EXHIBIT A
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AGREEMENT AND PLAN OF MERGER
DATED
DECEMBER 13, 2005
BY AND AMONG
ANTEON INTERNATIONAL CORPORATION,
GENERAL DYNAMICS CORPORATION
AND
AVENGER ACQUISITION CORPORATION
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER......................................................1
ARTICLE I THE MERGER..............................................................1
Section 1.1 The Merger....................................................1
Section 1.2 The Closing...................................................1
Section 1.3 Effective Time................................................2
Section 1.4 Effects of the Merger.........................................2
Section 1.5 Organizational Documents......................................2
Section 1.6 Directors and Officers........................................2
Section 1.7 Conversion of Shares..........................................2
Section 1.8 Company Options and Equity-Based Awards.......................3
Section 1.9 Employee Stock Purchase Plan..................................5
Section 1.10 Adjustments...................................................5
ARTICLE II PAYMENT 5
Section 2.1 Surrender of Certificates.....................................5
Section 2.2 Paying Agent; Certificate Surrender Procedures................6
Section 2.3 Transfer Books................................................7
Section 2.4 Termination of Payment Fund...................................7
Section 2.5 Appraisal Rights..............................................7
Section 2.6 Lost Certificates.............................................8
Section 2.7 No Rights as Stockholder......................................8
Section 2.8 Withholding...................................................8
Section 2.9 Escheat.......................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................9
Section 3.1 Corporate Existence and Power.................................9
Section 3.2 Capitalization...............................................10
Section 3.3 Authorization of Transaction.................................11
Section 3.4 Vote Required................................................12
Section 3.5 Noncontravention; Approvals..................................12
Section 3.6 Company Filings; Information in the Proxy Statement..........13
Section 3.7 No Undisclosed Liabilities...................................14
Section 3.8 Absence of Company Material Adverse Effect...................14
Section 3.9 Litigation and Legal Compliance..............................15
Section 3.10 Contract Matters.............................................16
Section 3.11 Tax Matters..................................................19
Section 3.12 Employee Benefit Matters.....................................21
Section 3.13 Environmental Matters........................................23
Section 3.14 Real Estate..................................................24
Section 3.15 Intellectual Property Matters................................25
Section 3.16 Labor Matters................................................25
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Section 3.17 Amendment to the Rights Agreement............................26
Section 3.18 Takeover Laws................................................26
Section 3.19 Insurance....................................................26
Section 3.20 Brokers' Fees................................................26
Section 3.21 Opinion of Financial Advisor.................................26
Section 3.22 No Other Representations or Warranties.......................27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT AND MERGER SUBSIDIARY....27
Section 4.1 Corporate Existence and Power................................27
Section 4.2 Authorization of Transaction; Non-Contravention; Approvals...27
Section 4.3 Financial Capability.........................................28
Section 4.4 Information in the Proxy Statement...........................28
Section 4.5 Litigation...................................................29
Section 4.6 Brokers' and Finders' Fees...................................29
Section 4.7 No Additional Representations................................29
ARTICLE V COVENANTS 29
Section 5.1 General......................................................29
Section 5.2 Further Assurances...........................................29
Section 5.3 Interim Conduct of the Company...............................30
Section 5.4 Control of Operations........................................33
Section 5.5 Proxy Statement; Company Stockholders Meeting................33
Section 5.6 Intentionally Omitted........................................34
Section 5.7 Acquisition Proposals........................................34
Section 5.8 Indemnification..............................................37
Section 5.9 Public Announcements.........................................38
Section 5.10 Full Access..................................................39
Section 5.11 Actions Regarding Antitakeover Statutes......................39
Section 5.12 Continued Benefits Plans.....................................39
Section 5.13 Standstill Provisions........................................41
Section 5.14 Notification of Certain Matters; Supplemental Disclosure.....41
ARTICLE VI CONDITIONS TO THE CONSUMMATION OF THE MERGER..........................41
Section 6.1 Conditions to the Obligations of Each Party..................41
Section 6.2 Conditions to the Obligation of the Company..................42
Section 6.3 Conditions to the Obligation of the Parent and the
Merger Subsidiary............................................42
Section 6.4 Frustration of Closing Conditions............................43
ARTICLE VII TERMINATION..........................................................43
Section 7.1 Termination..................................................43
Section 7.2 Effect of Termination........................................46
Section 7.3 Fees and Expenses............................................46
Section 7.4 Other Termination Fee and Expense Reimbursement Matters......47
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ARTICLE VIII MISCELLANEOUS....................................................48
Section 8.1 Nonsurvival of Representations............................48
Section 8.2 Specific Performance......................................48
Section 8.3 Successors and Assigns....................................48
Section 8.4 Amendment.................................................48
Section 8.5 Severability..............................................48
Section 8.6 Extension of Time; Waiver.................................49
Section 8.7 Counterparts..............................................49
Section 8.8 Descriptive Headings......................................49
Section 8.9 Notices...................................................49
Section 8.10 No Third-Party Beneficiaries..............................50
Section 8.11 Entire Agreement..........................................50
Section 8.12 Construction..............................................51
Section 8.13 Consent to Jurisdiction...................................51
Section 8.14 Governing Law.............................................52
Section 8.15 Company Disclosure Letter.................................52
EXHIBITS
EXHIBIT A - Surviving Corporation Certificate of Incorporation
EXHIBIT B - Surviving Corporation Bylaws
EXHIBIT C - Form of Amendment to Rights Agreement
TABLE OF DEFINED TERMS
Acquisition Proposal.............................................Section 5.7(g)
Affiliate.......................................................Section 3.10(g)
Agreement..............................................................Preamble
Agreement Date.........................................................Preamble
Anti-Bribery Laws................................................Section 3.9(d)
Antitrust Laws......................................................Section 3.5
Bear ▇▇▇▇▇▇▇.......................................................Section 3.20
Bear ▇▇▇▇▇▇▇ Engagement Letter.....................................Section 3.20
Certificate.........................................................Section 2.1
Certificate of Merger...............................................Section 1.3
Closing.............................................................Section 1.2
Closing Date........................................................Section 1.2
Code................................................................Section 2.8
Company................................................................Preamble
Company Common Stock...................................................Recitals
Company Disclosure Letter...........................................ARTICLE III
Company Expense Reimbursement....................................Section 7.3(b)
Company Material Adverse Effect..................................Section 3.1(b)
Company Material Agreements.....................................Section 3.10(a)
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Company Options..................................................Section 1.8(a)
Company Plans...................................................Section 3.12(a)
Company Preferred Stock..........................................Section 3.2(a)
Company Recommendation...........................................Section 5.5(a)
Company Representatives..........................................Section 5.7(a)
Company SEC Documents............................................Section 3.6(a)
Company Stock-Based Award........................................Section 1.8(e)
Company Stock Plans..............................................Section 1.8(a)
Company Stockholders...............................................Section 3.21
Company Stockholders Approval.......................................Section 3.4
Company Stockholders Meeting.....................................Section 5.5(a)
Company Termination Fee..........................................Section 7.3(b)
Confidentiality Agreement........................................Section 5.7(b)
Constituent Corporations............................................Section 1.1
Continuing Employee.............................................Section 5.12(a)
Delaware Act........................................................Section 1.1
Dissenting Share Limit...........................................Section 6.3(f)
Dissenting Shares................................................Section 2.5(a)
Effective Time......................................................Section 1.3
Employee Pension Benefit Plan...................................Section 3.12(a)
Employee Welfare Benefit Plan...................................Section 3.12(a)
Environmental Laws..............................................Section 3.13(b)
ERISA...........................................................Section 3.12(a)
Exchange Act.....................................................Section 1.8(a)
Expense Reimbursements...........................................Section 7.4(b)
Export Control Laws..............................................Section 3.9(c)
Filed SEC Documents.................................................ARTICLE III
Financial Statements.............................................Section 3.6(b)
GAAP.............................................................Section 3.6(b)
GDNS............................................................Section 5.12(a)
Government Contract.............................................Section 3.10(c)
Governmental Authority..............................................Section 3.5
Hazardous Substance.............................................Section 3.13(c)
HSR Act.............................................................Section 3.5
Inactive Subsidiaries............................................Section 3.1(a)
Indemnified Parties..............................................Section 5.8(a)
Intellectual Property...........................................Section 3.15(d)
Laws.............................................................Section 3.9(b)
Leased Real Property............................................Section 3.14(b)
Leases..........................................................Section 3.14(b)
Liens............................................................Section 3.2(e)
Material Adverse Effect..........................................Section 3.1(b)
Merger..............................................................Section 1.1
Merger Consideration.............................................Section 1.7(a)
Merger Subsidiary......................................................Preamble
Option Consideration.............................................Section 1.8(b)
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Outside Date..................................................Section 7.1(b)(i)
Owned Real Property.............................................Section 3.14(a)
Parent.................................................................Preamble
Parent Material Adverse Effect......................................Section 4.1
Parent Expense Reimbursement.....................................Section 7.3(e)
Parent Termination Fee...........................................Section 7.3(e)
Paying Agent.....................................................Section 2.2(a)
Payment Fund.....................................................Section 2.2(b)
Person...........................................................Section 3.1(b)
Proxy Statement..................................................Section 5.5(a)
Rights...........................................................Section 3.2(a)
Rights Agreement.................................................Section 3.2(a)
SEC.................................................................ARTICLE III
Securities Act...................................................Section 3.6(a)
Share............................................................Section 1.7(a)
SOXA.............................................................Section 3.6(a)
Specified Stockholders...........................................Section 6.3(f)
Stock-Based Payment..............................................Section 1.8(e)
Stock Purchase Plan.................................................Section 1.9
Subsidiary.......................................................Section 1.7(b)
Superior Proposal................................................Section 5.7(h)
Surviving Corporation...............................................Section 1.1
Tax.............................................................Section 3.11(c)
Tax Returns.....................................................Section 3.11(a)
Taxes...........................................................Section 3.11(c)
Termination Fees.................................................Section 7.4(b)
v
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated December 13,
2005 (the "AGREEMENT DATE"), by and among ANTEON INTERNATIONAL CORPORATION, a
Delaware corporation (the "COMPANY"), GENERAL DYNAMICS CORPORATION, a Delaware
corporation (the "Parent"), and AVENGER ACQUISITION CORPORATION, a Delaware
corporation and an indirect, wholly-owned subsidiary of Parent (the "MERGER
SUBSIDIARY").
BACKGROUND
WHEREAS, the Board of Directors of each of the Parent, the Merger
Subsidiary and the Company deem it advisable and in the best interests of their
respective companies and stockholders to consummate the merger of the Merger
Subsidiary with and into the Company, upon the terms and subject to the
conditions set forth herein, and have unanimously adopted resolutions adopting,
approving and declaring the advisability of this Agreement, the Merger and the
other transactions contemplated herein.
WHEREAS, pursuant to the Merger, shares of the Company's common stock,
par value $0.01 per share (the "COMPANY COMMON STOCK"), shall be, except as
otherwise provided herein, converted into the right to receive the Merger
Consideration (as defined below) in the manner set forth herein, and the Company
shall become an indirect wholly-owned subsidiary of the Parent.
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Agreement, and for other good and valuable consideration, the value,
receipt and sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. Subject to the terms and conditions of
this Agreement, at the Effective Time the Merger Subsidiary shall be merged with
and into the Company (the "MERGER") in accordance with the provisions of the
General Corporation Law of the State of Delaware (the "DELAWARE ACT"). Following
the Merger, the Company shall continue as the surviving corporation (the
"SURVIVING CORPORATION") and the separate corporate existence of the Merger
Subsidiary shall cease. As a result of the Merger, the Surviving Corporation
shall become an indirect, wholly-owned subsidiary of the Parent. The Company and
the Merger Subsidiary are sometimes referred to collectively as the "CONSTITUENT
CORPORATIONS."
SECTION 1.2 THE CLOSING. Unless this Agreement has been
terminated pursuant to SECTION 7.1, the closing of the Merger (the "CLOSING")
shall take place at 10:00 a.m., local time, on a date no later than the second
business day following satisfaction or waiver of the conditions set forth in
ARTICLE VI (the "CLOSING DATE"), at the Washington, D.C. offices of ▇▇▇▇, Weiss,
Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP, unless another date, time or place is agreed
to in writing by the parties.
SECTION 1.3 EFFECTIVE TIME. Upon the terms and subject to the
satisfaction or waiver of the conditions of this Agreement, at the Closing (or
at such other time as the parties may agree) the Company shall execute and file
with the Delaware Secretary of State an appropriate certificate of merger (the
"CERTIFICATE OF MERGER") in accordance with Section 251 of the Delaware Act and
make all other filings or recordings required by the Delaware Act in connection
with the Merger. The Merger shall be consummated upon the filing of the
Certificate of Merger with the Delaware Secretary of State or such later time as
is agreed upon by the parties and specified in such Certificate of Merger. The
time the Merger becomes effective in accordance with the Delaware Act is
referred to in this Agreement as the "EFFECTIVE TIME."
SECTION 1.4 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in this Agreement and the relevant provisions of the Delaware
Act. Without limiting the generality of the foregoing, as of the Effective Time,
the Surviving Corporation shall succeed to all the properties, rights,
privileges, powers, franchises and assets of the Constituent Corporations, and
all debts, liabilities and duties of the Constituent Corporations shall become
debts, liabilities and duties of the Surviving Corporation.
SECTION 1.5 ORGANIZATIONAL DOCUMENTS. At the Effective Time, and
without any further action on the part of the Constituent Corporations, the
certificate of incorporation and bylaws of the Company shall be amended in their
entirety to read as set forth on EXHIBITS A and B respectively, and thereby
shall become the certificate of incorporation and bylaws of the Surviving
Corporation until thereafter amended in accordance with their respective terms
and the Delaware Act.
SECTION 1.6 DIRECTORS AND OFFICERS. The directors and the
officers of the Merger Subsidiary at the Effective Time shall be the initial
directors and officers of the Surviving Corporation and shall hold office from
the Effective Time in accordance with the certificate of incorporation and
bylaws of the Surviving Corporation until their respective successors are duly
elected or appointed and qualified or until their earlier death, resignation or
removal.
SECTION 1.7 CONVERSION OF SHARES. As of the Effective Time, by
virtue of the Merger and without any action on the part of the Company, the
Parent or the Merger Subsidiary or their respective stockholders:
(a) each share of Company Common Stock together with the
associated Rights, if any, (each share of Company Common Stock together with the
associated Rights, if any, is hereinafter referred to as a "SHARE" and
collectively, the "SHARES"), other than shares to be canceled in accordance with
subsection (b) below and any Dissenting Shares, issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive $55.50 in cash, without interest, (the "MERGER CONSIDERATION") payable
to the holder thereof upon surrender of the Certificate formerly representing
such Share in the manner provided in SECTION 2.2. All such Shares, when so
converted, shall no longer be outstanding and shall automatically be canceled
and shall cease to exist, and each holder of a Certificate shall cease to have
any rights with respect
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to such Shares, except the right to receive the Merger Consideration, without
interest, upon the surrender of such Certificate in accordance with SECTION 2.2;
(b) each Share owned immediately prior to the Effective Time by
the Company, the Parent, the Merger Subsidiary or any of their respective
Subsidiaries, including any such Shares held as treasury stock of the Company,
shall be canceled and extinguished and no consideration shall be delivered in
exchange therefor. For purposes of this section, Company Common Stock owned
beneficially or held of record by any plan, program or arrangement sponsored or
maintained for the benefit of any current or former employee of the Company, the
Parent, the Merger Subsidiary or any of their respective Subsidiaries, shall not
be deemed to be held by the Company, the Parent, the Merger Subsidiary or any
such Subsidiary, regardless of whether the Company, the Parent, the Merger
Subsidiary or any such Subsidiary has the power, directly or indirectly, to vote
or control the disposition of such shares. For purposes of this Agreement, the
term "SUBSIDIARY" means, with respect to any Person, any other Person fifty
percent (50%) or more of the outstanding voting ownership securities of which
(or if there are no such voting interests, fifty percent (50%) or more of the
equity interests of which) are owned, directly or indirectly, by such first
Person; and
(c) each share of common stock, par value $1.00 per share, of the
Merger Subsidiary issued and outstanding immediately prior to the Effective Time
will, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into one share of common stock, par value $1.00 per share,
of the Surviving Corporation and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
(d) The holders of Dissenting Shares, if any, shall be entitled to
such rights as provided for in SECTION 2.5.
SECTION 1.8 COMPANY OPTIONS AND EQUITY-BASED AWARDS.
(a) As soon as reasonably practicable following the Agreement
Date, the Company shall take such action as shall be required: (i) to cause the
vesting of any outstanding but unvested options to purchase shares of Company
Common Stock (the "COMPANY OPTIONS") granted pursuant to the Amended and
Restated Anteon International Corporation Omnibus Stock Plan (or any other stock
option plan, program, agreement or arrangement of the Company and its
Subsidiaries (collectively, the "COMPANY STOCK PLANS")) to be accelerated in
full, effective immediately prior to the Effective Time; (ii) to effectuate the
cancellation, as of the Effective Time, of all Company Options outstanding
immediately prior to the Effective Time (without regard to the exercise price of
such Company Options); (iii) to cause, pursuant to the Company Stock Plans, each
outstanding Company Option to represent as of the Effective Time solely the
right to receive, in accordance with this SECTION 1.8, a lump sum cash payment
in the amount of the Option Consideration (as defined below), if any, with
respect to such Company Option and to no longer represent the right to purchase
Company Common Stock or any other equity security of the Company, the Parent,
the Surviving Corporation or any other Person; and (iv) to cause the
transactions contemplated by this section to be
3
exempt from the provisions of Section 16(b) of the Securities Exchange Act of
1934, as amended (together with the rules and regulations promulgated
thereunder, the "EXCHANGE ACT").
