations to make current wage or salary
payments that are terminable at will without notice) to or on behalf of any
employee or consultant.
(iii) Except as set forth on Schedule 3(s), the Company and each of
its Subsidiaries have at all times complied in all material respects, and are in
material compliance with, all applicable laws, rules and regulations respecting
employment, wages, hours, compensation, benefits, and payment and withholding of
taxes in connection with employment.
(iv) Except as could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, the Company and
each of its Subsidiaries have at all times since July 31, 1994 complied with,
and are in compliance with, all applicable laws, rules and regulations
respecting occupational health and safety, whether now existing or subsequently
amended or enacted, including, without limitation, the Occupational Safety &
Health Act of 1970, 29 U.S.C. Section 651 et seq. and the state analogies
thereto, all as amended or superseded from time to time, and any common law
doctrine relating to worker health and safety.
(t) REAL ESTATE.
(i) Neither the Company nor any of its Subsidiaries own any real
property.
23
(ii) Except as set forth on Schedule 3(t), neither the Company nor
any Subsidiary thereof has assigned, pledged or otherwise transferred or has
sublet (as sublessor) the premises demised by any Lease. The Company or a
Subsidiary thereof is in possession of the premises demised by the Leases.
Except as set forth on Schedule 3(t), no tenant or landlord under any Lease has
exercised any option or right to (A) cancel or terminate such Lease or shorten
the term thereof, (B) lease additional premises, (C) reduce or relocate the
premises demised by such Lease, or (D) purchase any property. All brokerage
commissions payable by the Company or any Subsidiary thereof with respect to any
Lease have been fully paid.
(u) ENVIRONMENTAL MATTERS. To the Knowledge of the Company or any
Subsidiary thereof, the Company or any Subsidiary thereof has obtained and holds
all necessary Environmental Permits. To the Knowledge of the Company or any
Subsidiary thereof, the Company or any Subsidiary thereof is in material
compliance with all terms, conditions and provisions of all applicable
Environmental Permits and Environmental Laws. There are no past, pending or, to
the Knowledge of the Company or any Subsidiary thereof, threatened material
Environmental Claims against the Company or any Subsidiary thereof, and the
Company or any Subsidiary thereof is not aware of any facts or circumstances
which could reasonably be expected to form the basis for any such material
Environmental Claim against the Company or any Subsidiary thereof. To the
Knowledge of the Company or any Subsidiary thereof, except as set forth on
Schedule 3(u), no Releases of Hazardous Materials have occurred at, from, in,
to, on or under any Site and no Hazardous Materials are present in, on, about or
migrating to or from any Site that constitutes a violation of any Environmental
Law. Except as set forth on Schedule 3(u), neither the Company or any Subsidiary
thereof, any predecessor of the Company or any Subsidiary thereof, nor any
entity previously owned by the Company or any Subsidiary thereof, has
transported or arranged for the treatment, storage, handling, disposal, or
transportation of any Hazardous Material to any off-Site location which
constitutes a violation of any Environmental Law. To the Knowledge of the
Company, no Site is a current or proposed Environmental Cleanup Site. There are
no Liens arising under or pursuant to any Environmental Law on any Site and
there are no facts, circumstances or conditions that could reasonably be
expected to restrict, encumber or result in the imposition of special conditions
under any Environmental Law with respect to the ownership, occupancy,
development, use or transferability of any Site. To the Knowledge of the Company
or any Subsidiary thereof, except as set forth on Schedule 3(u), no Site
contains any underground storage tanks, active or abandoned, polychlorinated
biphenyl- containing equipment or asbestos-containing material. There have been
no environmental investigations, studies, audits, tests, reviews or other
analyses conducted by, on behalf of, or which are in the possession of the
Company or any Subsidiary thereof with respect to any Site which have not been
delivered to AAC or any of its representatives prior to execution of this
Agreement.
(v) OTHER INTERESTS. Except as set forth in Schedule 3(v), the Company or
any Subsidiary thereof does not own, directly or indirectly, any interest or
investment (whether
24
equity or debt) in any corporation, partnership, joint venture, business, trust
or entity (other than investments in short-term investment securities).
(w) CERTAIN BUSINESS PRACTICES. Neither the Company nor any of its
Subsidiaries nor any of their respective directors, officers or employees or, to
the Knowledge of the Company or any Subsidiary thereof, agents or
representatives (in their capacity as directors, officers, agents,
representatives or employees) has: (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) directly or indirectly, paid or delivered any fee,
commission or other sum of money or item of property, however characterized, to
any finder, agent, or other Person acting on behalf of or under the auspices of
a governmental official or Governmental or Regulatory Body, in the United States
or any other country, which is in any manner related to the business or
operations of the Company or any of its Subsidiaries, that was illegal under any
federal, state or local laws of the United States or any other country having
jurisdiction; or (iii) made any payment to any customer or supplier of the
Company or any of its Subsidiaries or any officer, director, partner, employee
or agent of any such customer or supplier for the unlawful sharing of fees or to
any such customer or supplier or any such officer, director, partner, employee
or agent for the unlawful rebating of charges, or engaged in any other unlawful
reciprocal practice, or made any other unlawful payment or given any other
unlawful consideration to any such customer or supplier or any such officer,
director, partner, employee or agent, in respect of the business of the Company
and its Subsidiaries.
(x) INSURANCE. Since July 31, 1992, the Company and its Subsidiaries have
obtained and maintained in full force and effect insurance with responsible and
reputable insurance companies or associations in such amounts, on such terms,
with such deductibles and covering such risks, including fire and other risks
insured against by extended coverage, as is customarily carried by reasonably
prudent Persons conducting businesses or owning assets similar to those of the
Company and its Subsidiaries, and each has maintained in full force and effect
liability insurance against claims for personal injury or death or property
damage occurring in connection with the activities of the Company and its
Subsidiaries or any properties owned, occupied or controlled by the Company or
any of its Subsidiaries in such amount as is customarily carried by reasonably
prudent Persons conducting businesses or owning assets similar to those of the
Company and its Subsidiaries. There is no material default with respect to any
provision contained in any such policy or binder, nor has the Company or any of
its Subsidiaries failed to give any material notice or to present any material
claim under any such policy or binders in due and timely fashion. There are no
billed but unpaid premiums past due under any such policy or binder, the failure
of which to be paid would result in the cancellation of such policy or binder.
Except as otherwise set forth in the SEC Reports or in Schedule 3(x), (i) there
are no outstanding claims in excess of normal retentions that are not covered
under any such policies or binders and, to the Knowledge of the Company, there
has not occurred any event that might reasonably form the basis of any claim in
excess of normal retentions that is not covered against or relating to the
Company or any of its Subsidiaries that is not covered by any of such policies
and binders; (ii) no notice of cancellation or non-renewal of any such policies
or binders has been received;
25
and (iii) except as set forth in Schedule 3(x), there are no performance bonds
outstanding with respect to the Company or any of its Subsidiaries.
(y) DISCLOSURE DOCUMENTS. The Definitive Proxy Materials to be filed with
the SEC and sent to the Company Stockholders in connection with the special
meeting of the Company Stockholders (the "Special Meeting"), as of the date
first mailed to the Company Stockholders and at the time of the Special Meeting,
and the Rule 13e-3 Transaction Statement on Schedule 13E-3 (together with all
amendments and supplements thereto, the "Schedule 13E-3") at the time filed with
the SEC, or at any time thereafter when the information therein is required to
be updated pursuant to applicable law, will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Joint Disclosure
Documents will, when filed by the Company with the SEC, comply as to form in all
material respects with the applicable provisions of the Securities Exchange Act
and the SEC rules and regulations promulgated thereunder. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to the
statements made in any of the foregoing documents based on written information
supplied by or on behalf of AAC or any of its respective Affiliates specifically
for inclusion therein.
(z) CUSTOMERS AND SUPPLIERS. Since July 31, 1997, neither the Company nor
any of its Subsidiaries has received written notice that any customer or
supplier intends to cancel, terminate or otherwise modify any relationship with
the Company or any of its Subsidiaries, which constitutes a Material Adverse
Effect.
4. REPRESENTATIONS AND WARRANTIES OF AAC. AAC represents and warrants to
the Company, except as set forth in the disclosure schedule attached hereto:
(a) ORGANIZATION. AAC is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its incorporation.
AAC is duly authorized to conduct business and is in good standing under the
laws of each jurisdiction where such qualification is required, except where the
lack of such qualification would not have a Material Adverse Effect or a
material adverse effect on the ability of the Parties to consummate the
Transactions. AAC has full corporate power and authority to carry on the
businesses in which it is engaged and to own and use the properties owned and
used by it. AAC was formed solely for the purpose of engaging in the
Transactions, has engaged in no other business activities and has conducted its
operations only as contemplated hereby. AAC has not engaged, nor prior to the
Effective Time will it engage, in any business activities other than the
business activities contemplated hereby (including business activities
contemplated by or reasonably incident to the Debt Financing). AAC has conducted
and, prior to the Effective Time, will conduct its operations only as
contemplated hereby (including activities contemplated by or reasonably incident
to the Debt Financing). AAC has no Subsidiaries and, during the period
commencing with the date hereof and ending at the Effective Time, AAC will have
no Subsidiaries. AAC
26
does not have, nor at the Effective Time will it have, any Liabilities or
material obligations not expressly contemplated pursuant to this Agreement or
the Transactions.
(b) DEBT FINANCING.
(i) AAC has provided to the Company true and complete copies of a
letter, dated March 31, 1998, from ▇.▇. ▇▇▇▇▇▇ Securities Inc. pursuant to which
it has indicated that it is highly confident of its ability to underwrite in the
public markets senior notes of the Company in an aggregate amount of at least
$100 million to provide, together with the equity financing referred to in
Section 4(b)(ii) and the Revolving Credit Facility, all of the financing
required in order to consummate the Transactions and to fund what AAC reasonably
believes to be the working capital needs of the Company and its Subsidiaries
following the Closing. The financing to be provided pursuant to the foregoing
arrangements is hereinafter referred to as the "Debt Financing." As of the date
hereof, the highly confident letter relating to the Debt Financing has not been
withdrawn and is in full force and effect.
(ii) AAC has delivered to the Company a true and complete copy of a
commitment letter, dated as of April 21, 1998, from 399 pursuant to which 399
(together with its Affiliates) will have available $13.12445 million, subject to
the terms and conditions set forth therein, for purposes of consummating the
Transactions (the "Equity Financing Commitment"). As of the date hereof, such
commitment letter from 399 has not been withdrawn and is in full force and
effect.
(c) AUTHORIZATION OF THE TRANSACTIONS. AAC has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery by AAC, and the performance of its obligations hereunder,
have been duly authorized by all requisite corporate action, and this Agreement
has been duly executed and delivered by AAC. This Agreement constitutes the
valid and legally binding obligation of AAC, enforceable in accordance with its
terms and conditions.
(d) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the Transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any Governmental or
Regulatory Body to which AAC is subject or any provision of the certificate of
incorporation or bylaws of AAC or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any Party
the right to accelerate, terminate, modify or cancel, or require any notice or
consent under any Contract or other arrangement to which AAC is a party or by
which it is bound or to which any of its assets is subject, except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation or failure to give notice would not have a Material Adverse Effect
or a material adverse effect on the ability of the Parties to consummate the
Transactions. Other than in connection with the provisions of the HSR Act, the
DGCL, the Securities Exchange Act, the Securities Act and the state securities
laws, AAC is not required to give any notice to, make any
27
filing with, or obtain any authorization, consent or approval of any
Governmental or Regulatory Body in order for the Parties to consummate the
Transactions contemplated by this Agreement, except where the failure to give
notice, to file, or to obtain any authorization, consent or approval would not
have a material adverse effect on the ability of the Parties to consummate the
Transactions.
(e) BROKERS' FEES. AAC has no Liability or other obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
Transactions contemplated by this Agreement for which any of the Company or its
Subsidiaries thereof could become liable.
(f) LITIGATION. There is no action, suit or proceeding pending against,
or, to the knowledge of AAC, any action, suit, investigation or proceeding
threatened against or affecting, AAC or any of their respective properties
before any Governmental or Regulatory Body (i) which could reasonably be
expected to have a Material Adverse Effect or (ii) which in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the Merger or
any of the other Transactions and has a reasonable likelihood of success.
(g) DISCLOSURE DOCUMENTS. The information supplied by AAC for inclusion in
the Definitive Proxy Materials to be filed with the SEC and sent to the Company
Stockholders in connection with the Special Meeting, as of the date first mailed
to the Company Stockholders and at the time of the Special Meeting, and the
Schedule 13E-3 at the time filed with the SEC, or at any time thereafter when
the information therein is required to be updated pursuant to applicable law,
will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
5. COVENANTS. The Parties hereto hereby covenant as follows:
(a) FURTHER ASSURANCES. Each of the Company and AAC will use its
reasonable best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the Transactions
contemplated by this Agreement; provided, however, that no director or officer
of the Company shall be required either to violate any requirement imposed by
law in connection therewith or to take any action such director or officer
deems, after consultation with outside counsel, not consistent with such
director's or officer's fiduciary duty.
(b) NOTICES AND CONSENTS. The Company will, and will cause each of its
Subsidiaries to, give any notices to third parties, and will, and will cause
each of its Subsidiaries to, use its reasonable best efforts to obtain any
required third party consents, that AAC reasonably may request.
(c) REGULATORY MATTERS AND APPROVALS. Each of AAC and the Company will,
and will cause any of its respective Subsidiaries to, give any notices to, make
any filings with, and use its
28
reasonable best efforts to obtain any necessary authorizations, consents and
approvals of any Governmental or Regulatory Body. Without limiting the
generality of the foregoing, each of AAC and the Company will, and will cause
any of its respective Subsidiaries to, (i) file any notification and report
forms and related material that it may be required to file with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice under the HSR Act, (ii) use its best efforts to obtain an early
termination of the applicable waiting period and (iii) make any further filings
pursuant thereto that may be necessary, proper, or advisable.
(d) SECURITIES ACT, SECURITIES EXCHANGE ACT, AND STATE SECURITIES LAWS.
(i) The Company will prepare and file with the SEC preliminary proxy
materials ("Preliminary Proxy Materials") under the Securities Exchange Act
relating to the Merger. The Company will use its best efforts to respond to the
comments of the SEC thereon and will make any further filings (including
amendments and supplements) in connection therewith that may be necessary,
proper or advisable. AAC will provide the Company with information and
assistance in connection with the foregoing filings that the Company may
reasonably request.
(ii) The Company and AAC shall each use its reasonable best efforts
to take, or cause to be taken, (A) all actions necessary, proper or advisable by
such Party with respect to the prompt preparation and filing of the Joint
Disclosure Documents with the SEC, (B) such actions as may be required to have
the Joint Disclosure Documents declared effective under the Securities Act as
promptly as practicable, and (C) such actions as may be required to be taken
under state securities or applicable Blue Sky laws in connection with the
issuance of the securities contemplated hereby.
(iii) As soon as practicable after the date of announcement of the
execution of this Agreement, the Company shall file with the SEC a Schedule
13E-3. AAC and the Company each agrees to correct any information provided by it
for use in the Schedule 13E-3, if and to the extent that it shall have become
false and misleading in any material respect.
(e) DGCL; SPECIAL MEETING. The Company will (i) call the Special Meeting
as soon as reasonably practicable in order that such stockholders may consider
and vote upon the adoption of this Agreement and the approval of the Merger in
accordance with the DGCL and (ii) mail the Joint Disclosure Documents to the
Company Stockholders as soon as reasonably practicable, which Joint Disclosure
Documents will contain the affirmative recommendation of the Board of Directors
of the Company in favor of the adoption of this Agreement and the approval of
the Merger; provided, however, that any provision of this Agreement to the
contrary notwithstanding, the Company will not have any obligation to call the
Special Meeting or mail the Joint Disclosure Documents to the Company
Stockholders if such action would require any director or officer of the Company
either to violate any requirement imposed by law in connection therewith or,
after consultation with and advice from its outside counsel, any director
29
or officer of the Company determines in good faith that to take such action
would be inconsistent with such director's or officer's fiduciary duty.
(f) ACCOUNTING TREATMENT. Each Party hereto shall cooperate with the other
Party hereto in connection with the recording of the Merger as a
recapitalization for financial reporting purposes, including, without
limitation, providing appropriate disclosure with regard to such recording in
all filings with the SEC. In furtherance of the foregoing, the Company shall
provide AAC with a reasonable time period to review any description of the
Transactions filed with the SEC.
(g) DEBT FINANCING.
(i) AAC shall use its reasonable best efforts to assist the Company
in obtaining the Debt Financing or other alternative financing on substantially
comparable or more favorable terms. The Company shall use its reasonable best
efforts to cooperate with AAC in the obtaining of the Debt Financing, including,
without limitation, by participating in road shows and meeting with, and
providing information to, potential sources of financing identified by AAC.
(ii) The Company shall use its reasonable best efforts to obtain a
revolving credit facility commitment from a lending institution designated by
AAC in the amount of approximately $25 million ("Revolving Credit Facility").
(h) OPERATION OF THE COMPANY'S BUSINESS. The Company will not (and will
not cause or permit any of its Subsidiaries to) engage in any practice, take any
action or enter into any transaction outside the Ordinary Course of Business,
including, without limitation, the following:
(i) authorizing or effecting any change in its certificate of
incorporation or bylaws (other than as contemplated by this Agreement);
(ii) granting any options, warrants, or other rights to purchase or
obtain any of its capital stock or issuing, selling or otherwise disposing of
any of its capital stock (except upon the conversion or exercise of Options and
other rights and obligations currently outstanding);
(iii) declaring, setting aside, or paying any dividend or
distribution with respect to its capital stock (whether in cash or in kind), or
redeeming, repurchasing or otherwise acquiring any of its capital stock, in
either case, outside the Ordinary Course of Business;
(iv) except as set forth on Schedule 5(h), issuing any note, bond,
or other debt security or creating, incurring, assuming or guaranteeing any
indebtedness for borrowed money or capitalized lease obligation (except for
inter-company loans or advances from the Company to, or Guaranties on behalf of,
any one or more of its Subsidiaries), outside the Ordinary Course of Business;
30
(v) except as set forth on Schedule 5(h), imposing any Lien upon any
of its assets outside the Ordinary Course of Business;
(vi) other than pursuant to the Transactions, making any material
change in employment terms for any of its directors, officers and employees
outside the Ordinary Course of Business;
(vii) except pursuant to existing agreements or arrangements as of
the date hereof, making any capital investment in, making any loan to, or
acquiring the securities or assets of any other Person outside the Ordinary
Course of Business;
(viii)adopting or amending any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee Benefit Plan, agreement, trust, Plan, fund
or other arrangement for the benefit and welfare of any director, officer or
employee, except for normal increases in the Ordinary Course of Business and
that, in the aggregate, do not result in a material increase in benefits or
compensation expense to the Company or any Subsidiary thereof;
(ix) revaluing in any material respect any significant portion of
its assets, including, without limitation, writing down the value of inventory
in any material amount or write-off of notes or accounts receivable in any
material amount;
(x) paying, discharging or satisfying any material Liabilities
(whether matured, unmatured, absolute, accrued, asserted or unassented,
contingent or otherwise) other than the payment, discharge or satisfaction in
the Ordinary Course of Business of Liabilities reflected or reserved against in
the consolidated financial statements of the Company and set forth in the SEC
Reports or incurred in the Ordinary Course of Business;
(xi) making any Tax election with respect to or settling or
compromising any material income Tax Liability;
(xii) taking any action other than in the Ordinary Course of
Business with respect to accounting policies or procedures; and
(xiii)committing to any of the foregoing.
