\nARTICLE 7 CONDITIONS TO THE CONSUMMATION OF THE MERGER……………………………………………35
\n Section 7.1 Conditions to the Obligations of Each Party…………………………………….35
\n Section 7.2 Conditions to the Obligation of the Company…………………………………….35
\n Section 7.3 Conditions to the Obligation of the Parent Corporation and the Acquisition
\n Corporation…………………………………………………………………36
\n Section 7.4 Frustration of Closing Conditions……………………………………………..36<\/p>\nARTICLE 8 TERMINATION, AMENDMENT AND WAIVER……………………………………………………..36
\n Section 8.1 Termination…………………………………………………………………36
\n Section 8.2 Effect of Termination………………………………………………………..37
\n Section 8.3 Termination Fee……………………………………………………………..38<\/p>\n
ARTICLE 9 MISCELLANEOUS……………………………………………………………………….39
\n Section 9.1 Nonsurvival of Representations………………………………………………..39
\n Section 9.2 Remedies……………………………………………………………………39
\n Section 9.3 Successors and Assigns……………………………………………………….39
\n Section 9.4 Amendment…………………………………………………………………..39
\n Section 9.5 Extension and Waiver…………………………………………………………40
\n Section 9.6 Severability………………………………………………………………..40
\n Section 9.7 Counterparts………………………………………………………………..40
\n Section 9.8 Descriptive Headings…………………………………………………………40
\n Section 9.9 Notices…………………………………………………………………….40
\n Section 9.10 No Third Party Beneficiaries………………………………………………….41
\n Section 9.11 Entire Agreement…………………………………………………………….41
\n Section 9.12 Construction………………………………………………………………..41
\n Section 9.13 Submission to Jurisdiction……………………………………………………42
\n Section 9.14 Governing Law……………………………………………………………….42
\n<\/c><\/s><\/table>\n
iv
\n 5<\/p>\n
TABLE OF DEFINED TERMS<\/p>\n
Acquisition Corporation Preamble
\nAcquisition Proposal Section 6.7(b)
\nAntitrust Laws Section 4.3
\nCertificate Section 3.1
\nClosing Section 1.2
\nClosing Date Section 1.2
\nCode Section 4.10(f)
\nColi Policy Section 4.11(j)
\nCompany Preamble
\nCompany Common Stock Section 1.8(a)
\nCompany Disclosure Letter Article 4
\nCompany Material Adverse Effect Section 4.1
\nCompany Plans Section 4.11(a)
\nCompany SEC Documents Section 4.5(a)
\nCompany Stock-Based Award Section 1.9(a)(ii)
\nCompany Stockholder Approval Section 2.1(a)
\nCompany Stockholders Meeting Section 2.1(a)
\nConfidentiality Agreement Section 6.5
\nDelaware Act Section 1.1
\nEffective Time Section 1.3
\nEmployee Pension Benefit Plan Section 4.11(a)
\nEmployee Welfare Benefit Plan Section 4.11(a)
\nEmployees Section 6.13(a)
\nEnvironmental Law Section 4.12(b)
\nERISA Section 4.11(a)
\nGovernment Contract Section 4.9(b)
\nGovernment Subcontract Section 4.9(b)
\nHazardous Materials Section 4.12(c)
\nHSR Act Section 4.3
\nIndemnified Parties Section 6.8(a)
\nIntellectual Property Section 4.14(b)
\nLien Section 4.3
\nMerger Section 1.1
\nMerger Consideration Section 1.8(a)
\nOption Consideration Section 1.9(a)(iii)
\nParent Corporation Preamble
\nParent Corporation Disclosure Letter Article 5
\nParent Corporation Material Adverse Effect Section 6.2
\nPaying Agent Section 3.1
\nPayment Fund Section 3.2(a)<\/p>\n
v
\n 6<\/p>\n
Permitted Liens Section 4.13
\nProxy Statement Section 2.1(b)
\nRights Agreement Section 4.16
\nSAR Section 1.9(a)
\nSEC Section 2.1(b)
\nSecurities Act Section 4.5(a)
\nSecurities Exchange Act Section 1.9(d)
\nStock Option Section 1.9(a)
\nStock Plans Section 1.9(a)
\nSubsidiary Section 1.8(c)
\nSuperior Proposal Section 6.7(b)
\nSurviving Corporation Section 1.1
\nTaxes Section 4.10(a)
\nTax Returns Section 4.10(a)
\nTermination Fee Section 8.3(a)
\nThird Party Acquisition Section 8.3(b)
\nVirginia Act Section 1.1<\/p>\n
vi
\n 7<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
AGREEMENT AND PLAN OF MERGER dated as of November 9, 2000 among General
\nDynamics Corporation, a Delaware corporation (the “Parent Corporation”), Mars
\nAcquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
\nthe Parent Corporation (the “Acquisition Corporation”), and Primex Technologies,
\nInc., a Virginia corporation (the “Company”).<\/p>\n
The Boards of Directors of the Parent Corporation, the Acquisition
\nCorporation, and the Company have each determined that a business combination
\namong the Parent Corporation, the Acquisition Corporation and the Company is
\ndesirable and in the best interests of the Parent Corporation, the Acquisition
\nCorporation and the Company and their respective stockholders. The Boards of
\nDirectors of the Parent Corporation, the Acquisition Corporation and the Company
\naccordingly have each duly adopted resolutions approving this Agreement and the
\ntransactions contemplated hereby.<\/p>\n
NOW, THEREFORE, in consideration of the mutual agreements contained
\nherein and for other good and valuable consideration, the value, receipt and
\nsufficiency of which are hereby acknowledged, the parties hereto agree as
\nfollows:<\/p>\n
ARTICLE 1<\/p>\n
THE MERGER<\/p>\n
Section 1.1 The Merger. Upon the terms and subject to the conditions
\nset forth in this Agreement, at the Effective Time (as defined in Section 1.3)
\nthe Acquisition Corporation will be merged (the “Merger”) with and into the
\nCompany in accordance with the provisions of the Delaware General Corporation
\nLaw (the “Delaware Act”) and the Virginia Stock Corporation Act (the “Virginia
\nAct”). Following the Merger, the Company will continue as the surviving
\ncorporation (the “Surviving Corporation”) and the separate corporate existence
\nof the Acquisition Corporation will cease.<\/p>\n
Section 1.2 The Closing. Upon the terms and subject to the conditions
\nset forth in this Agreement, the consummation of the Merger and the other
\ntransactions contemplated by this Agreement (the “Closing”) will take place at
\nthe offices of Jenner & Block, 601 13th Street, N.W., Washington, D.C. 20005, at
\n10:00 a.m., local time, no later than the third business day following the
\nsatisfaction or waiver, to the extent permitted by applicable laws, of the
\nconditions set forth in Article 7 (other than those conditions that by their
\nnature are to be satisfied at the Closing, but subject to the satisfaction or,
\nwhere permitted, waiver of those conditions), or at such other date, time or
\nplace as the Parent Corporation and the Company may agree. The date upon which
\nthe Closing occurs is referred to in this Agreement as the “Closing Date.”<\/p>\n
8<\/p>\n
Section 1.3 Effective Time. The Merger will be consummated by the
\nfiling of articles of merger with the State Corporation Commission of Virginia
\nin accordance with Section 720 of the Virginia Act and a certificate of merger
\nin accordance with Section 252 of the Delaware Act. The time the Merger becomes
\neffective in accordance with Section 720 of the Virginia Act is referred to in
\nthis Agreement as the “Effective Time.”<\/p>\n
Section 1.4 Effects of the Merger. The Merger will have the effects set
\nforth in Section 721 of the Virginia Act and Section 259 of the Delaware Act.
\nWithout limiting the generality of the foregoing, as of the Effective Time, all
\nproperties, rights, privileges, powers and franchises of the Company and the
\nAcquisition Corporation will vest in the Surviving Corporation and all debts,
\nliabilities and duties of the Company and the Acquisition Corporation will
\nbecome debts, liabilities and duties of the Surviving Corporation.<\/p>\n
Section 1.5 Articles of Incorporation and Bylaws. At the Effective
\nTime, the articles of incorporation and bylaws of the Company in the respective
\nforms delivered by the Company to the Parent Corporation prior to the date of
\nthis Agreement will be the articles of incorporation and bylaws of the Surviving
\nCorporation, until amended by the Surviving Corporation pursuant to applicable
\nlaw.<\/p>\n
Section 1.6 Directors. The directors of the Acquisition Corporation at
\nthe Effective Time will be the initial directors of the Surviving Corporation
\nand will hold office from the Effective Time until their respective successors
\nare duly elected or appointed and qualified in the manner provided in the
\narticles of incorporation and bylaws of the Surviving Corporation or as
\notherwise provided by law.<\/p>\n
Section 1.7 Officers. The officers of the Acquisition Corporation at
\nthe Effective Time will be the initial officers of the Surviving Corporation and
\nwill hold office from the Effective Time until their respective successors are
\nduly elected or appointed and qualified in the manner provided in the articles
\nof incorporation and bylaws of the Surviving Corporation or as otherwise
\nprovided by law.<\/p>\n
Section 1.8 Conversion of Company Common Stock.<\/p>\n
(a) Subject to the provisions of Section 1.8(b), each
\n share of the Company’s Common Stock, par value $1.00 per share (the
\n “Company Common Stock”), issued and outstanding immediately prior to
\n the Effective Time (other than shares of Company Common Stock held in
\n the treasury of the Company, held by any Subsidiary of the Company or
\n held by the Parent Corporation or any Subsidiary of the Parent
\n Corporation) will, by virtue of the Merger and without any action on
\n the part of the holder thereof, be canceled and converted into the
\n right to receive, upon the surrender of the certificate formerly
\n representing such share, $32.10 in cash (the “Merger Consideration”).