(b) Each holder of a Company Option shall receive from the
Surviving Corporation, in respect and in consideration of each Company Option so
cancelled, as soon as practicable following the Effective Time (but in any event
not later than five business days after the Effective Time), an amount equal to
the product of (i) the excess, if any, of (A) the Merger Consideration over (B)
the exercise price per share of Company Common Stock subject to such Company
Option, MULTIPLIED BY (ii) the total number of shares of Company Common Stock
issuable upon exercise of such Company Option (whether or not then vested or
exercisable), without any interest thereon (the "OPTION CONSIDERATION").
(c) As soon as practicable following the execution of this
Agreement, the Company shall mail to each person who is a holder of Company
Options a letter describing the treatment of and payment for such Company
Options pursuant to this SECTION 1.8 and providing instructions for use in
obtaining payment for such Company Options. Parent shall at all times from and
after the Effective Time maintain sufficient liquid funds to satisfy its
obligations to holders of Company Options pursuant to this SECTION 1.8.
(d) As of the Effective Time, the Company Stock Plans shall
terminate and all rights under any provision of any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of the Company shall be canceled. At and after the
Effective Time, no Person shall have any right under the Company Options, the
Company Stock Plans or any other plan, program or arrangement with respect to
equity securities of the Surviving Corporation or any Subsidiary thereof, except
the right to receive the amount payable under this SECTION 1.8.
(e) Each right of any kind other than Company Options, whether
vested or unvested, contingent or accrued, to acquire or receive Company Common
Stock or to receive benefits measured by the value of a number of shares of
Company Common Stock, that may be held, awarded, outstanding, credited, payable
or reserved for issuance under the Company Stock Plans (including restricted
stock and performance shares or awards) (each, a "COMPANY STOCK-BASED AWARD")
outstanding immediately prior to the Effective Time, whether vested or unvested,
shall fully vest (at the maximum level of possible payout, if applicable) by
virtue of the Merger and without any action on the part of the holder thereof,
and the holder thereof shall receive from the Surviving Corporation (and the
Parent shall cause the Surviving Corporation to pay) within five (5) business
days after the Effective Time a cash payment with respect thereto equal to the
product of (x) the Merger Consideration and (y) the number of shares of Company
Common Stock subject to such Company Stock-Based Award (the "STOCK-BASED
PAYMENT").
(f) No additional Company Options, Company Stock-Based Awards or
other equity-based awards or other rights to acquire Company Common Stock shall
be granted pursuant to the Company Stock Plans or otherwise after the Agreement
Date.
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(g) The Board of Directors of the Company shall adopt such resolutions or take
such other actions as may be required or appropriate such that, upon the
Effective Time, each Company Option and Company Stock Plan is treated in
accordance with this SECTION 1.8.
SECTION 1.9 EMPLOYEE STOCK PURCHASE PLAN. The Board of Directors
of the Company shall adopt such resolutions or take such other actions with
respect to the Anteon International Corporation Employee Stock Purchase Plan,
dated as of April 11, 2004 (the "STOCK PURCHASE PLAN"), as may be required or
appropriate to provide that (i) no "Offering Period" (as defined in the Stock
Purchase Plan) shall commence following the Agreement Date and (ii) the Stock
Purchase Plan (and, subject to subparagraph (i), any Offering Period thereunder)
shall terminate, effective as of the Effective Time, and each outstanding
option, if any, for the Offering Period that terminates at the Effective Time
shall be canceled and each participant in the Stock Purchase Plan for that
Offering Period shall be entitled to receive, within five (5) business days
following the Effective Time, in lieu of any other amounts otherwise payable to
such participant under the Stock Purchase Plan with respect to such
participant's options, an amount in cash equal to the sum of (a) (x) the Merger
Consideration multiplied by (y) the number of whole shares of Company Common
Stock that would have been issuable upon exercise of such options had they been
exercised at the Effective Time and the participant purchased the maximum number
of shares subject thereto at the applicable "Purchase Price" (as defined in the
Stock Purchase Plan) and using the full amount of his or her "contributions" (as
defined in the Stock Purchase Plan) to the Stock Purchase Plan for that Offering
Period sufficient to purchase whole shares and (b) the amount of any such
"contributions" that would not have been sufficient to purchase a whole share.
SECTION 1.10 ADJUSTMENTS. In the event of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into capital stock), reorganization, reclassification,
combination, recapitalization or other like change with respect to the Company
Common Stock occurring after the Agreement Date and prior to the Effective Time,
all references in this Agreement to specified numbers of shares of any class or
series affected thereby, and all calculations provided for that are based upon
numbers of shares of any class or series affected thereby, shall be adjusted to
the extent necessary to provide the parties the same economic effect as
contemplated by this Agreement prior to such stock split, reverse stock split,
stock dividend, reorganization, reclassification, combination, recapitalization
or other like change.
ARTICLE II
PAYMENT
SECTION 2.1 SURRENDER OF CERTIFICATES. From and after the
Effective Time, each holder of a certificate that immediately prior to the
Effective Time represented an outstanding Share (a "CERTIFICATE") shall be
entitled to receive in exchange therefor, upon surrender thereof to the Paying
Agent, the Merger Consideration into which the Shares formerly evidenced by such
Certificate were converted into the right to receive pursuant to the Merger. No
interest shall be payable on the Merger Consideration
5
to be paid to any holder of a Certificate irrespective of the time at which such
Certificate is surrendered for exchange.
SECTION 2.2 PAYING AGENT; CERTIFICATE SURRENDER PROCEDURES.
(a) Prior to the Effective Time, the Parent shall designate (with
the approval of the Company, not to be unreasonably withheld), or shall cause to
be designated, a bank or trust company based in the United States, to act as
agent for the payment of the Merger Consideration upon surrender of Certificates
(the "PAYING AGENT").
(b) Immediately prior to the Effective Time, the Parent shall
deposit, or cause to be deposited, with the Paying Agent, an amount in cash
sufficient to provide all funds necessary for the Paying Agent to make prompt
payment of the aggregate Merger Consideration payable pursuant to SECTION 1.7
(the "PAYMENT FUND"). For purposes of determining the amount of Merger
Consideration to be so deposited, the Parent and the Merger Subsidiary shall
assume that no holder of Company Common Stock shall perfect any right to
appraisal of his, her or its Company Common Stock. Pending payment of such funds
to the holders of Certificates, the Payment Fund shall be held and may be
invested by the Paying Agent pursuant to the terms of the agreement entered into
between the Parent and the Paying Agent (which such agreement shall be
reasonably acceptable to the Company). The Parent shall replenish the Payment
Fund to the extent of any investment losses any monies lost through any
investment made pursuant to this subsection (b).
(c) As soon as reasonably practicable, and in any event not later
than three (3) business days, after the Effective Time, the Parent shall
instruct the Paying Agent to mail to each record holder of a Certificate (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to such Certificates shall pass, only upon delivery of
the Certificates to the Paying Agent and shall be in customary form) and (ii)
instructions for use in effecting the surrender of Certificates for the Merger
Consideration. Upon the surrender to the Paying Agent of a Certificate together
with a duly executed and completed letter of transmittal and all other documents
and other materials required by the Paying Agent to be delivered in connection
therewith, the holder shall be entitled to receive promptly in exchange therefor
the Merger Consideration into which the Shares formerly represented by such
Certificates so surrendered have been converted into the right to receive in
accordance with the provisions of this Agreement and the Certificates so
surrendered shall forthwith be canceled. If payment of the Merger Consideration
is to be made to a Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition precedent of payment that (i)
the Certificate so surrendered shall be properly endorsed or shall be otherwise
in proper form for transfer and (ii) the Person requesting such payment shall
have paid any transfer and other Taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such Tax either has been paid or is not required to
be paid. Until so surrendered, each outstanding Certificate shall be deemed from
and after the Effective Time, for all
6
corporate purposes, to evidence the right to receive the Merger Consideration
without interest thereon, into which the Shares represented by such Certificate
have been converted into the right to receive in accordance with the provisions
of this Agreement.
SECTION 2.3 TRANSFER BOOKS. The stock transfer books of the
Company shall be closed at the Effective Time, and no transfer of any shares of
Company Common Stock shall thereafter be recorded on any of the stock transfer
books. In the event of a transfer of ownership of any shares of Company Common
Stock prior to the Effective Time that is not registered in the stock transfer
records of the Company at the Effective Time, the Merger Consideration into
which such Company Common Stock has been converted into the right to receive in
the Merger shall be paid to the transferee in accordance with the provisions of
SECTION 2.2 only if the Certificate is surrendered as provided in SECTION 2.2
and accompanied by all documents required to evidence and effect such transfer
(including evidence of payment of any applicable stock transfer taxes).
SECTION 2.4 TERMINATION OF PAYMENT FUND. Any portion of the
Payment Fund (including any interest received with respect thereto) that remains
undistributed one hundred eighty (180) days after the Effective Time shall be
delivered to the Parent upon demand, and each holder of Company Common Stock as
of the Effective Time who has not previously surrendered Certificates in
accordance with the provisions of this ARTICLE II shall thereafter look only to
the Parent (subject to abandoned property, escheat or similar laws) only as
general creditors thereof with respect to the Merger Consideration payable upon
due surrender of their Certificates or affidavits of loss in lieu thereof,
without any interest thereon.
SECTION 2.5 APPRAISAL RIGHTS.
(a) Notwithstanding anything in this Agreement to the contrary,
Company Common Stock outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger or consented thereto
in writing and who has complied with all of the relevant provisions of Section
262 of the Delaware Act regarding appraisal for such shares ("DISSENTING
SHARES") shall not be converted into the right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses its right to appraisal. A holder of Dissenting Shares shall be entitled to
receive payment of the appraised value of such shares held by him, her or it in
accordance with Section 262 of the Delaware Act, unless such holder fails to
perfect or withdraws or otherwise loses his, her or its right to appraisal, in
which case such Company Common Stock shall be deemed to have converted into and
represent, as of the Effective Time, only the right to receive the Merger
Consideration without interest thereon, upon surrender of the Certificate or
Certificates or affidavits of loss in lieu thereof.
(b) The Company shall give the Parent prompt written notice of any
and all demands for appraisal rights, withdrawal of such demands and any other
communications delivered to the Company pursuant to Section 262 of the Delaware
Act, and the Company shall give the Parent the opportunity, to the extent
permitted by
7
applicable Law, to participate in all negotiations and proceedings with respect
to such demands. Except with the prior written consent of the Parent, the
Company shall not voluntarily make any payment with respect to any demand for
appraisal rights and shall not settle or offer to settle any such demand.
SECTION 2.6 LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit (in form and
substance reasonably acceptable to the Parent) of that fact by the Person making
such a claim, and, if required by the Parent, the posting by such Person of a
bond in such reasonable amount as the Parent may direct as indemnity against any
claim that may be made against or with respect to such Certificate, the Paying
Agent shall pay the Merger Consideration in respect of each Share represented by
such lost, stolen or destroyed Certificate.
SECTION 2.7 NO RIGHTS AS STOCKHOLDER. From and after the
Effective Time, the holders of Certificates shall cease to have any rights as a
stockholder of the Surviving Corporation except as otherwise expressly provided
in this Agreement or by applicable Laws, and the Parent shall be entitled to
treat each Certificate that has not yet been surrendered for exchange solely as
evidence of the right to receive the Merger Consideration into which the Company
Common Stock evidenced by such Certificate has been converted pursuant to the
Merger.
SECTION 2.8 WITHHOLDING. Each of the Parent, the Merger
Subsidiary, the Surviving Corporation and the Paying Agent shall be entitled to
deduct and withhold from the Merger Consideration, Option Consideration and/or
Stock-Based Payment otherwise payable to any former holder of Company Common
Stock, Company Options and Company Stock-Based Awards, or pursuant to SECTIONS
1.8 and 1.9, all amounts required to be deducted or withheld therefrom by the
Internal Revenue Code of 1986, as amended (the "CODE") or other applicable
state, local or foreign tax Law. To the extent that amounts are so deducted and
withheld and paid to the appropriate Governmental Authority, such amounts shall
be treated for all purposes of this Agreement as having been paid to the holder
thereof in respect of which such deduction and withholding was made by the
Parent or the Surviving Corporation. All payments to any Governmental Authority
required to be made in connection with the withholding Taxes as described in
this SECTION 2.8 shall be paid to the relevant Governmental Authority through
the withholding tax payment systems of the Surviving Corporation.
SECTION 2.9 ESCHEAT. Neither the Parent, the Merger Subsidiary
nor the Company shall be liable to any former holder of Company Common Stock for
any portion of the Merger Consideration delivered to any public official
pursuant to any applicable abandoned property, escheat or similar Law. In the
event any Certificate has not been surrendered for the Merger Consideration
prior to the sixth anniversary of the Closing Date, or prior to such earlier
date as of which such Certificate or the Merger Consideration payable upon the
surrender thereof would otherwise escheat to or become the property of any
Governmental Authority, then the Merger Consideration otherwise payable upon the
surrender of such Certificate will, to the extent permitted by applicable Laws,
become the property of the Surviving Corporation, free and clear of all rights,
interests and adverse claims of any person.
8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) with respect to SECTIONS 3.7 through 3.16 and SECTION 3.19,
as disclosed in the reports, schedules, forms, statements and other documents
(including exhibits) filed by the Company with, or furnished by the Company to,
the United States Securities and Exchange Commission (the "SEC") pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and publicly available
during the period beginning on January 1, 2004 and ending as of end of the
business day prior to the Agreement Date (collectively, the "FILED SEC
DOCUMENTS") or (ii) as disclosed in the letter dated the Agreement Date from the
Company to Parent (the "COMPANY DISCLOSURE LETTER"), the Company represents and
warrants to the Parent and the Merger Subsidiary that:
SECTION 3.1 CORPORATE EXISTENCE AND POWER.
(a) 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, and has all requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as presently being conducted, except when the failure to be in good
standing or have such power and authority, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect. Each
of the Company and its Subsidiaries is duly qualified or licensed to conduct
business and is in good standing in each jurisdiction in which the properties
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or license necessary, except where the failure to be so
qualified or licensed and in good standing, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect. The
Company has made available to the Parent or its counsel, true, correct and
complete copies of the charter and bylaws of each of the Company and its
Subsidiaries (other than Subsidiaries of the Company identified as being
inactive in Section 3.1(a) of the Company Disclosure Letter (the "INACTIVE
SUBSIDIARIES")), in each case as amended and in effect on the Agreement Date.
Neither the Company nor any of its Subsidiaries (other than the Inactive
Subsidiaries) is in material violation of any of the provisions of its charter
or bylaws or equivalent organizational documents. Since January 1, 2005, none of
the Inactive Subsidiaries has engaged in any material business activities.
(b) For purposes of this Agreement, "COMPANY MATERIAL ADVERSE
EFFECT" means a Material Adverse Effect with respect to the Company and
"MATERIAL ADVERSE EFFECT" means any event, circumstance, condition, change,
development or effect that, individually or in the aggregate with all other
events, circumstances, conditions, changes, developments or effects, would have
a material adverse effect on the business, financial condition, assets,
liabilities, operations or results of operations of a Person and its
Subsidiaries taken as a whole, or the ability of a Person to consummate the
Merger and to perform its obligations under this Agreement; PROVIDED THAT, none
of the following will be taken into account in determining whether there has
been a Material Adverse Effect: (i) conditions affecting any of the industries
in which such entity operates generally, (ii) conditions generally affecting the
economy or capital markets,
9
(iii) changes in the Person's stock price or trading volume (it being understood
that the facts or occurrences giving rise to or contributing to such change in
stock price or trading volume may be taken into account in determining whether
there has been a Material Adverse Effect), or (iv) the announcement, pendency or
consummation of the Merger. For purposes of this Agreement, "PERSON" means an
individual, a corporation, a limited liability company, a partnership, a joint
venture, an association, a trust, an unincorporated organization or any other
entity or organization, including any Governmental Authority.
SECTION 3.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of One
Hundred Seventy Five Million (175,000,000) shares of Company Common Stock, and
Fifteen Million (15,000,0000) shares of preferred stock, par value $0.01 per
share (the "COMPANY PREFERRED STOCK"), of which One Hundred Thousand (100,000)
shares of which Company Preferred Stock have been designated as Series A
Preferred Stock and have been reserved for issuance in connection with the
rights (the "RIGHTS") issued pursuant to the Rights Agreement dated as of March
15, 2002 (the "RIGHTS AGREEMENT") between the Company and American Stock
Transfer and Trust Company as the rights agent. As of the close of business on
December 9, 2005, 37,224,574 shares of Company Common Stock were issued and
outstanding, no shares were held by the Company as treasury shares and 1,962,783
shares were reserved for issuance pursuant to the Company Stock Plans, and no
shares of Company Preferred Stock have been issued or are outstanding or held by
the Company as treasury shares. All of the issued and outstanding shares of the
capital stock of the Company are, and all shares which may be issued pursuant to
the exercise of the Company Options or pursuant to the Stock Purchase Plan shall
be, when issued in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and non-assessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the Delaware Act, the Company's certificate of incorporation or bylaws or any
contract or commitment to which the Company is a party or otherwise bound and
(ii) issued in material compliance with all applicable Laws, including federal
and state securities Laws and all requirements set forth in applicable contracts
governing the issuance of such Company Options. The Company has granted no
Company Options outside of the Company Stock Plans.