(i) FULL ACCESS. Subject to the terms and conditions of the
Confidentiality Agreement, the Company will, and will cause each of its
Subsidiaries to, permit representatives of AAC and its Affiliates to have full
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of the Company and its Subsidiaries, to all premises,
properties, personnel, books, records (including Tax records), contracts and
documents of or pertaining to each of the Company and its Subsidiaries.
31
(j) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice to
the other Party of any event which could reasonably be expected to give rise to
a Material Adverse Effect or could reasonably be expected to cause a breach of
any of its own respective representations, warranties, covenants or other
agreement contained herein. No disclosure by any Party pursuant to this Section
5(j), however, shall be deemed to amend or supplement any Schedule, or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(k) NO SOLICITATION.
(i) The Company shall not, and shall not permit any of its
Subsidiaries to (whether directly or indirectly through advisors, agents or
other intermediaries), and the Company shall not, and shall not permit any of
its Subsidiaries to, authorize or knowingly permit any of its or their officers,
directors, agents, representatives, advisors or Subsidiaries (all of the
foregoing parties being referred to as the "Restricted Parties") to solicit,
initiate or knowingly encourage the submission of inquiries, proposals or offers
from any Third Party relating to (A) any acquisition of 5% or more of the
consolidated assets of the Company and its Subsidiaries or of over 5% of any
class of equity securities of the Company or any of its Subsidiaries, (B) any
tender offer (including a self tender offer) or exchange offer that if
consummated would result in any Third Party beneficially owning 5% or more of
any class of equity securities of the Company or any of its Subsidiaries, (C)
any merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
Subsidiaries whose assets, individually or in the aggregate, constitute more
than 5% of the consolidated assets of the Company, other than the Transactions
or (D) any other transaction the consummation of which would, or could
reasonably be expected to, impede, interfere with, prevent or materially delay
the Merger or which would, or could reasonably be expected to, materially dilute
the benefits to AAC of the Transactions (collectively, the "Acquisition
Proposals" and which, if consummated, will be an "Acquisition Transaction") or
enter into or participate in any discussions (except as may be necessary to
inform a Third Party of the provisions of this Section 5(k)) or negotiations
regarding any of the foregoing, or furnish to any Third Party any information
with respect to the business, properties or assets of the Company in connection
with the foregoing, or otherwise cooperate in any way with, or knowingly assist
or participate in, facilitate or encourage, any effort or attempt by any Third
Party to do or seek any of the foregoing; provided, however, that the provisions
of this Section 5(k) shall not limit or prohibit any of the Restricted Parties
from (x) engaging in discussions or negotiations with such a Third Party who has
made a Superior Acquisition Proposal, but only if the Board of Directors of the
Company, after consultation with and advice from its outside counsel, determines
in good faith that, in the exercise of its fiduciary responsibilities, such
discussions or negotiations should be commenced or such information should be
furnished or such facilitation, cooperation, encouragement or participation
undertaken; (y) furnishing information pursuant to an appropriate and customary
confidentiality letter (which shall not be substantially less restrictive than
the Confidentiality Agreement) concerning the Company or any Subsidiary thereof
and its businesses, properties or assets to a Third Party who has made a
Superior Acquisition Proposal
32
as to which a prior determination of the Board of Directors of the Company as
contemplated under clause (x) above has been made; provided, further, that (1)
the Board of Directors of the Company shall not, and shall not authorize any
officers or representatives to, take any of the foregoing actions until notice
to AAC of the Company's intent to take such action shall have been given; and
(2) if the Board of Directors of the Company receives a Superior Acquisition
Proposal, to the extent it may do so without breaching its fiduciary duties as
determined in good faith after consultation with its outside counsel, and
without violating any of the conditions of such Superior Acquisition Proposal,
then the Company shall promptly inform AAC of the material terms and conditions
of such proposal and the identity of the Third Party making it; or (z) taking a
position on a tender offer by a Third Party, as required by Rule 14e-2 under the
Securities Exchange Act (provided no such position shall constitute a
recommendation of such transaction if it does not constitute a Superior
Acquisition Proposal) or complying with its duties of disclosure under
applicable state law. As of the date hereof, the Company shall immediately cease
and shall cause each of its Subsidiaries and its and their advisors, agents and
other intermediaries to cease, any and all existing activities, discussions or
negotiations with any Third Party conducted heretofore with respect to any of
the foregoing; provided that the limitation set forth in this sentence shall not
restrict the Company from engaging in any such activities with such a Third
Party who hereafter makes a Superior Acquisition Proposal so long as the Company
has complied with the provisions of this Section 5(k).
(ii) If (A) this Agreement shall be terminated pursuant to Section
7(a)(iv), 7(a)(vi)(B) or (B)(1) a Third Party shall have made an Acquisition
Proposal, (2) the Agreement shall be terminated pursuant to Section 7(a)(ii),
Section 7(a)(vi)(A), 7(a)(vi)(C) and (3) any Acquisition Proposal (whether or
not proposed prior to the Special Meeting and whether or not it involves the
Third Party making the Acquisition Proposal referred to in Section
5(k)(ii)(B)(1) above) shall have been consummated within twelve months following
the termination of this Agreement, the Company shall pay to AAC, within ten (10)
Business Days following such occurrence, a fee of $3.375 million as liquidated
damages and not as a penalty together with reimbursement of all reasonable
out-of-pocket costs, fees and expenses, including, without limitation, the
reasonable fees and disbursements of banks, investment banks, accountants or
legal counsel and the expenses of any litigation incurred in connection with
collecting the fees and other amounts provided for in this Section 5(k)(ii),
which out-of-pocket costs, fees and expenses shall be no more than $1 million in
the aggregate (collectively, the "Fixed Amount"). Notwithstanding the foregoing,
if the Company breaches any representation, warranty, covenant or other
agreement hereunder, the Fixed Amount paid by Company and actually received by
AAC shall be credited against the amount of damages awarded to AAC as a result
of such breach and any damages awarded to AAC as a result of such breach shall
be credited against any subsequent payment of the Fixed Amount, to the extent
the Company is also obligated hereunder to pay the Fixed Amount.
33
(l) INSURANCE AND INDEMNIFICATION.
(i) For a period of 6 years after the Effective Time, the Surviving
Corporation shall indemnify and hold harmless the present and former officers
and directors of the Company and its Subsidiaries in respect of acts or
omissions occurring prior to the Effective Time to the maximum extent provided
under the Company's certificate of incorporation and bylaws, or any of its
Subsidiary's certificate of incorporation or bylaws, in either case, as in
effect on the date hereof; provided that such indemnification shall be subject
to any limitation imposed from time to time under applicable law.
(ii) For a period of 6 years after the Effective Time, the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering each
such Person currently covered by the Company's or any of its Subsidiary's
officers' and directors' liability insurance policy on terms with respect to
coverage and amount no less favorable than those of such policy in effect on the
date hereof (or, if such insurance policy cannot be obtained, such insurance
policy on terms with respect to coverage and amount as favorable as can be
obtained, subject to the proviso at the conclusion of this sentence), provided
that, in satisfying its obligation under this Section, the Surviving Corporation
shall not be obligated to pay premiums in excess of 150% of the amount per annum
the Company paid in its last full fiscal year, which amount has been disclosed
to AAC.
(m) JOINT DISCLOSURE DOCUMENTS. The Company shall cause the Joint
Disclosure Documents to comply with the Securities Exchange Act in all material
respects. The Company shall cause the Joint Disclosure Documents to not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they will be made, not misleading, other than with
respect to information provided by or on behalf of AAC and its Affiliates. AAC
shall cause the Joint Disclosure Documents to not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
will be made, not misleading, with respect to information provided by or on
behalf of AAC and its Affiliates.
(n) COMFORT LETTERS. The Company will deliver to AAC on or before the date
the Joint Disclosure Documents are mailed to the Company Stockholders a letter
from its accountants, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, stating its conclusions as to the
accuracy of certain information derived from the financial records from the
Company and its Subsidiaries and contained in the Joint Disclosure Document (the
"Company Comfort Letter"). The Company Comfort Letter shall be reasonably
satisfactory to AAC in form and substance.
(o) OPTIONS. Prior to the Effective Time, the Company shall take such
action as may be necessary to terminate the Company's Option Plan.
34
(p) DEBT FINANCING EXPENSE. Subject to any right to reimbursement pursuant
to Section 5(k)(ii) hereof, in the event the Transactions are not consummated,
399 and AAC shall, jointly and severally, be responsible for the payment of any
fee due to, or reimbursement of expenses incurred by, ▇. ▇. ▇▇▇▇▇▇ Securities,
Inc. and its affiliates or any other lender designated by AAC pursuant to the
Debt Financing, including, without limitation, the Revolving Credit Facility.
6. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO CLOSING BY AAC. The obligations of AAC to consummate the
Transactions are subject to satisfaction or waiver by AAC of the following
conditions:
(i) the representations and warranties set forth in Section 3 above
shall be true and correct in all respects at and as of the Effective Time,
except (A) for those representations and warranties which address matters only
as of a particular date (which shall have been true and correct as of such date,
subject to clause (B)), and (B) where the failure of any representations and
warranties set forth in Section 3, taken together without regard to any
materiality or Knowledge qualification set forth therein, to be true and correct
could not reasonably be expected to have a Material Adverse Effect, with the
same force and effect as if made on and as of the Effective Time;
(ii) the Company shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any judgment, order, decree, stipulation,
injunction or charge in effect preventing consummation of any of the
Transactions;
(iv) the Company shall have delivered to AAC a certificate to the
effect that each of the conditions specified above in Section 6(a)(i)-(iii) is
satisfied in all respects;
(v) this Agreement and the Merger shall have received the
Requisite Stockholder Approval;
(vi) the holders of not more than 10% of the outstanding Shares of
Company Common Stock shall have demanded appraisal of such Shares in accordance
with the DGCL;
(vii) the Company shall have delivered to AAC written consents to
the Transactions from the Persons who are parties to Contracts set forth on
Schedule 6(a);
(viii)all applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated and the
Parties shall have received all other authorizations, consents and approvals of
Governmental or Regulatory Bodies in connection with the execution, delivery and
performance of this Agreement;
35
(ix) AAC shall be reasonably satisfied that the Merger will be
recorded as a recapitalization for financial reporting purposes;
(x) total Debt of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP as of the Effective Time shall not
exceed $45 million;
(xi) the Company shall have received the proceeds of the Debt
Financing and the amount to be drawn under the Revolving Credit Facility or
other proceeds on terms and conditions which are substantially equivalent
thereto;
(xii) the Company shall have received and accepted the resignations
of all directors of the Company designated by AAC;
(xiii)each of the Voting Agreements and the Rollover Agreements
shall be in full force and effect;
(xiv) there shall not be instituted or pending any action or
proceeding by any Governmental or Regulatory Body, or any action or proceeding
by any other Person, that has a reasonable likelihood of success before any
Governmental or Regulatory Body, (A) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit the
consummation of the Merger or seeking to obtain material damages or otherwise
directly or indirectly relating to the Transactions, (B) seeking to restrain or
prohibit the ownership or operation by AAC of all or any material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole, (C)
seeking to impose or confirm material limitations on the ability of AAC to
effectively control the business or operations of the Company and its
Subsidiaries, taken as a whole, or effectively to exercise full rights of
ownership of the Shares of Company Common Stock or (D) requiring divestiture by
AAC of any Shares of Company Common Stock, and no Governmental or Regulatory
Body shall have issued any judgment, order, decree or injunction, and there
shall not be any statute, rule or regulation, that, in the reasonable judgment
of AAC is likely, directly or indirectly, to result in any of the consequences
referred to in the preceding clauses (A) through (D); and
(xv) the Warrants shall have been adjusted in accordance with the
terms of such Warrants, except for such Warrants that have expired in accordance
with their terms.
(xvi) AAC shall have received an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ & Kuh LLP, counsel to the Company, in the form of Exhibit E attached
hereto.
(b) CONDITIONS TO CLOSING BY THE COMPANY. The obligations of the Company
to consummate the Transactions are subject to satisfaction or waiver by the
Company of the following conditions:
36
(i) the representations and warranties set forth in Section 4 above
shall be true and correct in all respects at and as of the Effective Time,
except (A) for those representations and warranties which address matters only
as of a particular date (which shall have been true and correct as of such date,
subject to clause (B)), and (B) where the failure of any representations and
warranties set forth in Section 4 taken together without regard to any
materiality qualification set forth therein to be true and correct could not
reasonably be expected to have a Material Adverse Effect, with the same force
and effect as if made on and as of the Effective Time;
(ii) AAC shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing;
(iii) there shall not be any judgment, order, decree, stipulation,
injunction or charge in effect preventing consummation of any of the
Transactions;
(iv) AAC shall have delivered to the Company a certificate to the
effect that each of the conditions specified above in Section 6(b)(i)-(iii) is
satisfied in all respects;
(v) this Agreement and the Merger shall have received the Requisite
Stockholder Approval;
(vi) all applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated and the
Parties shall have received all other authorizations, consents and approvals of
Governmental or Regulatory Bodies in connection with the execution delivery and
performance of this Agreement;
(vii) there shall not be instituted or pending any action or
proceeding by any Governmental or Regulatory Body, or any action or proceeding
by any other Person, that has a reasonable likelihood of success before any
Governmental or Regulatory Body, (A) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or prohibit the
consummation of the Merger or seeking to obtain material damages or otherwise
directly or indirectly relating to the Transaction or (B) seeking to impose
liability on any officer or director of the Company for any actions taken in
connection with the Transactions, and no Governmental or Regulatory Body shall
have issued any judgment, order, decree or injunction, and there shall not be
any statute, rule or regulation, that, in the reasonable judgement of the
Company is likely, directly or indirectly, to result in any of the consequences
referred to in the preceding clauses (A) or (B);
(viii)the Company shall have received an opinion of ▇▇▇▇▇▇ ▇▇▇▇ LLC
as to the fairness to the Company Stockholders of the cash merger consideration
to be received by them; and
37
(ix) the Company shall have received an opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇ to the effect that consummation of the Transactions contemplated
hereby will not render the Company (i) "insolvent" as that term is defined in
Section 101(32) of the United States Bankruptcy Code (the "Bankruptcy Code"), or
Section 271 of the New York Debtor and Creditor Law (the "NYDCL") (ii) unable to
pay its debts as they mature, within the meaning of Section 548(a)(2)(B)(iii) of
the Bankruptcy Code or Section 275 of the NYDCL, or (iii) left with an
unreasonably small capital.
7. TERMINATION.
(a) TERMINATION OF AGREEMENT. The Parties hereto may terminate this
Agreement as follows:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
(ii) AAC may terminate this Agreement by giving written notice to
the Company at any time prior to the Effective Time (A) in the event the Company
has breached any material representation, warranty or covenant contained in this
Agreement when made or at any time prior to the Closing in any material respect,
AAC has notified the Company of the breach, and the breach has continued without
cure for a period of 30 days after the notice of breach, or (B) if the Closing
shall not have occurred on or before September 30, 1998, by reason of the
failure of any condition precedent under Section 6(a) hereof (unless the failure
results from a breach by AAC of any of its representations, warranties or
covenants or other agreements contained in this Agreement);
(iii) the Company may terminate this Agreement by giving written
notice to AAC at any time prior to the Effective Time (A) in the event AAC has
breached any material representation, warranty or covenant contained in this
Agreement when made or at any time prior to the Closing in any material respect,
the Company has notified AAC of the breach, and the breach has continued without
cure for a period of 30 days after the notice of breach, or (B) if the Closing
shall not have occurred on or before September 30, 1998, by reason of the
failure of any condition precedent under Section 6(b) hereof (unless the failure
results from a breach by the Company of any of its representations, warranties,
covenants or other agreements contained in this Agreement);
(iv) the Company may terminate this Agreement by giving written
notice to AAC, at any time prior to the Effective Time, in the event that a
Person has made an Acquisition Proposal that the Board of Directors of the
Company determines, in good faith, and after consultation with and advice from
its financial advisors, is reasonably likely to be subject to completion and
would, if consummated, result in a transaction more favorable, from a financial
point of view, to the Company Stockholders than the Transactions contemplated by
this Agreement and the Merger (a "Superior Acquisition Proposal");
38
(v) either the Company or AAC may terminate this Agreement by giving
written notice to the other Party at any time after the Special Meeting in the
event this Agreement and the Merger fail to receive the Requisite Stockholder
Approval;
(vi) AAC may terminate this Agreement by giving written notice to
the Company if (A) the Board of Directors of the Company shall have withdrawn or
modified or amended, in a manner adverse to AAC, either its approval or
recommendation of this Agreement and the Merger or its recommendation that the
Company Stockholders adopt and approve the Transactions contemplated by this
Agreement and the Merger, (B) the Board of Directors of the Company shall have
approved, recommended or endorsed any Superior Acquisition Proposal, or (C) if
the Company has failed to duly call the Special Meeting;
(vii) either the Company or AAC may terminate this Agreement by
giving written notice to the other Party hereto if there shall be any law or
regulation that makes consummation of the Merger illegal or otherwise prohibited
or if any judgment, injunction, order or decree enjoining AAC or the Company
from consummating the Merger is entered and such judgment, injunction, order or
decree shall become final and nonappealable.