\n In the event that, subsequent to the date of this Agreement but prior
\n to the Effective Time, (i) the outstanding shares of Company Common
\n Stock are changed into a different <\/p>\n
2
\n 9<\/p>\n
number of shares or a different class as a result of a stock split,
\n reverse stock split, stock dividend, subdivision, reclassification,
\n combination, exchange, recapitalization or similar transaction, or (ii)
\n there is any dividend, other than the regular quarterly dividend of
\n $0.075 per share of Company Common Stock, the Merger Consideration into
\n which each share of Company Common Stock will be converted as a result
\n of the Merger will be adjusted appropriately.<\/p>\n
(b) Each share of Company Common Stock held in the
\n treasury of the Company, held by any Subsidiary of the Company or held
\n by the Parent Corporation or any Subsidiary of the Parent Corporation
\n immediately prior to the Effective Time will, by virtue of the Merger
\n and without any action on the part of the holder thereof, be canceled
\n and retired and will cease to exist. For purposes of this Section
\n 1.8(b), shares of Company Common Stock owned beneficially or held of
\n record by any plan, program or arrangement sponsored or maintained for
\n the benefit of any current or former employee of the Company, the
\n Parent Corporation or any of their respective Subsidiaries will not be
\n deemed to be held by the Company, the Parent Corporation or any such
\n Subsidiary, regardless of whether the Company, the Parent Corporation
\n or any such Subsidiary has the power, directly or indirectly, to vote
\n or control the disposition of such shares.<\/p>\n
(c) The term “Subsidiary” as used in this Agreement means
\n any corporation, partnership, limited liability company or other
\n business entity 50 percent or more of the outstanding voting equity
\n securities of which are owned, directly or indirectly, by the Company
\n or the Parent Corporation, as applicable.<\/p>\n
Section 1.9 Stock Options; Equity-Based Awards<\/p>\n
(a) (i) The Company will take all necessary actions to
\n cause each option to purchase shares of Company Common Stock (a “Stock
\n Option”) and each stock appreciation right linked to the price of
\n Company Common Stock (a “SAR”) granted under any stock option plan,
\n program, agreement or arrangement of the Company or any of its
\n Subsidiaries (collectively, the “Stock Plans”) which is outstanding and
\n unexercised immediately prior to the Effective Time, whether vested or
\n unvested, to be cancelled as of the Effective Time and to be converted
\n at the Effective Time into the right to receive in cash from the
\n Company an amount equal to the product of (a) the excess, if any, of
\n the Merger Consideration over the exercise price per share of Company
\n Common Stock of such Stock Option or SAR and (b) the number of shares
\n of Company Common Stock subject to such Stock Option or SAR; provided,
\n however, that no cash payment shall be made with respect to any SAR
\n that is related to a Stock Option in respect of which such a cash
\n payment is made.<\/p>\n
(ii) The Company will take all necessary actions to cause
\n each right of any kind, whether vested or unvested, contingent or
\n accrued, to acquire or receive shares of Company Common Stock or to
\n receive benefits measured by the value of a number of <\/p>\n
3
\n 10<\/p>\n
shares of Company Common Stock, that may be held, awarded, outstanding,
\n credited, payable or reserved for issuance under the Stock Plans
\n (including, without limitation, restricted stock, restricted stock
\n units, performance awards and deferred stock units), except for Stock
\n Options and SARs converted in accordance with Section 1.9(a)(i) above
\n (each, a “Company Stock-Based Award”) outstanding immediately prior to
\n the Effective Time to fully vest and become immediately distributable
\n and payable, and each Company Stock-Based Award shall be cancelled as
\n of the Effective Time and converted as of the Effective Time into the
\n right to receive in cash from the Company an amount equal to the
\n product of (x) the Merger Consideration (less any applicable exercise
\n price) and (y) the number of shares of Company Common Stock subject to
\n such Company Stock-Based Award.<\/p>\n
(iii) Any cash payments required to be made pursuant to
\n this Section 1.9(a) (the “Option Consideration”) will be made (subject
\n to applicable withholding and payroll taxes) promptly following the
\n Effective Time.<\/p>\n
(b) No additional Stock Options, SARs, or other equity-based
\nawards or other rights to acquire Company Common Stock will be granted pursuant
\nto the Stock Plans or otherwise after the date of this Agreement.<\/p>\n
(c) The Board of Directors, or applicable committee thereof, of
\nthe Company will grant all approvals and take all other actions required
\npursuant to Rules 16b-3 under the Securities Exchange Act of 1934, as amended
\n(together with the rules and regulations of the SEC thereunder, the “Securities
\nExchange Act”), to cause the disposition in the Merger of Company Common Stock,
\nStock Options and SARs to be exempt from the provisions of Section 16(b) of the
\nSecurities Exchange Act.<\/p>\n
Section 1.10 Conversion of Acquisition Corporation Common Stock. Each
\nshare of the Common Stock, par value $1.00 per share, of the Acquisition
\nCorporation issued and outstanding immediately prior to the Effective Time will,
\nby virtue of the Merger and without any action on the part of the holder
\nthereof, be converted into one share of the Common Stock, par value $1.00 per
\nshare, of the Surviving Corporation.<\/p>\n
Section 1.11 Dissenters’ Rights. Subject to the consummation of the
\nMerger on the terms and conditions contained in this Agreement, the parties
\nhereto confirm that the holders of shares of Company Common Stock will not have
\ndissenters’ rights under Article 15 of the Virginia Act.<\/p>\n
4
\n 11<\/p>\n
ARTICLE 2<\/p>\n
STOCKHOLDER APPROVAL<\/p>\n
Section 2.1 Company Actions. The Company, acting through its Board of
\nDirectors, in accordance with applicable law, including the Virginia Act, its
\nArticles of Incorporation and Bylaws and the rules applicable to companies
\nlisted on of The Nasdaq Stock Market, will:<\/p>\n
(a) duly call, give notice of, convene and hold a special
\n meeting of its stockholders (the “Company Stockholders Meeting”), to be
\n held as soon as practicable after the date of this Agreement, for the
\n purpose of submitting this Agreement for approval by the holders of
\n more than two-thirds of the outstanding shares of Company Common Stock
\n (the “Company Stockholder Approval”);<\/p>\n
(b) prepare and file with the Securities and Exchange
\n Commission (the “SEC”) as promptly as practicable after the date of
\n this Agreement a Proxy Statement and related materials (the “Proxy
\n Statement”) with respect to the Company Stockholders Meeting satisfying
\n the requirements of the Securities Exchange Act, respond promptly to
\n any comments raised by the SEC with respect to the preliminary version
\n of the Proxy Statement, and cause the definitive version of the Proxy
\n Statement to be mailed to its stockholders as soon as it is legally
\n permitted to do so; and<\/p>\n
(c) include in the Proxy Statement (i) subject to Section
\n 6.7(d), the recommendation of the Board of Directors of the Company
\n that the stockholders of the Company vote in favor of the approval of
\n this Agreement and the transactions contemplated hereby and (ii) the
\n written opinion dated as of the date of this Agreement of Goldman,
\n Sachs & Co., financial advisor to the Board of Directors of the
\n Company, to the effect that as of the date of this Agreement the Merger
\n Consideration is fair to the stockholders of the Company, other than
\n the Parent Corporation and its affiliates, from a financial point of
\n view.<\/p>\n
Section 2.2 SEC Comments. The Company will promptly advise the Parent
\nCorporation of receipt by the Company of, and will promptly furnish the Parent
\nCorporation with copies of, all comments received from the SEC with respect to
\nthe Proxy Statement and will consult with the Parent Corporation in responding
\nto such comments.<\/p>\n
ARTICLE 3<\/p>\n
PAYMENT<\/p>\n
Section 3.1 Surrender of Certificates. From and after the Effective
\nTime, each holder of a certificate that immediately prior to the Effective Time
\nrepresented outstanding shares of Company Common Stock (a “Certificate”) will be
\nentitled to receive in exchange therefor, upon <\/p>\n
5
\n 12<\/p>\n
surrender thereof to a paying agent (the “Paying Agent”) to be designated by the
\nParent Corporation prior to the Effective Time with approval of the Company,
\nwhich approval shall not be unreasonably withheld, the Merger Consideration into
\nwhich the shares of Company Common Stock evidenced by such Certificate were
\nconverted pursuant to the Merger. No interest will be payable on the Merger
\nConsideration to be paid to any holder of a Certificate irrespective of the time
\nat which such Certificate is surrendered for exchange.<\/p>\n
Section 3.2 Paying Agent; Certificate Surrender Procedures.<\/p>\n
(a) As soon as reasonably practicable following the
\n Effective Time, the Parent Corporation will deposit, or cause to be
\n deposited, with the Paying Agent, an amount in cash sufficient to
\n provide all funds necessary for the Paying Agent to make payment of the
\n Merger Consideration pursuant to Section 1.8 (the “Payment Fund”).
\n Pending payment of such funds to the holders of certificates for shares
\n of Company Common Stock, such funds will be held and may be invested by
\n the Paying Agent as Parent Corporation directs (so long as such
\n directions do not impair the rights of holders of Company Common Stock)
\n in the direct obligations of the United States, obligations for which
\n the full faith and credit of the United States is pledged to provide
\n for the payment of principal and interest or commercial paper rated of
\n the highest quality by Moody’s Investors Services, Inc. or Standard & Poor’s Corporation. Any net profit resulting from, or interest or
\n income produced by, such investments will be payable to the Surviving
\n Corporation or Parent Corporation, as Parent Corporation directs.
\n Parent Corporation will promptly replace any monies lost through any
\n investment made pursuant to this Section 3.2.<\/p>\n
(b) As soon as reasonably practicable after the Effective
\n Time, the Parent Corporation will instruct the Paying Agent to mail to
\n each record holder of a Certificate (i) a letter of transmittal (which
\n will specify that delivery will be effected, and risk of loss and title
\n to such Certificates will pass, only upon delivery of the Certificate
\n to the Paying Agent and will be in such form and have such other
\n provisions as the Parent Corporation will reasonably specify) and (ii)
\n instructions for use in effecting the surrender of Certificates for the
\n Merger Consideration. Commencing immediately after the Effective Time,
\n upon the surrender to the Paying Agent of such Certificate or
\n Certificates, together with a duly executed and completed letter of
\n transmittal and all other documents and other materials required by the
\n Paying Agent to be delivered in connection therewith, the holder will
\n be entitled to receive the Merger Consideration into which the
\n Certificate or Certificates so surrendered have been converted in
\n accordance with the provisions of Section 1.8.<\/p>\n
Section 3.3 Transfer Books. The stock transfer books of the Company
\nwill be closed at the Effective Time and no transfer of any shares of Company
\nCommon Stock will thereafter be recorded on any of the stock transfer books. In
\nthe event of a transfer of ownership of any Company Common Stock prior to the
\nEffective Time that is not registered in the stock transfer <\/p>\n
6
\n 13<\/p>\n
records of the Company at the Effective Time, the Merger Consideration into
\nwhich such Company Common Stock has been converted in the Merger will be paid to
\nthe transferee in accordance with the provisions of Section 3.2(b) only if the
\nCertificate is surrendered as provided in Section 3.2 and accompanied by all
\ndocuments required to evidence and effect such transfer and by evidence of
\npayment of any applicable stock transfer taxes.<\/p>\n
Section 3.4 Termination of Payment Fund. Any portion of the Payment
\nFund which remains undistributed one hundred eighty (180) days after the
\nEffective Time will be delivered to the Parent Corporation upon demand, and each
\nholder of Company Common Stock who has not theretofore surrendered Certificates
\nin accordance with the provisions of this Article 3 will thereafter look only to
\nthe Parent Corporation for satisfaction of such holder’s claims for the Merger
\nConsideration.<\/p>\n
Section 3.5 Lost Certificates. If any Certificate has been lost, stolen
\nor destroyed, upon the making of an affidavit of that fact by the person
\nclaiming such Certificate to be lost, stolen or destroyed and, if required by
\nthe Parent Corporation, the posting by such person of a bond in such reasonable
\namount as the Parent Corporation may direct as indemnity against any claim that
\nmay be made against it with respect to such Certificate, the Paying Agent will
\ndeliver in exchange for such lost, stolen or destroyed Certificate the Merger
\nConsideration pursuant to Section 1.8.<\/p>\n
Section 3.6 No Rights as Stockholder. From and after the Effective
\nTime, the holders of Certificates will cease to have any rights as a stockholder
\nof the Surviving Corporation except as otherwise provided in this Agreement or
\nby applicable law, and the Parent Corporation will be entitled to treat each
\nCertificate that has not yet been surrendered for exchange solely as evidence of
\nthe right to receive the Merger Consideration into which the shares of Company
\nCommon Stock evidenced by such Certificate have been converted pursuant to the
\nMerger; provided, however, that each holder of a Certificate that has become
\nentitled to any declared and unpaid dividend will continue to be entitled to
\nsuch dividend following the Effective Time, and the Surviving Corporation will
\npay such dividend to such holder in the amount and on the date specified
\ntherefor by the Board of Directors of the Company at the time of declaration
\nthereof.<\/p>\n
Section 3.7 Withholding. The Parent Corporation will be entitled to
\ndeduct and withhold from the Merger Consideration otherwise payable to any
\nformer holder of Company Common Stock all amounts relating to federal and state
\nincome and payroll taxes required by law to be deducted or withheld therefrom.<\/p>\n
Section 3.8 Escheat. Neither the Parent Corporation, the Acquisition
\nCorporation nor the Company will be liable to any former holder of Company
\nCommon Stock for any portion of the Merger Consideration delivered to any public
\nofficial pursuant to any applicable abandoned property, escheat or similar law.