(b) There are no outstanding or authorized options, calls,
warrants, subscription rights, convertible securities, conversion rights,
exchange rights or other contracts, agreements or commitments that could require
the Company or any of its Subsidiaries to issue, transfer, sell or otherwise
cause to become outstanding any of its capital stock or other securities. There
are no outstanding stock appreciation, phantom stock, profit participation or
similar rights with respect to the Company or any of its Subsidiaries or other
equity interest in the Company or any of its Subsidiaries, or securities
convertible into or exchangeable for such shares or equity interests. As of the
Agreement Date, the Company Disclosure Letter sets forth a list of all
outstanding Company Options and any other awards, as well as the respective
exercise prices, dates of grant and vesting schedules thereof. Except as set
forth in ARTICLE I, the Company is
10
not party to or bound by any obligation to accelerate the vesting of any Company
Options.
(c) Neither the Company nor any of its Subsidiaries is a party to,
bound by, or has knowledge of, any voting trust, proxy or other agreement or
understanding with respect to the voting of any capital stock of the Company or
any of its Subsidiaries.
(d) The Board of Directors of the Company has not declared any
dividend or distribution with respect to the Company Common Stock the record or
payment date for which is on or after the Agreement Date.
(e) Other than with respect to the Subsidiaries listed on Section
3.2(e) of the Company Disclosure Letter, the Company does not directly or
indirectly own any securities or beneficial ownership interests in any other
Person (including through joint ventures or partnership arrangements) or have
any investment in any other Person. All of the outstanding shares of capital
stock of the Company's Subsidiaries that are owned by the Company are duly
authorized, validly issued, fully paid and non-assessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the Delaware Act, such Subsidiary's certificate of incorporation or bylaws (or
the equivalent thereof) or any contract or commitment to which such Subsidiary
is a party or otherwise bound, and (ii) issued in material compliance with all
applicable Laws, including federal and state securities laws, and are owned by
the Company or one of its Subsidiaries, free and clear of any and all liens,
encumbrances, security interests, charges, pledges or other claims ("LIENS").
(f) As of the Agreement Date, (i) no bonds, debentures, notes or
other indebtedness of the Company having the right to vote are issued or
outstanding, and (ii) there are no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company or any of its Subsidiaries.
(g) The Company Common Stock is traded on the New York Stock
Exchange. No other securities of the Company or any of its Subsidiaries are
listed or quoted for trading on any United States domestic or foreign securities
exchange.
SECTION 3.3 AUTHORIZATION OF TRANSACTION.
(a) The Company has full corporate power and authority and has
taken all requisite corporate action to enable it to execute and deliver this
Agreement, and, subject to obtaining the Company Stockholders Approval, to enter
into this Agreement and to consummate the transactions contemplated hereby and
to perform its obligations hereunder. This Agreement has been duly authorized,
executed and delivered by the Company and, assuming the due authorization,
execution and delivery thereof by the Parent and the Merger Subsidiary,
constitutes a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except that
11
(i) such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar Laws of general
applicability relating to or affecting enforcement of creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(b) In connection with its adoption of the resolutions of the
Board of Directors of the Company described in the Preamble to this Agreement,
the Board of Directors of the Company received the opinion of Bear ▇▇▇▇▇▇▇
referenced in SECTION 3.21.
SECTION 3.4 VOTE REQUIRED. The affirmative vote of the holders of
a majority of the outstanding shares of Company Common Stock (the "COMPANY
STOCKHOLDERS APPROVAL") is the only vote of the holders of any class or series
of the Company's capital stock necessary to adopt this Agreement and approve the
Merger and the consummation of the transactions contemplated hereby.
SECTION 3.5 NONCONTRAVENTION; APPROVALS. Except for (a) filings
and approvals necessary to comply with the applicable requirements of the
Exchange Act, (b) filings pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), and any other applicable
competition, merger control, antitrust or similar laws or regulations
(collectively with the HSR Act, the "ANTITRUST LAWS"), (c) the Company
Stockholders Approval and the filing of the Certificate of Merger pursuant to
the Delaware Act, and any similar certificates or filings to be made pursuant to
the corporation laws of other jurisdictions in which the Company or any of its
Subsidiaries is qualified to do business, and (d) any filings required under the
rules and regulations of the New York Stock Exchange, neither the execution and
delivery of this Agreement by the Company, nor the consummation by the Company
of the transactions contemplated hereby, shall (i) violate or conflict with any
provision of the certificate of incorporation or bylaws of the Company or the
equivalent organizational documents of any of its Subsidiaries, (ii) result in a
violation or breach of, be in conflict with, or constitute or create (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any Company Material Agreement, (iii) violate any
Laws applicable to the Company, any of its Subsidiaries or any of their
properties or assets, (iv) require any filing or registration with, notification
to, or authorization, consent or approval of, any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government with appropriate
jurisdiction over the Company, any of its Subsidiaries or their respective
properties or assets, whether federal, state or local, domestic or foreign (each
a "GOVERNMENTAL AUTHORITY") or (v) result in the creation or imposition of any
Lien on any of the property or assets of the Company or any of its Subsidiaries;
except in the case of clauses (ii), (iii), (iv), and (v) for such violations,
breaches, defaults or Liens that, or filings, registrations, notifications,
authorizations, consents or approvals the failure of which to obtain,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
12
SECTION 3.6 COMPANY FILINGS; INFORMATION IN THE PROXY STATEMENT.
(a) The Company has filed on a timely basis all proxy statements,
reports, schedules, forms, statements and other documents (including exhibits
thereto), and all amendments thereto, required to be filed by it with the SEC
since January 1, 2004 (collectively, together with the information incorporated
by reference therein, the "COMPANY SEC DOCUMENTS"). Each of the Company SEC
Documents, as of its filing date (or if amended or superceded by a filing prior
to the Agreement Date, then as of the date of such filing) complied in all
material respects with the applicable requirements of the Securities Act of
1933, as amended (together with the rules and regulations thereunder, the
"SECURITIES ACT"), the Exchange Act or the Sarbanes Oxley Act of 2002 ("SOXA")
(as the case may be) and the applicable rules and regulations of the SEC
thereunder, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. No Subsidiary of the Company is required to file any
statements, reports, schedules, forms or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC Documents
(the "FINANCIAL STATEMENTS"), (i) complied as to form in all material respects
with the published rules and regulations of the SEC with respect thereto, (ii)
was prepared in accordance with accounting principles generally accepted in the
United States ("GAAP") applied on a consistent basis throughout the periods
involved (except in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements as may be
permitted by the SEC on Form 10-Q, 8-K or any successor form under the Exchange
Act), and (iii) fairly presented in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates thereof and the consolidated results of the Company's and its
Subsidiaries' operations and cash flows for the periods indicated, subject, in
the case of the unaudited interim financial statements, to normal and recurring
year-end audit adjustments. Except as reflected in the Financial Statements as
of September 30, 2005 or otherwise disclosed in the Filed SEC Documents, neither
the Company nor any of its Subsidiaries is a party to any material off-balance
sheet arrangements (as defined in Item 303 of Regulation S-K promulgated under
the Exchange Act). As of the Agreement Date, the Company has not had any
material dispute with KPMG, LLP regarding accounting matters or policies during
any of its past two full fiscal years or during the current fiscal year that is
currently outstanding or that has resulted in a passed adjustment. The Company
has not had any material dispute with KPMG, LLP regarding accounting matters or
policies during any of its past two full fiscal years or during the current
fiscal year that is currently outstanding or that has resulted in any
restatement of the Financial Statements.
(c) Without limiting the generality of the foregoing, KPMG, LLP
has not resigned nor been dismissed as independent public accountant of the
Company as a result of or in connection with any disagreement with the Company
on a matter of accounting practices which materially impacts or would require
the restatement of any
13
previously issued financial statements, covering one or more years or interim
periods for which the Company is required to provide financial statements, such
that they should no longer be relied on.
(d) As of the Agreement Date, to the knowledge of the Company, no
investigation by the SEC with respect to the Company or any of its Subsidiaries
is pending or threatened.
(e) As required by Rule 13a-15 of the Exchange Act, the Company
has established and maintains (i) internal control over financial reporting (as
defined in Rule 13a-15(f) of the Exchange Act), which is designed to provide
reasonable assurance regarding the reliability of the Company's financial
reporting and its preparation of financial statements for external purposes in
accordance with GAAP and (ii) disclosure controls and procedures (as defined in
Rule 13a-15(e) of the Exchange Act), which are designed to ensure that all
material information required to be disclosed by the Company in the Company SEC
Documents is accumulated and communicated to the Company's and its Subsidiaries'
management, as appropriate to allow timely decisions regarding required
disclosure. Each Company SEC Document that was required to be accompanied by the
certifications required of the Company's principal executive officer and
principal financial officer pursuant to Sections 302 and 906 of SOXA and the
rules and regulations promulgated thereunder was accompanied by such
certification and, as the time of filing or submission of each such
certification, to the knowledge of the Company's principal executive officer and
principal financial officer, such certification was true and accurate and
complied with SOXA and the rules and regulations promulgated thereunder as of
the date filed.
SECTION 3.7 NO UNDISCLOSED LIABILITIES. Neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued or unaccrued, absolute or contingent, liquidated or
unliquidated, or due or to become due) required by GAAP to be set forth on a
consolidated balance sheet of the Company and its Subsidiaries or in the notes
thereto, except for (a) liabilities and obligations accrued or reserved in the
Financial Statements as of September 30, 2005 or otherwise disclosed in the
Filed SEC Documents, (b) liabilities and obligations incurred in the ordinary
course of business, consistent with past practice, since September 30, 2005, (c)
other liabilities and obligations that, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect, (d)
liabilities and obligations which have been discharged or paid prior to the
Agreement Date, and (e) liabilities and obligations disclosed in any section of
the Company Disclosure Letter.
SECTION 3.8 ABSENCE OF COMPANY MATERIAL ADVERSE EFFECT. Since
September 30, 2005, (i) to the Agreement Date, there has not been a Company
Material Adverse Effect, nor does there exist or has there occurred any event,
change, circumstance, condition, development or effect that, individually or in
the aggregate, would reasonably be expected to have a Company Material Adverse
Effect, and (ii) neither the Company nor any of its Subsidiaries has taken or
authorized the taking of any action prohibited by, or that would be in violation
of, SECTION 5.3.
14
SECTION 3.9 LITIGATION AND LEGAL COMPLIANCE.
(a) There are no claims, actions, suits or proceedings pending, or
to the Company's knowledge, threatened by or against the Company or any of its
Subsidiaries that, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect. To the Company's knowledge
there is no investigation pending or threatened by or against the Company or any
of its Subsidiaries that, individually or in the aggregate, would reasonably be
expected to have a Company Material Adverse Effect. Neither the Company nor any
of its Subsidiaries is subject to any outstanding judgment, injunction, order or
decree of any Governmental Authority that, individually or in the aggregate,
would reasonably be expected to have a Company Material Adverse Effect. As of
the Agreement Date, there are no material judicial or administrative actions or
proceedings pending, or to the Company's knowledge, threatened, and to the
Company's knowledge there are no investigations pending or threatened by or
against the Company, that question the validity of this Agreement or any action
taken or to be taken by the Company in connection with this Agreement.
(b) Except for instances of noncompliance that, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect, the Company and its Subsidiaries are in compliance with each
applicable federal, state, local and foreign law, statute, rule, regulation,
ordinance, code, license, permit, order, legal doctrine, writ, injunction,
judgment, decree, requirement or agreement with any Governmental Authority
(including common law or the interpretation thereof) (collectively the "Laws")
to which the Company, any of its Subsidiaries, or any of their respective assets
or properties may be subject. The Company and its Subsidiaries have all permits,
licenses, approvals, authorizations of and registrations with and under all
Laws, and from all Governmental Authorities, required by the Company and its
Subsidiaries to carry on their respective businesses as currently conducted,
except where the failure to have such permits, licenses, approvals,
authorizations and registrations would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
(c) To the knowledge of the Company, the Company and its
Subsidiaries are in compliance with all statutory and regulatory requirements
under the Arms Export Control Act (22 U.S.C. 2778), the International Traffic in
Arms Regulations (22 C.F.R. ss. 120 et seq.), the Export Administration
Regulations (15 C.F.R. ss. 730 et seq.) and associated executive orders, and the
Laws implemented by the Office of Foreign Assets Controls, United States
Department of the Treasury (collectively, the "EXPORT CONTROL LAWS"), except any
failure to be in compliance that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received any written communication
during the past twelve (12) months that alleges that the Company or its
Subsidiary is not, or may not be, in compliance with, or has, or may have, any
liability under, the Export Control Laws, except any failure to be in compliance
or liability that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
15
(d) The Company and its Subsidiaries are in compliance in all
material respects with all legal requirements under (i) the Foreign Corrupt
Practices Act (15 U.S.C. ▇▇.▇▇. 78dd-1, et seq) and the Organization for
Economic Cooperation and Development Convention Against Bribery of Foreign
Public Officials in International Business Transactions and legislation
implementing such Convention and (ii) international anti-bribery conventions
(other than the convention described in clause (i)) and local anti-corruption
and bribery Laws, in each case, in jurisdictions in which the Company and its
Subsidiaries are operating (collectively, the "ANTI-BRIBERY LAWS"), except any
failure to be in compliance that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect. To the
Company's knowledge, neither the Company nor any of its Subsidiaries has
received any written communication that alleges that the Company, its
Subsidiaries or any agent thereof is, or may be, in violation of, or has, or may
have, any material liability under, the Anti-Bribery Laws, except any written
communication received more than twenty-four (24) months prior to the Agreement
Date that did not result in an inquiry or investigation that to the Company's
knowledge is currently pending.
SECTION 3.10 CONTRACT MATTERS.
(a) Section 3.10 of the Company Disclosure Letter lists each of
the Company Material Agreements (as defined below) that as of the Agreement Date
are in effect or otherwise binding on the Company or any of its Subsidiaries or
their respective properties or assets, other than those contracts or agreements
that have been filed as exhibits to the Filed SEC Documents. "COMPANY MATERIAL
AGREEMENTS" means (i) any credit agreement, note, bond, guarantee, mortgage,
indenture, lease (excluding leases covered by SECTION 3.14(B) or not required to
be scheduled pursuant to that section because such lease is not material), or
other instrument or obligation pursuant to which any "indebtedness" (as defined
below) of the Company or any of its Subsidiaries is outstanding or may be
incurred; (ii) any agreement, contract or binding commitment which was or was
required to be filed as an exhibit to the Company SEC Documents; and (iii) any
(A) collective bargaining agreement; (B) employment agreement contract or
binding commitment providing for annual compensation or payments in excess of
$200,000 in the current or any future year; (C) agreement, contract or
commitment of indemnification or guaranty not entered into in the ordinary
course of business providing for indemnification which would reasonably be
expected to exceed $1,000,000, as well as any agreement, contract or commitment
of indemnification or guaranty between the Company or any of its Subsidiaries
and any of their respective officers or directors, irrespective of the amount;
(D) agreement, contract or binding commitment containing any covenant directly
or indirectly limiting the freedom of the Company or any of its Subsidiaries to
engage in any line of business, compete with any Person, or sell any product or
service (including any contract clause, mitigation plan, or other limitation
with respect to "Organizational Conflicts of Interest," as that term is used in
Federal Acquisition Regulation Subpart 9.5); (E) agreement, contract or binding
commitment that shall result in the payment by, or the creation of any
commitment or obligation (absolute or contingent) to pay on behalf of the
Company or any of its Subsidiaries any severance, termination, "golden
parachute," or other similar payments to any employee following termination of
employment or otherwise as a result of the consummation of the
16
transactions contemplated by this Agreement; (F) agreement, contract or binding
commitment by the Company or any of its Subsidiaries entered into since January
1, 2004 or that has material obligations that are to be performed subsequent to
the Agreement Date, relating to the disposition or acquisition of material
assets not in the ordinary course of business or any ownership interest in any
Subsidiary or other Person; (G) material agreements, contracts or binding
commitments regarding the development, ownership or use of Intellectual Property
(including material licenses to or from third parties but other than commercial
off-the-shelf software, as that term is commonly understood); (H) material
partnership, joint venture or similar agreement or arrangement; (I) any contract
or agreement involving a standstill or similar obligation of the Company or any
of its Subsidiaries to a third party; or (J) other agreement, contract or
binding commitment which is material to the operation, or which is outside the
ordinary course, of the Company's and its Subsidiaries' businesses. For purposes
of this section, "indebtedness" shall mean, with respect to any Person, without
duplication, (1) all obligations of such Person for borrowed money, (2) all
obligations of others secured by any Lien on property or assets owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (3) all letters of credit issued for the account of such Person
(excluding letters of credit issued for the benefit of suppliers to support
accounts payable to suppliers incurred in the ordinary course of business or to
support workers' compensation insurance obligations or performance obligations
under contracts entered into in the ordinary course) and (4) all obligations,
the principal component of which are obligations under leases that are, or
should be pursuant to GAAP, classified as capital leases; PROVIDED THAT, any
obligations between or among the Company and its wholly-owned Subsidiaries shall
not be considered to be "indebtedness" hereunder.