(b) EFFECT OF TERMINATION. If either Party terminates this Agreement
pursuant to Section 7(a) above, all rights and obligations hereunder shall
terminate; provided, however, that (i) this Section 7(b), Section 5(i), Section
5(k), Section 5(p), Section 8 and the Confidentiality Agreement shall survive
any such termination and (ii) nothing herein shall release any Party from
Liability for any breach hereof.
8. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENT. Neither the Company nor AAC
shall issue any press release or make any public announcement relating to the
subject matter of this Agreement without the prior written approval of the other
Party; provided, however, that the Company or AAC may make any public disclosure
it believes in good faith is required by applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other Party
prior to making the disclosure).
(b) NO THIRD PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties hereto and their
respective successors and permitted assigns, other than Section 5(1) which shall
be for the benefit of the Persons set forth therein, which Person shall have the
independent right to enforce their rights under such Section.
(c) ENTIRE AGREEMENT. This Agreement (including the Exhibits and the
Schedules hereto and any attachments thereto) and the Confidentiality Agreement
constitute the entire agreement between the Parties hereto and supersede any
prior understandings, agreements or
39
representations by or between the Parties hereto, written or oral, to the extent
they related in any way to the subject matter hereof, including, without
limitation, the Agreement, dated March 10, 1998, between the Company and CVC, as
amended.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party hereto may assign either this Agreement or any
of its rights, interests or obligations hereunder without the prior written
approval of the other Party hereto.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) GENERAL INTERPRETIVE PRINCIPLES. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(i) the terms defined in this Agreement include the plural as well
as the singular, and the use of any gender herein shall be deemed to include the
other gender;
(ii) accounting terms not otherwise defined herein have the meanings
given to them in accordance with GAAP;
(iii) references herein to "articles," "sections," "Sections,"
"subsections" and other subdivisions without reference to a document are to
designated articles, sections, Sections, subsections and other subdivisions of
this Agreement;
(iv) a reference to a subsection without further reference to a
section is a reference to such subsection as contained in the same section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions;
(v) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision;
(vi) the term "include" or "including" shall mean without limitation
by reason of enumeration;
(vii) the headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement;
(viii)any reference to any federal, state, local or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires; and
40
(ix) the Parties have participated jointly in the negotiation and
drafting of this Agreement, and, in the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring either Party by virtue of the authorship of any of the
provisions of this Agreement.
(g) NOTICES. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(i) on the day of service if served personally on the party to whom notice is to
be given; (ii) on the day of transmission if sent via facsimile transmission to
the facsimile number given below, and telephonic confirmation of receipt is
obtained promptly after completion of transmission, provided that a copy shall
be sent via certified mail, return receipt requested, simultaneously with any
such facsimile; (iii) on the business day after delivery to Federal Express or
similar overnight courier or the Express Mail service maintained by the United
States Postal Service; or (iv) on the fifth day after mailing, if mailed to the
party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid and properly addressed, to the party as follows:
If to the Company:Allied Digital Technologies Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ & Kuh LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.
If to AAC: Analog Acquisition Corp.
c/o 399 Venture Partners Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Copies to: 399 Venture Partners Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
41
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Any Party may change the address to which notices, requests, demands, claims and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York,
except to the extent that the DGCL applies as a result of the Company being
incorporated in the State of Delaware, in which case the DGCL shall apply.
(i) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS AND FOR ANY COUNTERCLAIM RELATING THERETO.
(j) AMENDMENTS AND WAIVERS. The Parties may mutually amend any provision
of this Agreement at any time prior to the Effective Time with the prior
authorization of their respective Boards of Directors; provided, however, that
any amendment effected subsequent to stockholder approval will be subject to the
restrictions contained in the DGCL. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by both
Parties hereto. No waiver by either Party hereto of any default,
misrepresentation or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of warranty or covenant hereunder or affect
in any way any rights arising by virtue of any prior or subsequent such
occurrence. No waiver shall be valid unless the same shall be in writing and
signed by both Parties.
(k) SEVERABILITY. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction; provided, however, that if the
invalidity of any covenant, agreement or provision shall deprive any Party of
the economic benefit intended to be conferred by this Agreement, the Parties
shall negotiate in good faith to amend the Agreement in a manner so that the
economic effect of the Agreement, as amended, is as nearly as possible the same
as the economic effect of this Agreement.
42
(l) EXPENSES. Other than as expressly set forth herein, each of the
Parties will bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the Transactions, whether or not
the Merger is consummated.
(m) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(n) TRANSFER TAXES. Any Liability arising out of any real property
transfer taxes, if applicable, and due with respect to the Merger, shall be
borne by the Surviving Corporation and expressly shall not be a Liability of the
Company Stockholders.
(o) LIMITED RECOURSE. Notwithstanding anything in this Agreement, the
Voting Agreements or the Rollover Agreements to the contrary (except as
otherwise expressly provided in the Voting Agreements or the Rollover
Agreements, as the case may be), (i) the obligations and Liabilities of the
Parties hereunder and the parties thereunder shall be without recourse to any
stockholder of such Party or any of such stockholder's Affiliates (other than
the Parties), or any of their respective directors, employees, officers,
representatives or agents (in each case, in their capacity as such) and shall be
limited to the assets of such Party and (ii) the stockholders of AAC have made
no (and shall not be deemed to have made any) representations, warranties or
covenants (express or implied) under or in connection with this Agreement, the
Voting Agreements or the Rollover Agreements.
(p) PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each Party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 5(1) which shall be for the benefit of the Persons
set forth therein, which Person shall have the independent right to enforce
their rights under such Section.
(q) SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or equity.
(r) HEADINGS. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(s) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
43
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
ALLIED DIGITAL TECHNOLOGIES CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: C.E.O. & Co-Chairman
ANALOG ACQUISITION CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
44
EXHIBIT A-1
STOCKHOLDER VOTING AGREEMENT
AGREEMENT, dated as of May 5, 1998, by and between Analog Acquisition
Corp., a Delaware corporation ("Purchaser"), and the other party signatory
hereto (the "Stockholder"). Capitalized terms used but not defined herein shall
have the meanings set forth in the Agreement and Plan of Merger, dated the date
hereof, by and between Purchaser and ABC (the "Company") (as such agreement may
be amended from time to time, the "Merger Agreement").
WHEREAS, concurrently herewith, Purchaser and the Company are entering
into a Merger Agreement, pursuant to which Purchaser will be merged with and
into the Company (the "Merger"), whereby each share of common stock, par value
$.01 per share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time will be converted into the right to
receive cash, other than any shares to remain outstanding pursuant to Section
2(g)(iii) of the Merger Agreement and any Dissenting Shares as defined in
Section 2(i) of the Merger Agreement.
WHEREAS, as a condition to Purchaser's entering into the Merger Agreement,
Purchaser requires that the Stockholder enter into, and the Stockholder has
agreed to enter into, this Agreement with Purchaser.
NOW, THEREFORE, in order to implement the foregoing and in consideration
of the mutual agreements contained herein, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. The following terms, when used in this
Agreement, shall have the following meanings (such definitions to be equally
applicable to both singular and plural terms of the terms defined):
"ACQUISITION PROPOSAL" shall mean any agreement, letter of intent,
proposal or offer (other than the transactions contemplated in the Merger
Agreement) involving the Company or any of its Subsidiaries for, or an inquiry
or indication of interest that reasonably could be expected to lead to: (i) any
merger, consolidation, share exchange, recapitalization, reorganization,
dissolution, liquidation, business combination, or other similar transaction
with the Company or any of its Subsidiaries, (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of a material portion of the
assets of the Company and its Subsidiaries, taken as a whole, in a single
transaction or series of transactions, or (iii) any tender offer or exchange
offer for all or any portion of the outstanding shares of capital stock of the
Company or any of its Subsidiaries or the filing of a registration statement
under the Securities Act of 1933, as amended, in connection therewith, but shall
not include the Merger Agreement.
"AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling, Controlled by, or under common Control with such
Person, provided that no security holder of the Company shall be deemed an
Affiliate of any other security holder solely by reason of any investment in the
Company. For the purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of stock,
as a trustee or executor, by contract or credit arrangement or otherwise.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all other Persons with whom such Person would constitute a "group" as described
in Section 13(d)(3) of the Exchange Act.
"BUSINESS DAYS" means any day on which the principal offices of the
Securities and Exchange Commission in Washington, D.C. are open to accept
filings or, in the case of determining a date when any payment is due, any day
other than a day on which banks in New York, New York are required or authorized
to be closed.
"COMPANY" has the meaning ascribed thereto in the recitals of this
Agreement.
"COMPANY COMMON STOCK" has the meaning ascribed thereto in the recitals of
this Agreement.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH") means the possession, directly or indirectly or as a trustee or executor,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock, as a trustee or executor, by
contract or credit arrangement or otherwise.
"EXISTING SHARES" has the meaning ascribed thereto in Section 2(a)(i).
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"MERGER" has the meaning ascribed thereto in the recitals of this
Agreement.
"PERMITTED TRANSFEREE" means in the case of any Stockholder, (a) a spouse
or lineal descendent (including by adoption and stepchildren), heir, executor,
testamentary trustee or legatee of the Stockholder or (b) any trust or estate
the beneficiaries of which, or any corporation,
2
limited liability company or partnership, the stockholders, members or partners
of which include only the Persons described in clause (a) above.
"PERSON" means an individual, corporation, partnership, limited liability
company, limited partnership, association, trust, unincorporated organization or
other entity or group (as defined in Section 13(d)(3) of the Exchange Act).
"PURCHASER" has the meaning ascribed thereto in the introductory paragraph
of this Agreement.
"SHARES" means the Existing Shares, together with any shares of Company
Common Stock acquired of record or beneficially by the Stockholder in any
capacity after the date hereof and prior to the termination hereof, whether upon
exercise of options, conversion of convertible securities, purchase, exchange or
otherwise; PROVIDED, HOWEVER, that in the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
"STOCKHOLDER" has the meaning ascribed thereto in the introductory
paragraph to this Agreement.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person.
"TERMINATION DATE" has the meaning ascribed thereto in Section 9 of this
Agreement.
"TRUSTEE" has the meaning ascribed thereto in Section 2(a)(i) of this
Agreement.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The
Stockholder hereby represents and warrants to Purchaser as follows:
(a) (i) The Stockholder is either (A) the record holder or
beneficial owner of the number of, or (B) trustee of a trust that is
the record holder or beneficial owner of, and whose beneficiaries
are the beneficial owners (such trustee, a "Trustee"), shares of
Company Common Stock and Options as is set forth opposite the
Stockholder's name on Schedule I hereto (the "Existing Shares").
(ii) On the date hereof, the Existing Shares set forth
opposite the Stockholder's name on Schedule I hereto constitute all
of the outstanding shares
3
of Company Common Stock owned of record or beneficially by the
Stockholder. The Stockholder does not have record or beneficial
ownership of any Shares not set forth on Schedule I hereto.
(iii) The Stockholder has sole power of disposition with
respect to all of the Existing Shares set forth opposite the
Stockholder's name on Schedule I and sole voting power with respect
to the matters set forth in Section 4 hereof and sole power to
demand dissenter's or appraisal rights, in each case with respect to
all of the Existing Shares set forth opposite the Stockholder's name
on Schedule I, with no restrictions on such rights, subject to
applicable federal securities laws and the terms of this Agreement.
(iv) The Stockholder will have sole power of disposition with
respect to Shares other than Existing Shares, if any, which become
beneficially owned by the Stockholder and will have sole voting
power with respect to the matters set forth in Section 4 hereof and
sole power to demand dissenter's or appraisal rights, in each case
with respect to all Shares other than Existing Shares, if any, which
become beneficially owned by the Stockholder with no restrictions on
such rights, subject to applicable federal securities laws and the
terms of this Agreement.
(b) The Stockholder has the legal capacity, power and authority to
enter into and perform all of the Stockholder's obligations under this
Agreement. Other than as set forth in Schedule 2(b), the execution,
delivery and performance of this Agreement by the Stockholder will not
violate any other agreement to which the Stockholder is a party or by
which the Stockholder is bound including, without limitation, any trust
agreement, voting agreement, stockholders agreement, voting trust,
partnership or other agreement. This Agreement has been duly and validly
executed and delivered by the Stockholder and constitutes a valid and
binding agreement of the Stockholder, enforceable against the Stockholder
in accordance with its terms, except as limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditor's rights generally, (b) general principles of equity, whether
such enforceability is considered in a proceeding in equity or at law, and
to the discretion of the court before which any proceeding therefore may
be brought, or (c) public policy considerations or court decisions which
may limit the rights of the parties thereto for indemnification. All
necessary consents of any beneficiary of or holder of interest in any
trust of which a Stockholder is Trustee to the execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been obtained. If the Stockholder is married and the
Stockholder's Shares constitute community property, this Agreement has
been duly authorized, executed and delivered by, and constitutes a valid
and binding agreement of, the Stockholder's spouse, enforceable against
such person in accordance with its terms.
(c) (i) No filing with, and no permit, authorization, consent or
approval of, any state or federal public body or authority is necessary
for the execution of this
4
Agreement by the Stockholder and the consummation by the Stockholder of
the transactions contemplated hereby and (ii) neither the execution and
delivery of this Agreement by the Stockholder nor the consummation by the
Stockholder of the transactions contemplated hereby nor compliance by the
Stockholder with any of the provisions hereof shall (x) conflict with or
result in any breach of any applicable trust, partnership agreement or
other agreements or organizational documents applicable to the
Stockholder, (y) result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default (or give rise to any
third party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of
any kind to which the Stockholder is a party or by which the Stockholder
or any of the Stockholder's properties or assets may be bound or (z)
violate any order, writ, injunction, decree, judgment, statute, rule or
regulation applicable to the Stockholder or any of the Stockholder's
properties or assets.
(d) Except for the shares of Company Common Stock identified in
Schedule II hereto (the "Pledged Shares"), the Stockholder's Shares and
the certificates representing such Shares are now and at all times during
the term hereof will be held by the Stockholder, or by a nominee or
custodian for the benefit of the Stockholder, free and clear of all liens,
claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
(e) No broker, investment banker, financial adviser or other person
is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of the Stockholder in
his or her capacity as such.
(f) The Stockholder understands and acknowledges that Purchaser is
entering into the Merger Agreement in reliance upon the Stockholder's
execution and delivery of this Agreement with Purchaser.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Purchaser
hereby represents and warrants to the Stockholder as follows:
(a) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation.
(b) Purchaser has all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by Purchaser of this
Agreement and the consummation by Purchaser of the transactions
contemplated hereby have been duly and validly authorized
5
and approved by all required corporate action other than shareholder
approval which shall be effected prior to the Effective Time. This
Agreement has been duly executed and delivered by Purchaser, and (assuming
due authorization, execution and delivery by the Stockholder) constitutes
a valid and binding obligation of Purchaser, enforceable against it in
accordance with its terms, except as limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditor's rights generally, (b) general principles of equity, whether
such enforceability is considered in a proceeding in equity or at law, and
to the discretion of the court before which any proceeding therefor may be
brought, or (c) public policy considerations or court decisions which may
limit the rights of the parties thereto for indemnification.
(c) The execution and delivery of this Agreement do not, and the
consummation by Purchaser of the transactions contemplated by this
Agreement and compliance by Purchaser with the provisions of this
Agreement will not, conflict with, or result in any breach or violation
of, or default (with or without notice or lapse of time, or both) under,
or give rise to a right of termination, cancellation or acceleration of or
"put" right with respect to any obligation or to loss of a material
benefit under, or result in the creation of any lien upon any of the
properties or assets of Purchaser under, (i) any charter or by-laws of
Purchaser, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to Purchaser or its properties or assets
or (iii) any judgment, order, decree, statute, law, ordinance, rule,
regulation or arbitration award applicable to Purchaser or its properties
or assets. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to, any state or
federal public body or authority is required by or with respect to
Purchaser in connection with the execution and delivery of this Agreement
by Purchaser or the consummation by Purchaser of any of the transactions
contemplated by this Agreement.
(d) No broker, investment banker, financial adviser or other person
is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of the Purchaser.
Section 4. AGREEMENT TO VOTE; PROXY
(a) The Stockholder hereby agrees that, until the Termination Date
(as defined in Section 9), at any meeting of the stockholders of the
Company, however called, or in connection with any written consent of the
stockholders of the Company, the Stockholder shall vote (or cause to be
voted) the Shares held of record or beneficially by the Stockholder (i) in
favor of the Merger, the execution and delivery by the Company of the
Merger Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Merger Agreement and this Agreement and
any actions required in furtherance hereof and thereof; (ii) against any
action or agreement that would result in a
6
breach of any covenant, representation or warranty or any other obligation
or agreement of the Company under the Merger Agreement or this Agreement;
and (iii) against the following actions (other than the Merger and the
transactions contemplated by the Merger Agreement or any such actions
identified in writing by Purchaser in advance): (A) any extraordinary
corporate transaction, including, without limitation, a merger,
consolidation or other business combination involving the Company or its
Subsidiaries; (B) a sale, lease or transfer of a material amount of assets
of the Company or its Subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of the Company or its Subsidiaries; (C) any
change in the majority of the board of directors of the Company; (D) any
material change in the present capitalization of the Company or any
amendment of the Company's Certificate of Incorporation or By-Laws; (E)
any other material change in the Company's corporate structure or
business; or (F) any other action which is intended, or could reasonably
be expected, to impede, interfere with, delay, postpone, discourage or
materially adversely affect the Merger or the transactions contemplated by
the Merger Agreement or this Agreement. The Stockholder shall not enter
into any agreement or understanding with any person or entity to vote or
give instructions in any manner inconsistent with clauses (i) or (ii) of
the preceding sentence.
(b) THE STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, PURCHASER AND
ANY DESIGNEE OF PURCHASER, EACH OF THEM INDIVIDUALLY, THE STOCKHOLDER'S
IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT (WITH
FULL POWER OF SUBSTITUTION) TO VOTE THE SHARES AS SET FORTH IN SECTION
4(a) ABOVE. THE STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL
THE TERMINATION DATE) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO
EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY
PREVIOUSLY GRANTED BY THE STOCKHOLDER WITH RESPECT TO THE STOCKHOLDER'S
SHARES.