\nIn the event any Certificate has not been surrendered for the Merger
\nConsideration prior to the sixth anniversary of the Closing Date, or prior to
\nsuch earlier date as of which such Certificate or the Merger Consideration
\npayable upon the surrender thereof <\/p>\n
7
\n 14<\/p>\n
would otherwise escheat to or become the property of any governmental entity,
\nthen the Merger Consideration otherwise payable upon the surrender of such
\nCertificate will, to the extent permitted by applicable law, become the property
\nof the Surviving Corporation, free and clear of all rights, interests and
\nadverse claims of any person.<\/p>\n
ARTICLE 4<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company represents and warrants to the Parent Corporation and the
\nAcquisition Corporation that except as disclosed in the reports, schedules,
\nforms, statements and other documents filed by the Company with the SEC since
\nDecember 31, 1999 and publicly available prior to the date of this Agreement or
\nas disclosed in the letter dated as of the date of this Agreement from the
\nCompany to the Parent Corporation (the “Company Disclosure Letter”):<\/p>\n
Section 4.1 Organization. The Company and each of its Subsidiaries is
\n(a) a corporation duly organized and validly existing under the laws of the
\njurisdiction of its incorporation, (b) has all requisite power and authority to
\nown, lease and operate its properties and to carry on its business as presently
\nbeing conducted, and (c) is in good standing under the laws of the jurisdiction
\nof its incorporation and is duly qualified to conduct business as a foreign
\ncorporation in each other jurisdiction where such qualification is required,
\nexcept, in the case of clauses (b) and (c) above, where such failure,
\nindividually or in the aggregate, is not reasonably likely to have a material
\nadverse effect on the business, financial condition, operations or results of
\noperations of the Company and its Subsidiaries taken as a whole (other than
\nchanges or effects resulting from occurrences relating to the economy in
\ngeneral, the securities markets in general or the Company’s industry in general
\nand not specifically relating to the Company) or the ability of the Company to
\nconsummate the Merger and to perform its obligations under this Agreement (a
\n“Company Material Adverse Effect”). The Company has delivered to the Parent
\nCorporation correct and complete copies of its articles of incorporation and
\nbylaws, as presently in effect, and, upon request, will make available to the
\nParent Corporation after the date of this Agreement correct and complete copies
\nof the articles of incorporation and bylaws, as presently in effect, of each of
\nits Subsidiaries.<\/p>\n
Section 4.2 Authorization of Transaction; Enforceability. Subject to
\nobtaining the Company Stockholder Approval, the Company has full corporate power
\nand authority and has taken all requisite corporate action to enable it to
\nexecute and deliver this Agreement, to consummate the Merger and the other
\ntransactions contemplated hereby and to perform its obligations hereunder. The
\nBoard of Directors of the Company, at a meeting thereof duly called and held,
\nhas duly adopted resolutions, by more than the required vote, approving this
\nAgreement, the Merger and the other transactions contemplated hereby,
\ndetermining that the terms and conditions of this Agreement, the Merger and the
\nother transactions contemplated hereby are in the best interests of the Company
\nand its stockholders and recommending that the Company’s stockholders approve
\nthis Agreement. The foregoing resolutions of the Board of <\/p>\n
8
\n 15<\/p>\n
Directors of the Company have not been modified, supplemented or rescinded and
\nremain in full force and effect as of the date of this Agreement. In connection
\nwith its adoption of the foregoing resolutions, the Board of Directors of the
\nCompany received the written opinion of Goldman, Sachs & Co., financial advisor
\nto the Board of Directors of the Company, dated as of the date of this
\nAgreement, to the effect that, as of such date, the Merger Consideration is fair
\nto the stockholders of the Company, other than the Parent Corporation and its
\naffiliates, from a financial point of view. The foregoing opinion has not been
\nmodified, supplemented or rescinded prior to the date of this Agreement. The
\nCompany will deliver to the Parent Corporation promptly after the date of this
\nAgreement correct and complete copies of the foregoing resolutions and opinion.
\nAssuming due execution and authorization by the Parent Corporation and the
\nAcquisition Corporation, this Agreement constitutes the valid and legally
\nbinding obligation of the Company, enforceable against the Company in accordance
\nwith its terms and conditions.<\/p>\n
Section 4.3 Noncontravention; Consents. Except for (a) filings and
\napprovals necessary to comply with the applicable requirements of the Securities
\nExchange Act and the “blue sky” laws and regulations of various states, (b) the
\nfiling of a Notification and Report Form and related material with the Federal
\nTrade Commission and the Antitrust Division of the United States Department of
\nJustice under the Hart-Scott-Rodino Act of 1976, as amended (the “HSR Act”), and
\nany other filing required pursuant to any other applicable competition, merger
\ncontrol, antitrust or similar law or regulation (together with the HSR Act, the
\n“Antitrust Laws”), (c) the filing of articles of merger pursuant to the Virginia
\nAct, a certificate of merger pursuant to the Delaware Act and any applicable
\ndocuments with the relevant authorities of other jurisdictions in which the
\nCompany or any of its Subsidiaries is qualified to do business, and (d) any
\nfilings required under the rules and regulations of The NASDAQ Stock Market,
\nneither the execution and delivery of this Agreement by the Company, nor the
\nconsummation by the Company of the transactions contemplated hereby, will
\nconstitute a violation of, be in conflict with, constitute or create (with or
\nwithout notice or lapse of time or both) a default under, give rise to any right
\nof termination, cancellation, amendment or acceleration with respect to, or
\nresult in the creation or imposition of any lien, encumbrance, security interest
\nor other claim (a “Lien”) upon any property of the Company or any of its
\nSubsidiaries pursuant to (i) the articles of incorporation or bylaws of the
\nCompany or any of its Subsidiaries, (ii) any constitutional provision, law,
\nrule, regulation, permit, order, writ, injunction, judgment or decree to which
\nthe Company or any of its Subsidiaries is subject or (iii) any agreement or
\ncommitment to which the Company or any of its Subsidiaries is a party or by
\nwhich the Company, any of its Subsidiaries or any of their respective properties
\nis bound or subject, except, in the case of clauses (ii) and (iii) above, for
\nsuch matters which, individually or in the aggregate, are not reasonably likely
\nto have a Company Material Adverse Effect.<\/p>\n
Section 4.4 Capitalization.<\/p>\n
(a) As of the date of this Agreement, the authorized
\n capital stock of the Company consists of 60,000,000 shares of Company
\n Common Stock and 10,000,000 <\/p>\n
9
\n 16<\/p>\n
shares of Preferred Stock, par value $1.00 per share, none of which
\n shares of Preferred Stock have been issued. As of the close of business
\n on November 3, 2000, 10,401,241 shares of Company Common Stock were
\n issued and outstanding, 129,480 shares of Company Common Stock were
\n reserved for restricted stock grants or awards (including stock grants
\n or awards to non-employee directors), no shares were held by the
\n Company as treasury shares and 1,641,732 shares were reserved for
\n issuance upon the exercise of outstanding Stock Options. All of the
\n issued and outstanding shares of capital stock of the Company have been
\n duly authorized and are validly issued, fully paid and nonassessable.<\/p>\n
(b) Other than Stock Options to acquire an aggregate of
\n not more than 1,560,952 shares of Company Common Stock and not more
\n than 80,823 shares of Company Common Stock which are subject to
\n restricted stock granted or awarded (including stock grants or awards
\n to non-employee directors) by the Company to current and former
\n directors, officers, employees and advisors of the Company and its
\n Subsidiaries, there are no outstanding or authorized options, warrants,
\n subscription rights, conversion rights, exchange rights or other
\n contracts or commitments that could require the Company or any of its
\n Subsidiaries to issue, sell or otherwise cause to become outstanding
\n any of its capital stock. There are no outstanding stock appreciation,
\n phantom stock, profit participation or similar rights with respect to
\n the Company or any of its Subsidiaries. The schedule of Stock Options
\n and SARs set forth in the Company Disclosure Letter sets forth a list
\n of all outstanding Stock Options and SARs as of the date set forth
\n therein, the respective exercise prices thereof or amount of such
\n rights and the holders thereof.<\/p>\n
(c) Neither the Company nor any of its Subsidiaries is a
\n party to any voting trust, proxy or other agreement or understanding
\n with respect to the voting of any capital stock of the Company or any
\n of its Subsidiaries.<\/p>\n
(d) The Board of Directors of the Company has not
\n declared any dividend or distribution with respect to the Company
\n Common Stock the record or payment date for which is on or after the
\n date of this Agreement (other than any regular quarterly dividend of
\n $0.075 per share of Company Common Stock).<\/p>\n
(e) All of the outstanding shares of the capital stock of
\n each of the Company’s Subsidiaries have been validly issued, are fully
\n paid and nonassessable and are owned by the Company or one of its
\n Subsidiaries, free and clear of any Lien. Except for its Subsidiaries
\n set forth in the Company Disclosure Letter, the Company does not
\n control directly or indirectly or have any direct or indirect equity
\n participation in any corporation, partnership, limited liability
\n company, joint venture or other entity.<\/p>\n
10
\n 17<\/p>\n
Section 4.5 Company Reports; Proxy Statement.<\/p>\n
(a) The Company has since December 31, 1996 filed all
\n reports, forms, statements and other documents (collectively, together
\n with all financial statements included or incorporated by reference
\n therein, the “Company SEC Documents”) required to be filed by the
\n Company with the SEC pursuant to the provisions of the Securities Act
\n of 1933, as amended (the “Securities Act”) or the Securities Exchange
\n Act. Each of the Company SEC Documents, as of its filing date, complied
\n in all material respects with the applicable requirements of the
\n Securities Act and the Securities Exchange Act. None of the Company SEC
\n Documents, as of their respective filing dates, contained any untrue
\n statement of a material fact or omitted to state a material fact
\n required to be stated therein or necessary in order to make the
\n statements therein, in light of the circumstances under which they were
\n made, not misleading. No Subsidiary of the Company is required to file
\n any reports, forms, statements or other documents pursuant to the
\n Securities Act or the Securities Exchange Act.<\/p>\n
(b) Each of the consolidated financial statements
\n (including related notes) included in the Company SEC Documents
\n presented fairly in all material respects the consolidated financial
\n condition, cash flows and results of operations of the Company and its
\n Subsidiaries for the respective periods or as of the respective dates
\n set forth therein. Each of the financial statements (including related
\n notes) included in the Company SEC Documents has been prepared in
\n accordance with United States generally accepted accounting principles,
\n consistently applied during the periods involved, except (i) as noted
\n therein, (ii) to the extent required by changes in United States
\n generally accepted accounting principles or (iii) in the case of
\n unaudited interim financial statements, normal recurring year-end audit
\n adjustments.<\/p>\n
(c) The Company has delivered to the Parent Corporation
\n correct and complete copies of any proposed or contemplated amendments
\n or modifications to the Company SEC Documents (including any exhibit
\n documents included therein) that have not yet been filed by the Company
\n with the SEC.<\/p>\n
(d) The Proxy Statement will comply in all material
\n respects with the applicable requirements of the Securities Exchange
\n Act and will not, at the time the definitive Proxy Statement is filed
\n with the SEC and mailed to the stockholders of the Company, contain any
\n untrue statement of material fact or omit to state any material fact
\n required to be stated therein or necessary in order to make the
\n statements therein, in light of the circumstances under which they were
\n made, not misleading. No representation or warranty is made herein by
\n the Company with respect to any information, if any, supplied in
\n writing by the Parent Corporation for inclusion in the Proxy Statement.<\/p>\n
Section 4.6 No Undisclosed Liabilities. The Company and its
\nSubsidiaries have no liabilities or obligations (whether absolute or contingent,
\nliquidated or unliquidated, or due or to <\/p>\n
11
\n 18<\/p>\n
become due) except for (a) liabilities and obligations referenced (whether by
\nvalue or otherwise) or reflected in the Company SEC Documents, (b) liabilities
\nand obligations incurred in the ordinary course of business, consistent with
\npast practice, since October 1, 2000, and (c) other liabilities and obligations
\nwhich, individually or in the aggregate, are not reasonably likely to have a
\nCompany Material Adverse Effect.<\/p>\n
Section 4.7 Absence of Material Adverse Change. Since October 1, 2000
\nthere has not been a Company Material Adverse Effect nor has there occurred any
\nevent, change, effect or development which, individually or in the aggregate, is
\nreasonably likely to have a Company Material Adverse Effect.<\/p>\n
Section 4.8 Litigation and Legal Compliance.<\/p>\n
(a) As of the date of this Agreement, the Company