(b) Each Company Material Agreement and each Government Contract
(as defined below) is valid, binding and enforceable upon the Company or the
Subsidiary that is a party thereto, and to the Company's knowledge each other
party thereto, and is, and following consummation of the transactions
contemplated by this Agreement shall remain, in full force and effect (except
that (i) such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar Laws of general
applicability relating to or affecting the enforcement of creditors' rights, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought), except where any
failure to be valid, binding and enforceable and in full force and effect,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect. There are no defaults or breaches under any
Company Material Agreement by the Company or any of its Subsidiaries, or to its
knowledge any other party thereto, except those defaults or breaches that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
(c) With respect to each contract, agreement, bid or proposal
between the Company or any of its Subsidiaries and any (i) Governmental
Authority, including any facilities contract for the use of government-owned
facilities or (ii) third party relating to a contract between such third party
and any domestic or foreign government or
17
Governmental Authority (each a "GOVERNMENT Contract"), to the knowledge of the
Company, (A) the Company and each of its Subsidiaries have complied in all
material respects with all terms and conditions of such Government Contract,
including all clauses, provisions and requirements incorporated expressly by
reference, or by operation of law therein; (B) the Company and each of its
Subsidiaries have complied in all material respects with all requirements of all
applicable Laws, or agreements pertaining to such Government Contract, including
where applicable the "Cost Accounting Standards" disclosure statement of the
Company or such Subsidiary; (C) all representations and certifications executed,
acknowledged or set forth in or pertaining to such Government Contract were
complete and correct as of their effective dates and the Company and its
Subsidiaries have complied with all such representations and certifications; (D)
neither the United States government nor any prime contractor, subcontractor or
other Person has notified the Company or any of its Subsidiaries, in writing or
orally, that the Company or any of its Subsidiaries has breached or violated any
Laws, certification, representation, clause, provision or requirement pertaining
to such Government Contract; (E) neither the Company nor any of its Subsidiaries
has received any notice of termination for convenience, notice of termination
for default, cure notice or show cause notice pertaining to such Government
Contract; (F) other than in the ordinary course of business, no cost incurred by
the Company or any of its Subsidiaries pertaining to such Government Contract
has been questioned or challenged, is the subject of any audit or investigation
or has been disallowed by any Governmental Authority; and (G) no payments due to
the Company or any of its Subsidiaries pertaining to such Government Contract
have been withheld or set off, nor has any claim been made to withhold or set
off money, and the Company and its Subsidiaries are entitled to all progress or
other payments received with respect thereto, except for any such failure,
noncompliance, inaccuracy, breach, violation, termination, withholding, cost,
investigation, disallowance or payment that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect.
(d) To the Company's knowledge, neither the Company nor any of its
Subsidiaries or any of their respective directors, officers, employees,
consultants or agents is or since January 1, 2004 has been under (i) any civil
or criminal investigation or indictment by any Governmental Authority or under
investigation by the Company or any of its Subsidiaries or (ii) material
administrative investigation or material audit by any Governmental Authority, in
either case with respect to any alleged improper act or omission arising under
or relating to any Government Contract.
(e) There exist (i) no material outstanding claims against the
Company or any of its Subsidiaries, either by any Governmental Authority or by
any prime contractor, subcontractor, vendor or other Person, arising under or
relating to any Government Contract, and (ii) no material disputes between the
Company or any of its Subsidiaries and the United States government under the
Contract Disputes Act, as amended, or any other federal statute, or between the
Company or any of its Subsidiaries and any prime contractor, subcontractor or
vendor arising under or relating to any Government Contract which would
reasonably be expected to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has any interest in any pending claim
against any prime contractor, subcontractor or vendor arising under or
18
relating to any Government Contract that, individually or in the aggregate,
would reasonably be expected to have a Company Material Adverse Effect.
(f) Since January 1, 2004, neither the Company nor any of its
Subsidiaries has been debarred or suspended from participation in the award of
contracts with the United States government or any other Governmental Authority
(excluding for this purpose ineligibility to bid on certain contracts due to
generally applicable bidding requirements). To the Company's knowledge, there
exist no facts or circumstances that would warrant the institution of suspension
or debarment proceedings or the finding of nonresponsibility or ineligibility on
the part of the Company, any of its Subsidiaries or any of their respective
directors, officers or employees which would reasonably be expected to have a
Company Material Adverse Effect.
(g) To the Company's knowledge, the assets of the Company and its
Subsidiaries do not include any material receivable or other obligation or
commitment from an Affiliate, and the liabilities of the Company and its
Subsidiaries do not include any material payable or other obligation or
commitment to any Affiliate. For purposes of this Agreement, "AFFILIATE" will
mean any Person that (i) owns 5% or more of the voting securities of the Company
or any of its Subsidiaries, (ii) is a director, executive or officer employed by
the Company or any of its Subsidiaries, or (iii) directly or indirectly
controls, is controlled by or is under common control with the Company or any of
its Subsidiaries.
SECTION 3.11 TAX MATTERS.
(a) The Company and each of its Subsidiaries have (i) timely filed
with the appropriate Governmental Authorities every material return, report or
other document or information (including any election, declaration, disclosure,
schedule, estimate or information return) required to be supplied to a taxing
authority or agent thereof in connection with Taxes ("TAX RETURNS") required to
be filed for all periods ending on or prior to the Effective Time, and for which
a tax return is required by applicable Law to be filed on or prior to such
Effective Time (including pursuant to extensions properly obtained), and such
filed Tax Returns are correct and complete in all material respects, (ii) timely
paid in full or made adequate provision for the payment of all Taxes for all
periods ending at or prior to November 30, 2005 and (iii) timely withheld and
paid all Taxes required by applicable Laws to have been withheld and paid as of
the Effective Time in connection with amounts paid or owing to any employee,
independent contractor, creditor, or other third party. The liabilities and
reserves for Taxes reflected in the balance sheet included in the Company
Reports as of and for the period ended September 30, 2005 are adequate to cover
all Taxes of the Company and its Subsidiaries for all periods ending at and
prior to the date of such balance sheet and there are no material Liens for
Taxes upon any property or asset of the Company or any of its Subsidiaries,
except for Liens for Taxes not yet due. The Company has delivered to the Parent
correct and complete copies of all federal income Tax Returns filed for 2002,
2003 and 2004, and any amended federal income Tax Returns filed within the
three-year period ending on the Agreement Date, and all state, local and foreign
income Tax Returns filed for 2004. The Company and its Subsidiaries have each
disclosed on their respective
19
Tax Returns all positions taken therein that could give rise to a substantial
understatement of Tax within the meaning of Code Section 6662 or any similar
provision of applicable Law, and is in possession of supporting documentation as
may be required under any such provision.
(b) Neither the Company nor any of its Subsidiaries: (i) has
waived any statute of limitations in respect of Taxes or agreed to any extension
of time with respect to a Tax assessment or deficiency other than waivers and
extensions which are no longer in effect; (ii) has received any written notice
indicating an intent to open an audit or other review, a request for information
related to Tax matters, or notice of deficiency or proposed adjustment for any
amount of Tax proposed, asserted or assessed (and no audit or administrative or
judicial Tax proceeding is pending or being conducted with respect to the
Company or any of its Subsidiaries), (iii) has been subject to a written claim
by a Governmental Authority in a jurisdiction where the Company or any of its
Subsidiaries does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction; (iv) is a party to any agreement providing for the
allocation or sharing of Taxes with any person that is not, directly or
indirectly, a wholly owned Subsidiary of the Company; (v) for taxable years
after 2001, has "participated" (within the meaning of Treasury Regulation
Section 1.6011-4(c)(3)(i)(A)) in any "listed transaction" within the meaning of
Code Section 6011 or any similar provision of state, local or foreign Law; (vi)
is presently required, or shall be required, to include any taxable income for
any period ending after the Closing Date as a result of (A) a change in method
of accounting under Code Section 481 made prior to the Closing Date, (B) any
intercompany transaction, (C) an installment sale or open transaction
disposition made on or prior to the Closing Date, or (D) a prepaid amount
received on or prior to the Closing Date (or under any provision of Law of any
jurisdiction with similar consequences as any of (vi)(A) through (vi)(D) above);
(vii) is a party to any material agreement, contract, arrangement or plan (A)
pursuant to which any one of them is required to make a compensatory payment to
any individual more than two and one-half (2 1/2) months after December 31, 2005
for services performed as an employee in 2005 or sooner, (B) that has resulted
or would result, separately or in the aggregate, in the payment of any "excess
parachute payment" within the meaning of Code Section 280G, or any amount that
would not be fully deductible as a result of Code Section 162(m), or (C)
pursuant to which it is bound to compensate any Person for excise or other
additional Taxes paid pursuant to Code Sections 409A or 4999 or any similar
provision of state, local or foreign Law. There are no unresolved issues of law
or fact which, to the knowledge of the Company, arise out of a notice of
deficiency, proposed deficiency or assessment from the Internal Revenue Service
or any other Governmental Authority with respect to Taxes of the Company or any
of its Subsidiaries.
(c) For purposes of this Agreement, "TAX" or "TAXES" shall mean
(i) any and all taxes, fees, levies, duties, tariffs, imposts, and other like
charges imposed by the United States or any other Governmental Authority
(together with any and all interest, penalties, loss, damage, liability,
expense, additions to tax and additional amounts or costs incurred or imposed
with respect thereto), whether disputed or not, including (A) taxes or other
charges on or with respect to income, estimated income, franchise, escheat,
windfall or other profits, gross receipts, real or personal property,
20
sales, use, capital gains, capital stock or shares, premium, payroll,
employment, social security (or similar), workers' compensation, occupation,
unemployment compensation, disability, environmental (including taxes under Code
Section 59A), alternative or add-on minimum, estimated or net worth; (B) taxes
or other charges in the nature of excise, withholding, ad valorem, license,
registration, stamp, transfer, value added, or gains taxes; and (C) customs
duties, tariffs, import and export taxes and similar charges; (ii) any liability
for payment of amounts described in clause (i) whether as a result of transferee
liability, of being a member of an affiliated, consolidated, combined or unitary
group for any period, or otherwise through operation of law; and (iii) any
liability for payment of amounts described in clauses (i) and (ii) as a result
of any tax sharing, tax indemnity or tax allocation agreement or any other
express or implied agreement to indemnify any Person.
(d) Excluded from this SECTION 3.11 are any Taxes, tax returns or
other matters pertaining to Taxes of the Company or its Subsidiaries which,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect.
SECTION 3.12 EMPLOYEE BENEFIT MATTERS.
(a) Each plan, program, agreement or arrangement of the Company or
any of its Subsidiaries constituting (i) an employee welfare benefit plan as
defined in Section 3(1) of the Employee Retirement Income Security Act of 1974
(as amended, "ERISA") is referred to herein as an "EMPLOYEE WELFARE BENEFIT
PLAN" and (ii) a pension benefit plan as defined in Section 3(2) of ERISA is
referred to herein as an "EMPLOYEE PENSION BENEFIT PLAN." The Employee Welfare
Benefit Plans, Employee Pension Benefit Plans and each other employee benefit
plan, agreement, program or arrangement or employment practice maintained by the
Company or any of its Subsidiaries with respect to any of its current or former
employees or to which the Company or any of its Subsidiaries contributes or is
required to contribute with respect to any of its current or former employees
are collectively referred to herein as the "COMPANY PLANS." With respect to each
Company Plan:
(i) such Company Plan (and each related trust, insurance
contract or fund) has been administered in a manner consistent in all respects
with its written terms and complies in form and operation with the applicable
requirements of ERISA and the Code and other applicable Laws, except for
failures of administration or compliance that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect;
(ii) all required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports and Summary Plan Descriptions) have
been filed or distributed appropriately with respect to such Company Plan,
except for failures of filing or distribution that, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect;
21
(iii) The requirements of Part 6 of Subtitle B of Title I
of ERISA and Code Section 4980B have been met with respect to each such Company
Plan which is an Employee Welfare Benefit Plan, except for failures that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect;
(iv) all material contributions, premiums or other
payments (including all employer contributions and employee salary reduction
contributions) that are required to be made under the terms of any Company Plan
have been timely made and properly provided for in the Financial Statements
contained in the most recent Company SEC Documents, except for failures that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect;
(v) each such Company Plan which is an Employee Pension
Benefit Plan intended to be a "qualified plan" under Code Section 401(a) has
received a favorable determination letter from the Internal Revenue Service, and
no event has occurred which would reasonably be expected to cause the loss,
revocation or denial of any such favorable determination letter;
(vi) the Company shall continue to make available to the
Parent, upon its request, correct and complete copies of the plan documents and
most recent summary plan descriptions, the most recent determination letter
received from the Internal Revenue Service, the most recent Form 5500 Annual
Report, the most recent actuarial report, the most recent audited financial
statements, and all related trust agreements, insurance contracts and other
funding agreements that implement such Company Plan;
(vii) all Company Plans are by their terms able to be
amended or terminated by the Company; and
(viii) the Company has never been, nor is it a party to, or
otherwise bound by any advance agreement or similar arrangement with any
Governmental Authority, relating to the allowability, allocation or
reimbursement of benefit costs or other matters in connection with any Company
Plan.
(b) With respect to each Employee Welfare Benefit Plan or Employee
Pension Benefit Plan that the Company or any of its Subsidiaries maintains or
ever has maintained, or to which any of them contributes, ever has contributed
or ever has been required to contribute, there have been no non-exempt
prohibited transactions (as defined in Section 406 of ERISA and Code Section
4975) with respect to such plan, no fiduciary has any liability for breach of
fiduciary duty or any other failure to act or comply in connection with the
administration or investment of the assets of such plan, and no action, suit,
proceeding, hearing or, to the Company's knowledge, investigation with respect
to the administration or the investment of the assets of such plan (other than
routine claims for benefits) is pending or, to the Company's knowledge,
threatened, but excluding, from each of the foregoing, events or circumstances
that, individually or in the
22
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
(c) No Company Plan is a "defined benefit plan" as defined in
Section 3(35) of ERISA. Neither the Company nor any of its Subsidiaries
contributes to, or has ever been obligated to contribute to, a Multiemployer
Plan (as such term is defined in Section 3(37) of ERISA).
(d) Neither the Company nor any of its Subsidiaries has any
obligation to provide medical, health, life insurance or other welfare benefits
for currently retired or future retired or terminated employees, their spouses
or their dependents (other than in accordance with Code Section 4980B ).
(e) No Company Plan contains any provision that would prohibit the
consummation of the transactions contemplated by this Agreement, would give rise
to any severance, termination or other payments as a result of the transactions
contemplated by this Agreement (alone or together with the occurrence of any
other event), or would cause any payment, acceleration or increase in benefits
provided by any Company Plan as a result of the transactions contemplated by
this Agreement (alone or together with the occurrence of any other event).
SECTION 3.13 ENVIRONMENTAL MATTERS.
(a) (i) The Company and its Subsidiaries are and have since
January 1, 2004, been in compliance with all applicable Environmental Laws and
have all permits, licenses and authorizations required by such Environmental
Laws necessary for the operation of their businesses as presently conducted;
(ii) there is no order, claim, action, proceeding or demand for information
pending or, to the knowledge of the Company, threatened in writing against the
Company or any of its Subsidiaries pursuant to Environmental Laws; (iii) the
Company is not otherwise subject to any liability under Environmental Laws
including any liability arising out of the release or disposal of hazardous,
toxic, dangerous or regulated substances into the environment; and (iv) the
Company and its Subsidiaries have not received any notice, demand letter or
request for information from any Governmental Authority or third party, which
has not heretofore been resolved with such Governmental Authority or third
party, indicating that the Company or any of its Subsidiaries may be in
violation of, or liable under, any Environmental Laws; PROVIDED, HOWEVER, that
no representation or warranty is made in the foregoing clauses (i), (ii), (iii)
and (iv) with respect to matters that individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect.
(b) For purposes of this Agreement, "ENVIRONMENTAL LAWS" means any
Federal, state, local or foreign Laws relating to (i) the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, groundwater, drinking water supply, surface land, subsurface
land, plant and animal life or any other natural resource) or (ii) the exposure
to, or the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling production, release or disposal
23
of, Hazardous Substances, in each case as amended. The term "ENVIRONMENTAL LAWS"
includes the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended by the Superfund Amendment
and Reauthorization Act of 1986 and as further amended, the Federal Water
Pollution Control Act, 33 U.S.C. ss. 1251 et seq., as amended, the Solid Waste
Disposal Act of 1976, 42 U.S.C. ss. 6901 et seq., as amended, the Clean Air Act,
42 U.S.C. ss. 7401 et seq., as amended, the Toxic Substances Control Act, 15
U.S.C. ss. 2601 et seq., as amended, the Hazardous Material Transportation Act,
49 Ap. U.S.C.A. ss. 1801 et seq., as amended, the Federal Insecticide, Fungicide
and Rodenticide Act, 7 U.S.C. ss. 136 et seq., as amended, and comparable state
and local Laws.