Section 5. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with
the terms of this Agreement, the Stockholder hereby covenants and agrees as
follows:
(a) Prior to the Termination Date, no Stockholder shall, in its
capacity as such, directly or indirectly (including through advisors,
agents or other intermediaries), solicit (including by way of furnishing
information) or respond to any inquiries or the making of any proposal by
any person or entity (other than Purchaser or any Affiliate thereof) with
respect to the Company that constitutes or could reasonably be expected to
lead to an Acquisition Proposal. If the Stockholder in its capacity as
such receives any such inquiry or proposal, then the Stockholder shall
within 24 hours furnish Purchaser with an accurate description of the
material terms (including any changes or adjustments to such terms as a
result of negotiations or otherwise) and conditions, if any, of such
inquiry or proposal and the identity of the person making it. The
Stockholder, in its capacity as such, will
7
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing; provided, that the limitation set forth
in this sentence shall not restrict the Stockholder from engaging in any
such activities with such a third party who hereafter makes a Superior
Acquisition Proposal. The foregoing provisions of this Section 5(a) shall
not restrict a Stockholder who is also a director of the Company from
taking any actions, or refraining from complying with the foregoing
provision, in the Stockholder's capacity as a director, provided that any
such actions do not violate Section 5(k) of the Merger Agreement.
(b) Prior to the Termination Date, the Stockholder shall not,
directly or indirectly (i) except pursuant to the terms of the Merger
Agreement or this Agreement, offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, enforce or permit the
execution of the provisions of any redemption agreement with the Company
or enter into any contract, option or other arrangement or understanding
with respect to or consent to the offer for sale, sale, transfer, tender,
pledge, encumbrance, assignment or other disposition of, or exercise any
discretionary powers to distribute, any or all of the Stockholder's Shares
or any interest therein, including any trust income or principal, except
in each case to a Permitted Transferee who is or agrees to become bound by
this Agreement; (ii) except as contemplated hereby, grant any proxies or
powers of attorney with respect to any Shares, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares;
or (iii) take any action that would make any representation or warranty of
the Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing the Stockholder's
obligations under this Agreement.
(c) The Stockholder hereby waives any rights of appraisal or rights
to dissent from the Merger that the Stockholder may have. The Trustee
represents that no beneficiary who is a beneficial owner of Shares under
any trust has any right of appraisal or right to dissent from the Merger
which has not been so waived.
(d) Unless, in connection therewith, the Shares held by any trust
which are presently subject to the terms of this Agreement are transferred
to the Stockholder and remain subject in all respects to the terms of this
Agreement, or other Permitted Transferees who upon receipt of such Shares
become signatories to this Agreement, the Stockholder who is a Trustee
shall not take any action to terminate, close or liquidate any such trust
and shall take all steps necessary to maintain the existence thereof at
least until the first to occur of (i) the Effective Time and (ii) the
Termination Date.
Section 6. FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and
8
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
Section 7. CERTAIN EVENTS. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Stockholder's Shares and shall be
binding upon any person or entity to which legal or Beneficial Ownership of such
Shares shall pass, whether by operation of law or otherwise, including without
limitation the Stockholder's heirs, guardians, administrators or successors or
as a result of any divorce.
Section 8. STOP TRANSFER. The Stockholder agrees with, and covenants to,
Purchaser that the Stockholder shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Stockholder's Shares, unless such transfer is made in
compliance with this Agreement.
Section 9. TERMINATION. The obligations of the Stockholder and the
irrevocable proxy contained in Section 4(b) of this Agreement shall terminate
upon the first to occur of (a) the Effective Time and (b) the date the Merger
Agreement is terminated in accordance with its terms (the "Termination Date");
provided that the provisions of Sections 2, 3, 9 and 10 and any claim for breach
of any representation, warranty, covenant or other agreement under this
Agreement shall survive the Effective Time and/or the Termination Date, as
applicable.
Section 10. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been
duly given (i) on the day of service if served personally on the party to
whom notice is to be given; (ii) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of
transmission, provided that a copy shall be sent via certified mail,
return receipt requested, simultaneously with any such facsimile; (iii) on
the business day after delivery to Federal Express or similar overnight
courier or the Express Mail service maintained by the United States Postal
Service; or (iv) on the fifth day after mailing, if mailed to the party to
whom notice is to be given, by first class mail, registered or certified,
postage prepaid and properly addressed, to the party as follows:
If to the Stockholder: [Name]
[Address]
9
If to Purchaser: Analog Acquisition Corp.
c/o 399 Venture Partners Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
and: ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
(b) At any time prior to the Effective Time, any party hereto may,
with respect to any other party hereto, (i) extend the time for the
performance of any of the obligations or other acts, (ii) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto or (iii) waive compliance with any
of the agreements or conditions contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
(c) The headings contained in this Agreement are for the convenience
of reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by the Merger Agreement
is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner.
(e) This Agreement, including all exhibits, disclosure schedules and
schedules hereto, constitutes the entire agreement and supersedes all
prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof and
except as otherwise expressly provided herein.
10
(f) Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by any party (whether by operation of law or
otherwise) without the prior written consent of the other parties hereto.
Subject to the preceding sentence, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other Person shall have any
right, benefit or obligation under this Agreement as a third party
beneficiary or otherwise.
(g) The parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms. It is accordingly agreed that the
parties hereto shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
(h) No failure or delay on the part of any party hereto in the
exercise of any right hereunder shall impair such right or be construed to
be a waiver of, or acquiescence in, any breach of any representation,
warranty or agreement herein, nor shall any single or partial exercise of
any such right preclude other or further exercise thereof or of any other
right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
(i) Notwithstanding anything herein to the contrary, no Person
executing this Agreement who is, or becomes during the term hereof, a
director of the Company makes any agreement or understanding herein in his
or her capacity as such director, and the agreements set forth herein
shall in no way restrict any director in the exercise of his or her
fiduciary duties as a director of the Company. The Stockholder has
executed this Agreement solely in his or her capacity as the record or
beneficial holder of the Stockholder's Shares or as the trustee of a trust
whose beneficiaries are the beneficial owners of the Stockholder's Shares.
(j) Each party agrees to bear its own expenses in connection with
the transactions contemplated hereby.
(k) This Agreement shall be governed and construed in accordance
with the laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New
York, except to the extent that the General Corporation Law of the State
of Delaware applies as a result of the Company being incorporated in the
State of Delaware, in which case such General Corporation Law shall apply.
(l) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
11
CONTEMPLATED BY THE MERGER AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
(m) This Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Signature Page to Follow]
12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
ANALOG ACQUISITION CORP.
By:___________________________
Name:
Title:
----------------------------
[Stockholder]
SCHEDULE I
EXISTING SHARES
---------------
STOCKHOLDER NO. OF EXISTING SHARES NO. OF OPTION SHARES
----------- ---------------------- --------------------
SCHEDULE II
PLEDGED SHARES
--------------
STOCKHOLDER NO. OF PLEDGED SHARES
----------- ---------------------
EXHIBIT A-2
ROLLOVER AGREEMENT
AGREEMENT, dated as of May 5, 1998, by and between Analog Acquisition
Corp., a Delaware corporation ("Purchaser"), and the other party signatory
hereto (the "Stockholder"). Capitalized terms used but not defined herein shall
have the meanings set forth in the Agreement and Plan of Merger, dated the date
hereof, by and between Purchaser and ABC (the "Company") (as such agreement may
be amended from time to time, the "Merger Agreement").
WHEREAS, concurrently herewith, Purchaser and the Company are entering
into a Merger Agreement, pursuant to which Purchaser will be merged with and
into the Company (the "Merger"), whereby each share of common stock, par value
$.01 per share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time will be converted into the right to
receive cash, other than any shares to remain outstanding pursuant to Section
2(g)(iii) of the Merger Agreement and any Dissenting Shares as defined in
Section 2(i) of the Merger Agreement.
WHEREAS, the Stockholder desires to convert, upon payment of the exercise
price, certain of its Options into shares of Company Common Stock immediately
prior to the Effective Time.
WHEREAS, as a condition to Purchaser's entering into the Merger Agreement,
Purchaser requires that the Stockholder enter into, and the Stockholder has
agreed to enter into, this Agreement with Purchaser.
NOW, THEREFORE, in order to implement the foregoing and in consideration
of the mutual agreements contained herein, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. The following terms, when used in this
Agreement, shall have the following meanings (such definitions to be equally
applicable to both singular and plural terms of the terms defined):
"ACQUISITION PROPOSAL" shall mean any agreement, letter of intent,
proposal or offer (other than the transactions contemplated in the Merger
Agreement) involving the Company or any of its Subsidiaries for, or an inquiry
or indication of interest that reasonably could be expected to lead to: (i) any
merger, consolidation, share exchange, recapitalization, reorganization,
dissolution, liquidation, business combination, or other similar transaction
with the Company or any of its Subsidiaries, (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of a material portion of the
assets of the Company and its Subsidiaries, taken as a
whole, in a single transaction or series of transactions, or (iii) any tender
offer or exchange offer for all or any portion of the outstanding shares of
capital stock of the Company or any of its Subsidiaries or the filing of a
registration statement under the Securities Act of 1933, as amended, in
connection therewith, but shall not include the Merger Agreement.
"AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling, Controlled by, or under common Control with such
Person, provided that no security holder of the Company shall be deemed an
Affiliate of any other security holder solely by reason of any investment in the
Company. For the purpose of this definition, the term "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of stock,
as a trustee or executor, by contract or credit arrangement or otherwise.
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all other Persons with whom such Person would constitute a "group" as described
in Section 13(d)(3) of the Exchange Act.
"BUSINESS DAYS" means any day on which the principal offices of the
Securities and Exchange Commission in Washington, D.C. are open to accept
filings or, in the case of determining a date when any payment is due, any day
other than a day on which banks in New York, New York are required or authorized
to be closed.
"COMPANY" has the meaning ascribed thereto in the recitals of this
Agreement.
"COMPANY COMMON STOCK" has the meaning ascribed thereto in the recitals of
this Agreement.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL
WITH") means the possession, directly or indirectly or as a trustee or executor,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of stock, as a trustee or executor, by
contract or credit arrangement or otherwise.
"EXISTING SHARES" has the meaning ascribed thereto in Section 2(a).
"MERGER" has the meaning ascribed thereto in the recitals of this
Agreement.
2
"PERMITTED TRANSFEREE" means in the case of any Stockholder, (a) a spouse
or lineal descendent (including by adoption and stepchildren), heir, executor,
testamentary trustee or legatee of the Stockholder or (b) any trust or estate
the beneficiaries of which, or any corporation, limited liability company or
partnership, the stockholders, members or partners of which include only the
Persons described in clause (a) above.
"PERSON" means an individual, corporation, partnership, limited liability
company, limited partnership, association, trust, unincorporated organization or
other entity or group (as defined in Section 13(d)(3) of the Exchange Act).
"PURCHASER" has the meaning ascribed thereto in the introductory paragraph
of this Agreement.
"SHARES" means the Existing Shares, together with any shares of Company
Common Stock acquired of record or beneficially by the Stockholder in any
capacity after the date hereof and prior to the termination hereof, whether upon
exercise of options, conversion of convertible securities, purchase, exchange or
otherwise; PROVIDED, HOWEVER, that in the event of a stock dividend or
distribution, or any change in the Company Common Stock by reason of any stock
dividend, split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include the Shares as
well as all such stock dividends and distributions and any shares into which or
for which any or all of the Shares may be changed or exchanged.
"STOCKHOLDER" has the meaning ascribed thereto in the introductory
paragraph to this Agreement.
"TERMINATION DATE" has the meaning ascribed thereto in Section 9 of this
Agreement.
"TRUSTEE" has the meaning ascribed thereto in Section 2(a) of this
Agreement.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The
Stockholder hereby represents and warrants to Purchaser as follows:
(a) The Stockholder is either (A) the record holder or beneficial
owner of the number of, or (B) trustee of a trust that is the record
holder or beneficial owner of, and whose beneficiaries are the
beneficial owners (such trustee, a "Trustee"), shares of Company
Common Stock and Options as is set forth opposite the Stockholder's
name on Schedule I hereto (the "Existing Shares").
(b) No broker, investment banker, financial adviser or other person
is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of the Stockholder in
his or her capacity as such.
3
(c) The Stockholder understands and acknowledges that Purchaser is
entering into the Merger Agreement in reliance upon the Stockholder's
execution and delivery of this Agreement with Purchaser.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. Purchaser
hereby represents and warrants to the Stockholder as follows:
(a) Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation.
(b) Purchaser has all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by Purchaser of this
Agreement and the consummation by Purchaser of the transactions
contemplated hereby have been duly and validly authorized and approved by
all required corporate action other than shareholder approval which shall
be effected prior to the Effective Time. This Agreement has been duly
executed and delivered by Purchaser, and (assuming due authorization,
execution and delivery by the Stockholder) constitutes a valid and binding
obligation of Purchaser, enforceable against it in accordance with its
terms, except as limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditor's rights generally,
(b) general principles of equity, whether such enforceability is
considered in a proceeding in equity or at law, and to the discretion of
the court before which any proceeding therefor may be brought, or (c)
public policy considerations or court decisions which may limit the rights
of the parties thereto for indemnification.
(c) No broker, investment banker, financial adviser or other person
is entitled to any broker's, finder's, financial adviser's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of the Purchaser.
Section 4. CERTAIN COVENANTS OF THE STOCKHOLDER. Except in accordance with
the terms of this Agreement, the Stockholder hereby covenants and agrees as
follows:
(a) Prior to the Termination Date, no Stockholder shall, in its
capacity as such, directly or indirectly (including through advisors,
agents or other intermediaries), solicit (including by way of furnishing
information) or respond to any inquiries or the making of any proposal by
any person or entity (other than Purchaser or any Affiliate thereof) with
respect to the Company that constitutes or could reasonably be expected to
lead to an Acquisition Proposal. If the Stockholder in its capacity as
such receives any such inquiry or proposal, then the Stockholder shall
within 24 hours furnish Purchaser with an accurate description of the
material terms (including any changes or adjustments to such terms as a
result of negotiations or otherwise) and conditions, if any, of such
inquiry or proposal and the identity of the person making it. The
Stockholder, in its capacity as such, will
4
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing; provided, that the limitation set forth
in this sentence shall not restrict the Stockholder from engaging in any
such activities with such a third party who hereafter makes a Superior
Acquisition Proposal. The foregoing provisions of this Section 4(a) shall
not restrict a Stockholder who is also a director of the Company from
taking any actions, or refraining from complying with the foregoing
provision, in the Stockholder's capacity as a director, provided that any
such actions do not violate Section 5(k) of the Merger Agreement.
(b) Prior to the Termination Date, the Stockholder shall not,
directly or indirectly (i) except pursuant to the terms of the Merger
Agreement or this Agreement, offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, enforce or permit the
execution of the provisions of any redemption agreement with the Company
or enter into any contract, option or other arrangement or understanding
with respect to or consent to the offer for sale, sale, transfer, tender,
pledge, encumbrance, assignment or other disposition of, or exercise any
discretionary powers to distribute, any or all of the Stockholder's
Rollover Shares as defined below or any interest therein, including any
trust income or principal, except in each case to a Permitted Transferee
who is or agrees to become bound by this Agreement; or (ii) take any
action that would make any representation or warranty of the Stockholder
contained herein untrue or incorrect or have the effect of preventing or
disabling the Stockholder from performing the Stockholder's obligations
under this Agreement.
(c) The Stockholder hereby waives any rights of appraisal or rights
to dissent from the Merger that the Stockholder may have. The Trustee
represents that no beneficiary who is a beneficial owner of Rollover
Shares under any trust has any right of appraisal or right to dissent from
the Merger which has not been so waived.
(d) [(i) Stockholder hereby agrees to convert, upon payment of the
exercise price thereof, [_____] Options to purchase Company Common Stock
into [_____] Shares immediately prior to the Effective Time and] subject
to the terms and provisions of the Merger Agreement, in connection with
the Merger, the Stockholder hereby agrees to retain an aggregate of
[_____] shares of Surviving Corporation Class A Common Stock held by and
registered in the name of the Stockholder, and in the amount opposite such
name, set forth on Schedule II hereto, upon conversion of, and with
respect to, [_____] of such Stockholder's Shares (the "Rollover Shares")
unless otherwise agreed with Purchaser.
(ii) The Stockholder shall use its best efforts to negotiate
and execute an Investors Agreement on terms and conditions mutually
satisfactory to Purchaser and Stockholder.
5
(e) Unless, in connection therewith, the Rollover Shares held by any
trust which are presently subject to the terms of this Agreement are
transferred to the Stockholder and remain subject in all respects to the
terms of this Agreement, or other Permitted Transferees who upon receipt
of such Rollover Shares become signatories to this Agreement, the
Stockholder who is a Trustee shall not take any action to terminate, close
or liquidate any such trust and shall take all steps necessary to maintain
the existence thereof at least until the first to occur of (i) the
Effective Time and (ii) the Termination Date.
(f) The Stockholder shall take all actions necessary to cause any
Rollover Shares, prior to the Effective Time, to be free and clear of all
liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
Section 5. FURTHER ASSURANCES. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
Section 6. CERTAIN EVENTS. The Stockholder agrees that this Agreement and
the obligations hereunder shall attach to the Stockholder's Rollover Shares and
shall be binding upon any person or entity to which legal or Beneficial
Ownership of such Rollover Shares shall pass, whether by operation of law or
otherwise, including without limitation the Stockholder's heirs, guardians,
administrators or successors or as a result of any divorce.
Section 7. STOP TRANSFER. The Stockholder agrees with, and covenants to,
Purchaser that the Stockholder shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Stockholder's Rollover Shares, unless such transfer is
made in compliance with this Agreement.
Section 8. RULE 145 AFFILIATES. The Stockholder who is an "affiliate" of
the Company for purposes of Rule 145 under the Securities Act of 1933, as
amended, hereby agrees to deliver to Purchaser, on or prior to the Effective
Time, a written agreement in form and substance acceptable to Purchaser,
restricting the disposition of Rollover Shares.
Section 9. TERMINATION. The obligations of the Stockholder hereunder shall
terminate upon the first to occur of (a) the Effective Time and (b) the date the
Merger Agreement is terminated in accordance with its terms (the "Termination
Date"); provided that the provisions of Sections 2, 3, 9 and 10 and any claim
for breach of any representation, warranty, covenant or other agreement under
this Agreement shall survive the Effective Time and/or the Termination Date, as
applicable.
6
Section 10. MISCELLANEOUS.