\n Disclosure Letter sets forth each instance in which the Company or any
\n of its Subsidiaries is (i) subject to any material unsatisfied judgment
\n order, decree, stipulation, injunction or charge or (ii) a party to or,
\n to the Company’s knowledge, threatened to be made a party to any
\n material charge, complaint, action, suit, proceeding, hearing or, to
\n the Company’s knowledge, investigation of or in any court or
\n quasi-judicial or administrative agency of any federal, state, local or
\n foreign jurisdiction, except for judgments, orders, decrees,
\n stipulations, injunctions, charges, complaints, actions, suits,
\n proceedings, hearings and investigations which, individually or in the
\n aggregate, are not reasonably likely to have a Company Material Adverse
\n Effect. As of the date of this Agreement, there are no judicial or
\n administrative actions, proceedings or, to the Company’s knowledge,
\n investigations pending or, to the Company’s knowledge, threatened that
\n question the validity of this Agreement or any action taken or to be
\n taken by the Company in connection with this Agreement,<\/p>\n
(b) Except for instances of noncompliance which,
\n individually or in the aggregate, are not reasonably likely to have a
\n Company Material Adverse Effect, and except for Environmental Laws,
\n which are the subject of Section 4.12, the Company and its Subsidiaries
\n are in compliance with each constitutional provision, law, rule,
\n regulation, permit, order, writ, injunction, judgment or decree to
\n which the Company or any of its Subsidiaries is subject.<\/p>\n
Section 4.9 Contract Matters.<\/p>\n
(a) Neither the Company nor any of its Subsidiaries is in
\n default or violation of (and no event has occurred which with notice or
\n the lapse of time or both would constitute a default or violation) of
\n any term, condition or provision of any note, mortgage, indenture, loan
\n agreement, other evidence of indebtedness, guarantee, license, lease,
\n agreement or other contract, instrument or contractual obligation to
\n which the Company or any of its Subsidiaries is a party or by which any
\n of their respective assets is <\/p>\n
12
\n 19<\/p>\n
bound, except for any such default or failure which, individually or in
\n the aggregate, is not reasonably likely to have a Company Material
\n Adverse Effect.<\/p>\n
(b) With respect to each contract, agreement, bid or
\n proposal between the Company or any of its Subsidiaries and any
\n domestic or foreign government or governmental agency, including any
\n facilities contract for the use of government-owned facilities (a
\n “Government Contract”), and each contract, agreement, bid or proposal
\n that is a subcontract between the Company or any of its Subsidiaries
\n and a third party relating to a contract between such third party and
\n any domestic or foreign government or governmental agency (a
\n “Government Subcontract”), (i) the Company and each of its Subsidiaries
\n have complied with all terms and conditions of such Government Contract
\n or Government Subcontract, including all clauses, provisions and
\n requirements incorporated expressly, by reference or by operation of
\n law therein, (ii) the Company and each of its Subsidiaries have
\n complied with all requirements of all laws, rules, regulations or
\n agreements pertaining to such Government Contract or Government
\n subcontract, including where applicable the Cost Accounting Standards
\n disclosure statement of the Company or such Subsidiary, (iii) all
\n representations and certifications executed, acknowledged or set forth
\n in or pertaining to such Government Contract or Government Subcontract
\n were complete and correct as of their effective dates and the Company
\n and its Subsidiaries have complied with all such representations and
\n certifications, (iv) neither the United States government nor any prime
\n contractor, subcontractor or other person or entity has notified the
\n Company or any of its Subsidiaries, in writing or orally, that the
\n Company or any of its Subsidiaries has breached or violated any law,
\n rule, regulation, certification, representation, clause, provision or
\n requirement pertaining to such Government Contract or Government
\n Subcontract, (v) neither the Company nor any of its Subsidiaries has
\n received any notice of termination for convenience, notice of
\n termination for default, cure notice or show cause notice pertaining to
\n such Government Contract or Government Subcontract, (vi) other than in
\n the ordinary course of business, no cost incurred by the Company or any
\n of its Subsidiaries pertaining to such Government Contract or
\n Government Subcontract has been questioned or challenged, is the
\n subject of any audit or investigation or has been disallowed by any
\n government or governmental agency, and (vii) no payments due to the
\n Company or any of its Subsidiaries pertaining to such Government
\n Contract or Government Subcontract has been withheld or set off, nor
\n has any claim been made to withhold or set off money, and the Company
\n and its Subsidiaries are entitled to all progress payments received to
\n date with respect thereto, except for any such failure, noncompliance,
\n inaccuracy, breach, violation, termination, cost, investigation,
\n disallowance or payment which, individually or in the aggregate, is not
\n reasonably likely to have a Company Material Adverse Effect.<\/p>\n
(c) To the Company’s knowledge, neither the Company nor
\n any of its Subsidiaries any of the respective directors, officers,
\n employees, consultants or agents of the Company or any of its
\n Subsidiaries is or since January 1, 1997 has been under administrative,
\n civil or criminal investigation, indictment or information by any<\/p>\n
13
\n 20<\/p>\n
government or governmental agency or any audit or in investigation by
\n the Company or any of its Subsidiaries with respect to any alleged act
\n or omission arising under or relating to any Government Contract or
\n Government Subcontract.<\/p>\n
(d) There exist (i) no material outstanding claims
\n against the Company or any of its Subsidiaries, either by any
\n government or governmental agency or by any prime contractor,
\n subcontractor, vendor or other person or entity, arising under or
\n relating to any Government Contract or Government Subcontract, and (ii)
\n no disputes between the Company or any of its Subsidiaries and the
\n United States government under the Contract Disputes Act or any other
\n federal statute or between the Company or any of its Subsidiaries and
\n any prime contractor, subcontractor or vendor arising under or relating
\n to any Government Contract or Government Subcontract, except for any
\n such claim or dispute which, individually or in the aggregate, is not
\n reasonably likely to have a Company Material Adverse Effect. Neither
\n the Company nor any of its Subsidiaries has (i) any interest in any
\n pending or potential material claim against any government or
\n governmental agency or (ii) any interest in any pending claim against
\n any prime contractor, subcontractor or vendor arising under or relating
\n to any Government Contract or Government Subcontract, which, if
\n adversely determined against the Company, individually or in the
\n aggregate, is reasonably likely to have a Company Material Adverse
\n Effect.<\/p>\n
(e) Since January 1, 1997, neither the Company nor any of
\n its Subsidiaries has been debarred or suspended from participation in
\n the award of contracts with the United States government or any other
\n government or governmental agency (excluding for this purpose
\n ineligibility to bid on certain contracts due to generally applicable
\n bidding requirements). To the Company’s knowledge, there exists no
\n facts or circumstances that would warrant the institution of suspension
\n or debarment proceedings or the finding of nonresponsibility or
\n ineligibility on the part of the Company, any of its Subsidiaries or
\n any of their respective directors, officers or employees. No payment
\n has been made by or on behalf of the Company or any of its Subsidiaries
\n in connection with any Government Contract or Government Subcontract in
\n violation of applicable procurement laws, rules and regulations or in
\n violation of, or requiring disclosure pursuant to, the Foreign Corrupt
\n Practices Act, as amended, except for any such violation or failure to
\n disclose which, individually or in the aggregate, is not reasonably
\n likely to have a Company Material Adverse Effect.<\/p>\n
(f) The Company Disclosure Letter sets forth, as of the
\n date of this Agreement, a list of each contract by the Company or any
\n of its Subsidiaries with any customer or supplier that (i) involves an
\n obligation of $3,000,000 or more (per annum, if applicable) or (ii)
\n represents one of the top three contracts (in dollar value) for any
\n particular business unit of the Company, provided the value of any such
\n contract exceeds $500,000 (per annum, if applicable), and identifies
\n the parties to the contract, the general <\/p>\n
14
\n 21<\/p>\n
nature of the contract and the term and amount of each contract,
\n whether a prime contract, subcontract or otherwise.<\/p>\n
Section 4.10 Tax Matters.<\/p>\n
(a) For each taxable period beginning on or after January
\n 1, 1997, the Company and each of its Subsidiaries have timely filed all
\n required returns, declarations, reports, claims for refund or
\n information returns and statements, including any schedule or
\n attachment thereto (collectively “Tax Returns”), relating to any
\n federal, state, local or foreign net income, gross income, gross
\n receipts, sales, use, ad valorem, transfer, franchise, profits,
\n license, lease, service, service use, withholding, payroll, employment,
\n excise, severance, stamp, occupation, premium, property, windfall
\n profits, customs, duties or other tax, fee, assessment or charge,
\n including any interest, penalty or addition thereto and including any
\n liability for the taxes of any other person or entity under Treasury
\n Regulation Section 1.1502-6 (or any similar state, local or foreign
\n law, rule or regulation), and any liability in respect of any tax as a
\n transferee or successor, by law, contract or otherwise (collectively
\n “Taxes”), and all such Tax Returns are accurate and complete in all
\n respects, except to the extent any such failure to file or any such
\n inaccuracy in any filed Tax Return, individually or in the aggregate,
\n is not reasonably likely to have a Company Material Adverse Effect. All
\n Taxes owed by the Company or any of its Subsidiaries (whether or not
\n shown on any Tax Return) have been paid or adequately reserved for in
\n accordance with generally accepted accounting principles in the
\n financial statements of the Company, except (i) for any Taxes related
\n to any period prior to January 1, 1997 for which the Company would be
\n entitled to indemnification from Olin Corporation and are not required
\n to be reserved in the financial statements of the Company in accordance
\n with generally accepted accounting principles or (ii) except to the
\n extent any such failure to pay or reserve, individually or in the
\n aggregate, is not reasonably likely to have a Company Material Adverse
\n Effect.<\/p>\n
(b) The most recent financial statements contained in the
\n Company SEC Documents reflect adequate reserves in accordance with
\n generally accepted accounting principles for all Taxes payable by the
\n Company and its Subsidiaries for all Tax periods and portions thereof
\n through the date of such financial statements, except to the extent
\n that any failure to so reserve, individually or in the aggregate, is
\n not reasonably likely to have a Company Material Adverse Effect. No
\n deficiency with respect to Taxes has been proposed, asserted or
\n assessed against the Company or any of its Subsidiaries and no requests
\n for waivers of the time to assess any such Taxes are pending, except to
\n the extent any such deficiency or request for waiver, individually or
\n in the aggregate, is not reasonably likely to have a Company Material
\n Adverse Effect.<\/p>\n
(c) For each taxable period beginning on or after January
\n 1, 1997, none of the federal income Tax Returns of the Company or any
\n of its Subsidiaries consolidated in such Tax Returns have been examined
\n by and settled with the Internal Revenue Service.<\/p>\n
15
\n 22<\/p>\n
(d) Except for Liens for current Taxes not yet due and
\n payable or which are being contested in good faith, there is no Lien
\n affecting any of the assets or properties of the Company or any of its
\n Subsidiaries that arose in connection with any failure or alleged
\n failure to pay any Tax, except for Liens which, individually or in the
\n aggregate, are not reasonably likely to have a Company Material Adverse
\n Effect.<\/p>\n
(e) Neither the Company nor any of its Subsidiaries is a
\n party to any Tax allocation or Tax sharing agreement with any person
\n other than the Company or any of its Subsidiaries.<\/p>\n
(f) No amount payable by either the Company or any of its
\n Subsidiaries will be subject to disallowance under Section 162(m) of
\n the Internal Revenue Code of 1986, as amended (the “Code”).<\/p>\n
(g) Neither the Company nor any of its Subsidiaries has
\n made any payments, is obligated to make any payments or is a party to
\n any agreement that could obligate it to make any payments as a result
\n of the execution and delivery of this Agreement, the obtaining of the
\n Company Stockholder Approval or the consummation of the Merger or any
\n other transaction contemplated by this Agreement (including as a result
\n of termination of employment on or following the Effective Time) that
\n would not be fully deductible by reason of Section 280G of the Code.<\/p>\n
Section 4.11 Employee Benefit Matters.<\/p>\n
(a) The Company Disclosure Letter lists each plan,
\n program, agreement or arrangement constituting a material employee
\n welfare benefit plan (an “Employee Welfare Benefit Plan”) as defined in
\n Section 3(1) of the Employee Retirement Income Security Act of 1974, as
\n amended (“ERISA”), or a material employee pension benefit plan (an
\n “Employee Pension Benefit Plan”) as defined in Section 3(2) of ERISA,
\n and each other material employee benefit plan, agreement, program or