(c) For purposes of this Agreement, "HAZARDOUS SUBSTANCE" means
any substance presently or hereafter listed, defined, designated or classified
as hazardous, toxic, radioactive, or dangerous, or otherwise regulated, under
any Environmental Laws. Hazardous Substance includes any substance to which
exposure is regulated by any Governmental Authority or any Environmental Laws
including any toxic waste, pollutant, contaminant, hazardous substance, toxic
substance, hazardous waste, special waste, industrial substance or petroleum or
any derivative or by-product thereof, radon, radioactive material, asbestos, or
asbestos containing material, urea formaldehyde foam insulation, lead or
polychlorinated biphenyls.
SECTION 3.14 REAL ESTATE.
(a) Section 3.14(a) of the Company Disclosure Letter sets forth
the address of all material real property owned by the Company or its
Subsidiaries as of the Agreement Date (the "OWNED REAL PROPERTY"). The Company
or one of its Subsidiaries, as applicable, holds valid, fee simple title to the
Owned Real Property, except for Liens that, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect.
(b) Section 3.14(b) of the Company Disclosure Letter sets forth
the address of all material real property in which Company or any Subsidiary of
Company holds a leasehold or subleasehold estate as of the Agreement Date (the
"LEASED REAL PROPERTY"); the leases or subleases for such Leased Real Property
being referred to as the "LEASES"). The Company or a Subsidiary, as applicable,
holds a valid leasehold interest in all Leased Real Property, except where the
failure to hold such valid leasehold interests, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
(c) Other than options, rights of first refusal or other similar
arrangements in favor of the Company and its Subsidiaries under the Leases,
neither the Company nor any of its Subsidiaries has entered into any material
contract, arrangement or understanding with respect to the future ownership,
development, use, occupancy or operations of the Owned Real Property or the
Leased Real Property.
24
SECTION 3.15 INTELLECTUAL PROPERTY MATTERS.
(a) To the Company's knowledge, the Company and its Subsidiaries
own or have a valid and enforceable right to use all Intellectual Property that
is material to their business or operations as presently conducted. The
Intellectual Property that is owned by the Company or its Subsidiaries is not
subject to any Liens or restrictions or limitations regarding ownership, use,
license or disclosure (including any "rights in data" claims of the U.S.
Government), other than pursuant to a written agreement set forth in Section
3.15 of the Company Disclosure Letter, or that, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
(b) Except with respect to infringement, misappropriation or other
unauthorized use that, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect, to the Company's knowledge:
(i) neither the Company nor any of its Subsidiaries is infringing,
misappropriating or otherwise making unauthorized use of any third-party's
Intellectual Property, and no claims regarding the foregoing are pending or
threatened; and (ii) no third-party is infringing, misappropriating or otherwise
making unauthorized use of the Company's or any of its Subsidiaries'
Intellectual Property.
(c) To the Company's knowledge, except as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect,
no Governmental Authority is currently, nor since January 1, 2004 has been,
entitled to claim any rights (including license rights) in: (i) any "Technical
Data" (as defined below) included in or related to any Intellectual Property
owned by the Company or any of its Subsidiaries, other than "Limited Rights" (as
defined below); (ii) any "Computer Software" (as defined below) included in the
Intellectual Property owned by the Company or any of its Subsidiaries, other
than "Restricted Rights" (as defined below); (iii) any patents or patentable
invention included in the Intellectual Property owned by the Company or any of
its Subsidiaries; or (iv) any copyright included in the Intellectual Property
owned by the Company or any of its Subsidiaries.
(d) The term "INTELLECTUAL PROPERTY" as used in this Agreement
means all of the following in any jurisdiction throughout the world: (i)
patents, patent applications, patent disclosures and inventions; (ii)
trademarks, service marks, trade dress, trade names, corporate names and
Internet domain names, together with all goodwill associated therewith; (iii)
copyrights; (iv) registrations for and applications to register any of the
foregoing; (v) computer software; (vi) trade secrets, confidential information
and know-how; and (vii) any other intellectual property rights.
(e) The terms "Technical Data" and "Limited Rights" have the
meanings set forth at 48 C.F.R. 252.227-7013, and the terms "Restricted Rights"
and "Computer Software" have the meanings set forth at 48 C.F.R. 252.227-7014.
SECTION 3.16 LABOR MATTERS. Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreements, memoranda of
understanding, settlements or other labor agreements with any union or labor
25
organization. There are no disputes or controversies pending or, to the
Company's knowledge, threatened between the Company or any of its Subsidiaries
and any of their current or former employees or any labor or other collective
bargaining unit representing any such employee that, individually or in the
aggregate, would reasonably be expected to have a Company Material Adverse
Effect. To the Company's knowledge, as of the Agreement Date, there is no
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of the Company or any of its Subsidiaries.
To the Company's knowledge, as of the Agreement Date, there are no current
Department of Labor, Office of Federal Contract Compliance Programs or Equal
Employment Opportunity Commission audits pending with respect to the Company or
any of its Subsidiaries except for audits arising in the ordinary course of
business or that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. There are no material
liabilities or obligations relating to any individual's current or former
employment with the Company or its Subsidiaries or related entities arising in
connection with any violation of any Laws.
SECTION 3.17 AMENDMENT TO THE RIGHTS AGREEMENT. The Company has
taken all necessary action to amend the Rights Agreement in accordance with its
terms to render it inapplicable to the transactions contemplated by this
Agreement. The Company has delivered to Parent a true and correct copy of the
executed amendment to the Rights Agreement, a form of which is attached hereto
as EXHIBIT C.
SECTION 3.18 TAKEOVER LAWS. The restrictions contained in Section
203 of the Delaware Act do not apply to the Company. The Company has taken all
necessary action to render any other potentially applicable anti-takeover or
similar statute or regulation or provision of the certificate of incorporation
or by-laws, or other organizational or constitutive document or governing
instruments of the Company or any of its Subsidiaries, inapplicable to this
Agreement and the transactions contemplated by this Agreement.
SECTION 3.19 INSURANCE. All material insurance policies maintained
by the Company and its Subsidiaries are in full force and effect, all premiums
due and payable thereon have been paid, and the Company and its Subsidiaries are
otherwise in compliance in all material respects with the terms and conditions
of such policies and bonds, except for any of the foregoing that, individually
or in the aggregate, would not reasonably be expected to result in a Company
Material Adverse Effect.
SECTION 3.20 BROKERS' FEES. Except for the fees and expenses
payable by the Company to Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("BEAR ▇▇▇▇▇▇▇") pursuant to
a letter agreement dated November 18, 2005 (the "BEAR ▇▇▇▇▇▇▇ ENGAGEMENT
LETTER"), a complete copy of which has been previously delivered to the Parent,
neither the Company nor any of its Subsidiaries has any liability or obligation
to pay any fees or commissions to any financial advisor, broker, finder or agent
with respect to the transactions contemplated by this Agreement.
SECTION 3.21 OPINION OF FINANCIAL ADVISOR. The Company has
received the opinion of Bear ▇▇▇▇▇▇▇, dated the Agreement Date, to the effect
that the
26
consideration to be received by the holders of Company Common Stock (the
"COMPANY STOCKHOLDERS") pursuant to this Agreement is fair to the Company
Stockholders from a financial point of view. Upon the Company's receipt of the
written version of such opinion, the Company will promptly provide the Parent
with a copy of such opinion. The Company has received the consent of Bear
▇▇▇▇▇▇▇ to include its final written opinion in the Proxy Statement subject to
the terms and provisions of the Bear ▇▇▇▇▇▇▇ Engagement Letter.
SECTION 3.22 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for
the representations and warranties contained in this Agreement, neither the
Company nor any other Person (i) makes any representation or warranty express or
implied, including any implied representation or warranty, as to condition,
merchantability, suitability or fitness for a particular purpose of any of the
assets used in the business of or held by the Company or (ii) makes any
representation or warranty, express or implied, as to the accuracy or
completeness of any information regarding the Company or the business conducted
by the Company, in each case except as expressly set forth in this Agreement or
as and to the extent required by this Agreement to be set forth in the Company
Disclosure Letter.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PARENT AND MERGER SUBSIDIARY
The Parent and the Merger Subsidiary represent and warrant to the
Company that:
SECTION 4.1 CORPORATE EXISTENCE AND POWER. Each of the Parent and
the Merger Subsidiary is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently being conducted,
except when the failure to be in good standing or have such power and authority,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect with respect to the Parent (a "PARENT MATERIAL ADVERSE
EFFECT"). Each of the Parent and the Merger Subsidiary is duly qualified or
licensed to conduct business and is in good standing in each jurisdiction in
which the properties owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or license necessary, except
where the failure to be so qualified or licensed and in good standing,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect. Since the date of its incorporation, the Merger
Subsidiary has not engaged in any activities other than in connection with, or
as contemplated by, this Agreement.
SECTION 4.2 AUTHORIZATION OF TRANSACTION; NON-CONTRAVENTION;
APPROVALS.
(a) The Parent and the Merger Subsidiary have full corporate power
and authority and have taken all requisite corporate action to enter into this
Agreement
27
and, subject to the adoption of this Agreement by the Parent as the sole
stockholder of the Merger Subsidiary (which shall occur promptly after the
execution and delivery hereof), to consummate the transactions contemplated
hereby and to perform its obligations hereunder. This Agreement has been duly
authorized, executed and delivered by the Parent and the Merger Subsidiary and,
assuming the due authorization, execution and delivery thereof by the Company,
constitutes a valid and legally binding agreement of the Parent and the Merger
Subsidiary enforceable against each of them in accordance with its terms, except
that (i) such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar Laws of general
applicability relating to or affecting enforcement of creditors' rights
generally and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(b) Except for (a) filings and approvals necessary to comply with
the applicable requirements of the Exchange Act, (b) filings pursuant to the HSR
Act and any other applicable Antitrust Laws, (c) the filing of the Certificate
of Merger pursuant to the Delaware Act, and (d) any filings required under the
rules and regulations of the New York Stock Exchange, neither the execution and
delivery of this Agreement by the Parent and the Merger Subsidiary, nor the
consummation by the Parent and the Merger Subsidiary of the transactions
contemplated hereby, shall (i) violate or conflict with any provision of the
certificate of incorporation or bylaws of the Parent or the Merger Subsidiary,
(ii) violate any Laws applicable to the Parent or the Merger Subsidiary or any
of their respective properties or assets, or (iii) require any filing or
registration with, notification to, or authorization, consent or approval of,
any Governmental Authority; except in the case of clauses (ii) and (iii) for
such violations, breaches or defaults that, or filings, registrations,
notifications, authorizations, consents or approvals that the failure to obtain,
individually or in the aggregate, would not reasonably be expected to have a
Parent Material Adverse Effect.
SECTION 4.3 FINANCIAL CAPABILITY. The Parent has the financial
capacity to perform and to cause the Merger Subsidiary to perform all of its
obligations under this Agreement, and the Parent has currently available all
funds necessary to pay the Merger Consideration and the other payments
contemplated by ARTICLE I. Without limiting the foregoing, the Parent's ability
and obligation to consummate and to cause the Merger Subsidiary to consummate
the transactions contemplated hereby is not contingent on the Parent's ability
to complete any public offering or private placement of equity or debt
securities or to obtain any other type of financing prior to or on the Closing
Date.
SECTION 4.4 INFORMATION IN THE PROXY STATEMENT. The information
supplied by Parent or the Merger Subsidiary expressly for inclusion or
incorporation by reference in the Proxy Statement shall 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 the
light of the circumstances under which they were made, not misleading.
28
SECTION 4.5 LITIGATION. As of the Agreement Date, there are no
claims, actions or proceedings pending or, to the knowledge of Parent,
threatened in writing against Parent or any of its Subsidiaries before any
Governmental Authority that seek to restrain or enjoin the consummation of the
Merger. As of the Agreement Date, neither Parent nor any of its Subsidiaries is
subject to any to any outstanding judgment, injunction, order or decree of any
Governmental Authority which prohibits or restricts the consummation of the
transactions contemplated by this Agreement.
SECTION 4.6 BROKERS' AND FINDERS' FEES. Parent has not incurred
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
SECTION 4.7 NO ADDITIONAL REPRESENTATIONS. Neither Parent nor
Merger Subsidiary, nor any other Person acting on behalf of Parent or Merger
Subsidiary has made any representation or warranty, express or implied, as to
the accuracy or completeness of any information regarding Parent or Merger
Subsidiary, in each case, except as expressly set forth in this Agreement.
ARTICLE V
COVENANTS
SECTION 5.1 GENERAL. Subject to the terms and conditions of this
Agreement, each of the parties shall take all actions and do all things
necessary, proper or advisable to perform its obligations under this Agreement
which are required to be performed on or prior to the Closing, and use its
reasonable efforts to consummate and make effective the transactions
contemplated by this Agreement as promptly as reasonably practical.
SECTION 5.2 FURTHER ASSURANCES. Prior to the Closing Date, each
of the parties shall (a) give all required notices to third parties and
Governmental Authorities and shall use its reasonable efforts to obtain all
material third party and governmental consents and approvals that it is required
to obtain in connection with this Agreement, the Merger and the other
transactions contemplated hereby and (b) use its reasonable efforts to prevent
any preliminary or permanent injunction or other order by a Governmental
Authority that seeks to modify, delay or prohibit the consummation of the
transactions contemplated by this Agreement, including under the Antitrust Laws,
and, if issued, to appeal any such injunction or order through the appellate
court or body for the relevant jurisdiction. No later than January 6, 2006, each
of the parties shall file a Notification and Report Form and related material
with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice under the HSR Act and any other applicable
Antitrust Laws, shall use its respective reasonable efforts to obtain
termination of the applicable waiting period under all Antitrust Laws and shall
take all further actions and make all further filings pursuant to the Antitrust
Laws that may be necessary, proper or advisable. Notwithstanding anything to the
contrary contained herein, nothing contained in this Agreement shall be deemed
to require the Parent to enter into any agreement, consent decree or other
commitment requiring the Parent or any of its Subsidiaries to litigate, pursue
or defend any action or proceeding by
29
any Governmental Authority challenging any of the transactions contemplated
hereby as violative of any Antitrust Laws. In connection with the foregoing,
each party (i) shall promptly notify the other party in writing of any
communication received by that party or its Affiliates from any Governmental
Authority, and subject to applicable Laws, provide the other party with a copy
of any such written communication (or written summary of any oral
communication), and (ii) not participate in any substantive meeting or
discussion with any Governmental Authority in respect of any filing,
investigation or inquiry concerning the transactions contemplated by this
Agreement unless it consults with the other party in advance, and to the extent
permitted by such Governmental Authority, give the other party the opportunity
to attend and participate thereat.
SECTION 5.3 INTERIM CONDUCT OF THE COMPANY.
(a) Except as expressly permitted by this Agreement, set forth in
Section 5.3 of the Company Disclosure Letter, or pursuant to the Parent's prior
written consent (which consent shall not be unreasonably withheld, conditioned
or delayed, it being understood that reasonableness for this purpose will be
assessed from the Parent's perspective assuming the Closing will take place in
accordance with this Agreement), from and after the Agreement Date through the
Effective Time, the Company shall, and shall cause each of its Subsidiaries, (i)
to conduct its operations in accordance with its ordinary course of business,
consistent with past practice, and (ii) use its reasonable efforts to preserve
intact its business organization, keep available the services of its current
officers and employees, preserve the goodwill of those having business
relationships with the Company and its Subsidiaries, preserve its relationships
with customers, creditors and suppliers, maintain its books, accounts and
records and comply in all material respects with applicable Laws.