(a) NOTICES. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been
duly given (i) on the day of service if served personally on the party to
whom notice is to be given; (ii) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, and telephonic
confirmation of receipt is obtained promptly after completion of
transmission, provided that a copy shall be sent via certified mail,
return receipt requested, simultaneously with any such facsimile; (iii) on
the business day after delivery to Federal Express or similar overnight
courier or the Express Mail service maintained by the United States Postal
Service; or (iv) on the fifth day after mailing, if mailed to the party to
whom notice is to be given, by first class mail, registered or certified,
postage prepaid and properly addressed, to the party as follows:
If to the Stockholder: [Name]
[Address]
If to Purchaser: Analog Acquisition Corp.
c/o 399 Venture Partners Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
and: ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth
above.
(b) At any time prior to the Effective Time, any party hereto may,
with respect to any other party hereto, (i) extend the time for the
performance of any of the obligations or other acts, (ii) waive any
inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto or (iii) waive compliance with any
of the agreements or conditions contained herein. Any such extension or
waiver shall be valid if set forth in an instrument in writing signed by
the party or parties to be bound thereby.
7
(c) The headings contained in this Agreement are for the convenience
of reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by the Merger Agreement
is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner.
(e) This Agreement, including all exhibits, disclosure schedules and
schedules hereto, constitutes the entire agreement and supersedes all
prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof and
except as otherwise expressly provided herein.
(f) Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by any party (whether by operation of law or
otherwise) without the prior written consent of the other parties hereto.
Subject to the preceding sentence, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other Person shall have any
right, benefit or obligation under this Agreement as a third party
beneficiary or otherwise.
(g) The parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms. It is accordingly agreed that the
parties hereto shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
(h) No failure or delay on the part of any party hereto in the
exercise of any right hereunder shall impair such right or be construed to
be a waiver of, or acquiescence in, any breach of any representation,
warranty or agreement herein, nor shall any single or partial exercise of
any such right preclude other or further exercise thereof or of any other
right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
(i) Notwithstanding anything herein to the contrary, no Person
executing this Agreement who is, or becomes during the term hereof, a
director of the Company makes any agreement or understanding herein in his
or her capacity as such director, and the agreements set forth herein
shall in no way restrict any director in the exercise of his or her
fiduciary duties as a director of the Company. The Stockholder has
executed this
8
Agreement solely in his or her capacity as the record or beneficial holder
of the Stockholder's Shares or as the trustee of a trust whose
beneficiaries are the beneficial owners of the Stockholder's Shares.
(j) Each party agrees to bear its own expenses in connection with
the transactions contemplated hereby.
(k) This Agreement shall be governed and construed in accordance
with the laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New
York, except to the extent that the General Corporation Law of the State
of Delaware applies as a result of the Company being incorporated in the
State of Delaware, in which case such General Corporation Law shall apply.
(l) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
(m) This Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[Signature Page to Follow]
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
ANALOG ACQUISITION CORP.
By:___________________________
Name:
Title:
----------------------------
[Name]
SCHEDULE I
EXISTING SHARES
---------------
STOCKHOLDER NO. OF EXISTING SHARES NO. OF OPTION SHARES
----------- ---------------------- --------------------
SCHEDULE II
ROLLOVER SHARES
---------------
STOCKHOLDER NO. OF ROLLOVER SHARES
----------- ----------------------
EXHIBIT B-1
RESTATED CERTIFICATE OF INCORPORATION
OF
ALLIED DIGITAL TECHNOLOGIES CORP.
--------------------------------------------
The undersigned officer of ALLIED DIGITAL TECHNOLOGIES CORP., a
corporation organized and existing under the laws of the State of Delaware (the
"CORPORATION") does hereby certify on behalf of the Corporation as follows:
1. The name of the corporation is Allied Digital Technologies Corp.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
4. The total number of shares of all classes of stock which the
corporation shall have authority to issue is twenty-six million (26,000,000)
shares which shall be divided into two classes as follows:
(a) 1,000,000 shares of Preferred Stock, $.01 par value per share
("Preferred Stock");
(b) 25,000,000 shares of Common Stock, $.01 par value per share
("Common Stock").
The designations and the powers, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions of the above classes of stock shall be as follows:
PART I: PREFERRED STOCK
(a) Shares of Preferred Stock may be issued in one or more series
at such time or times and for such consideration or
considerations as the Board of Directors may determine.
(b) The Board of Directors is expressly authorized at any time,
and from time to time, to provide for the issuance of shares
of Preferred Stock in one or more series, with such voting
powers, full or limited, or without voting powers, and with
such determinations, preferences and relative, participating,
optional or other special rights, and qualifications,
limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions providing for the
issue thereof adopted by the Board of Directors, and as are
not stated and expressed in this Article, or any amendment
thereto, including (but without limiting the generality of the
foregoing) the following:
(i) The designation of such series and number of shares
comprising such series, which number may (except where
otherwise provided by the Board of Directors in creating such
series) be increased or decreased (but not below the number of
shares then outstanding) from time to time by action of the
Board of Directors.
(ii) The dividend rate or rates on the shares of such
series and the preference or relation which such dividends
shall bear to the dividends payable on any other class of
capital stock or on any other series of Preferred Stock, the
terms and conditions upon which and the periods in respect of
which dividends shall be payable, whether and upon what
conditions such dividends shall be cumulative and, if
cumulative, the date or dates from which dividends shall
accumulate.
(iii) Whether the shares of such series shall be
redeemable, and, if redeemable, whether redeemable for cash,
property or rights, including securities of any other
corporation, at the option of either the holder or the
corporation or upon the happening of a specified event, the
limitations and restrictions with respect to such redemption,
the time or times when, the price or prices or rate or rates
at which, the adjustments with which and the manner in which
such shares shall be redeemable, including the manner of
selecting shares of such series for redemption if less than
all shares are to be redeemed.
(iv) The rights to which the holders of shares of such
series shall be entitled, and the preferences, if any, over
any other series (or of any other series over such series),
upon the voluntary or involuntary liquidation, dissolution,
distribution or winding up of the corporation, which rights
may vary depending on whether such liquidation, dissolution,
distribution or winding up is voluntary or involuntary, and,
if voluntary, may vary at different dates.
(v) Whether the shares of such series shall be subject
to the operation of a purchase, retirement or sinking fund,
and, if so, whether and upon what conditions such purchase,
retirement or sinking fund shall be cumulative or
noncumulative, the extent to which and the manner in which
such fund shall be applied to the purchase or redemption of
the shares of such series for retirement or to other corporate
purposes and the terms and provisions relative to the
operation thereof.
(vi) Whether the shares of such series shall be
convertible into, or exchangeable for, at the option of either
the holder or the corporation or upon the happening of a
specified event, shares of any other class or of any other
series of any class of capital stock of the corporation, and,
if so convertible or exchangeable, the times, prices, rates,
adjustments, and other terms and conditions of such conversion
or exchange.
(vii) The voting powers, full and/or limited, if any, of
the shares of such series, and whether and under what
conditions the shares of such series (alone or together with
the shares of one or more other series having similar
provisions) shall be entitled to vote separately as a single
class, for the election of one or more directors, or
additional directors, of the corporation in case of dividend
arrearages or other specified events, or upon other matters.
(viii)Whether the issuance of any additional shares of
such series, or of any shares of any other series, shall be
subject to restrictions as to issuance, or as to the powers,
preferences or rights of any such other series.
(ix) Any other preferences, privileges and powers and
relative, participating, option or other special rights, and
qualifications, limitations or restrictions of such series, as
the Board of Directors may deem advisable and as shall not be
inconsistent with the provisions of these Articles.
(c) Unless and except to the extent otherwise required by law or
provided in the resolution or resolutions of the Board of
Directors creating any series of Preferred Stock pursuant to
this Part I, the holders of the Preferred Stock shall have no
voting power with respect to any matter whatsoever.
(d) Shares of Preferred Stock redeemed, converted, exchanged,
purchased, retired or surrendered to the corporation, or which
have been issued and reacquired in any manner, may, upon
compliance with any applicable provisions of the Act, be given
the status of authorized and unissued
shares of Preferred Stock and may be reissued by the Board of
Directors as part of the series of which they were originally
a part or may be reclassified into and reissued as part of a
new series or as a part of any other series, all subject to
the protective conditions or restrictions of any outstanding
series of Preferred Stock.
PART II: COMMON STOCK
(a) Except as otherwise required by law or by any amendment to
this Article, each holder of Common Stock shall have one vote
for each share of stock held by such holder or record on the
books of the corporation on all matters voted upon by the
stockholders of the corporation.
(b) Subject to the preferential dividend rights, if any,
applicable to shares of Preferred Stock and subject to
applicable requirements, if any, with respect to the setting
aside of sums for purchase, retirement or sinking funds for
Preferred Stock, the holders of Common Stock shall be entitled
to receive, to the extent permitted by law, such dividends as
may be declared from time to time by the Board of Directors.
(c) In the event of the voluntary or involuntary liquidation,
dissolution, distribution of assets or winding up of the
corporation, after distribution in full of the preferential
amounts, if any, to be distributed to the holders of shares of
Preferred Stock, holders of Common Stock shall be entitled to
receive all of the remaining assets of the corporation of
whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common Stock
held by them respectively. The Board of Directors may
distribute in kind to the holders of Common Stock such
remaining assets of the corporation or may sell, transfer or
otherwise dispose of all or any part of such remaining assets
to any other corporation, trust or entity, any combination
thereof, and may sell all or any part of the consideration so
received and distribute any balance thereof in kind to holders
of Common Stock. The merger of the corporation into or with
any other corporation, or the merger of any other corporation
into it, or any purchase or redemption of shares of stock of
the corporation of any class, shall not be deemed to be a
dissolution, liquidation or winding up of the corporation for
the purposes of this paragraph.
(d) Such numbers of shares of Common Stock as may from time to
time be required for such purpose shall be reserved for
issuance (i) upon conversion of any shares of Preferred Stock
or any obligation of the corporation convertible into shares
of Common Stock which is at the time outstanding or issuable
upon exercise of any options or warrants at the
time outstanding and (ii) upon exercise of any options,
warrants or rights at the time outstanding to purchase shares
of Common Stock.
5. The name and mailing address of the sole incorporator are as follows:
NAME MAILING ADDRESS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to make, alter or repeal
the bylaws of the corporation.
8. Elections of directors need not be by written ballot unless the bylaws
of the corporation shall so provide.
9. Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws may provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the corporation.
10. The corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
11. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the director derived
any improper personal benefit.
Any repeal, amendment or other modification of this Article shall
not increase the liability or alleged liability of any director of the
corporation then existing with respect to any state of facts then or theretofore
existing or any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts. If the
General Corporation Law of the State of Delaware is subsequently amended to
authorize corporate action further eliminating or limiting personal liability of
directors, then the liability of directors shall be eliminated or limited to the
fullest extent permitted by the General Corporation Law of the State of Delaware
as so amended.
12. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application of any
receiver or receivers appointed for this corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation as the case may be, and also on this
corporation.
13. Any action required or permitted under the General Corporation Law of
the State of Delaware to be taken at an annual or special meeting of
stockholders may be taken without a meeting and without a vote, if a consent in
writing, setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take the action at a meeting at which all shares
entitled to vote thereon were present and voted. Not less than ten (10) days
prior written notice of the corporate action to be taken without a meeting by
less than unanimous written consent shall be given to stockholders who have not
consented in writing.
14. The business and affairs of the corporation shall be managed by or
under the direction of a Board of Directors. The number of directors which shall
constitute the whole board shall be not more than twelve (12) nor less than one
(1), the exact number of directors to be determined from time to time by
resolution adopted by affirmative vote of a majority of the entire Board of
Directors. The Board of Directors immediately after the time that the merger of
HMG Digital Technologies Corp., a Delaware corporation ("HMG"), and EOS
Acquisition Corp., a Delaware corporation ("EAC"), shall become effective under
the General Corporation Law of the State of Delaware (the "Effective Time") as
provided in the Amended and Restated Reorganization Agreement by and among the
corporation, HMG, EAC and certain other parties (the "Reorganization Agreement")
and the Amended and Restated Agreement of Merger by and among the corporation,
HMG and EAC (the "Agreement of Merger"), the directors shall be divided into
three classes designated Class I, Class II, and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. The initial term of the
Class I directors shall expire at the first annual meeting of stockholders after
the Effective Time scheduled to occur in 1995, the initial term of the Class II
directors shall expire at the second annual meeting of stockholders after the
Effective Time and the initial term of the Class III directors shall expire at
the third annual meeting of
stockholders after the Effective Time. At each annual meeting of stockholders,
successors to the class of directors whose term expires at the annual meeting
shall be elected for a three-year term. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible, and
any additional director of any class elected to fill a vacancy resulting from an
increase in such class shall hold office for a term that shall coincide with the
remaining term of that class, but in no case will a decrease in the number of
directors shorten the term of any incumbent director. A director shall hold
office until the annual meeting for the year in which his or her term expires
and until his or her successor shall be elected and shall qualify, subject,
however, to prior death, resignation, retirement, disqualification or removal
from office. Directors may only be removed only for cause. The initial Board of
Directors of the corporation immediately after the Effective Time shall consist
of nine (9) directors and the persons determined as provided in the
Reorganization Agreement shall be elected by the directors of the corporation
then in office to fill the vacancies thus created and to the classes determined
as provided in the Reorganization Agreement. This Article 14 may not be amended
or repealed unless approved by the affirmative vote of not less than two-thirds
of the outstanding shares of the corporation entitled to vote in an election of
directors.
IN WITNESS WHEREOF, the undersigned has executed this Restated
Certificate of Incorporation on behalf of the Corporation and does verify and
affirm, under penalty of perjury, that this Restated Certificate of
Incorporation is the act and deed of the Corporation and that the facts stated
herein are true as of this ___ day of __________, 1998.
ALLIED DIGITAL TECHNOLOGIES CORP..
By: __________________________________
Name:
Title:
EXHIBIT B-2
RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLIED DIGITAL TECHNOLOGIES CORP.
--------------------------------------------
The undersigned officer of ALLIED DIGITAL TECHNOLOGIES CORP., a
corporation organized and existing under the laws of the State of Delaware (the
"CORPORATION") does hereby certify on behalf of the Corporation as follows:
WHEREAS, the name of the Corporation is Allied Digital Technologies
Corp.;
WHEREAS, this Amended and Restated Certificate of Incorporation is
being filed pursuant to Sections 242 and 245 of the Delaware General Corporation
Law in order to amend and restate the Certificate of Incorporation of the
Corporation, as amended by the Certificate of Amendment.
The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended and restated in its entirety as follows:
1. The name of the Corporation is Allied Digital Technologies Corp.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
4. The total number of shares of capital stock which the Corporation shall
have authority to issue is 1,000,000 shares, consisting of (a) 250,000 shares of
Class A Common Stock, par value $0.01 per share (the "CLASS A COMMON"); (b)
250,000 shares of Class B Common Stock, par value $0.01 per share (the "CLASS B
COMMON"; the Class A Common and the Class B Common hereinafter being referred to
collectively as the "COMMON STOCK") and (c) 500,000 shares of Preferred Stock,
par value $0.01 per share (the "PREFERRED STOCK").
PART I
DEFINITIONS
(A) The following terms shall have the following meanings in this
Certificate of Incorporation (such definitions to be equally applicable to both
singular and plural forms of the terms defined):
"AFFILIATE" means with respect to any Person, any other Person that
controls, is controlled by or is under common control with such Person. For the
purposes of this definition, "control" (including its 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 such
Person, whether through the ownership of securities, by contract or otherwise.
"BOARD OF DIRECTORS" means the board of directors of the
Corporation.
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on
which banks in New York, New York are open for business.
"EFFECTIVE TIME" means the date upon which the certificate of merger
regarding the merger of Analog Acquisition Corp. with and into the Corporation
is filed with the Secretary of State of the State of Delaware.
"PERSON" or "PERSON" means an individual, partnership, corporation,
limited liability company or partnership, trust, unincorporated organization,
joint venture, government (or agency or political subdivision thereof) or any
other entity of any kind.
"QUALIFYING OFFERING" means the consummation by the Corporation,
after the Effective Time, of an underwritten primary or secondary public
offering of Common Stock pursuant to an effective registration statement under
the Securities Act, covering the distribution of the Common Stock which (taken
together with all similar previous public offerings subsequent to the Effective
Time) raises at least $15 million of aggregate net proceeds to the Company
(after underwriters' fees, commissions and discounts and offering expenses).
"SALE OF THE COMPANY" means the sale of the Corporation (whether by
merger, consolidation, recapitalization, reorganization, sale of securities,
sale of assets or otherwise) in one transaction or series of related
transactions to a Person or Persons pursuant to which such Person or Persons
(together with its Affiliates) acquires (1) securities representing at least a
majority of the voting power of all securities of the Corporation, assuming the
conversion, exchange or exercise of all securities convertible, exchangeable or
exercisable for or into voting securities, or (2) all or substantially all of
the Corporation's assets on a consolidated basis.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.
"TAX" or "TAXES" means all Federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, AD VALOREM, value added,
franchise, bank shares, withholding, payroll, employment, excise, property,
alternative or add-on minimum, environmental or other taxes, assessments,
duties, fees, levies or other governmental charges of any nature whatever,
whether disputed or not, together with any interest, penalties, additions to tax
or additional amounts with respect thereto.
(B) The following terms, when used in this Amended and Restated
Certificate of Incorporation, shall have the meanings provided for such terms in
the Sections set forth below (such definitions to be equally applicable to both
singular and plural forms of the terms defined):
SECTION (PART)
TERM OF ARTICLE FOURTH
---- -----------------
Class A Common preamble
Class B Common preamble
Common Stock preamble
Date of Issuance A(3)(b) (Part III)
Dividend Payment Date A(3)(c) (Part III)
Dividend Period A(3)(b) (Part III)
Dividend Rate A(3)(b) (Part III)
Junior A Stock A(3)(e) (Part III)
Preferred Liquidation Value A(3)(d) (ii) (Part III)
Preferred Stock preamble
Redemption Date A(4)(a) (iii) (Part III)
Redemption Event A(4)(a) (i) (Part III)
Redemption Price A(4)(a) (iii) (Part III)
Series A Preferred A(1)(a) (Part III)
Special Acquisition A(4)(d) (Part III)
Stated Value A(1)(b) (Part III)
PART II
COMMON STOCK
The powers and rights of the shares of each class of Common Stock, and the
qualifications, limitations or restrictions thereof, are set forth in this Part
II.