\n arrangement or employment practice maintained by the Company or any of
\n its Subsidiaries with respect to any of its current or former employees
\n or to which the Company or any of the Company Subsidiaries contributes
\n or is required to contribute with respect to any of its current or
\n former employees (collectively, the “Company Plans”). With respect to
\n each Company Plan:<\/p>\n
(i) such Company Plan (and each related trust,
\n insurance contract or fund) has been administered in a manner
\n consistent in all respects with its written terms and complies
\n in form and operation with the applicable requirements of
\n ERISA and the Code and other applicable laws, except for
\n failures of administration or compliance which, individually
\n or in the aggregate, are not reasonably likely to have a
\n Company Material Adverse Effect;<\/p>\n
16
\n 23<\/p>\n
(ii) all required reports and descriptions
\n (including Form 5500 Annual Reports, Summary Annual Reports,
\n PBGC-1’s and Summary Plan Descriptions) have been filed or
\n distributed appropriately with respect to such Company Plan,
\n except for failures of filing or distribution which,
\n individually or in the aggregate, are not reasonably likely to
\n have a Company Material Adverse Effect;<\/p>\n
(iii) the requirements of Part 6 of Subtitle B of
\n Title I of ERISA and Section 4980B of the Code have been met
\n with respect to each such Company Plan which is an Employee
\n Welfare Benefit Plan, except for failures which, individually
\n or in the aggregate, are not reasonably likely to have a
\n Company Material Adverse Effect;<\/p>\n
(iv) all material contributions, premiums or
\n other payments (including all employer contributions and
\n employee salary reduction contributions) that are required to
\n be made under the terms of any Company Plan have been timely
\n made or have been reflected on the financial statements
\n contained in the Company’s most recent Form 10-Q filed with
\n the SEC;<\/p>\n
(v) each such Company Plan which is an Employee
\n Pension Benefit Plan intended to be a “qualified plan” under
\n Section 401(a) of the Code has received a favorable
\n determination letter from the Internal Revenue Service, and no
\n event has occurred which could reasonably be expected to cause
\n the loss, revocation or denial of any such favorable
\n determination letter;<\/p>\n
(vi) the Company has made available and will
\n continue to make available to the Parent Corporation, upon its
\n request, correct and complete copies of the plan documents and
\n most recent summary plan descriptions, the most recent
\n determination letter received from the Internal Revenue
\n Service, the most recent Form 5500 Annual Report, the most
\n recent actuarial report, the most recent audited financial
\n statements, and all related trust agreements, insurance
\n contracts and other funding agreements that implement such
\n Company Plan (but excluding the failure to make available any
\n such document which is not material). The valuation summaries
\n provided by the Company to the Parent Corporation reasonably
\n represent the assets and liabilities attributable to Company
\n Plans calculated in accordance with the Company’s past
\n practices, but excluding any failure which, individually or in
\n the aggregate, is not reasonably likely to have a Company
\n Material Adverse Effect;<\/p>\n
(vii) no Company Plan which is an Employee Pension
\n Benefit Plan has been amended in any manner which would
\n require the posting of security under Section 401(a)(29) of
\n the Code or Section 307 of ERISA, except any such action<\/p>\n
17
\n 24<\/p>\n
which, individually or in the aggregate, is not reasonably
\n likely to have a Company Material Adverse Effect;<\/p>\n
(viii) neither the Company nor any of its
\n Subsidiaries has communicated to any employee (excluding
\n internal memoranda to management) any plan or commitment,
\n whether or not legally binding, to create any additional
\n employee benefit plan or to modify or change any Company Plan
\n affecting any employee or terminated employee of the Company
\n or any of its Subsidiaries, except any such action which,
\n individually or in the aggregate, is not reasonably likely to
\n have a Company Material Adverse Effect;<\/p>\n
(ix) the Company Disclosure Letter includes a
\n workers’ compensation paid loss summary through the date of
\n this Agreement on an accident year basis; the Company
\n Disclosure Letter additionally includes a recent listing of
\n all open workers compensation claims showing claimant name,
\n claim number, description, paid loss and case reserve, except
\n for any such claim which, individually or in the aggregate, is
\n not reasonably likely to have a Company Material Adverse
\n Effect;<\/p>\n
(x) the Company has never been nor is a party to
\n or otherwise bound by any advance agreement or similar
\n arrangement with any foreign, federal, state or local
\n government or regulatory body relating to the allowability,
\n allocation or reimbursement of benefit costs or other matters
\n in connection with any Company Plan;<\/p>\n
(xi) any Company Plan is by its terms able to be
\n amended or terminated by the Company; and<\/p>\n
(xii) there are no liabilities or obligations
\n relating to any individual’s current or former employment with
\n the Company or its Subsidiaries or related entities arising in
\n connection with any violation of any applicable law, except
\n for any liabilities or obligations which, individually or in
\n the aggregate, is not reasonably likely to have a Company
\n Material Adverse Effect.<\/p>\n
(b) With respect to each Employee Welfare Benefit Plan or
\n Employee Pension Benefit Plan that the Company or any of its
\n Subsidiaries maintains or ever has maintained, or to which any of them
\n contributes, ever has contributed or ever has been required to
\n contribute:<\/p>\n
(i) no such Employee Pension Benefit Plan (other
\n than any Multiemployer Plan) has been completely or partially
\n terminated (other than any termination which, individually or
\n in the aggregate, is not reasonably likely to have a Company
\n Material Adverse Effect), no reportable event (as defined in
\n Section 4043 of ERISA) for which the 30-day reporting
\n requirement has not been waived, as to which notices would be
\n required to be filed with the Pension Benefit <\/p>\n
18
\n 25<\/p>\n
Guaranty Corporation, has occurred but has not yet been so
\n reported (but excluding any failure to report which,
\n individually or in the aggregate, is not reasonably likely to
\n have a Company Material Adverse Effect), and no proceeding by
\n the Pension Benefit Guaranty Corporation to terminate such
\n Employee Pension Benefit Plan (other than any Multiemployer
\n Plan) has been instituted;<\/p>\n
(ii) there have been no non-exempt prohibited
\n transactions (as defined in Section 406 of ERISA and Section
\n 4975 of the Code) with respect to such plan, no fiduciary has
\n any liability for breach of fiduciary duty or any other
\n failure to act or comply in connection with the administration
\n or investment of the assets of such plan, and no action, suit,
\n proceeding, hearing or, to the Company’s knowledge,
\n investigation with respect to the administration or the
\n investment of the assets of such plan (other than routine
\n claims for benefits) is pending or, to the Company’s
\n knowledge, threatened, but excluding, from each of the
\n foregoing, events or circumstances which, individually or in
\n the aggregate, are not reasonably likely to have a Company
\n Material Adverse Effect; and<\/p>\n
(iii) other than routine claims for benefits, none
\n of the Company or any of its Subsidiaries or related entities
\n has incurred, and the Company has no reason to expect that the
\n Company or any of its Subsidiaries or related entities will
\n incur, any liability under Subtitle C or D Title IV of ERISA
\n or under the Code with respect to any Company Plan that is an
\n Employee Pension Benefit Plan.<\/p>\n
(c) Neither the Company nor any of its Subsidiaries
\n presently contributes to, nor, since January 1, 1997, have they been
\n obligated to contribute to, a Multiemployer Plan.<\/p>\n
(d) Other than pursuant to a Company Plan, neither the
\n Company nor any of its Subsidiaries has any obligation to provide
\n medical, health, life insurance or other welfare benefits for current
\n or future retired or terminated employees, their spouses or their
\n dependents (other than in accordance with Section 4980B of the Code).<\/p>\n
(e) No Company Plan contains any provision that would
\n prohibit the transactions contemplated by this Agreement, would give
\n rise to any severance, termination or other payments as a result of the
\n transactions contemplated by this Agreement (alone or together with the
\n occurrence of any other event), or would cause any payment,
\n acceleration or increase in benefits provided by any Company Plan as a
\n result of the transactions contemplated by this Agreement (alone or
\n together with the occurrence of any other event), but excluding from
\n this paragraph (e) any payment or any benefit, acceleration or increase
\n to directors and employees, as to the top tier employees in the amounts
\n (based on the Company’s good faith estimates as of the date of this
\n Agreement) and to the individuals specifically set forth in, and as to
\n other employees in the aggregate amount (based on the Company’s good
\n faith estimates as of the date of this Agreement) specifically set
\n forth in, the Company Disclosure Letter and excluding any <\/p>\n
19
\n 26<\/p>\n
non-employee or non-director payment or benefit acceleration or
\n increase which is not material.<\/p>\n
(f) No individual classified as a non-employee for
\n purposes of receiving employee benefits (such an independent
\n contractor, leased employee, consultant or special consultant),
\n regardless of treatment for other purposes, is eligible pursuant to the
\n terms thereof to participate in or receive benefits under any Company
\n Plan intended to qualify under Section 401(a) of the Code.<\/p>\n
(g) The provisions of Section 6.01(a) of the Distribution
\n Agreement by and between Olin Corporation and Company dated December
\n 30, 1996 shall continue to apply to affected employees following the
\n Effective Time.<\/p>\n
(h) The PRIME Plan does not take into account as
\n compensation for plan allocation purposes any bonus bank payment from
\n the Company Incentive Compensation Plan that may be paid on account of
\n the Merger contemplated herein.<\/p>\n
(i) Certain of the Company Plans have been amended as
\n stated in the Company Disclosure Letter.<\/p>\n
(j) The Company has previously provided to the Parent
\n Corporation a list of each Company owned life insurance policy (each a
\n “Coli Policy”). With respect to each Coli Policy:<\/p>\n
(i) for purposes of Code Section 264(a)(4), each
\n Coli Policy qualifies as a contract purchased on or before
\n June 20, 1986, no change has taken place prior to the date of
\n this Agreement and will not be taken on or before the Closing
\n Date to affect such status, and this status has never been
\n challenged by the Internal Revenue Service (or any other
\n government agency) in any audit or any other administrative or
\n judicial proceeding;<\/p>\n
(ii) the aggregate cash surrender value of the
\n Coli Policies as of December 31, 1999 is set forth in the
\n materials previously disclosed to the Parent Corporation; and<\/p>\n
(iii) there are no loans against such policies.<\/p>\n
Section 4.12 Environmental Matters.<\/p>\n
(a) Except for matters which, individually or in the
\n aggregate, are not reasonably likely to have a Company Material Adverse
\n Effect: (i) the Company and its Subsidiaries are, and, to the Company’s
\n knowledge, since January 1, 1997 have been in compliance in all
\n respects with all Environmental Laws (as defined in Section 4.12(b)) in
\n connection with the ownership, use, maintenance and operation of their
\n owned, operated <\/p>\n
20
\n 27<\/p>\n
or leased real property used by them and otherwise in connection with
\n their operations, (ii) neither the Company nor any of its Subsidiaries
\n has any liability, whether contingent or otherwise, under, or for any
\n violations of, any Environmental Law, (iii) no notices of any violation
\n or alleged violation of, non-compliance or alleged noncompliance with
\n or any liability under, any Environmental Law have been received by the
\n Company or any of its Subsidiaries since January 1, 1997 that are
\n currently outstanding and unresolved as of the date of this Agreement,
\n and, to the Company’s knowledge, there are no other outstanding notices
\n that are unresolved for which the Company or any of its Subsidiaries
\n have responsibility, (iv) there are no administrative, civil or
\n criminal writs, injunctions, decrees, orders or judgments outstanding
\n or any administrative, civil or criminal actions, suits, claims,
\n proceedings or, to the Company’s knowledge, investigations pending or,
\n to the Company’s knowledge, threatened, relating to compliance with or
\n liability under any Environmental Law affecting the Company or any of
\n its Subsidiaries, (v) the Company and its Subsidiaries possess valid
\n environmental permits required by any Environmental Law in connection
\n with the ownership, use, maintenance and operation of its owned,
\n operated and leased real property, and (vi) to the knowledge of the
\n Company, no material changes or alterations in the practices or
\n operations of the Company or any of its Subsidiaries as presently
\n conducted are anticipated to be required in the future in order to
\n permit the Company and its Subsidiaries to continue to comply in all
\n material respects with all applicable Environmental Laws. The Company
\n Disclosure Letter sets forth the amount reserved as of October 1, 2000
\n by the Company for compliance with all Environmental Laws.<\/p>\n
(b) The term “Environmental Law” as used in this
\n Agreement means any law, rule, regulation, permit, order, writ,
\n injunction, judgment or decree with respect to the preservation of the
\n environment or the promotion of worker health and safety, including any
\n law, rule, regulation, permit, order, writ, injunction, judgment or
\n decree relating to Hazardous Materials (as defined in Section 4.12(c)).