(b) Without limiting the generality of the foregoing, except as
provided in this Agreement, or in Section 5.3 of the Company Disclosure Letter,
from and after the Agreement Date through the Effective Time, the Company shall
not, and shall not cause or permit any of its Subsidiaries to, take any of the
following actions without the prior written consent of the Parent (which consent
shall not be unreasonably withheld, conditioned or delayed, it being understood
that reasonableness for this purpose shall be assessed from the Parent's
perspective assuming the Closing shall take place in accordance with this
Agreement):
(i) amend or propose to amend its certificate (or
articles) of incorporation or bylaws or file any certificate of designation or
similar instrument with respect to any shares of its authorized but unissued
capital stock;
(ii) authorize or effect any stock split, combination or
reclassification of shares of its capital stock or amend any term of any
outstanding security of the Company or repurchase, redeem or otherwise acquire
any shares of its capital stock;
(iii) declare, pay or set aside any dividend or
distribution with respect to the Company Common Stock or any other of its
capital stock (other than
30
dividends payable by a wholly-owned Subsidiary of the Company to the Company or
another wholly-owned Subsidiary), authorize for issuance or issue, sell, grant
any shares of its capital stock (other than in connection with the exercise of
Company Options outstanding on the Agreement Date and listed in the Company
Disclosure Letter or in connection with any "Offering Period" under the Stock
Purchase Plan that has commenced prior to the Agreement Date), options,
warrants, commitments, subscriptions, other rights of any kind (including
Company Stock Based Awards) to acquire any shares of capital stock, or any other
securities exercisable or exchangeable for or convertible into shares of its
capital stock, or repurchase, redeem or otherwise acquire any shares of its
capital stock or any other securities exercisable or exchangeable for or
convertible into shares of its capital stock;
(iv) merge or consolidate with any entity or liquidate,
dissolve or effect any recapitalization or reorganization in any form or create
any new Subsidiary;
(v) sell, lease, license, pledge, encumber or otherwise
dispose of any assets or any interests (including any shares of the capital
stock of any of the Subsidiaries) that are material to the Company and its
Subsidiaries, taken as a whole, other than assets used, consumed, replaced or
sold in the ordinary course of business, consistent with past practice;
(vi) acquire (whether by purchase of assets, purchase of
stock, merger or otherwise) (A) any assets (including any equity interests)
other than in the ordinary course of business or (B) any equity interest of any
Person or any business or division of any business, or enter into any joint
venture, partnership agreement, joint development agreement, strategic alliance
agreement or other similar agreement (other than teaming or other similar
agreements entered into by the Company and/or its Subsidiaries in the ordinary
course of business, consistent with past practice);
(vii) create, incur, assume or otherwise become liable for
any indebtedness for borrowed money, or guarantee any such indebtedness; issue
or sell any debt securities or warrants or rights to acquire any debt securities
of the Company or its Subsidiaries; guarantee any debt securities of others;
enter into any "keep well" or other contract to maintain any financial statement
condition of any Person other than a wholly-owned Subsidiary or enter into any
arrangement having the economic effect of the foregoing, other than indebtedness
existing as of the Agreement Date, borrowings under existing credit lines or any
of the foregoing created, incurred or assumed in the ordinary course of
business, consistent with past practice, and intercompany indebtedness among the
Company and its wholly-owned Subsidiaries;
(viii) except as required as a result of changes in Law,
GAAP or Regulation S-X of the Exchange Act, change any of the accounting
principles or practices used by it as of September 30, 2005 that would
reasonably be expected to materially affect the assets, liabilities or results
of operation of the Company or any of its Subsidiaries;
31
(ix) make or change any material Tax election, settle or
compromise any material Tax liability, change in any material respect any
accounting method in respect of Taxes, file any amendment to a material Tax
Return, enter into any closing agreement, settle any material claim or material
assessment in respect of Taxes, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of Taxes,
except, in each case, in the ordinary course of business consistent with past
practice;
(x) except as required under the terms of any
employment-related agreement in effect on the Agreement Date, increase the
compensation payable or to become payable to any director, officer or employee
(other than increases in cash compensation in the ordinary course of business,
consistent with past practice, it being understood that the Company's annual
increases of salaries and setting of bonus targets which shall be approved in
February 2006 and the Company's approval of 2005 bonuses which shall occur in
February 2006, shall not be deemed a violation of this provision if such action
results in salaries, 2005 bonuses and 2006 bonus targets that are consistent
with the Company's past practices in the aggregate) or increase any bonus,
insurance, severance, pension or other benefit plan, payment or arrangement made
to, for or with any such directors, officers or employees, or grant any
severance or termination pay to any executive officer or director, or to any
other employee except payments made (1) in connection with the termination of
employees who are not executive officers in amounts consistent with its policies
and past practice or (2) pursuant to written agreements listed on Section
5.3(b)(x) of the Company Disclosure Letter;
(xi) make any capital expenditure, capital addition or
capital improvement in amounts exceeding $1,000,000 in any individual
occurrence;
(xii) (A) enter into any contract, agreement or commitment
of a character that is, or would reasonably be expected to be, material to the
Company and its Subsidiaries taken as whole, except that the Company may enter
into any contract, agreement or commitment in the ordinary course of business
consistent with past practice or (B) terminate, renew or amend in any material
respect any contract, agreement or commitment that is, or would reasonably be
expected to be, material to the Company and its Subsidiaries taken as a whole,
except for terminations, renewals, or amendments of contracts in the ordinary
course of business consistent with past practice;
(xiii) waive, release or assign any material rights, claims
or benefits of the Company or any Subsidiary under any Company Material
Agreement;
(xiv) enter into any Government Contract or submit any bid
for a Government Contract that would, under the federal rules covering
Organizational Conflicts of Interest, as that term is used in Federal
Acquisition Regulation Subpart 9.5, limit the Parent, the Surviving Corporation
or any of their respective Subsidiaries from engaging in any line of business,
competing with any Person or selling any product or service;
32
(xv) engage in any "reportable transaction," including any
"listed transaction," within the meaning of Code Section 6011 or any other
applicable federal Law including any Internal Revenue Service ruling, procedure,
notice or other pronouncement;
(xvi) waive or release any rights that are material to the
Company and its Subsidiaries, taken as a whole, or pay, discharge or satisfy any
claims, liabilities or obligations that are, or would reasonably be expected to
be, material to the Company and its Subsidiaries, taken as a whole, before the
same come due in accordance with their terms, except in either case other than
the payment, discharge and satisfaction in the ordinary course of business of
liabilities reflected on or reserved for in the Financial Statements of the
Company included in the most recent Filed SEC Documents or otherwise incurred in
the ordinary course of business, consistent with past practice;
(xvii) settle or compromise any material pending or
threatened suit, action or proceeding; or
(xviii) agree, resolve or commit to do any of the foregoing.
SECTION 5.4 CONTROL OF OPERATIONS. Nothing contained in this
Agreement shall give to Parent, directly or indirectly, rights to control or
direct the operations of the Company prior to the Effective Time. Prior to the
Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its and its
Subsidiaries' operations.
SECTION 5.5 PROXY STATEMENT; COMPANY STOCKHOLDERS MEETING.
(a) As soon as possible after the Agreement Date, the Company
shall commence preparation of a proxy statement (as amended or supplemented, the
"PROXY STATEMENT") relating to a special meeting of the Company's stockholders
meeting (the "COMPANY STOCKHOLDERS MEETING") for the purpose of obtaining the
Company Stockholders Approval, and file a preliminary Proxy Statement with the
SEC or its staff. The Company shall use its reasonable efforts to respond to any
comments by the SEC or its staff to such preliminary Proxy Statement and to
cause a definitive Proxy Statement to be mailed to the Company Stockholders as
soon as possible following the Agreement Date. The Company shall notify Parent
promptly of the receipt of and shall respond promptly to any (i) comments from
the SEC or its staff and (ii) request by the SEC or its staff or its staff for
amendments or supplements to the Proxy Statement or for additional information
and shall supply Parent with copies of all correspondence between the Company or
any of its representatives, on the one hand, and the SEC or its staff, on the
other hand, with respect to the Proxy Statement or the Merger. Parent and its
counsel shall be given a reasonable opportunity to review and comment upon the
Proxy Statement and any amendment or supplement thereto and any such
correspondence prior to its filing with the SEC or dissemination to the Company
Stockholders. If necessary, after the Proxy Statement has been so mailed, the
Company shall promptly circulate amended, supplemental or supplemented proxy
materials, and if required in connection therewith, resolicit proxies. Subject
to SECTION 5.7(D), the Company shall include in the definitive
33
Proxy Statement the unanimous recommendation of the Company's Board of Directors
that the Company Stockholders vote in favor of approval of the Merger and the
adoption of this Agreement (the "COMPANY RECOMMENDATION").
(b) The Parent shall provide the Company with information
concerning or relating to the Parent or the Merger Subsidiary that may be
required in connection with the preparation and filing of the Proxy Statement
pursuant to this SECTION 5.5. The information supplied by Parent and the Company
for inclusion in the Proxy Statement shall not at the time (i) the Proxy
Statement is filed with the SEC, (ii) the Proxy Statement is first mailed to the
Company Stockholders, or (iii) of the Company Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. For
purposes of the foregoing, it is understood and agreed that information
concerning or relating to Parent will be deemed to have been supplied by Parent,
and all other information will be deemed to have been supplied by the Company.
The Company shall cause all documents filed with the SEC in connection with the
Merger to comply as to form and substance in all material respects with the
applicable requirements of the Exchange Act.
(c) The Company, acting through the Company's Board of Directors,
shall in accordance with applicable Law and as soon as possible following the
Agreement Date, establish a record date for, duly call, give notice of, convene
and hold the Company Stockholders Meeting for the purpose of voting upon this
Agreement and the Merger, and the Company shall submit this Agreement at such
meeting. The Company shall use its reasonable efforts to solicit from the
Company Stockholders proxies in favor of the adoption of this Agreement and take
all actions reasonably necessary or, in the reasonable opinion of Parent,
advisable to secure the Company Stockholders Approval. Without limiting the
generality of the foregoing, the Company's obligation pursuant to the preceding
two sentences will not be affected by the commencement, public proposal, public
disclosure or communication to the Company of any Acquisition Proposal or
Superior Proposal or any withdrawal of the Company Recommendation. Subject to
the Company withdrawing, modifying or changing its recommendation pursuant to
SECTION 5.7(D), the Company, acting through the Company's Board of Directors,
shall make the Company Recommendation at the Company Stockholders Meeting.
SECTION 5.6 INTENTIONALLY OMITTED.
SECTION 5.7 ACQUISITION PROPOSALS.
(a) From the Agreement Date until the Effective Time, the Company
shall, and shall cause its Subsidiaries and each of their respective directors,
officers, employees, agents, attorneys, accountants, investment bankers and
other representatives (collectively, the "COMPANY REPRESENTATIVES"), to
immediately cease all existing discussions, negotiations or other action with
any other Person conducted heretofore with respect to any Acquisition Proposal.
From the Agreement Date until the Effective Time, the Company shall not, and
shall cause its Subsidiaries and each of the Company
34
Representatives not to, (i) solicit, initiate, facilitate or knowingly
encourage, directly or indirectly, the making or submission of any Acquisition
Proposal, (ii) enter into any letter of intent, agreement, arrangement or
understanding with respect to any Acquisition Proposal, or agree to approve or
endorse any Acquisition Proposal or enter into any agreement, arrangement or
understanding that would require the Company to abandon, terminate or fail to
consummate the Merger or any other transaction contemplated by this Agreement,
(iii) initiate or participate in any way in any discussions or negotiations
with, or furnish or disclose any information to, any Person (other than the
Parent or the Merger Subsidiary) in furtherance of any proposal that
constitutes, or could reasonably be expected to lead to, any Acquisition
Proposal, or (iv) facilitate or further in any other manner any inquiries or the
making or submission of any proposal that constitutes, or could reasonably be
expected to lead to, any Acquisition Proposal. Without limiting the foregoing,
it is agreed that any violation of the foregoing restrictions by any Company
Representative, whether or not such Person is purporting to act on behalf of the
Company or any of its Subsidiaries, or otherwise, will be deemed to be a breach
of this SECTION 5.7(A) by the Company.
(b) Notwithstanding the restrictions set forth in SECTION 5.7(A),
if at any time prior to obtaining the Company Stockholders Approval, the
Company's Board of Directors receives a bona fide, unsolicited Acquisition
Proposal (under circumstances in which there has not been a violation of SECTION
5.7(A)) and the Company's Board of Directors determines in good faith (after
consulting with its financial advisor and outside legal counsel) that such
Acquisition Proposal is, or is reasonably likely to result in, a Superior
Proposal (as such term is defined in subsection (h) below) and that failure to
take such action permitted under this paragraph would result in a breach of its
fiduciary duties to the Company Stockholders under applicable Laws, the Company
may (or permit the Company Representatives), subject to providing Parent with
the information required pursuant to subsection (c) below, (A) furnish
information with respect to the Company and its Subsidiaries to the Person
making such Acquisition Proposal pursuant to a customary confidentiality
agreement not less restrictive (including with respect to standstill provisions)
on the other party than the confidentiality agreement between the Company and
the Parent dated November 2, 2005 (the "CONFIDENTIALITY AGREEMENT"), and (B)
participate in discussions or negotiations with the Person making such
Acquisition Proposal.
(c) The Company shall as promptly as practical, and in any event
within forty-eight (48) hours, notify Parent of any Acquisition Proposal or of
any request for information or inquiry that could reasonably be expected to lead
to an Acquisition Proposal, which notification shall include a copy of the
applicable Acquisition Proposal or a reasonably detailed written summary
thereof, request or inquiry (or, if oral, a written copy of statement setting
forth in reasonable detail the terms and conditions of such Acquisition
Proposal, request or inquiry), including the identity of the third party making
such Acquisition Proposal, request or inquiry. The Company shall keep the Parent
advised on a reasonably current basis of the status and content of any
discussions or negotiations involving any Acquisition Proposal, request or
inquiry and shall promptly make available to the Parent any non-public
information furnished to any third party in connection therewith that has not
been previously provided to the Parent. The Company
35
will notify the Parent in writing promptly after any determination by the Board
of Directors of the Company that an Acquisition Proposal is, or would reasonably
be likely to result in or lead to, a Superior Proposal.
(d) Neither the Company's Board of Directors nor any committee
thereof will withdraw, modify or change, or propose publicly to withdraw, modify
or change, in a manner adverse to the Parent, the Merger Subsidiary or the
transactions contemplated by this Agreement, the Company Recommendation, unless
prior to obtaining the Company Stockholders Approval, (A) the Company's Board of
Directors determines in good faith (after consultation with outside legal
counsel) that the failure to take such action would be a breach of its fiduciary
duties to the Company Stockholders under applicable Laws, and (B) if such
withdrawal, modification or public proposal is taken in response to a Superior
Proposal, then unless the Company also first gives the Parent four (4) business
days written notice of the material terms and provisions of such Superior
Proposal, during which four (4) business day period the Company will and will
cause the Company Representatives to negotiate in good faith with the Parent, so
that the Parent may propose an amendment to this Agreement for the purpose of
causing the Acquisition Proposal to no longer constitute a Superior Proposal. In
the case of subclause (A) of the immediately preceding sentence, the Company may
withdraw, modify or change its recommendation and shall give Parent prompt
notification thereof. In the case of subclause (B) of the immediately preceding
sentence, if at the end of such four (4) business day period, the Company's
Board of Directors continues to believe in good faith, after receiving the
advice of its financial advisors and outside legal counsel, that the Acquisition
Proposal continues to be a Superior Proposal, and the Company has concurrently
satisfied its obligations pursuant to SECTIONS 7.3 and 7.4, then the Company may
withdraw, modify or change the Company Recommendation by written notice to the
Parent and terminate this Agreement pursuant to SECTION 7.1(C)(II).
(e) Unless the Company's Board of Directors has previously
withdrawn or modified, or is concurrently withdrawing or modifying, the Company
Recommendation in accordance with this section, the Company's Board of Directors
shall not recommend any Acquisition Proposal to the Company Stockholders.
Notwithstanding the foregoing, nothing contained in this Agreement shall prevent
the Company's Board of Directors from complying with Rule 14e-2(a) and Rule
14d-9 promulgated under the Exchange Act with respect to any Acquisition
Proposal or making any disclosure required by applicable Laws.
(f) The Company shall not release nor permit the release of any
Person from, or waive or permit the waiver of any provision of, and the Company
shall use its reasonable efforts to enforce or cause to be enforced, any
confidentiality, "standstill" or similar agreement to which any of the Company
or any of its Subsidiaries is a party, unless the Company's Board of Directors
determines in good faith (after consultation with outside legal counsel) that
the failure to take such action would be a breach of its fiduciary duties to the
Company Stockholders under applicable Laws; PROVIDED, HOWEVER, that the Company
shall not release or permit the release from, or waiver or permit the waiver of
any provision of any standstill or similar agreement the
36
effect of which would be to permit such Person to effect a transaction without
the approval of the Company's Board of Directors.
(g) The term "ACQUISITION PROPOSAL" means an inquiry, proposal,
indication of interest or offer relating to any (i) acquisition or sale of (1)
20% or more of the consolidated assets of the Company and its Subsidiaries, or
(2) 20% or more (in number or voting power) of the equity securities of the
Company (or any of its Subsidiaries, as applicable), (ii) tender offer or
exchange offer, as defined pursuant to the Exchange Act, that, if consummated,
would result in any Person beneficially owning 20% or more (in number or voting
power) of the equity securities of the Company (or a Company Subsidiary as
applicable), or (iii) merger, consolidation, business combination,
reorganization, recapitalization, liquidation, dissolution or other similar
transaction involving the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement or a merger involving only the
Company and one or more of its wholly-owned Subsidiaries.
(h) The term "SUPERIOR PROPOSAL" means a bona fide, written
Acquisition Proposal that is (i) not received in violation of SECTION 5.7(A),
(ii) for at least a majority of the outstanding Company Common Stock or all or
substantially all of the assets of the Company on a consolidated basis, (iii)
fully financed or for which financing, to the extent required, is reasonably
likely to be available and (iv) on terms that the Company's Board of Directors
determines in good faith (A) would result in a transaction that is more
favorable to the Company Stockholders from a financial point of view, than the
transactions contemplated hereby, and (B) is reasonably capable of being
completed according to its terms.