(A) (1) VOTING RIGHTS. Except as expressly provided herein or as required
under the GCL, on all matters to be voted on by the Corporation's stockholders,
(a) each holder of record of shares of Class A Common will be entitled to one
vote per share so held, and (b) each holder of record of shares of Class B
Common will be entitled to no voting rights.
(2) CUMULATIVE VOTING IN ELECTION OF DIRECTORS. In any election of
Directors of the Corporation, there shall be cumulative voting for election of
Directors so that any holder of shares of the Corporation entitled to vote
generally in the election of Directors may cumulate the voting power represented
by his shares and give one candidate a number of votes equal to the number of
Directors to be elected multiplied by the number of votes to which such shares
are entitled , or distribute such votes on the same principle among as many
candidates for election as such holder of shares determines.
(3) REMOVAL WITHOUT CAUSE. If at any time less than the entire
Board of Directors is to be removed, no Director may be removed from office
without cause if the votes cast against his removal would be sufficient to elect
him as a Director if then cumulatively voted at an election of the entire Board
of Directors.
(4) AMENDMENT, REPEAL OR ALTERATION. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, the affirmative
vote of the holders of at least 95% of the combined voting power of the
outstanding shares of the Common Stock entitled to vote thereon, voting together
as a single class, shall be required to alter, change, amend, repeal or adopt
any provision inconsistent with this Section (A) of this Part II.
(B) DIVIDENDS. When and as dividends are declared or paid on shares of
Common Stock, whether in cash, property or securities, each holder of record of
shares of Common Stock will be entitled to a ratable portion of such dividend,
based upon the number of shares of Common Stock then held of record by each such
holder, provided that (1) if dividends are declared in shares of Common Stock,
such dividends will be declared and paid at the same rate per share on each
class of Common Stock, and, unless the Corporation obtains the prior affirmative
vote or written consent of at least 95% of the issued and outstanding shares of
each class of Common Stock, dividends payable in shares of a specific class of
Common Stock will be payable only to holders of that particular class of Common
Stock; provided, further, that any dividend or distribution payable to one class
of Common Stock entitles the other class of Common Stock to the same form and
distribution amount (except as provided for in (2) below) on the same date, and
(2) if the dividends consist of voting securities of the Corporation, the
Corporation will make available to each holder of Class B Common, at such
holder's request, dividends consisting of non-voting securities of the
Corporation, which are otherwise identical to the voting securities and which
are convertible into or exchangeable for such voting securities on the same
terms as the shares of Class B Common are convertible into the shares of Class A
Common.
(C) STOCK SPLITS; COMBINATIONS. If the Corporation, in any manner,
subdivides or combines (by stock split, stock dividend or otherwise) the issued
and the outstanding shares of any class of Common Stock, the issued and
outstanding shares of the other class of Common Stock will be proportionately
subdivided or combined , unless the Corporation obtains the prior affirmative
vote or consent of the holders of all of the issued and outstanding shares of
the Class A Common and the Class B Common voting together as a single class.
(D) LIQUIDATION.
(1) RATABLE PARTICIPATION. The holders of the Common Stock will be
entitled to share ratably, on the basis of the number of shares of Common Stock
then held by each such holder, in all distributions to the holders of the Common
Stock in any liquidation, dissolution or winding-up of the Corporation.
(2) MERGERS, ETC. Neither the voluntary sale, conveyance, exchange
or transfer (for cash, shares of stock, securities or other consideration) of
all or substantially all the property or assets of the Corporation nor the
consolidation, merger or other business combination of the Corporation with or
into one or more corporations shall be deemed to be a liquidation, dissolution
or winding-up, voluntary or involuntary, of the Corporation.
(E) CONVERSION.
(1) OPTIONAL CONVERSION OF CLASS A COMMON. Each share of Class A
Common is convertible into one share of Class B Common at the option of the
holder.
(2) OPTIONAL CONVERSION OF CLASS B COMMON. Each share of Class B
Common is convertible into one share of Class A Common at the option of the
holder.
(3) CONVERSION PROCEDURE.
(a) Each conversion of shares of one class of Common Stock
into shares of another class of Common Stock will be effected by the surrender
of the certificate or certificates representing the shares to be converted at
the principal office of the Corporation at any time during normal business
hours, together with written notice by the holder of such shares stating that
the holder desires to convert the shares, or a stated number of the shares, of a
class of Common Stock represented by such certificate or certificates into such
other class of Common Stock.
(b) Each conversion of shares of one class of Common Stock
into shares of another class of Common Stock will be deemed to have been
effected as of the close of business on the date on which such certificate or
certificates were surrendered and such notice was received. At such time the
rights of the holder of the converted Common Stock as such holder will cease and
the person or persons in whose name or names the certificate or certificates for
shares of such other class of Common Stock are to be issued upon such conversion
will be deemed to have become the holder or holders of record of the shares of
such other class of Common Stock represented thereby.
(c) Following each surrender of certificates and the receipt
of such written notice, the Corporation will issue and deliver in accordance
with the surrendering holder's instructions (i) the certificate or certificates
for the class of Common Stock issuable upon such conversion and (ii) a
certificate representing any Common Stock which was represented by the
certificate or certificates delivered to the Corporation in connection with such
conversion but which was not converted.
(d) The issuance of certificates for a class of Common Stock
upon conversion of any class of Common Stock will be made without charge to the
holders of such shares for any issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of such other class of Common Stock.
(e) The Corporation will at all times reserve and keep
available out of its authorized but unissued shares of Class A Common and Class
B Common the number of such shares sufficient for issuance upon conversion of
any Class A Common and Class B Common hereunder.
(f) The Corporation will not close its books against the
transfer of any class of Common Stock in any manner which would interfere with
the timely conversion of any class of Common Stock.
(F) MERGERS, ETC. In connection with any merger, consolidation or
recapitalization in which holders of Class A Common generally receive, or are
given the opportunity to receive, consideration for their shares, then, in all
such circumstances, unless otherwise approved by the holders of a majority of
shares of Class B Common voting as a separate class, all holders of Class B
Common shall be given the opportunity to receive the same form and amount of
consideration per share.
PART III
PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more series,
the number of shares and any designation of each series and the powers
(including voting powers), designations, preferences and relative,
participating, optional, and other special rights of the shares of each series,
and the qualifications, limitations or restrictions thereof, to be as stated and
expressed in a resolution or resolutions providing for the issue of such series
adopted by the Board of Directors, subject to the limitations prescribed by law.
(A) SERIES A PREFERRED STOCK
(1) DESIGNATION.
(a) SERIES A PREFERRED. A series of Preferred Stock is hereby
created with the designations, powers, preferences and rights set forth herein.
The Corporation is authorized to issue a series of Preferred Stock designated as
Series A Preferred Stock consisting of 250,000 shares (the "SERIES A
PREFERRED").
(b) STATED VALUE; DATE OF ISSUANCE. Each share of Series A
Preferred shall have a stated value of $100 (the "STATED VALUE"). No shares of
Series A Preferred will be issued except as part of the original issuance
thereof. The date on which the Corporation initially issues any share of
Preferred Stock will be deemed its "DATE OF ISSUANCE" regardless of the number
of times transfer of such share is made on the stock records of the Corporation
and regardless of the number of certificates which may be issued to evidence
such share.
(c) RANKING. For so long as any shares of Series A Preferred
are issued and outstanding, the Corporation will not issue any series of
Preferred Stock which will be senior or PARI PASSU with respect to payment of
dividends, other distributions, preference on redemption or liquidation rights
or otherwise; PROVIDED, HOWEVER, that holders of more than a majority of the
shares of Series A Preferred may consent to the issuance of Preferred Stock
ranking senior or PARI PASSU to the Series A Preferred.
(2) VOTING.
(a) NO VOTING RIGHTS GENERALLY. Except as otherwise provided
specifically herein or required by law, none of the shares of Series A Preferred
shall have any voting rights.
(b) CONSENT REQUIREMENTS. For so long as shares of Series A
Preferred are issued and outstanding, the affirmative vote or consent of the
holders of more than a majority of all of the shares of Series A Preferred at
the time issued and outstanding, voting as a separate class, given in person or
by proxy either in writing (as may be permitted by law and the Certificate of
Incorporation and By-laws of the Corporation) or at any special or annual
meeting, shall be necessary to permit, effect or validate the taking of any of
the following actions by the Corporation, whether such actions are effected
directly or through a merger or another transaction (PROVIDED, that, no such
affirmative vote or consent shall be required in connection with a merger or
other transaction which would effect such an action if such merger or other
transaction would result in a Sale of the Company, so long as prior to or
simultaneously with completion of that transaction, the Series A Preferred will
be redeemed in full):
(i) the amendment of the Certificate of
Incorporation or By-laws of the Corporation, or the alteration or change of the
powers, rights, privileges or
preferences of the Series A Preferred, if such amendment, alteration or change
would adversely affect any of the powers, rights, privileges or preferences of
the holders of the Series A Preferred;
(ii) the authorization of (or issuance of any shares
of) any class of Preferred Stock which ranks senior to or PARI PASSU with the
Series A Preferred with respect to dividends or upon liquidation, dissolution or
winding-up of the Corporation;
(iii) the increase of the number of shares of Series
A Preferred authorized for issuance; or
(iv) the issuance after the Effective Time of any
shares of Series A Preferred (excluding the issuance of share certificates upon
transfers or exchanges of shares by holders (other than the Corporation) thereof
or upon replacement of lost, stolen, damaged or mutilated share certificates),
except for issuances of shares of Series A Preferred which have been redeemed or
otherwise acquired.
(3) DIVIDENDS; CASH AND STOCK DIVIDENDS.
(a) PAYMENT. Dividends will be payable on each share of Series
A Preferred, in cash, as provided herein when, as and if declared by the Board
of Directors, to the extent funds are legally available therefor.
(b) RATES; DATES PAYABLE. Dividends on shares of Series A
Preferred will be payable in cash at a rate per annum equal to 12% of the
Preferred Liquidation Value (as defined in Section 3(d)(ii) below) thereof (the
"DIVIDEND RATE"). Such dividends shall be payable semi-annually on June 30 and
December 31 of each year (each such date hereinafter referred to as a "DIVIDEND
PAYMENT DATE" and each such dividend period hereinafter referred to as a
"DIVIDEND PERIOD") (or, if such date is not a Business Day, then on the next
succeeding Business Day), to the holders of record as they appear on the
register of the Corporation for the shares of such Series A Preferred.
(c) RECORD DATE. The Board of Directors may fix a record date
for the determination of holders of shares of Series A Preferred entitled to
receive payment of the dividends payable pursuant to Section 3(b), which record
date shall not be more than 60 days prior to the Dividend Payment Date.
(d) ACCRUAL.
(i) Dividends on the shares of Series A Preferred
shall accrue cumulatively on a daily basis and shall accrue from the Date of
Issuance to and including the date on which the redemption of such share of
Series A Preferred shall have been effected or on which full payment with
respect to such share shall have been made pursuant to any liquidation,
dissolution or winding-up of the Corporation, whether or not such dividends have
been declared and whether or not there shall be (at the time such dividends
became or become payable or any other time) profits, surpluses or other funds of
the Corporation legally available for the payment of dividends.
(ii) To the extent not paid on any Dividend Payment
Date, all dividends which have accrued on any share of Series A Preferred then
outstanding during the period from and including the preceding Dividend Payment
Date (or from and including the Date of Issuance in the case of the initial
Dividend Payment Date) to (but excluding) such Dividend Payment Date shall be
added on such Dividend Payment Date to the Preferred Liquidation Value of such
share of Series A Preferred (so that, without limitation, dividends shall
thereafter accrue in respect of the amount of such accrued but unpaid dividends)
and shall remain a part thereof until (but only until) such dividends are paid.
The "PREFERRED LIQUIDATION VALUE" of any share of Series A Preferred as of a
particular date shall be equal to the sum of $100 plus an amount equal to any
accrued and unpaid dividends (whether or not earned or declared) on such share
of Series A Preferred added to the Preferred Liquidation Value of such share of
Series A Preferred on any Dividend Payment Date pursuant to this Section 3(d)
and not thereafter paid.
(e) PRIORITY. For so long as any shares of Series A Preferred
shall be outstanding, no dividend or distribution, whether in cash, stock or
other property, shall be paid, declared and set apart for payment or made on any
date on or in respect to the Common Stock, or any other class or series of stock
of the Corporation ranking junior to the Series A Preferred (together with the
Common Stock, a "JUNIOR A STOCK") as to dividends or distributions of assets
upon liquidation, dissolution or winding up, and no payment on account of the
redemption, purchase or other acquisition or retirement for value by the
Corporation of shares of Common Stock or any other Junior A Stock shall be made
on any date unless, in each case, the full amount of unpaid dividends accrued on
all outstanding shares of Series A Preferred shall have been paid or
contemporaneously are declared and paid; PROVIDED, HOWEVER, that the foregoing
provisions of this sentence shall not prohibit (i) a dividend payable solely in
shares of Common Stock or any other Junior A Stock or (ii) the acquisition of
any shares of any Common Stock or any other Junior A Stock upon conversion or
exchange thereof into or for any shares of any other class of Common Stock or
other Junior A Stock.
(4) REDEMPTION.
(a) REDEMPTION BY THE CORPORATION.
(i) To the extent funds are legally available
therefor, on the earlier of (x) ________, 2009(1), or if such date is not a
Business Day then on the next Business Day, and (y) the date on which a Sale of
the Company or a Qualifying Offering occurs, the Corporation shall redeem at the
Redemption Price therefor all issued and outstanding shares of
--------
(1) Day and month of closing.
Series A Preferred (the events described in any of the above clauses (x) or (y)
are each referred to herein as a "REDEMPTION EVENT").
(ii) To the extent funds are legally available
therefor, on any Business Day prior to a Redemption Event, the Corporation, at
its option, may redeem at the Redemption Price therefor all or any portion of
the shares of Series A Preferred then issued and outstanding.
(iii) The date on which shares of Series A Preferred
are required to be redeemed pursuant to this Section 4 is referred to herein as
the "REDEMPTION DATE." If, on the Redemption Date, there shall be insufficient
funds of the Corporation legally available for the complete redemption of the
Series A Preferred, such amount of the funds as is legally available shall be
used for the redemption obligation as described in Section 4(d) of this Part
III. If the Corporation shall fail to discharge its obligation to redeem shares
of the Series A Preferred upon the occurrence of a Redemption Event, such
obligation shall be discharged as soon as the Corporation is permitted by law to
discharge such obligations. Such redemption obligation shall be cumulative so
that if such obligation shall not be fully discharged for any reason, all funds
legally available therefor shall immediately be applied thereto upon receipt by
the Corporation until such obligation is discharged.
The redemption price (the "REDEMPTION PRICE") for each outstanding share of
Series A Preferred to be redeemed pursuant to this Section 4(a) shall be the
Preferred Liquidation Value thereof as of the Redemption Date.
(b) PAYMENT OF REDEMPTION PRICE. Each payment of the
Redemption Price in accordance with Section 4(a)(iii) of this Part III shall be
made to the holder of each share of Series A Preferred being redeemed, upon
surrender by such holder at the Corporation's principal executive office of the
certificate representing such share of Series A Preferred, duly endorsed in
blank or accompanied by an appropriate form of assignment.
(c) REDEEMED SHARES NOT TO BE REISSUED. All shares of Series A
Preferred redeemed pursuant to Section 4(a) of this Part III shall be retired
and canceled and shall not thereafter be reissued. This Section shall not apply
to any shares of Series A Preferred which is otherwise redeemed, purchased or
acquired by the Corporation.
(d) AMOUNT OF SHARES REDEEMED. The Corporation may acquire
shares of the Series A Preferred from time to time without redeeming or
otherwise acquiring all or any other issued and outstanding shares of the Series
A Preferred (such acquisition, a "SPECIAL ACQUISITION"). Except with respect to
any Special Acquisition, if less than all of the issued and outstanding shares
of Series A Preferred is to be redeemed pursuant to this Section 4, the
Corporation shall determine the number of shares held by each holder of such
series to be redeemed as hereinafter provided. The number of shares of Series A
Preferred to be redeemed from each holder thereof shall be the number of shares
determined by multiplying the total
number of shares of Series A Preferred to be redeemed by a fraction, the
numerator of which shall be the total number of shares of Series A Preferred
then held by such holder and the denominator of which shall be the total number
of shares of Series A Preferred then issued and outstanding.
(e) NOTICE OF REDEMPTION. Notice of the redemption of shares
of Series A Preferred pursuant to Section 4(a) of this Part III, specifying the
time and place of redemption and the Redemption Price, shall be mailed by
certified or registered mail, return receipt requested, to each holder of record
of shares to be redeemed, at the address for such holder shown on the stock
records of the Corporation not less than 10 Business Days prior to the date on
which such redemption is to be made; PROVIDED, that neither failure to give such
notice nor any defect therein shall affect the validity of the proceeding for
the redemption of any shares of Series A Preferred to be redeemed. Such notice
shall also specify the number of shares of Series A Preferred of each holder
thereof and the certificate numbers thereof which are to be redeemed. In case
less than all the shares of Series A Preferred represented by any certificate
are redeemed, a new certificate representing the unredeemed shares shall be
issued to the holder thereof without cost to such holder.
(f) DIVIDENDS AFTER REDEMPTION DATE. Unless the Redemption
Price is not made available on the Redemption Date to the holder of a share of
Series A Preferred, then from and after the Redemption Date, such share of
Series A Preferred shall not be entitled to any dividends accruing after such
date, all rights of the holder of such share of Series A Preferred as a
stockholder of the Corporation by reason of the ownership of such share of
Series A Preferred shall cease, except the right to receive the Redemption Price
of such share of Series A Preferred upon the presentation and surrender of the
certificate representing such share of Series A Preferred and such share of
Series A Preferred shall not after such date be deemed to be outstanding for any
purpose.
(5) LIQUIDATION RIGHTS.
(a) PREFERENCE. Upon the dissolution, liquidation or
winding-up of the Corporation, whether voluntary or involuntary, the holders of
issued and outstanding shares of Series A Preferred shall be entitled to
receive, out of the assets of the Corporation available for distribution to
stockholders, before any payment or distribution shall be made to the holders of
Common Stock or any other Junior A Stock, an amount per share of Series A
Preferred, in cash, equal to the Preferred Liquidation Value of such shares as
of the date of final distribution. Such assets shall be distributed ratably
among the shares of Series A Preferred.