\n Without limiting the generality of the foregoing, the term will
\n encompass each of the following statutes and the regulations
\n promulgated thereunder, and any similar applicable state, local or
\n foreign law, rule or regulation, each as amended (i) the Comprehensive
\n Environmental Response, Compensation, and Liability Act of 1980, (ii)
\n the Solid Waste Disposal Act, (iii) the Hazardous Materials
\n Transportation Act, (iv) the Toxic Substances Control Act, (v) the
\n Clean Water Act, (vi) the Clean Air Act, (vii) the Safe Drinking Water
\n Act, (viii) the National Environmental Policy Act of 1969, (ix) the
\n Superfund Amendments and Reauthorization Act of 1986, (x) Title III of
\n the Superfund Amendments and Reauthorization Act, (xi) the Federal
\n Insecticide, Fungicide and Rodenticide Act and (xii) the provisions of
\n the Occupational Safety and Health Act of 1970 relating to the handling
\n of and exposure to Hazardous Materials.<\/p>\n
(c) The term “Hazardous Materials” as used in this
\n Agreement means each and every element, compound, chemical mixture,
\n contaminant, pollutant, material, waste or other substance (i) that is
\n defined, determined or identified as hazardous or toxic under any
\n Environmental Law or (ii) the spilling, leaking, pumping, pouring,
\n emitting, <\/p>\n
21
\n 28<\/p>\n
emptying, discharging, injecting, storing, escaping, leaching, dumping,
\n discarding, burying, abandoning or disposing into the environment of
\n which is prohibited under any Environmental Law. Without limiting the
\n generality of the foregoing, the term will include (i) “hazardous
\n substances” as defined in the Comprehensive Environmental Response,
\n Compensation, and Liability Act of 1980, and regulations promulgated
\n thereunder, each as amended, (ii) “extremely hazardous substance” as
\n defined in the Superfund Amendments and Reauthorization Act of 1986, or
\n Title III of the Superfund Amendments and Reauthorization Act and
\n regulations promulgated thereunder, each as amended, (iii) “hazardous
\n waste” as defined in the Solid Waste Disposal Act and regulations
\n promulgated thereunder, each as amended, (iv) “hazardous materials” as
\n defined in the Hazardous Materials Transportation Act and the
\n regulations promulgated thereunder, each as amended, (v) “chemical
\n substance or mixture” as defined in the Toxic Substances Control Act
\n and regulation promulgated thereunder, each as amended, (vi) petroleum
\n and petroleum products and byproducts and (vii) asbestos.<\/p>\n
Section 4.13 Title. The Company and its Subsidiaries has good and, in
\nthe case of real property, marketable title to all the properties and assets
\npurported to be owned by them, free and clear of all Liens except (a) Liens for
\ncurrent Taxes or assessments not delinquent, (b) builder, mechanic,
\nwarehousemen, materialmen, contractor, workmen, repairmen, carrier or other
\nsimilar Liens arising and continuing in the ordinary course of business for
\nobligations that are not delinquent, (c) the rights, if any, of vendors having
\npossession of tooling of the Company and its Subsidiaries, (d) liens arising
\nfrom the receipt by the Company and its Subsidiaries of progress payments by the
\nUnited States government, (e) Liens securing rental payments under capital lease
\narrangements and (f) other Liens which, individually or in the aggregate, are
\nnot reasonably likely to have a Company Material Adverse Effect (collectively,
\n“Permitted Liens”).<\/p>\n
Section 4.14 Intellectual Property Matters.<\/p>\n
(a) The Company and its Subsidiaries own or have the
\n right to use pursuant to valid license, sublicense, agreement or
\n permission all items of Intellectual Property necessary for their
\n operations as presently conducted and as presently proposed to be
\n conducted, except where the failure to have such rights, individually
\n or in the aggregate, are not reasonably likely to have a Company
\n Material Adverse Effect. Neither the Company nor any of its
\n Subsidiaries has received any charge, complaint, claim, demand or
\n notice alleging any interference, infringement, misappropriation or
\n violation of the Intellectual Property rights of any third party. Since
\n January 1, 1997, to the Company’s knowledge, no third party has
\n interfered with, infringed upon, misappropriated or otherwise come into
\n conflict with any Intellectual Property rights of the Company or any of
\n its Subsidiaries, except for misappropriations and violations which,
\n individually or in the aggregate, are not reasonably likely to have a
\n Company Material Adverse Effect.<\/p>\n
(b) The term “Intellectual Property” as used in this
\n Agreement means, collectively, patents, patent disclosures, trademarks,
\n service marks, logos, trade names, copyrights and mask works, and all
\n registrations, applications, reissuances, continuations,<\/p>\n
22
\n 29<\/p>\n
continuations-in-part, revisions, extensions, reexaminations and
\n associated good will with respect to each of the foregoing, computer
\n software (including source and object codes), computer programs,
\n computer data bases and related documentation and materials, data,
\n documentation, trade secrets, confidential business information
\n (including ideas, formulas, compositions, inventions, know-how,
\n manufacturing and production processes and techniques, research and
\n development information, drawings, designs, plans, proposals and
\n technical data, financial, marketing and business data and pricing and
\n cost information) and all other intellectual property rights (in
\n whatever form or medium).<\/p>\n
Section 4.15 Labor Matters. There are no controversies pending or, to
\nthe Company’s knowledge, threatened between the Company or any of its
\nSubsidiaries and any of their current or former employees or any labor or other
\ncollective bargaining unit representing any such employee that are reasonably
\nlikely to have a Company Material Adverse Effect or are reasonably likely to
\nresult in a material labor strike, dispute, slow-down or work stoppage. The
\nCompany is not aware of any organizational effort presently being made or
\nthreatened by or on behalf of any labor union with respect to employees of the
\nCompany or any of its Subsidiaries. To the Company’s knowledge, as of the date
\nof this Agreement no executive, key employee or group of employees of the
\nCompany or any of its Subsidiaries has any plan to terminate employment with the
\nCompany and its Subsidiaries, which termination, individually or in the
\naggregate, is reasonably likely to have a Company Material Adverse Effect. As of
\nthe date of this Agreement, there are no current DOL, OFCCP or EEOC audits. As
\nof the date of this Agreement, there are no OFCCP concilliation agreements in
\neffect.<\/p>\n
Section 4.16 Rights Agreement. The Company has taken all requisite
\naction under the Rights Agreement dated as of February 1, 2000 between the
\nCompany and The Bank of New York (the “Rights Agreement”) to cause the
\nprovisions of the Rights Agreement or any other similar agreement not to be
\napplicable to this Agreement, the Merger or the other transactions contemplated
\nhereby.<\/p>\n
Section 4.17 State Takeover Laws. The resolutions adopted by the Board
\nof Directors of the Company approving this Agreement are sufficient to cause the
\nprovisions of Article 14 of the Virginia Act to be inapplicable to this
\nAgreement, the Merger and the other transactions contemplated hereby. Article
\n14.1 of the Virginia Act is not applicable to this Agreement, the Merger and the
\nother transactions contemplated hereby pursuant to Article VII, Section 5 of the
\nBylaws of the Company as in effect on the date of this Agreement. To the
\nCompany’s knowledge, no other fair price, moratorium, control share acquisition
\nor other form of antitakeover statute, rule or regulation of any state or
\njurisdiction applies or purports to apply to this Agreement, the Merger or the
\nother transactions contemplated hereby.<\/p>\n
Section 4.18 Brokers’ Fees. Except for the fees and expenses payable by
\nthe Company to Goldman, Sachs & Co., neither the Company nor any of its
\nSubsidiaries has any liability or obligation to pay any fees or commissions to
\nany financial advisor, broker, finder or agent with respect to the transactions
\ncontemplated by this Agreement. The Company has delivered to the Parent
\nCorporation a correct and complete copy of the engagement letter between the
\nCompany <\/p>\n
23
\n 30<\/p>\n
and Goldman, Sachs & Co. relating to the transactions contemplated by this
\nAgreement, which letter describes the fees payable to Goldman, Sachs & Co. in
\nconnection with this Agreement.<\/p>\n
Section 4.19 Representations and Warranties. The representations and
\nwarranties of the Company contained in this Agreement in the aggregate,
\ndisregarding all qualifications and exceptions contained therein relating to
\nmateriality or Company Material Adverse Effect, are true and correct with only
\nsuch exceptions which in the aggregate are not reasonably likely to have a
\nCompany Material Adverse Effect. In the event a representation and warranty is
\nqualified by a Company Material Adverse Effect exception and there occurs a
\nCompany Material Adverse Effect with respect thereto, such representation and
\nwarranty shall be conclusively deemed breached without regard to whether the
\nCompany Material Adverse Effect was or was not reasonably likely.<\/p>\n
ARTICLE 5<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE PARENT CORPORATION<\/p>\n
Each of the Parent Corporation and the Acquisition Corporation, as the
\ncase may be, represents and warrants to the Company that:<\/p>\n
Section 5.1 Organization. Each of the Parent Corporation and the
\nAcquisition Corporation is a corporation duly organized, validly existing and in
\ngood standing under the laws of the jurisdiction of its incorporation and has
\nall requisite power and authority to own, lease and operate its properties and
\nto carry on its business as presently being conducted. All of the outstanding
\nshares of the capital stock of the Acquisition Corporation have been validly
\nissued, are fully paid and nonassessable and are owned by the Parent Corporation
\nfree and clear of any Lien. The Acquisition Corporation has been organized
\nsolely for the purpose of engaging in the Merger and the other transactions
\ncontemplated by this Agreement and has not engaged in any business other than
\ncontemplated by this Agreement.<\/p>\n
Section 5.2 Authorization of Transaction; Enforceability. Each of the
\nParent Corporation and the Acquisition Corporation has full corporate power and
\nauthority and has taken all requisite corporate action to enable it to execute
\nand deliver this Agreement, to consummate the Merger and the other transactions
\ncontemplated hereby and to perform its obligations hereunder. Each of the Board
\nof Directors of the Parent Corporation and the Board of Directors of the
\nAcquisition Corporation has duly adopted resolutions, by the requisite majority
\nvote, approving this Agreement, the Merger and the other transactions
\ncontemplated hereby and determining that the terms and conditions of this
\nAgreement, the Merger and the other transactions contemplated hereby are in the
\nbest interests of the Parent Corporation and its stockholders and of the
\nAcquisition Corporation and its sole stockholder, as the case may be. The
\nforegoing resolutions of each such Board of Directors have not been modified,
\nsupplemented or rescinded and remain in full force and effect as of the date of
\nthis Agreement. This Agreement constitutes the valid and legally binding
\nobligation of each of the Parent <\/p>\n
24
\n 31<\/p>\n
Corporation and the Acquisition Corporation, enforceable against the Parent
\nCorporation and the Acquisition Corporation in accordance with its terms and
\nconditions.<\/p>\n
Section 5.3 Noncontravention; Consents. Except for (a) filings and
\napprovals necessary to comply with the applicable requirements of the Securities
\nExchange Act and the “blue sky” laws and regulations of various states, (b) the
\nfiling of a Notification and Report Form and related material with the Federal
\nTrade Commission and the Antitrust Division of the United States Department of
\nJustice under the HSR Act and any other filing required by any other Antitrust
\nLaw, (c) the filing of articles of merger pursuant to the Virginia Act and a
\ncertificate of merger under the Delaware Act, and (d) any filings required under
\nthe rules and regulations of the New York Stock Exchange, neither the execution