SECTION 5.8 INDEMNIFICATION. (a) From and after the Effective
Time, the Parent shall, and shall cause the Surviving Corporation to, fulfill
and honor in all respects the obligations of the Company pursuant to any
indemnification, exculpation and advancement of expenses provisions in favor of
the current or former directors, officers, employees or agents of the Company or
any of its Subsidiaries or any other person who, at the request of the Company
or any of its Subsidiaries, served as a director, officer, member, trustee or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise (the "INDEMNIFIED PARTIES") under the
constitutional documents of the Company and its Subsidiaries or any agreement
between an Indemnified Party and the Company or any of its Subsidiaries in
effect as of the Agreement Date. The certificate of incorporation and by-laws of
the Surviving Corporation shall contain provisions with respect to
indemnification, exculpation and advancement of expenses that are at least as
favorable to the Indemnified Parties as those contained in the certificate of
incorporation and by-laws of the Company in effect on the Agreement Date (and
which shall expressly provide for advancement of expenses to former officers,
directors, employees or agents subject only to delivery of an undertaking to
repay such advanced expenses if the Indemnified Party is ultimately determined
not to be entitled to indemnification), and such provisions shall not be
amended, repealed or otherwise modified for a period of six (6) years from the
Effective Time in any manner that would adversely affect the rights of the
Indemnified Parties thereunder.
37
(b) For a period of six (6) years after the Closing Date, the
Parent shall cause to be maintained in effect policies of directors and officers
liability insurance and fiduciary liability insurance substantially equivalent
in scope and amount of coverage (and on terms and conditions no less
advantageous to the insureds) to the policies maintained by the Company as of
the Agreement Date with respect to claims arising from or relating to actions or
omissions, or alleged actions or omissions, occurring on or prior to the
Effective Time. Notwithstanding the provisions of this section, the Parent shall
not be obligated to make total annual premium payments with respect to such
policies of insurance to the extent such premiums exceed two hundred percent
(200%) of the last annual premium paid by the Company prior to the Agreement
Date. If the annual premium costs necessary to maintain such insurance coverage
exceed the foregoing amount, the Parent shall maintain as much comparable
directors and officers liability insurance and fiduciary liability insurance
reasonably obtainable for an annual premium not exceeding the foregoing amount.
The Company represents that the amount of the last annual premium paid by the
Company prior to the Agreement Date was the amount set forth on Section 5.8(b)
of the Company Disclosure Letter.
(c) The Parent shall cause the Surviving Corporation to honor the
provisions of this SECTION 5.8.
(d) The rights of each Indemnified Party hereunder shall be in
addition to any other rights such Indemnified Party may have under the Delaware
Act or otherwise. Notwithstanding anything to the contrary contained in this
Agreement or otherwise, the provisions of this SECTION 5.8 shall survive the
consummation of the Merger, and each Indemnified Party will, for all purposes,
be a third party beneficiary of the covenants and agreements contained in this
SECTION 5.8 and, accordingly, shall be treated as a party to this Agreement for
purposes of the rights and remedies relating to enforcement of such covenants
and agreements and shall be entitled to enforce any such rights and exercise any
such remedies directly against the Parent and the Surviving Corporation.
SECTION 5.9 PUBLIC ANNOUNCEMENTS. The initial press releases
issued by each party announcing the Merger and the transactions contemplated by
this Agreement shall be in a form that is mutually acceptable to the Parent and
the Company. Thereafter, the Parent and the Company shall consult with one
another before issuing any press releases or otherwise making any public
announcements with respect to the transactions contemplated by this Agreement,
and except as may be required by applicable Laws or by the rules and regulations
of the New York Stock Exchange shall not issue any such press release or make
any such announcement prior to such consultation, except that (a) the Parent and
the Company shall agree on the content of the first announcement made to the
Company's employees regarding the execution of this Agreement and the
transactions contemplated hereby and (b) the Company may otherwise communicate
with the Company's employees as it deems appropriate, PROVIDED THAT, in any
formal communications with such employees, the Company shall not make any
commitments to the employees that might reasonably be expected to be binding
upon the Parent or the Surviving Corporation after the Closing.
38
SECTION 5.10 FULL ACCESS. (a) Between the Agreement Date and the
Effective Time, the Company shall, and shall cause its Subsidiaries to, afford
Parent and its Representatives reasonable access during normal business hours
and upon reasonable notice, to the officers, employees, agents, properties,
books and records of the Company and its Subsidiaries; PROVIDED THAT, the
foregoing shall not require the Company (i) to permit any inspection, or to
disclose any information, that in the reasonable judgment of the Company would
result in the disclosure of any trade secrets of third parties or violate any of
its obligations with respect to confidentiality if the Company shall have used
reasonable efforts to obtain the consent of such third party to such inspection
or disclosure without requiring the Company to pay any amount or waive any
rights to obtain such consent; (ii) to disclose any information of the Company
or any of its Subsidiaries subject to the attorney client privilege, PROVIDED
THAT, the Company will nonetheless provide the Parent and its Representatives
with appropriate information regarding the factual basis underlying any
circumstances that resulted in the preparation of such privileged analyses;
(iii) to provide any information or access that the Company reasonably believes
could violate applicable Laws; PROVIDED, FURTHER, that this SECTION 5.10 shall
not obligate the Company to devote any material resources to create any
information that does not already exist at the time of such request (other than
to convert existing information from one medium to another, such as providing a
printout of information that is sorted in a computer database).
(b) The Parent shall hold, and shall cause its directors,
officers, employees, agents and representatives to hold, all information
provided to them pursuant to this SECTION 5.10 in confidence in accordance with
the terms of the Confidentiality Agreement and, in the event of the termination
of this Agreement for any reason, the Parent promptly shall return or destroy
all such information in accordance with the terms of the Confidentiality
Agreement.
SECTION 5.11 ACTIONS REGARDING ANTITAKEOVER STATUTES. If Section
203 of the Delaware Act or any other potentially applicable anti-takeover or
similar statute or regulation is or becomes applicable to the transactions
contemplated by this Agreement, the Board of Directors of the Company shall
grant such approvals and take such other actions as may be required so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms and conditions set forth in this Agreement.
SECTION 5.12 CONTINUED BENEFITS PLANS. (a) The Parent shall,
through the period beginning on the Closing Date and ending on December 31,
2007, cause or take such necessary action to cause the Company and its
Subsidiaries to maintain for each person who is an employee of the Company
immediately prior to the Closing (including each such person who is on vacation,
temporary layoff, leave of absence, sick leave or short- or long-term
disability) (each, a "CONTINUING EMPLOYEE") the wages, other compensation and
benefits of the types provided to such Continuing Employees, that are not less
favorable in the aggregate to such Continuing Employees than the wages, other
compensation
39
and benefits provided to them as in effect immediately prior to the Closing.
Commencing on January 1, 2007, the Parent may satisfy its obligations under the
preceding sentence by providing the Continuing Employees wages, other
compensation and benefits on substantially the same basis and level as are
provided to similarly situated employees of General Dynamics Network Systems,
Inc. ("GDNS"); PROVIDED THAT, commencing on January 1, 2007, the Parent may in
the ordinary course of business (i) add, delete or change providers of benefits,
(ii) change, increase or decrease co-payments, deductibles or other requirements
for coverage or benefits (e.g., utilization review or pre-certification
requirements), and/or (iii) make other changes in administration or changes in
the design, coverage and benefits given, so long as the foregoing apply to all
similarly situated employees of GDNS. The Parent shall take all necessary action
so that, for all purposes under each employee benefit plan maintained by the
Parent or any of its Subsidiaries or Affiliates in which Continuing Employees
become eligible to participate upon or after the Closing, the Continuing
Employees shall be given credit for all service with the Company and its
Subsidiaries to the same extent as if such services had been rendered to the
Parent or any of its Subsidiaries or Affiliates (but only to the extent that
such credit does not create any duplication of benefits or benefit accruals
under any Parent-sponsored defined benefit retirement or welfare plan).
Notwithstanding the foregoing, Continuing Employees, will not be offered any
Parent-sponsored defined benefit retirement plan, any Parent-provided
post-employment benefits, such as retiree medical or retiree life or employee
stock purchase plans.
(b) The Parent shall, or shall cause the Company and its
Subsidiaries to: (i) waive all limitations as to pre-existing conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Continuing Employees under any welfare or fringe
benefit plan in which such Continuing Employees may be eligible to participate
after the Closing; and (ii) provide each Continuing Employee with credit under
any general leave, welfare plan or fringe benefit plan in which such Continuing
Employee becomes eligible to participate after the Closing for any co-payments
and deductibles paid by such Continuing Employee for the then current plan year
under the corresponding welfare or fringe benefit plan maintained by the Company
or any of its Subsidiaries prior to the Closing.
(c) Without limiting the application of the provisions of SECTION
5.12(A), Parent shall or shall cause the Company or its Subsidiaries to (i)
honor and continue in effect in accordance with their terms any and all
severance arrangements, agreements or policies of the Company and its
Subsidiaries (which in the case of senior executive arrangements and agreements
are set forth on the Company Disclosure Letter) as in effect on the Agreement
Date and honor all commitments under those agreements whenever due, and (ii)
honor, pay, perform and satisfy all liabilities and commitments, with respect to
the annual incentive bonuses payable to any Continuing Employees for 2005 in
accordance with the terms of the applicable bonus plans, programs and policies
of the Company as in effect on the Agreement Date.
(d) From and after the Closing Date, Parent assumes full
responsibility for compliance with, as well as any liability which may exist
under, the Workers Adjustment and Retraining Notification Act, P.L. 100-379, and
any other similar state law on account of any Continuing Employee terminated
after the Closing.
40
SECTION 5.13 STANDSTILL PROVISIONS. The restrictions on the Parent
and the Merger Subsidiary contained in Section 6A of the Confidentiality
Agreement are hereby waived by the Company but only to the extent reasonably
necessary to permit the Parent and the Merger Subsidiary to consummate the
transactions contemplated by this Agreement and/or to comply with their
obligations or exercise their legal remedies under this Agreement.
SECTION 5.14 NOTIFICATION OF CERTAIN MATTERS; SUPPLEMENTAL
DISCLOSURE. Each party shall give the other reasonably prompt notice upon
learning of any event that is reasonably likely to cause any of the conditions
set forth in ARTICLE VI not to be satisfied. The Company shall give prompt
written notice to the Parent of the occurrence of any event that, individually
or in the aggregate, would reasonably be expected to result in a Company
Material Adverse Effect. Each of the Company, the Parent and the Merger
Subsidiary agrees use their respective reasonable efforts to prevent or promptly
remedy, (i) the occurrence or failure to occur or the impending or threatened
occurrence or failure to occur, of any event which occurrence or failure to
occur would be likely to cause any of its representations or warranties in this
Agreement to be untrue or inaccurate in any material respect at any time from
the Agreement Date to the Effective Time and (ii) any material failure on its
part to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder. Each party shall give prompt written
notice to the other of any material development which would give rise to a
failure of a condition set forth in ARTICLE VI. The delivery of any notice
pursuant to this SECTION 5.14 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice nor be deemed to have
amended any of the disclosures set forth in the Company Disclosure Letter, to
have qualified the representations and warranties contained herein or to have
cured any misrepresentation or breach of a representation or warranty that
otherwise might have existed hereunder by reason of such material development.
No disclosure after the Agreement Date of the untruth of any representation and
warranty made in this Agreement will operate as a cure of any breach of the
failure to disclose the information, nor any untrue representation or warranty
made herein.
ARTICLE VI
CONDITIONS TO THE CONSUMMATION OF THE MERGER
SECTION 6.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The
respective obligation of each party to consummate the Merger and the other
transactions contemplated hereby is subject to the satisfaction at or prior to
the Closing Date of each of the following conditions, any of which may be waived
by the written agreement of the parties:
(a) the Company shall have obtained the Company Stockholders
Approval;
(b) no order, decree, ruling, judgment or injunction will have
been enacted, entered, promulgated or enforced by any Governmental Authority of
competent jurisdiction making illegal or otherwise prohibiting the Merger and
the consummation of
41
the transactions contemplated by this Agreement substantially on the terms
contemplated hereby, and continue to be in effect; and
(c) all applicable waiting periods under the HSR Act will have
expired or been terminated.
SECTION 6.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY. The
obligations of the Company to consummate the Merger and the other transactions
contemplated hereby, are subject to the satisfaction at or prior to the Closing
Date of each of the following conditions, any of which may be waived, in
writing, exclusively by the Company:
(a) the representations and warranties of the Parent and the
Merger Subsidiary contained herein (which for purposes of this subparagraph
shall be read as though none of them contained any Parent Material Adverse
Effect or materiality qualification) shall be true and correct in all respects
as of the Closing Date with the same effect as though made as of the Closing
Date (PROVIDED THAT, any representations and warranties made as of a specified
date shall be required only to continue on the Closing Date to be true and
correct as of such specified date), except for any failure of such
representations and warranties to be true and correct that, individually or in
the aggregate, would not reasonably be expected to have a Parent Material
Adverse Effect;
42
(b) each of the Parent and the Merger Subsidiary shall have
performed or complied with in all material respects all covenants and
obligations required to be performed or complied with by it under this Agreement
at or prior to the Effective Time; and
(c) the Parent shall have delivered to the Company a certificate,
dated the Closing Date and signed by an executive officer of the Parent,
certifying the satisfaction of the conditions set forth in subsections (a) and
(b) above.
SECTION 6.3 CONDITIONS TO THE OBLIGATION OF THE PARENT AND THE
MERGER SUBSIDIARY. The obligations of the Parent and the Merger Subsidiary to
consummate the Merger and the other transactions contemplated hereby, are
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by the
Parent:
(a) the representations and warranties of the Company contained
herein (which for purposes of this subparagraph shall be read as though none of
them contained any Company Material Adverse Effect or materiality qualification)
shall be true and correct in all respects as of the Closing Date with the same
effect as though made as of the Closing Date (PROVIDED THAT, any representations
and warranties made as of a specified date shall be required only to continue on
the Closing Date to be true and correct as of such specified date), except for
any failure of such representations and warranties to be true and correct that,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect;
(b) the Company shall have performed or complied with in all
material respects all obligations required to be performed or complied with by
it under this Agreement at or prior to the Effective Time;
(c) since the Agreement Date, there shall have been no Company
Material Adverse Effect;
(d) the Company shall have delivered to the Parent a certificate,
dated the Closing Date and signed by an executive officer of the Company,
certifying the satisfaction of the conditions set forth in subsections (a), (b)
and (c) above; and
(e) the Company shall have delivered an affidavit meeting the
requirements of Code Section 1445(b)(3) and the regulations promulgated
thereunder, certifying that either: (i) the Company is not and has not been a
United States real property holding corporation (within the meaning of Code
Section 897(c)(2)) during the period described in Code Section 897(c)(1)(A)(ii);
or (ii) as of the Effective Time, interests in the Company are not United States
real property interests by reason of Code Section 897(c)(1)(B); and
(f) Dissenting Shares, excluding any Dissenting Shares that are
beneficially owned by any Specified Stockholders, do not exceed the Dissenting
Share Limit. For purposes of this Agreement, the "DISSENTING SHARE LIMIT" shall
mean the excess, if any, of (x) sixteen percent (16%) of the outstanding shares
of Company Common Stock over (y) any portion of the Dissenting Shares that are
beneficially owned by any of the Specified Stockholders (expressed as a
percentage of the outstanding shares of Company Common Stock), PROVIDED THAT, if
(y) in the preceding clause is greater than or equal to 16%, then the Dissenting
Shares shall be deemed to exceed the Dissenting Share Limit for purposes of this
SECTION 6.3(F) and SECTION 7.1(D)(IV). For purposes of this Agreement,
"SPECIFIED STOCKHOLDERS" shall mean ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Azimuth Technologies,
L.P., Azimuth Tech. II LLC, Georgica (Azimuth Technologies), Inc., Georgica
(Azimuth Technologies), L.P., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ Family 1987 Trust, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, SML Family Investors, LLC, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or any of their
respective Affiliates (as defined in Rule 12b-2 of the Exchange Act) and
Associates (as defined in Rule 12b-2 of the Exchange Act).