(b) PREFERENCES ARE NOT PARTICIPATING. After the payment to
the holders of the shares of Series A Preferred of the full preferential amounts
provided for in Section 5 of this Part III the holders of shares of Series A
Preferred shall have no right or claim to any of the remaining assets of the
Corporation.
(c) MERGERS, ETC. Neither the sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all the property or assets of the Corporation nor the
consolidation, merger or other business combination of the Corporation with or
into one or more corporations shall be deemed to be a liquidation, dissolution
or winding-up, voluntary or involuntary, of the Corporation.
5. Intentionally Deleted.
6. The Corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to make, alter or repeal
the bylaws of the Corporation.
8. Elections of directors need not be by written ballot unless the bylaws
of the Corporation shall so provide.
9. Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the bylaws of the Corporation.
10. The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this certificate of incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
11. A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the director derived
any improper personal benefit.
Any repeal, amendment or other modification of this Article shall
not increase the liability or alleged liability of any director of the
Corporation then existing with respect to any state of facts then or theretofore
existing or any action, suit or proceeding theretofore or thereafter brought or
threatened based in whole or in part upon any such state of facts. If the
General Corporation Law of the State of Delaware is subsequently amended to
authorize corporate action further eliminating or limiting personal liability of
directors, then the liability of directors shall be eliminated or limited to the
fullest extent permitted by the General Corporation Law of the State of Delaware
as so amended.
12. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application of any
receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation as the case may be, and also on the
Corporation.
13. Any action required or permitted under the General Corporation Law of
the State of Delaware to be taken at an annual or special meeting of
stockholders may be taken without a meeting and without a vote, if a consent in
writing, setting forth the action so taken, is signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take the action at a meeting at which all shares
entitled to vote thereon were present and voted.
14. The business and affairs of the Corporation shall be managed by or
under the direction of a Board of Directors. The number of directors which shall
constitute the whole board shall be not more than twelve (12) nor less than one
(1), the exact number of directors to be determined from time to time by
resolution adopted by affirmative vote of a majority of the entire Board of
Directors.
IN WITNESS WHEREOF, the undersigned has executed this Amended and
Restated Certificate of Incorporation on behalf of the Corporation and does
verify and affirm, under penalty of perjury, that this Amended and Restated
Certificate of Incorporation is the act and deed of the Corporation and that the
facts stated herein are true as of this ___ day of __________, 1998.
ALLIED DIGITAL TECHNOLOGIES CORP.
By: __________________________________
Name:
Title:
EXHIBIT C
AMENDED AND RESTATED
BY-LAWS
OF
ALLIED DIGITAL TECHNOLOGIES CORP.
ARTICLE I
STOCKHOLDERS
SECTION 1. ANNUAL MEETING. The annual meeting of the stockholders of
the Corporation shall be held on such date, at such time and at such place
within or without the State of Delaware as may be designated by the Board of
Directors, for the purpose of electing Directors and for the transaction of such
other business as may be properly brought before the meeting.
SECTION 2. SPECIAL MEETINGS. Except as otherwise provided in the
Certificate of Incorporation, a special meeting of the stockholders of the
Corporation may be called at any time by the Board of Directors or the Chairman
of the Board. Any special meeting of the stockholders shall be held on such
date, at such time and at such place within or without the State of Delaware as
the Board of Directors or the officer calling the meeting may designate. At a
special meeting of the stockholders, no business shall be transacted and no
corporate action shall be taken other
than that stated in the notice of the meeting unless all of the stockholders are
present in person or by proxy, in which case any and all business may be
transacted at the meeting even though the meeting is held without notice.
SECTION 3. NOTICE OF MEETINGS. Except as otherwise provided in these
By-Laws or by law, a written notice of each meeting of the stockholders shall be
given not less than ten (10) nor more than sixty (60) days before the date of
the meeting to each stockholder of the Corporation entitled to vote at such
meeting at his or her address as it appears on the records of the Corporation.
The notice shall state the place, date and hour of the meeting and, in the case
of a special meeting, the purpose or purposes for which the meeting is called.
SECTION 4. QUORUM. At any meeting of the stockholders, the holders of a
majority in number of the total outstanding shares of stock of the Corporation
entitled to vote at such meeting, present in person or represented by proxy,
shall constitute a quorum of the stockholders for all purposes, unless the
representation of a larger number of shares shall be required by law, by the
Certificate of Incorporation or by these By-Laws, in which case the
representation of the number of shares so required shall constitute a quorum;
provided that at any meeting of the stockholders at which the holders of any
class of stock of the Corporation shall be entitled to vote separately as a
class, the holders of a majority in number of the total outstanding shares of
such class, present in person or represented by proxy, shall constitute a quorum
for purposes of such class vote unless the representation of a larger number of
shares of such class shall be required by law, by the Certificate of
Incorporation or by these By-Laws.
-2-
SECTION 5. ADJOURNED MEETINGS. Whether or not a quorum shall be present
in person or represented at any meeting of the stockholders, the holders of a
majority in number of the shares of stock of the Corporation present in person
or represented by proxy and entitled to vote at such meeting may adjourn from
time to time; provided, however, that if the holders of any class of stock of
the Corporation are entitled to vote separately as a class upon any matter at
such meeting, any adjournment of the meeting in respect of action by such class
upon such matter shall be determined by the holders of a majority of the shares
of such class present in person or represented by proxy and entitled to vote at
such meeting. When a meeting is adjourned to another time or place, notice need
not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the stockholders, or the holders of any class of stock entitled to vote
separately as a class, as the case may be, may transact any business which might
have been transacted by them at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the adjourned meeting.
SECTION 6. ORGANIZATION. The Chairman of the Board, or, in his absence,
the Chief Executive Officer, or, in the absence of the Chairman of the Board and
the Chief Executive Officer, the President, or, in the absence of the Chairman
of the Board, the Chief Executive Officer and the President, a Vice President
shall call all meetings of the stockholders to order, and shall act as Chairman
of such meetings. In the absence of the Chairman of the Board, the
-3-
Chief Executive Officer, the President and all of the Vice Presidents, the
holders of a majority in number of the shares of stock of the Corporation
present in person or represented by proxy and entitled to vote at such meeting
shall elect a Chairman.
The Secretary of the Corporation shall act as Secretary of all meetings
of the stockholders; but in the absence of the Secretary, the Chairman may
appoint any person to act as Secretary of the meeting. It shall be the duty of
the Secretary to prepare and make, at least ten days before every meeting of
stockholders, a complete list of stockholders entitled to vote at such meeting,
arranged in alphabetical order and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list shall
be open, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting or, if not so
specified, at the place where the meeting is to be held, for the ten days next
preceding the meeting, to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, and shall be produced
and kept at the time and place of the meeting during the whole time thereof and
subject to the inspection of any stockholder who may be present.
SECTION 7. VOTING. Except as otherwise provided in the Certificate of
Incorporation or by law, each stockholder shall be entitled to one vote for each
share of the capital stock of the Corporation registered in the name of such
stockholder upon the books of the Corporation. Each stockholder entitled to vote
at a meeting of stockholders or to express consent or dissent to corporate
action in writing without a meeting may authorize another person or persons to
act for
-4-
him or her by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period. When
directed by the presiding officer or upon the demand of any stockholder, the
vote upon any matter before a meeting of stockholders shall be by ballot. Except
as otherwise provided by law or by the Certificate of Incorporation, Directors
shall be elected by a plurality of the votes cast at a meeting of stockholders
by the stockholders entitled to vote in the election and, whenever any corporate
action, other than the election of Directors is to be taken, it shall be
authorized by a majority of the votes cast at a meeting of stockholders by the
stockholders entitled to vote thereon.
Shares of the capital stock of the Corporation belonging to the
Corporation or to another corporation, if a majority of the shares entitled to
vote in the election of directors of such other corporation is held, directly or
indirectly, by the Corporation, shall neither be entitled to vote nor be counted
for quorum purposes.
SECTION 8. INSPECTORS. When required by law or directed by the
presiding officer or upon the demand of any stockholder entitled to vote, but
not otherwise, the polls shall be opened and closed, the proxies and ballots
shall be received and taken in charge, and all questions touching the
qualification of voters, the validity of proxies and the acceptance or rejection
of votes shall be decided at any meeting of the stockholders by one or more
Inspectors who may be appointed by the Board of Directors before the meeting, or
if not so appointed, shall be appointed by the presiding officer at the meeting.
If any person so appointed fails to appear or act, the vacancy may be filled by
appointment in like manner. Each inspector, before entering
-5-
upon the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his ability.
SECTION 9. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Any action
required to be taken at any annual or special meeting of stockholders of the
Corporation, or any action which may be taken at any annual or special meeting
of the stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business, or an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the Corporation's
registered office shall be made by hand or by certified or registered mail,
return receipt requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty (60) days of
the date the earliest dated consent is delivered to the Corporation, a written
consent or consents signed by a sufficient number of holders to take action are
delivered to the Corporation in the manner prescribed in the first paragraph of
this Section.
-6-
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. NUMBER AND TERM OF OFFICE. The business and affairs of the
Corporation shall be managed by or under the direction of a Board of Directors,
none of whom need be stockholders of the Corporation. The number of Directors
constituting the Board of Directors shall be fixed from time to time by
resolution passed by a majority of the Board of Directors. The Directors shall,
except as hereinafter otherwise provided for filling vacancies, be elected at
the annual meeting of stockholders, and shall hold office until their respective
successors are elected and qualified or until their earlier resignation or
removal.
SECTION 2. REMOVAL, VACANCIES AND ADDITIONAL DIRECTORS. The
stockholders may, at any special meeting the notice of which shall state that it
is called for that purpose, remove, with or without cause, any Director and fill
the vacancy; provided that whenever any Director shall have been elected by the
holders of any class of stock of the Corporation voting separately as a class
under the provisions of the Certificate of Incorporation, such Director may be
removed and the vacancy filled only by the holders of that class of stock voting
separately as a class. Vacancies caused by any such removal and not filled by
the stockholders at the meeting at which such removal shall have been made, or
any vacancy caused by the death or resignation of any Director or for any other
reason, and any newly created directorship resulting from any increase in the
authorized number of Directors, may be filled by the affirmative vote of a
majority of the Directors then in office, although less than a quorum, and any
Director so elected to fill any such
-7-
vacancy or newly created directorship shall hold office until his or her
successor is elected and qualified or until his or her earlier resignation or
removal.
When one or more Directors shall resign effective at a future date, a
majority of the Directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective, and each
Director so chosen shall hold office as herein provided in connection with the
filling of other vacancies.
SECTION 3. PLACE OF MEETING. The Board of Directors may hold its
meetings in such place or places in the State of Delaware or outside the State
of Delaware as the Board from time to time shall determine.
SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such times and places as the Board from time to time by
resolution shall determine. No further notice shall be required for any regular
meeting of the Board of Directors; but a copy of every resolution fixing or
changing the time or place of regular meetings shall be mailed to every Director
at least five days before the first meeting held in pursuance thereof.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Directors
shall be held whenever called by direction of the Chairman of the Board or by
any two of the Directors then in office.
-8-
Notice of the day, hour and place of holding of each special meeting
shall be given by mailing the same at least two days before the meeting or by
causing the same to be transmitted by facsimile, telegram or telephone at least
one day before the meeting to each Director. Unless otherwise indicated in the
notice thereof, any and all business other than an amendment of these By-Laws
may be transacted at any special meeting, and an amendment of these By-Laws may
be acted upon if the notice of the meeting shall have stated that the amendment
of these By-Laws is one of the purposes of the meeting. At any meeting at which
every Director shall be present, even though without any notice, any business
may be transacted, including the amendment of these By-Laws.
SECTION 6. QUORUM. Subject to the provisions of Section 2 of this
Article II, a majority of the members of the Board of Directors in office (but
in no case less than one-third of the total number of Directors nor less than
two Directors) shall constitute a quorum for the transaction of business and the
vote of the majority of the Directors present at any meeting of the Board of
Directors at which a quorum is present shall be the act of the Board of
Directors. If at any meeting of the Board there is less than a quorum present, a
majority of those present may adjourn the meeting from time to time.
SECTION 7. ORGANIZATION. The Chairman of the Board shall preside at all
meetings of the Board of Directors. In the absence of the Chairman of the Board,
a Chairman shall be elected from the Directors present. The Secretary of the
Corporation shall act as Secretary of all
-9-
meetings of the Directors; but in the absence of the Secretary, the Chairman may
appoint any person to act as Secretary of the meeting.
SECTION 8. COMMITTEES. The Board of Directors may designate one or more
committees including, without limitation, compensation and audit committees,
each committee to consist of one or more of the Directors of the Corporation.
The Board may designate one or more Directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of a member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board, shall have and
may exercise all the powers and authority of the Board of Directors in the
management of the business and the affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it;
but no such committee shall have the power or authority in reference to
approving or adopting, or recommending to the stockholders, any action or matter
expressly required by law to be submitted to stockholders for approval, or
adopting, amending or repealing these By-laws.
SECTION 9. CONFERENCE TELEPHONE MEETINGS. Unless otherwise restricted
by the Certificate of Incorporation or by these By-Laws, the members of the
Board of Directors or any committee designated by the Board, may participate in
a meeting of the Board or such
-10-
committee, as the case may be, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.
SECTION 10. CONSENT OF DIRECTORS OR COMMITTEE IN LIEU OF MEETING.
Unless otherwise restricted by the Certificate of Incorporation or by these
By-Laws, any action required or permitted to be taken at any meeting of the
Board Directors, or of any committee thereof, may be taken without a meeting if
all members of the Board or committee, as the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the Board or committee, as the case may be.
ARTICLE III
OFFICERS
SECTION 1. OFFICERS. The officers of the Corporation shall be a
Chairman of the Board, Chief Executive Officer, a President, one or more Vice
Presidents, a Secretary and a Treasurer, and such additional officers, if any,
as shall be elected by the Board of Directors pursuant to the provisions of
Section 8 of this Article III. The Chairman of the Board, the President, the
Chief Executive Officer, one or more Vice Presidents, the Secretary and the
Treasurer shall be elected by the Board of Directors at its first meeting after
each annual meeting of the stockholders. The failure to hold such election shall
not of itself terminate the term of office of any officer. All officers shall
hold office at the pleasure of the Board of Directors. Any
-11-
officer may resign at any time upon written notice to the Corporation. Officers
may, but need not, be Directors. Any number of offices may be held by the same
person.
All officers, agents and employees shall be subject to removal, with or
without cause, at any time by the Board of Directors. The removal of an officer
without cause shall be without prejudice to his or her contract rights, if any.
The election or appointment of an officer shall not of itself create contract
rights. All agents and employees other than officers elected by the Board of
Directors shall also be subject to removal, with or without cause, at any time
by the officers appointing them.
Any vacancy caused by the death, resignation or removal of any officer,
or otherwise, may be filled by the Board of Directors, and any officer so
elected shall hold office at the pleasure of the Board of Directors.
In addition to the powers and duties of the officers of the Corporation
as set forth in these By-Laws, the officers shall have such authority and shall
perform such duties as from time to time may be determined by the Board of
Directors.
SECTION 2. POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD. The Chairman
of the Board shall preside at all meetings of the stockholders and at all
meetings of the Board of Directors and shall have such other powers and perform
such other duties as may from time to time be assigned by these By-Laws or by
the Board of Directors.
-12-
SECTION 3. POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER. The Chief
Executive Officer shall be the chief executive officer of the Corporation, have
general charge and control of all the Corporation's business and affairs and,
subject to the control of the Board of Directors, shall have all powers and
shall perform all duties incident to the office of Chief Executive Officer. In
the absence of the Chairman of the Board, the Chief Executive Officer shall
preside at all meetings of the stockholders and at all meetings of the Board of
Directors. In addition, the Chief Executive Officer shall have such other powers
and perform such other duties as may from time to time be assigned by these
By-Laws or by the Board of Directors.
SECTION 4. POWERS AND DUTIES OF THE PRESIDENT. The President shall,
subject to the control of the Board of Directors, have all powers and shall
perform all duties incident to the office of President. In the absence of the
Chairman of the Board and the Chief Executive Officer, the President shall
preside at all meetings of the stockholders and at all meetings of the Board of
Directors. In the absence of the Chief Executive Officer, the President shall be
the chief executive officer of the Corporation, have general charge and control
of all the Corporation's business and affairs and shall have such other powers
and perform such other duties as may from time to time be assigned by these
By-Laws or by the Board of Directors.
SECTION 5. POWERS AND DUTIES OF THE VICE PRESIDENTS. Each Vice
President shall have all powers and shall perform all duties incident to the
office of Vice President and shall have such other powers and perform such other
duties as may from time to time be assigned by
-13-
these By-Laws or by the Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President.
SECTION 6. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall keep
the minutes of all meetings of the Board of Directors and the minutes of all
meetings of the stockholders in books provided for that purpose. The Secretary
shall attend to the giving or serving of all notices of the Corporation; shall
have custody of the corporate seal of the Corporation and shall affix the same
to such documents and other papers as the Board of Directors, the Chairman of
the Board, the Chief Executive Officer or the President shall authorize and
direct; shall have charge of the stock certificate books, transfer books and
stock ledgers and such other books and papers as the Board of Directors, the
Chairman of the Board, the Chief Executive Officer or the President shall
direct, all of which shall at all reasonable times be open to the examination of
any Director, upon application, at the office of the Corporation during business
hours. The Secretary shall have all powers and shall perform all duties incident
to the office of Secretary and shall also have such other powers and shall
perform such other duties as may from time to time be assigned by these By-Laws
or by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the President.
SECTION 7. POWERS AND DUTIES OF THE TREASURER. The Treasurer shall have
custody of, and when proper shall pay out, disburse or otherwise dispose of, all
funds and securities of the Corporation. The Treasurer may endorse on behalf of
the Corporation for collection checks, notes and other obligations and shall
deposit the same to the credit of the Corporation in such
-14-
bank or banks or depositary or depositaries as the Board of Directors may
designate; shall sign all receipts and vouchers for payments made to the
Corporation; shall enter or cause to be entered regularly in the books of the
Corporation kept for the purpose full and accurate accounts of all moneys
received or paid or otherwise disposed of and whenever required by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer or the
President shall render statements of such accounts. The Treasurer shall, at all
reasonable times, exhibit the books and accounts to any Director of the
Corporation upon application at the office of the Corporation during business
hours; and shall have all powers and shall perform all duties incident of the
office of Treasurer and shall also have such other powers and shall perform such
other duties as may from time to time be assigned by these By-Laws or by the
Board of Directors, the Chairman of the Board, the Chief Executive Officer or
the President.