\nand delivery of this Agreement by the Parent Corporation or the Acquisition
\nCorporation, nor the consummation by the Parent Corporation or the Acquisition
\nCorporation of the transactions contemplated hereby, will constitute a violation
\nof, be in conflict with, or result in the breach of (i) the charter or bylaws of
\nthe Parent Corporation or the Acquisition Corporation, (ii) any constitutional
\nprovision, law, rule, regulation, permit, order, writ, injunction, judgment or
\ndecree to which the Parent Corporation or the Acquisition Corporation is subject
\nor (iii) any material agreement or commitment to which the Parent Corporation or
\nthe Acquisition Corporation is a party or by which either of them is bound or
\nsubject.<\/p>\n
Section 5.4 Adequate Cash Resources. The Parent Corporation has
\nadequate resources to provide the aggregate Merger Consideration and the Option
\nConsideration in cash in the amount and at the time required by Section 1.9 or
\nby Article 3.<\/p>\n
Section 5.5 No Capital Ownership in the Company. Neither the Parent
\nCorporation nor any of its Subsidiaries owns any shares of Company Common Stock.<\/p>\n
ARTICLE 6<\/p>\n
COVENANTS<\/p>\n
Section 6.1 General. Each of the parties will use its respective best
\nefforts to take all action and to do all things necessary, proper or advisable
\nto consummate and make effective the transactions contemplated by this
\nAgreement.<\/p>\n
Section 6.2 Notices and Consents. Each of the parties prior to the
\nClosing Date will give all notices to third parties and governmental entities
\nand will use its respective best efforts to obtain all third party and
\ngovernmental consents and approvals that are required in connection with the
\ntransactions contemplated by this Agreement. Within five business days following
\nthe execution and delivery of this Agreement, each of the parties will file a
\nNotification and Report Form and related material with the Federal Trade
\nCommission and the Antitrust Division of the United States Department of Justice
\nunder the HSR Act, will use its respective best efforts to obtain early
\ntermination of the applicable waiting period and will make all further filings
\npursuant thereto or any other Antitrust Law that may be necessary, proper or
\nadvisable. The <\/p>\n
25
\n 32<\/p>\n
foregoing two sentences will not be deemed to require the Parent Corporation to
\nenter into any agreement, consent decree or other commitment requiring the
\nParent Corporation or any of its Subsidiaries to divest or hold separate any
\nassets (including any assets of the Company or any of its Subsidiaries) or to
\ntake any other action which, individually or in the aggregate, is reasonably
\nlikely to have a material adverse effect on the business, financial condition,
\noperations or results of operations of the Parent Corporation and its
\nSubsidiaries taken as a whole (other than changes or effects resulting from
\noccurrences relating to the economy in general, the securities markets in
\ngeneral or the Parent Corporation’s industry in general and not specifically
\nrelating to the Parent Corporation) (a “Parent Corporation Material Adverse
\nEffect”).<\/p>\n
Section 6.3 Interim Conduct of the Company. Except as expressly
\ncontemplated by this Agreement, as set forth in the Company Disclosure Letter,
\nas required by law or by the terms of any contract in effect on the date of this
\nAgreement or as the Parent Corporation may approve, which approval will not be
\nunreasonably withheld or delayed, from and after the date of this Agreement
\nthrough the Closing Date, the Company will, and will cause each of its
\nSubsidiaries to, conduct its operations in accordance with its ordinary course
\nof business, consistent with past practice, and in accordance with such covenant
\nwill not, and will not cause or permit any of its Subsidiaries to:<\/p>\n
(a) amend its articles of incorporation or bylaws or file
\n any certificate of designation or similar instrument with respect to
\n any shares of its authorized but unissued capital stock;<\/p>\n
(b) authorize or effect any stock split or combination or
\n reclassification of shares of its capital stock;<\/p>\n
(c) declare or pay any dividend or distribution with
\n respect to its capital stock (other than the regular quarterly dividend
\n of $0.075 per share of Company Common Stock and dividends payable by a
\n Subsidiary of the Company to the Company or another Subsidiary), issue
\n or authorize the issuance of any shares of its capital stock (other
\n than in connection with the exercise of currently outstanding Stock
\n Options listed in the Company Disclosure Letter) or any other
\n securities exercisable or exchangeable for or convertible into shares
\n of its capital stock, or repurchase, redeem or otherwise acquire for
\n value any shares of its capital stock or any other securities
\n exercisable or exchangeable for or convertible into shares of its
\n capital stock;<\/p>\n
(d) merge or consolidate with any entity;<\/p>\n
(e) sell, lease or otherwise dispose of any of its
\n capital assets, including any shares of the capital stock of any of its
\n Subsidiaries, other than sales, leases or other dispositions of
\n machinery, equipment, tools, vehicles and other operating assets no
\n longer required in its operations made in the ordinary course of
\n business, consistent with past practice;<\/p>\n
26
\n 33<\/p>\n
(f) liquidate, dissolve or effect any recapitalization or
\n reorganization in any form;<\/p>\n
(g) acquire any interest in any business (whether by
\n purchase of assets, purchase of stock, merger or otherwise) or enter
\n into any joint venture;<\/p>\n
(h) create, incur, assume or suffer to exist any
\n indebtedness for borrowed money (including capital lease obligations),
\n other than indebtedness existing as of the date of this Agreement,
\n borrowings under existing credit lines in the ordinary course of
\n business, consistent with past practice, and intercompany indebtedness
\n among the Company and its Subsidiaries arising in the ordinary course
\n of business, consistent with past practice;<\/p>\n
(i) create, incur, assume or suffer to exist any Lien
\n (other than Permitted Liens) affecting any of its material assets or
\n properties;<\/p>\n
(j) except as required as the result of changes in United
\n States generally accepted accounting principles, change any of the
\n accounting principles or practices used by it or revalue in any
\n material respect any of its assets or properties, other than
\n write-downs of inventory or accounts receivable in the ordinary course
\n of business, consistent with past practice;<\/p>\n
(k) except as required under the terms of any collective
\n bargaining agreement in effect as of the date of this Agreement or as
\n required by applicable law, grant any general or uniform increase in
\n the rates of pay of its employees or grant any increase in the benefits
\n under any bonus or employee benefit plan or other arrangement, contract
\n or commitment;<\/p>\n
(l) except for any increase required under the terms of
\n any collective bargaining agreement or consulting, executive or
\n employment agreement in effect on the date of this Agreement or as
\n required by applicable law, increase the compensation payable or to
\n become payable to officers and salaried employees with a base salary in
\n excess of $100,000 per year or increase any bonus, insurance, pension
\n or other benefit plan, payment or arrangement made to, for or with any
\n such officers or salaried employees;<\/p>\n
(m) enter into any contract or commitment or engage in
\n any transaction with any affiliated person or entity (other than the
\n Company or its Subsidiaries) or enter into any contract or commitment
\n or engage in any transaction with any unaffiliated person or entity
\n which, to the Company’s knowledge, is reasonably likely to have a
\n Company Material Adverse Effect;<\/p>\n
(n) make any material Tax election or settle or
\n compromise any material Tax liability, except in the ordinary course of
\n business;<\/p>\n
27
\n 34<\/p>\n
(o) pay, discharge or satisfy any claims, liabilities or
\n obligations other than the payment, discharge and satisfaction in the
\n ordinary course of business of liabilities reflected or reserved for in
\n the consolidated financial statements of the Company or otherwise
\n incurred in the ordinary course of business, consistent with past
\n practice;<\/p>\n
(p) settle or compromise any material pending or
\n threatened suit, action or proceeding; or<\/p>\n
(q) commit to do any of the foregoing.<\/p>\n
Section 6.4 Preservation of Organization. Subject to compliance with
\nthe provisions of Section 6.3, the Company will, and will cause each of its
\nSubsidiaries to, use its best efforts to preserve its business organization
\nintact in all material respects, use its reasonable efforts to keep available to
\nthe Company and its Subsidiaries, the present officers and employees of the
\nCompany and its Subsidiaries as a group and use its best efforts to preserve the
\npresent relationships of the Company and its Subsidiaries with suppliers and
\ncustomers and others having business relations with the Company and its
\nSubsidiaries.<\/p>\n
Section 6.5 Full Access. The Company will, and will cause its
\nSubsidiaries and its and their representatives to, afford the Parent Corporation
\nand its representatives reasonable access, upon reasonable notice at all
\nreasonable times to all premises, properties, books, records, contracts and
\ndocuments of or pertaining to the Company and its Subsidiaries. Notwithstanding
\nthe foregoing, neither party will be required to provide access or to disclose
\ninformation where such access or disclosure would contravene any law or contract
\nor would result in the waiver of any legal privilege or work-product protection.
\nAny information disclosed will be subject to the provisions of the
\nConfidentiality Agreement, dated March 17, 2000, between the Company and the
\nParent Corporation (the “Confidentiality Agreement”).<\/p>\n
Section 6.6 Notice of Developments. The Company will give prompt
\nwritten notice to the Parent Corporation of any material development affecting
\nthe Company or any of its Subsidiaries. Each party will give prompt written
\nnotice to the other of any material development which would give rise to a
\nfailure of a condition set forth in Section 7.2 (in the case of the Parent
\nCorporation or the Acquisition Corporation) or Section 7.3 (in the case or the
\nCompany). No such written notice of such a material development will be deemed
\nto have amended any of the disclosures set forth in the Company Disclosure
\nLetter, to have qualified the representations and warranties contained herein
\nand to have cured any misrepresentation or breach of warranty that otherwise
\nmight have existed hereunder by reason of such material development.<\/p>\n
28
\n 35<\/p>\n
Section 6.7 Nonsolicitation of Acquisition Proposals.<\/p>\n
(a) The Company and each of its Subsidiaries, and each of
\n their respective directors, officers, employees, agents and
\n representatives, will immediately cease any discussions or negotiations
\n presently being conducted with respect to any Acquisition Proposal. The
\n Company and its Subsidiaries will not and will use their best efforts
\n to cause their respective directors, officers, employees, agents and
\n representatives not to (i) initiate or solicit, directly or indirectly,
\n any inquiries with respect to, or the making of, any Acquisition
\n Proposal or (ii) engage in any negotiations or discussions with,
\n furnish any information or data to or enter into any letter of intent,
\n agreement in principle, acquisition agreement or similar agreement with
\n any party relating to any Acquisition Proposal; provided, however, that
\n the Board of Directors of the Company may, in response to an
\n Acquisition Proposal that the Board of Directors of the Company
\n determines in good faith is reasonably likely to lead to a Superior
\n Proposal, (A) furnish information with respect to the Company and its
\n Subsidiaries to the person making such Acquisition Proposal (and its
\n representatives) pursuant to a confidentiality agreement containing
\n provisions at least as restrictive with respect to such person as the
\n restrictions on the Parent Corporation contained in the Confidentiality
\n Agreement (as modified by Section 6.14) and (B) participate in
\n discussions or negotiations with the person making such Acquisition
\n Proposal (and its representatives) regarding such Acquisition Proposal.