SECTION 6.4 FRUSTRATION OF CLOSING CONDITIONS. None of the
Company, the Parent or the Merger Subsidiary may rely on the failure of any
condition set forth in SECTIONS 6.1, 6.2 or 6.3, as the case may be, to be
satisfied if such party's material breach of this Agreement has been a principal
cause of the failure of such condition to be satisfied.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or, subject to the terms
hereof, after the Company Stockholders Approval has been obtained:
43
(a) by mutual written agreement of the Parent and the Company;
(b) by either the Parent or the Company, if:
(i) the Closing has not occurred by April 30, 2006 (the
"OUTSIDE DATE"); PROVIDED THAT, if all applicable waiting periods under the HSR
Act have not expired or been terminated by such date, then the Company or the
Parent may provide the other with a written election extending the Outside Date
to July 31, 2006, and following such extension, the "Outside Date" for all
purposes of this Agreement shall be July 31, 2006; FURTHER, PROVIDED, that the
party seeking to terminate this Agreement pursuant to this subsection (b)(i) has
not breached in any material respect its obligations under this Agreement in any
manner that has been the principal cause of, or resulted in, the failure of the
Closing to occur on or before such date;
(ii) (A) there are any Laws that prohibit or make the
Merger illegal, or if an order, decree, ruling, judgment or injunction has been
entered by a Governmental Authority of competent jurisdiction permanently
restraining, enjoining or otherwise prohibiting the Merger and such order,
decree, ruling, judgment or injunction has become final and non-appealable, and
(B) the party seeking to terminate this Agreement pursuant to this subsection
(b)(ii) has used its reasonable efforts to resist, resolve or remove such Laws,
order, decree, ruling, judgment or injunction;
(iii) at the Company Stockholder Meeting (including any
adjournment or postponement thereof), the Company Stockholders Approval has not
been obtained; unless such failure to obtain the Company Stockholders Approval
is the result of a material breach of this Agreement by the party seeking to
terminate this Agreement; or
(iv) any one of the following shall have occurred;
PROVIDED, HOWEVER, that the party seeking to terminate this Agreement pursuant
to this subsection (b)(iv) has used reasonable efforts to resist, resolve or
remove the impediments to the Closing set forth in subparagraphs (A), (B), and
(C) of this subsection (b)(iv):
(A) the waiting period applicable to the
consummation of the Merger under the HSR Act shall not have expired or been
terminated by the Outside Date;
(B) any Governmental Authority files a complaint
or otherwise commences a proceeding seeking a judgment, injunction, order or
decree enjoining the consummation of the Merger or restraining or prohibiting
the operation of the business of the Parent or any of its Subsidiaries or the
Company or any of its Subsidiaries after the Effective Time; or
(C) the Parent receives notice that the United
States Federal Trade Commission has authorized its staff to file a complaint, or
that the Assistant Attorney General or other appropriate official at the United
States Department
44
of Justice has authorized the staff of the Antitrust Division to seek a
preliminary injunction, as the case may be, enjoining consummation of the
Merger;
(c) by the Company:
(i) if (A) the representations and warranties of the
Parent and/or the Merger Subsidiary contained in ARTICLE IV of this Agreement
fail to be true and correct in any respect that causes a failure of the
condition set forth in SECTION 6.2(A) or (B) the Parent or the Merger Subsidiary
materially breaches or materially fails to perform its covenants and other
agreements contained herein; PROVIDED THAT, in each of the foregoing clauses (A)
and (B), such breach or failure cannot be or has not been cured in all material
respects within twenty (20) days after the Company's written notice thereof to
the Parent or the Merger Subsidiary; or
(ii) prior to obtaining the Company Stockholders Approval,
if (A) the Board of Directors of the Company approves and authorizes the Company
to enter into a definitive agreement providing for the implementation of a
Superior Proposal, and (B) immediately following termination of this Agreement
the Company enters into such definitive agreement; PROVIDED THAT, concurrent
with the termination of this Agreement pursuant to this subsection and as a
condition precedent thereof, the Company pays to the Parent the Company
Termination Fee and Company Expense Reimbursement in accordance with SECTIONS
7.3 and 7.4;
(d) by the Parent if:
(i) (A) the representations and warranties of the Company
contained in ARTICLE III of this Agreement fail to be true and correct in any
respect that causes a failure of the conditions set forth in SECTION 6.3(A) of
this Agreement, or (B) the Company materially breaches or materially fails to
perform its covenants and other agreements contained herein; PROVIDED THAT, in
each of the foregoing clauses (A) and (B), such breach or failure cannot be or
has not been cured in all material respects within twenty (20) days after the
Parent's written notice thereof to the Company;
(ii) (A) the Company's Board of Directors (or any
committee thereof) withdraws or modifies in a manner adverse to the Parent the
Company Recommendation; (B) the Company's Board of Directors fails to reconfirm
the Company Recommendation within ten (10) business days after receipt of a
request by Parent, PROVIDED THAT, any such request may be made only after notice
of any of the following events (as any of the following events may occur from
time to time): (1) the public announcement of the receipt by the Company of an
Acquisition Proposal or any material change thereto; or (2) a public
announcement of any transaction to acquire a material portion of the Company
Common Stock by a Person other than the Merger Subsidiary, the Parent or any of
their Affiliates;
(iii) the Company enters into a definitive agreement with
respect to an Acquisition Proposal, or approves or recommends any Acquisition
Proposal; or
45
(iv) Dissenting Shares, excluding any Dissenting Shares
that are beneficially owned by any Specified Stockholders, exceed the Dissenting
Share Limit (as calculated pursuant to SECTION 6.3(F)).
SECTION 7.2 EFFECT OF TERMINATION. If any party terminates this
Agreement pursuant to SECTION 7.1 above, all rights and obligations of the
parties hereunder shall terminate without any liability of any party to any
other party, except for any liability of any party then in breach, PROVIDED THAT
(i) the provisions of this SECTION 7.2, SECTIONS 7.3 and 7.4 and ARTICLE VIII of
this Agreement shall remain in full force and effect and survive any termination
of this Agreement and (ii) nothing in this Agreement shall relieve any party
from liability for any willful breach of this Agreement or willful failure to
perform its obligations under this Agreement. No termination of this Agreement
shall affect the obligations of the parties contained in the Confidentiality
Agreement, all of which obligations shall survive termination of this Agreement
in accordance with its terms.
SECTION 7.3 FEES AND EXPENSES.
(a) Except as set forth in this SECTION 7.3 and SECTION 7.4, all
fees and expenses incurred in connection with the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated.
(b) If this Agreement is validly terminated pursuant to SECTION
7.1(C)(II), then the Company shall (i) pay to the Parent a fee of $42,500,000
(the "COMPANY TERMINATION FEE") and (ii) reimburse up to an aggregate of
$500,000 for the Parent's documented out-of-pocket expenses in connection with
the transactions contemplated by this Agreement (the "COMPANY EXPENSE
REIMBURSEMENT") at the time set forth in SECTION 7.4.
(c) If this Agreement is validly terminated pursuant to SECTION
7.1(D)(II) or SECTION 7.1(D)(III), then the Company will pay to the Parent the
Company Termination Fee and the Company Expense Reimbursement at the time set
forth in SECTION 7.4.
(d) If this Agreement is validly terminated pursuant to SECTION
7.1(B)(I), SECTION 7.1(B)(III), SECTION 7.1(D)(I) or SECTION 7.1(D)(IV), then if
(A) prior to such termination there exists an Acquisition Proposal (whether or
not such offer or proposal has been rejected or has been withdrawn prior to the
time of such termination) and (B) within twelve (12) months of such termination,
the Company or any of its Subsidiaries accepts a written offer for, or otherwise
enters into an agreement to consummate or consummates, an Acquisition Proposal
then the Company shall pay to the Parent the Company Termination Fee and the
Company Expense Reimbursement at the time set forth in SECTION 7.4. For purposes
of the foregoing clause (d) only, references in the definition of the term
"Acquisition Proposal" to the figure "20%" shall be deemed to be replaced by the
figure "50%."
46
(e) If this Agreement is validly terminated pursuant to SECTION
7.1(B)(IV), then the Parent will pay to the Company a fee of $42,500,000 (the
"PARENT TERMINATION FEE") and (ii) reimburse up to an aggregate of $500,000 for
the Company's documented out-of-pocket expenses in connection with the
transactions contemplated by this Agreement (the "PARENT EXPENSE
REIMBURSEMENT"), at the time set forth in SECTION 7.4.
SECTION 7.4 OTHER TERMINATION FEE AND EXPENSE REIMBURSEMENT
MATTERS.
(a) The parties shall make all payments required by SECTION 7.3 by
wire transfer of immediately available funds to an account designated by the
receiving party in writing.
(b) All Company Termination Fees and Parent Termination Fees
(collectively, the "TERMINATION FEES") and all Parent Expense Reimbursement and
Company Expense Reimbursement (collectively, the EXPENSE REIMBURSEMENTS") will
be paid as follows:
(i) if payments are due pursuant to SECTION 7.3(B), then
the Company Expense Reimbursement and the Company Termination Fee shall be paid
to Parent by the Company concurrently with, and as a condition precedent to,
such termination of this Agreement by the Company pursuant to SECTION
7.1(C)(II);
(ii) if payments are due pursuant to SECTION 7.3(C), then
the Company Expense Reimbursement and the Company Termination Fee shall be paid
to Parent by the Company within two (2) business days following such termination
of this Agreement by the Parent;
(iii) if payments are to be made pursuant to SECTION
7.3(D), then the Company Expense Reimbursement and the Company Termination Fee
shall be paid to Parent by the Company on the earlier of the date of the
Company's entry into an agreement providing for, or consummating, an Acquisition
Proposal; and
(iv) if payments are to be made pursuant to SECTION
7.3(E), then the Parent Expense Reimbursement and the Parent Termination Fee
shall be paid to the Company by the Parent within two (2) business days
following such termination of this Agreement.
(c) The parties agree that (i) the provisions of SECTIONS 7.3 and
7.4 are an integral part of the transactions contemplated by this Agreement,
(ii) the amount of, and basis for payment of, the Termination Fees and Expense
Reimbursements are reasonable and appropriate in all respects, and (iii) without
those provisions, the parties would not enter into this Agreement. Accordingly,
if any party fails to pay in a timely manner a Termination Fee and/or Expense
Reimbursement, and in order to obtain such payment, the other party makes a
claim that results in a judgment for the amounts set forth in SECTION 7.3, the
defaulting party shall pay to the other party its reasonable costs and expenses
(including reasonable attorneys' fees and expenses) in connection with such
47
suit, together with interest on the amount set forth in SECTION 7.3 at the rate
announced by Bank of America, N.A. as its prime rate in effect on the date such
payment was required to be made hereunder. Payment of the amounts described in
SECTION 7.3 will not be in lieu of damages incurred in the event of breach of
this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NONSURVIVAL OF REPRESENTATIONS. None of the
representations and warranties contained in this Agreement or in any schedule,
certificate, instrument or other writing delivered pursuant to this Agreement
shall survive the Merger or the termination of this Agreement. This SECTION 8.1
shall not limit any covenant or agreement of the parties hereto which by its
terms contemplates performance after the Effective Time and this ARTICLE VIII
shall survive the Effective Time.
SECTION 8.2 SPECIFIC PERFORMANCE. The parties agree that
irreparable damage would occur and the non-breaching party could not be made
whole by monetary damages in the event any of the provisions of this Agreement
were not performed in accordance with their specific terms, and it is
accordingly agreed that the parties shall be entitled to specific performance of
the terms of this Agreement, without posting a bond or other security, this
being in addition to any other remedy to which they are entitled hereunder, at
law or in equity.
SECTION 8.3 SUCCESSORS AND ASSIGNS. Neither this Agreement nor
any of the rights, interests or obligations provided by this Agreement shall be
assigned by any of the parties (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
SECTION 8.4 AMENDMENT. This Agreement may be amended in
accordance with its terms by the execution and delivery of a written instrument
by or on behalf of the Parent, the Merger Subsidiary and the Company at any time
before or after the Company Stockholders Approval; PROVIDED THAT, after
obtaining the Company Stockholders Approval, no amendment to this Agreement
shall be made without the approval of the stockholders of the Company if and to
the extent such approval is required under applicable Law or in accordance with
the rules of any relevant stock exchange.
SECTION 8.5 SEVERABILITY. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable Laws, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable Laws, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement. The parties hereto agree to
replace any such void or unenforceable provision of this Agreement with a valid
and enforceable provision that shall achieve, to the greatest
48
extent possible, the economic, business and other purposes of such void or
unenforceable provision.
SECTION 8.6 EXTENSION OF TIME; WAIVER. Except as set forth
elsewhere in this Agreement, at any time prior to the Effective Time, the
parties may extend the time for performance of or waive compliance with any of
the covenants, agreements or conditions of the other parties to this Agreement,
and may waive any breach of the representations or warranties of such other
parties. No agreement extending or waiving any provision of this Agreement shall
be valid or binding unless it is in writing and is executed and delivered by or
on behalf of the party against which it is sought to be enforced. Delay in
exercising any right under this Agreement shall not constitute a waiver of such
right.
SECTION 8.7 COUNTERPARTS. This Agreement may be executed in two
or more counterparts (whether by facsimile or otherwise), each of which shall be
deemed an original, but all such counterparts taken together shall constitute
one and the same Agreement.
SECTION 8.8 DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are inserted for convenience only and shall not constitute a part
of this Agreement.
SECTION 8.9 NOTICES. Any notice, request, instruction or other
document to be given hereunder shall be sent in writing and delivered
personally, sent by reputable, overnight courier service (charges prepaid), sent
by registered or certified mail, postage prepaid, or by facsimile, according to
the instructions set forth below. Such notices shall be deemed given: at the
time delivered by hand, if personally delivered; one business day after being
sent, if sent by reputable, overnight courier service; at the time received, if
sent by registered or certified mail; and at the time when confirmation of
successful transmission is received by the sending facsimile machine, if sent by
facsimile.
If to the Parent or the Merger General Dynamics Corporation
Subsidiary, to: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President &
General Counsel
49
with a copy (which shall not constitute Jenner & Block LLP
notice) to: ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
If to the Company, to: Anteon International Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Senior Vice President &
General Counsel
with a copy (which shall not constitute ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
notice) to: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address or to the attention of such other party that the
recipient party has specified by prior written notice to the sending party in
accordance with the preceding.
SECTION 8.10 NO THIRD-PARTY BENEFICIARIES. Except as provided
pursuant to SECTION 5.8, the terms and provisions of this Agreement will not
confer third-party beneficiary rights or remedies upon any person or entity
other than the parties hereto and their respective successors and permitted
assigns. The provisions of SECTION 5.8 are intended to be for the benefit of,
and shall be enforceable by, the Indemnified Parties and shall be binding on the
Parent and the Surviving Corporation and their successors and assigns. In the
event the Parent or the Surviving Corporation or one of their successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity in such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any Person, then, and in each case, proper provision shall be made so that
the successors or assigns of Parent or the Surviving Corporation, as the case
may be, honor the obligations set forth in SECTION 5.8.
SECTION 8.11 ENTIRE AGREEMENT. This Agreement, the Confidentiality
Agreement, the Company Disclosure Letter and the other documents referred to
herein collectively constitute the entire agreement among the parties and
supersede any prior
50
and contemporaneous understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof.
SECTION 8.12 CONSTRUCTION. For purposes of this Agreement:
(a) References to "applicable" Law or Laws with respect to a
particular Person, thing or matter shall include only such Law or Laws as to
which the Governmental Authority that enacted or promulgated such Law or Laws
has jurisdiction over such Person, thing or matter as determined under such
Laws.
(b) Whenever the context requires, the singular number shall
include the plural, and vice versa, the masculine gender shall include the
feminine and neuter genders, the feminine gender shall include the masculine and
neuter genders, and the neuter gender shall include masculine and feminine
genders.
(c) The words "include" and "including," and variations thereof,
shall not be deemed to be terms of limitation, but rather shall be deemed to be
followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections and
Exhibits to this Agreement.
(e) The terms "hereof," "hereunder," "herein" and words of similar
import shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(f) As it relates to the Company, "knowledge" means the actual
knowledge of the persons set forth in Section 8.12 of the Company Disclosure
Letter with no further duty of inquiry.
(g) Each party hereto has participated in the drafting of this
Agreement, which each party acknowledges is the result of extensive negotiations
between the parties, and consequently, this Agreement shall be interpreted
without reference to any rule or precept of Law to the effect that any ambiguity
in a document be construed against the drafter.
SECTION 8.13 CONSENT TO JURISDICTION. Each of the parties to this
Agreement consents to submit to the personal jurisdiction of the Court of
Chancery of the State of Delaware or any federal court sitting in the State of
Delaware, in any action or proceeding arising out of or relating to this
Agreement, agrees that all claims in respect of the action or proceeding may be
heard and determined in any such court, and agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the parties to this Agreement agrees not to assert in any action or
proceeding arising out of relating to this Agreement that the venue is improper,
and waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety or other security that might
be required of any other party with respect thereto.
51
SECTION 8.14 GOVERNING LAW. THIS AGREEMENT AND THE COMPANY
DISCLOSURE LETTER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY LAW OR RULE THAT WOULD
CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE
APPLIED.
SECTION 8.15 COMPANY DISCLOSURE LETTER. The Company Disclosure
Letter is qualified in its entirety by reference to the specific provisions of
this Agreement and nothing in the Company Disclosure Letter is intended to
broaden the scope of any representation or warranty contained in this Agreement
or to create any representation, warranty, agreement or covenant on the part of
the Company. The inclusion of any matter, information, item or other disclosure
set forth in any section of the Company Disclosure Letter shall not be deemed to
constitute an admission of any liability of the Company to any third party or
otherwise imply that such matter, information or item is material or creates a
measure for materiality for purposes of this Agreement or is required to be
disclosed under this Agreement. Each section of the Company Disclosure Letter,
as the case may be, corresponds to the section of this Agreement to which it
relates; PROVIDED THAT, disclosure of any fact or item in any section of the
Company Disclosure Letter shall be deemed to be disclosed with respect to
another paragraph or section whether or not a specific cross-reference thereto
appears, to the extent it is reasonably apparent that such disclosure should
apply to such paragraph or section. Certain matters have been disclosed in the
Company Disclosure Letter for informational purposes only.
* * * * *
52
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
GENERAL DYNAMICS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Executive Vice President
AVENGER ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
ANTEON INTERNATIONAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President and Chief Executive
Officer
[Signature Page to Agreement and Plan of Merger]