SECTION 8. ADDITIONAL OFFICERS. The Board of Directors may from time to
time elect such other officers (who may but need not be Directors), including a
Controller, Assistant Treasurers, Assistant Secretaries and Assistant
Controllers, as the Board may deem advisable and such officers shall have such
authority and shall perform such duties as may from time to time be assigned by
the Board of Directors, the Chairman of the Board, the Chief Executive Officer
or the President.
The Board of Directors may from time to time by resolution delegate to
any Assistant Treasurer or Assistant Treasurers any of the powers or duties
herein assigned to the Treasurer;
-15-
and may similarly delegate to any Assistant Secretary or Assistant Secretaries
any of the powers or duties herein assigned to the Secretary.
SECTION 9. GIVING OF BOND BY OFFICERS. All officers of the Corporation,
if required to do so by the Board of Directors, shall furnish bonds to the
Corporation for the faithful performance of their duties, in such penalties and
with such conditions and security as the Board shall require.
SECTION 10. VOTING UPON STOCKS. Unless otherwise ordered by the Board
of Directors, the Chairman of the Board, the Chief Executive Officer, the
President or any Vice President shall have full power and authority on behalf of
the Corporation to attend and to act and to vote, or in the name of the
Corporation to execute proxies to vote, at any meeting of stockholders of any
corporation in which the Corporation may hold stock, and at any such meeting
shall possess and may exercise, in person or by proxy, any and all rights,
powers and privileges incident to the ownership of such stock. The Board of
Directors may from time to time, by resolution, confer like powers upon any
other person or persons.
SECTION 11. COMPENSATION OF OFFICERS. The officers of the Corporation
shall be entitled to receive such compensation for their services as shall from
time to time be determined by the Board of Directors.
-16-
ARTICLE IV
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter, a "Proceeding"), by reason of the fact that he or
she is or was a director or officer of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter, an "Indemnitee"), whether the basis of such Proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent shall
be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than permitted prior thereto), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) reasonably incurred or suffered by such
Indemnitee in connection therewith and such indemnification shall continue as to
an Indemnitee who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the Indemnitee's heirs, executors and
administrators; PROVIDED, HOWEVER, that, except as provided in Section 3 of this
Article IV with respect to Proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such Indemnitee in
-17-
connection with a Proceeding (or part thereof) initiated by such Indemnitee only
if such Proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
Section 2. RIGHT TO ADVANCEMENT OF EXPENSES. The right to
indemnification conferred in Section 1 of this Article IV shall include the
right to be paid by the Corporation the expenses incurred in defending any
Proceeding for which such right to indemnification is applicable in advance of
its final disposition (hereinafter, an "Advancement of Expenses"); PROVIDED,
HOWEVER, that, if the Delaware General Corporation Law requires, an Advancement
of Expenses incurred by an Indemnitee in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such Indemnitee, including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of an undertaking
(hereinafter, an "Undertaking"), by or on behalf of such Indemnitee, to repay
all amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter, a "Final
Adjudication") that such Indemnitee is not entitled to be indemnified for such
expenses under this Section or otherwise.
Section 3. RIGHT OF INDEMNITEE TO BRING SUIT. The rights to
indemnification and to the advancement of expenses conferred in Sections 1 or 2
of this Article IV shall be contract rights. If a claim under Sections 1 or 2 of
this Article IV is not paid in full by the Corporation within sixty days after a
written claim has been received by the Corporation, except in the case of a
claim for an Advancement of Expenses, in which case the applicable period shall
be twenty days, the Indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole or
in part in any such suit, or in a suit brought
-18-
by the Corporation to recover an Advancement of Expenses pursuant to the terms
of an Undertaking, the Indemnitee shall be entitled to be paid also the expense
of prosecuting or defending such suit. In (i) any suit brought by the Indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the Indemnitee to enforce a right to an Advancement of Expenses) it shall be a
defense that, and (ii) in any suit by the Corporation to recover an Advancement
of Expenses pursuant to the terms of an Undertaking the Corporation shall be
entitled to recover such expenses upon a Final Adjudication that, the Indemnitee
has not met any applicable standard for indemnification set forth in the
Delaware General Corporation Law. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the Indemnitee is proper in the circumstances
because the Indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a right to indemnification or to an Advancement of Expenses hereunder,
or by the Corporation to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such Advancement of Expenses, under this
Section or otherwise shall be on the Corporation.
-19-
Section 4. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and
to the Advancement of Expenses conferred in this Article IV shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, the Corporation's certificate of incorporation, bylaw,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 5. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
Section 6. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION.
The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and to the Advancement of Expenses
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article IV with respect to the indemnification and
Advancement of Expenses of directors and officers of the Corporation.
ARTICLE V
STOCK-SEAL-FISCAL YEAR
SECTION 1. CERTIFICATES FOR SHARES OF STOCK. The certificates for
shares of stock of the Corporation shall be in such form, not inconsistent with
the Certificate of Incorporation, as
-20-
shall be approved by the Board of Directors. All certificates shall be signed by
the Chairman of the Board, the Chief Executive Officer, the President or a Vice
President and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and shall not be valid unless so signed.
In case any officer or officers who shall have signed any such
certificate or certificates shall cease to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates had not ceased
to be such officer or officers of the Corporation.
All certificates for shares of stock shall be consecutively numbered as
the same are issued. The name of the person owning the shares represented
thereby with the number of such shares and the date of issue thereof shall be
entered on the books of the Corporation.
Except as hereinafter, provided, all certificates surrendered to the
Corporation for transfer shall be canceled, and no new certificates shall be
issued until former certificates for the same number of shares have been
surrendered and canceled.
SECTION 2. LOST, STOLEN OR DESTROYED CERTIFICATES. Whenever a person
owning a certificate for shares of stock of the Corporation alleges that it has
been lost, stolen or destroyed,
-21-
he or she shall file in the office of the Corporation an affidavit setting
forth, to the best of his or her knowledge and belief, the time, place and
circumstances of the loss, theft or destruction, and, if required by the Board
of Directors, a bond of indemnity or other indemnification sufficient in the
opinion of the Board of Directors to indemnify the Corporation and its agents
against any claim that may be made against it or them on account of the alleged
loss, theft or destruction of any such certificate or the issuance of a new
certificate in replacement therefor. Thereupon the Corporation may cause to be
issued to such person a new certificate in replacement for the certificate
alleged to have been lost, stolen or destroyed. Upon the stub of every new
certificate so issued shall be noted the fact of such issue and the number, date
and the name of the registered owner of the lost, stolen or destroyed
certificate in lieu of which the new certificate is issued.
SECTION 3. TRANSFER OF SHARES. Shares of stock of the Corporation shall
be transferred on the books of the Corporation by the holder thereof, in person
or by his or her attorney duly authorized in writing, upon surrender and
cancellation of certificates for the number of shares of stock to be
transferred, except as provided in Section 2 of this Article IV.
SECTION 4. REGULATIONS. The Board of Directors shall have power and
authority to make such rules and regulations as it may deem expedient concerning
the issue, transfer and registration of certificates for shares of stock of the
Corporation.
SECTION 5. RECORD DATE. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders, or
to receive payment
-22-
of any dividend or other distribution or allotment of any rights or to exercise
any rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the day next preceding the day
on which the meeting is held, and, for determining stockholders entitled to
receive payment of any dividend or other distribution or allotment of rights or
to exercise any rights of change, conversion or exchange of stock or for any
other purpose, the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall be not more than ten (10) days after the date upon which
the resolution fixing the record date is adopted. If no record date has been
fixed by
-23-
the Board of Directors and no prior action by the Board of Directors is required
by the Delaware General Corporation Law, the record date shall be the first date
on which a signed written consent setting forth the action taken or proposed to
be taken is delivered to the Corporation in the manner prescribed by Article I,
Section 9 hereof. If no record date has been fixed by the Board of Directors and
prior action by the Board of Directors is required by the Delaware General
Corporation Law with respect to the proposed action by written consent of the
stockholders, the record date for determining stockholders entitled to consent
to corporate action in writing shall be at the close of business on the day on
which the Board of Directors adopts the resolution taking such prior action.
SECTION 6. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation, the Board of Directors shall have power to declare and pay
dividends upon shares of stock of the Corporation, but only out of funds
available for the payment of dividends as provided by law.
Subject to the provisions of the Certificate of Incorporation, any
dividends declared upon the stock of the Corporation shall be payable on such
date or dates as the Board of Directors shall determine. If the date fixed for
the payment of any dividend shall in any year fall upon a legal holiday, then
the dividend payable on such date shall be paid on the next day not a legal
holiday.
SECTION 7. CORPORATE SEAL. The Board of Directors shall provide a
suitable seal, containing the name of the Corporation, which seal shall be kept
in the custody of the Secretary.
-24-
A duplicate of the seal may be kept and be used by any officer of the
Corporation designated by the Board of Directors, the Chairman of the Board, the
Chief Executive Officer or the President.
SECTION 8. FISCAL YEAR. The fiscal year of the Corporation shall be
such fiscal year as the Board of Directors from time to time by resolution shall
determine.
ARTICLE VI
MISCELLANEOUS PROVISIONS.
SECTION 1. CHECKS, NOTES, ETC. All checks, drafts, bills of exchange,
acceptances, notes or other obligations or orders for the payment of money shall
be signed and, if so required by the Board of Directors, countersigned by such
officers of the Corporation and/or other persons as the Board of Directors from
time to time shall designate.
Checks, drafts, bills of exchange, acceptances, notes, obligations and
orders for the payment of money made payable to the Corporation may be endorsed
for deposit to the credit of the Corporation with a duly authorized depository
by the Treasurer and/or such other officers or persons as the Board of Directors
from time to time may designate.
SECTION 2. LOANS. No loans and no renewals of any loans shall be
contracted on behalf of the Corporation except as authorized by the Board of
Directors. When authorized to do so, any officer or agent of the Corporation may
effect loans and advances for the Corporation
-25-
from any bank, trust company or other institution or from any firm, corporation
or individual, and for such loans and advances may make, execute and deliver
promissory notes, bonds or other evidences of indebtedness of the Corporation.
When authorized so to do, any officer or agent of the Corporation may pledge,
hypothecate or transfer, as security for the payment of any and all loans,
advances, indebtedness and liabilities of the Corporation, any and all stocks,
securities and other personal property at any time held by the Corporation, and
to that end may endorse, assign and deliver the same. Such authority may be
general or confined to specific instances.
SECTION 3. CONTRACTS. Except as otherwise provided in these By-Laws or
by law or as otherwise directed by the Board of Directors, the Chairman of the
Board, the Chief Executive Officer, the President or any Vice President shall be
authorized to execute and deliver, in the name and on behalf of the Corporation,
all agreements, bonds, contracts, deeds, mortgages, and other instruments,
either for the Corporation's own account or in a fiduciary or other capacity,
and the seal of the Corporation, if appropriate, shall be affixed thereto by any
of such officers or the Secretary or an Assistant Secretary. The Board of
Directors, the Chairman of the Board, the Chief Executive Officer, the President
or any Vice President designated by the Board of Directors may authorize any
other officer, employee or agent to execute and deliver, in the name and on
behalf of the Corporation, agreements, bonds, contracts, deeds, mortgages, and
other instruments, either for the Corporation's own account or in a fiduciary or
other capacity, and, if appropriate, to affix the seal of the Corporation
thereto. The grant of such authority by the Board or any such officer may be
general or confined to specific instances.
-26-
SECTION 4. WAIVERS OF NOTICE. Whenever any notice whatever is required
to be given by law, by the Certificate of Incorporation or by these By-Laws to
any person or persons, a waiver thereof in writing, signed by the person or
persons entitled to the notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
SECTION 5. OFFICES OUTSIDE OF DELAWARE. Except as otherwise required by
the laws of the State of Delaware, the Corporation may have an office or offices
and keep its books, documents and papers outside of the State of Delaware at
such place or places as from time to time may be determined by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer or the
President.
ARTICLE VII
AMENDMENTS
These By-Laws and any amendment thereof may be altered, amended or
repealed, or new By-Laws may be adopted, by the Board of Directors at any
regular or special meeting by the affirmative vote of a majority of all of the
members of the Board, provided in the case of any special meeting at which all
of the members of the Board are not present, that the notice of such meeting
shall have stated that the amendment of these By-Laws was one of the purposes of
the meeting; but these By-Laws and any amendment thereof may be altered, amended
or repealed or new By-Laws may be adopted by the holders of a majority of the
total outstanding stock of the Corporation entitled to vote at any annual
meeting or at any special meeting, provided, in the
-27-
case of any special meeting, that notice of such proposed alteration, amendment,
repeal or adoption is included in the notice of the meeting.
-28-
EXHIBIT D
NAME ROLLOVER SHARES
---- ---------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 26,250
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 26,250
▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,500
▇▇▇▇▇ ▇▇▇▇▇▇ 5,000
▇▇▇▇▇ ▇▇▇▇ 3,750
▇▇▇▇▇ ▇▇▇▇▇▇ 3,750
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 2,500
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. 2,500
▇▇▇▇▇▇ ▇▇▇▇▇ 2,500
EXHIBIT E
______________________, 1998
Analog Acquisition Corp.
▇/▇ ▇▇▇ ▇▇▇▇▇▇▇ Partners Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
We have acted as special transaction counsel to ALLIED DIGITAL
TECHNOLOGIES CORP., a Delaware corporation ("ADT"), in connection that certain
Agreement and Plan of Merger, dated as of ______________, 1998 (the "Merger
Agreement"), by and between Analog Acquisition Corp., a Delaware corporation
("AAC") and ADT. Our opinion is being delivered to you pursuant to Section
6(a)(xvi) of the Merger Agreement. Capitalized terms used but not defined herein
shall have the respective meanings assigned to such terms in the Merger
Agreement.
In connection with the preparation of our opinion, we have reviewed
the Merger Agreement as well as the following documents: (i) the Certificate of
Incorporation of ADT, as amended to date, (ii) the By-Laws of ADT in effect on
the date hereof, (iii) the form of Stockholders Agreement substantially in the
form dated April __, 1998, to be entered into between AAC and each Stockholder,
(iv) the form of Rollover Agreement substantially in the form dated April __,
1998, to be entered into between AAC and each Stockholder, and (v) the form of
Stockholder Voting and Rollover Agreement substantially in the form, dated April
__, 1998 to be entered into between AAC and ▇▇▇▇▇▇ ▇▇▇▇▇▇. In addition, we have
examined such other records of ADT, and such other certificates and instruments,
including certificates of public officials, as we have considered necessary or
appropriate under the circumstances to render our opinion.
In rendering our opinion, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as certified or
photostatic copies, and the authenticity of all such latter documents, and we
have assumed the incumbency and authority of all public officials.
As to the matters of fact material to our opinion, we have relied
solely upon the representations and warranties made by ADT in the Merger
Agreement and upon certificates from
public officials and officers of ADT or its Subsidiaries. We have assumed the
accuracy of the factual matters contained therein, and have not attempted to
verify independently any of such factual matters; however, nothing has come to
our attention which would cause us to question the accuracy of such factual
matters. Without limiting the generality of the foregoing, where the phrase "to
our knowledge" appears herein, the foregoing provisions of this paragraph apply.
We have made such investigations of law as we have deemed
appropriate and necessary for our opinion, although we have not reviewed the
laws of any jurisdiction other than the laws of the State of New York, the
Delaware General Corporation Law and the federal laws of the United States.
Accordingly, we express no opinion as to the effect on the Transactions
described herein, and in the agreements and materials referred to herein, of the
laws of any State or other jurisdiction other than the laws of the state of New
York or the General Corporation Law of the State of Delaware or the federal laws
of the United States. As members of the Bar of the State of New York, we do not
purport to be experts on the laws of any other State.
In rendering our opinion, we also have assumed that the Merger
Agreement embodies the entire agreement between the parties thereto with respect
to the subject matter thereof, and has not been amended by oral or written
agreement or by conduct of the parties.
Our opinion is also qualified to the extent that the enforceability
of any provisions of the Merger Agreement or any of the rights granted pursuant
thereto, may be subject to or limited by (i) applicable bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally, and (ii) the application of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or in law), including, without limitation, (a) the possible
unavailability of specific performance, injunctive relief or other equitable
remedies, and (b) concepts of materiality, reasonableness, good faith and fair
dealing.
Based upon the foregoing and subject to the comments and
qualifications set forth below, we are of the opinion that:
1. ADT is a corporation validly existing and in good standing under
the laws of the State of Delaware.
2. Neither execution and delivery of the Merger Agreement, nor the
consummation of the Transactions contemplated thereby, will (a) violate any
applicable constitution, statute, regulation, rule, or to our knowledge, any
injunction, judgment, order, decree, ruling, charge or other restriction, in
each case, of any governmental or regulatory body or court to which ADT or its
Subsidiaries is subject, or any provision of the certificate of incorporation or
by-laws of ADT and its Subsidiaries, or (b) conflict with, result in breach of,
constitute a default under, or result in the acceleration of, create in any
Party the right to accelerate, terminate, modify, or cancel or require any
notice under any Contract set forth on Schedules 3(d)(i) and 3(d)(ii) of the
Merger Agreement to which any of ADT and its Subsidiaries is a party or by which
it is bound or to which any of its assets
-2-
is subject, except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation or failure to give notice would not have
a Material Adverse Effect or a material adverse effect on the ability of the
Parties to consummate the Transactions.
3. ADT has duly executed and delivered the Merger Agreement and it
constitutes a legally valid and binding obligation of ADT, enforceable in
accordance with its terms.
Our opinion and the matters addressed herein are as of the date
hereof and we undertake no, and disclaim any, obligation to advise you of any
change in any matter set forth herein after the date hereof. Our opinion is
furnished by us solely for your benefit in connection with the Transactions
referred to above, and it may not be relied upon, quoted by, or delivered to any
other person. Our opinion is limited to the matters stated herein and no opinion
is implied or may be inferred beyond the matters expressly stated herein.
Our opinion is not to be furnished to any other person or agency
without our prior written consent, except (i) to your counsel, and (ii) in a
legal proceeding, to the court or any party thereto, and then only after you
have given us at least 20 days' prior written notice thereof (or such shorter
period of notice thereof as shall be available if the situation does not permit
20 days' notice).
-3-