\n The Company will be responsible for any breach of the provisions of
\n this Section 6.7 by any director, officer, employee, agent or
\n representative of the Company or any of its Subsidiaries.<\/p>\n
(b) The term “Acquisition Proposal” as used in this
\n Agreement means any bona fide proposal, whether or not in writing, made
\n by a party that if consummated would result in such party acquiring
\n beneficial ownership (as defined under Rule 13(d) promulgated under the
\n Securities Exchange Act) of more than 20% of the consolidated assets
\n (determined based on book or fair market value) of, or more than 20% of
\n the voting power in, the Company and its Subsidiaries, taken as a
\n whole, pursuant to a merger, consolidation or other business
\n combination, sale of shares of capital stock, sale of assets, tender or
\n exchange offer or similar transaction involving the Company or any of
\n its Subsidiaries, including any single or multi-step transaction or
\n series of related transactions that is structured to permit such party
\n to acquire such beneficial ownership.<\/p>\n
(c) The term “Superior Proposal” as used in this
\n Agreement means any bona fide proposal, in writing, made by a party
\n that (i) if consummated, would result in such party acquiring
\n beneficial ownership of more than 50% of the consolidated assets
\n (determined based on book or fair market value) of, or more than 50% of
\n the voting power in, the Company and its Subsidiaries, taken as a
\n whole, pursuant to a merger, consolidation or other business
\n combination, sale of shares of capital stock, sale of assets, tender or
\n exchange offer or similar transaction involving the Company or any of
\n its Subsidiaries, including any single or multi-step transaction or
\n series of related transactions that is structured to permit such party
\n to acquire such beneficial ownership, <\/p>\n
29
\n 36<\/p>\n
and (ii) the Board of Directors of the Company, after consultation with
\n its outside legal counsel and financial advisers, determines in its
\n good faith business judgment (x) is superior from a financial view to
\n the stockholders of the Company and (y) is reasonably capable of being
\n completed, taking into account all legal, financial, regulatory and
\n other aspects of such proposal.<\/p>\n
(d) Nothing contained in this Agreement will prohibit the
\n Company from (i) taking and disclosing to its stockholders a position
\n contemplated by Rule 14e-2(a) promulgated under the Securities Exchange
\n Act or (ii) making any disclosure or recommendation, including a
\n withdrawal or adverse amendment of its recommendation of the Merger
\n that would permit the Parent Corporation to terminate this Agreement
\n pursuant to Section 8.1(c)(ii), to the Company’s stockholders if the
\n Board of Directors of the Company, after consultation with its outside
\n legal counsel, determines in good faith that failure to so disclose or
\n recommend would be inconsistent with applicable law.<\/p>\n
Section 6.8 Indemnification.<\/p>\n
(a) From and after the Closing Date, the Parent
\n Corporation will cause the Surviving Corporation to indemnify, defend
\n and hold harmless each person who is now, or has been at any time prior
\n to the Effective Time, an officer or director of the Company or any of
\n its present or former Subsidiaries or corporate parents (collectively,
\n the “Indemnified Parties”) from and against all losses, claims, damages
\n and expenses (including reasonable attorney’s fees and expenses)
\n arising out of or relating to actions or omissions, or alleged actions
\n or omissions, occurring at or prior to the Effective Time to the
\n fullest extent permitted from time to time by the Virginia Act or any
\n other applicable laws as presently or hereafter in effect.<\/p>\n
(b) Any determination required to be made with respect to
\n whether any Indemnified Party may be entitled to indemnification will,
\n if requested by such Indemnified Party, be made by independent legal
\n counsel selected by the Indemnified Party and reasonably satisfactory
\n to the Surviving Corporation.<\/p>\n
(c) For a period of six years after the Closing Date, the
\n Parent Corporation will cause to be maintained in effect the policies
\n of directors and officers liability insurance and fiduciary liability
\n insurance currently maintained by the Company with respect to claims
\n arising from or relating to actions or omissions, or alleged actions or
\n omissions, occurring on or prior to the Closing Date. The Parent
\n Corporation may at its discretion substitute for such policies
\n currently maintained by the Company directors and officers liability
\n insurance and fiduciary liability insurance policies with reputable and
\n financially sound carriers providing for no less favorable coverage.
\n Notwithstanding the provisions of this Section 6.8(c), the Parent
\n Corporation will not be obligated to make annual premium payments with
\n respect to such policies of insurance to the extent such premiums
\n exceed 200 percent of the annual premiums paid by the Company as of the
\n date of this Agreement. If the annual premium costs necessary to
\n maintain such <\/p>\n
30
\n 37<\/p>\n
insurance coverage exceed the foregoing amount, the Parent Corporation
\n will maintain the most advantageous policies of directors and officers
\n liability insurance and fiduciary liability insurance obtainable for an
\n annual premium equal to the foregoing amount. <\/p>\n
(d) To the fullest extent permitted from time to time
\n under the law of the Commonwealth of Virginia, the Parent Corporation
\n will cause the Surviving Corporation to pay on an as-incurred basis
\n the reasonable fees and expenses of each Indemnified Party (including
\n reasonable fees and expenses of counsel) in advance of the final
\n disposition of any action, suit, proceeding or investigation that is
\n the subject of the right to indemnification, subject to reimbursement
\n in the event such Indemnified Party is not entitled to
\n indemnification.<\/p>\n
(e) The provisions providing for director and officer
\n indemnification, abrogation of liability and advancement of expenses
\n set forth in Article VII of the articles of incorporation of the
\n Company, as in effect immediately prior to the Effective Time, will
\n apply to each Indemnified Party with respect to all matters occurring
\n on or prior to the Effective Time. The foregoing will not be deemed to
\n restrict the right of the Surviving Corporation to modify the
\n provisions of its articles of incorporation relating to director and
\n officer indemnification, abrogation of liability or advancement of
\n expenses with respect to events or occurrences after the Closing Date
\n but such modifications shall not adversely affect the rights of the
\n Indemnified Parties hereunder. The Parent Corporation shall cause the
\n Surviving Corporation to honor the provisions of this Section 6.8(e).<\/p>\n
(f) In the event of any action, suit, investigation or
\n proceeding, the Indemnified Party will be entitled to control the
\n defense thereof with counsel of its own choosing reasonably acceptable
\n to the Parent Corporation, and the Parent Corporation and the Surviving
\n Corporation will cooperate in the defense thereof, provided that
\n neither the Parent Corporation nor the Surviving Corporation will be
\n liable for the fees of more than one counsel for all Indemnified
\n Parties, other than local counsel, unless the use of a single counsel
\n would present conflict of interest issues which would make it
\n impracticable for all Indemnified Parties to be represented by a single
\n counsel, and provided further that neither the Parent Corporation nor
\n the Surviving Corporation will be liable for any settlement effected
\n without its written consent (which consent will not be unreasonably
\n withheld or delayed).<\/p>\n
(g) The rights of each Indemnified Party hereunder will
\n be in addition to any other rights such Indemnified Party may have
\n under the articles of incorporation or bylaws of the Surviving
\n Corporation or any of their respective Subsidiaries, under the law of
\n the Commonwealth of Virginia or otherwise. Notwithstanding anything to
\n the contrary contained in this Agreement or otherwise, the provisions
\n of this Section 6.8 will survive the consummation of the Merger, and
\n each Indemnified Party will, for all purposes, be a third party
\n beneficiary of the covenants and agreements contained in this Section
\n 6.8 and, accordingly, will be treated as a party to this Agreement for
\n purposes of <\/p>\n
31
\n 38<\/p>\n
the rights and remedies relating to enforcement of such covenants and
\n agreements and will be entitled to enforce any such rights and exercise
\n any such remedies directly against the Parent Corporation and the
\n Surviving Corporation.<\/p>\n
(h) Nothing in this Section 6.8 will diminish any rights
\n or entitlements available to any director or officer of the Company
\n under the Company’s articles of incorporation as in effect immediately
\n prior to the Effective Time.<\/p>\n
Section 6.9 Public Announcements. The initial press release announcing
\nthe transactions contemplated by this Agreement will be a joint press release.
\nThereafter, the Parent Corporation and the Company will consult with one another
\nbefore issuing any press releases or otherwise making any public announcements
\nwith respect to the transactions contemplated by this Agreement and, except as
\nmay be required by applicable law or by the rules and regulations of the New
\nYork Stock Exchange or of The Nasdaq Stock Market, will not issue any such press
\nrelease or make any such announcement prior to such consultation.<\/p>\n
Section 6.10 Preservation of Programs and Agreements. From and after
\nthe date of this Agreement through the Closing Date, the Company will not enter
\ninto any agreement which it knows or has reason to know is reasonably likely to
\ncause a major customer of the Company or any of its Subsidiaries to terminate
\nany material program or agreement, the overall effect of which, after taking
\ninto account the anticipated benefits of the new agreement and the anticipated
\ndetriments of such termination, is reasonably likely to have a Company Material
\nAdverse Effect.<\/p>\n
Section 6.11 Actions Regarding Antitakeover Statutes. If any fair
\nprice, moratorium, control share acquisition or other form of antitakeover
\nstatute, rule or regulation is or becomes applicable to the transactions
\ncontemplated by this Agreement, the Board of Directors of the Company will grant
\nsuch approvals and take such other actions as may be required so that the
\ntransactions contemplated hereby may be consummated as promptly as practicable
\non the terms and conditions set forth in this Agreement.<\/p>\n
Section 6.12 Defense of Orders and Injunctions. In the event either
\nparty becomes subject to any order or injunction of a court of competent
\njurisdiction which prohibits the consummation of the transactions contemplated
\nby this Agreement, each party will use its best efforts to overturn or lift such
\norder or injunction. The foregoing will not be deemed to require the Parent
\nCorporation to enter into any agreement, consent decree or other commitment
\nrequiring the Parent Corporation or any of its Subsidiaries to divest or hold
\nseparate any assets or to take any other action which, individually or in the
\naggregate, is reasonably likely to have a Parent Corporation Material Adverse
\nEffect.<\/p>\n
Section 6.13 Employee Benefit Matters.<\/p>\n
(a) Subject to applicable collective bargaining
\n agreements, until (or in respect of the period ending on )
\n December 31, 2001, Parent Corporation shall cause to be
\n maintained for the employees and former employees of the
\n Company and its Subsidiaries (the “Employees”), benefits and
\n benefit levels which are, in<\/p>\n
32
\n 39<\/p>\n
the aggregate, substantially similar to benefits and benefit
\n levels as provided by the Company and its Subsidiaries through
\n any Company Plan that is an Employee Pension Benefit Plan, an
\n Employee Welfare Benefit Plan, or a fringe benefit program
\n (providing, for example, sick pay, vacation pay and tuition
\n reimbursement) prior to the Effective Time. Notwithstanding
\n the foregoing, without limitation, this Section 6.13(a) shall
\n not apply to any bonus, incentive, or equity-based
\n compensation plan or arrangement. Further, subject to Section
\n 6.3(k), this Section 6.13(a) shall not prohibit any change in
\n benefits or benefit levels adopted prior to the Effective Time
\n and effective on or after the Effective Time or any other
\n change in benefits (such as a change in vendor, co-pay,
\n deductible, lifetime maximum, etc.) that would have been made
\n by the Company in the ordinary course during the 2001 year to
\n reflect market conditions for the provision of these benefits.<\/p>\n
(b) The Parent Corporation will honor and will
\n cause the Surviving Corporation to honor, in accordance with
\n their respective terms, the Company Plans and all of the
\n Company’s other employee benefit, compensation, employment,
\n severance and termination plans, programs, policies, and
\n arrangements, including any rights or benefits arising as a
\n result of the transactions contemplated by this Agreement
\n (either alone or in combination with any other event).<\/p>\n
(c) Solely for purposes of eligibility and
\n vesting under the employee benefit plans of the Parent
\n Corporation and its Subsidiaries (including the Surviving
\n Corporation) providing benefits to any Employees after the
\n Effective Time, each Employee will be credited with his or her
\n years of service with the Company and its Subsidiaries (and
\n any predecessor entities thereof) before the Effective Time,
\n to the same extent as such employee was entitled, before the
\n Effective Time, to credit for such service under any similar
\n Company Plan. Following the Effective Time, the Parent
\n Corporation will, or will cause its Subsidiaries to, (i) waive
\n any pre-existing condition limitation under any Employee
\n Welfare Benefit Plan maintained by the Parent Corporation or
\n any of its Subsidiaries in which Employees and their eligible
\n dependents participate (except to the extent that such
\n pre-existing condition limitation would have been applicable
\n under the comparable Company Employee Welfare Benefit Plans
\n immediately prior to the Effective Time), and (ii) provide
\n each Employee with credit for any co-payments and deductibles
\n incurred prior to the Effective Time (or such earlier or later
\n transition date to new Employee Welfare Benefits Plans) for
\n the calendar year in which the Effective Time (or such earlier
\n or later transaction date) occurs, in satisfying any
\n applicable deductible or out-of-pocket requirements under any
\n welfare plans that the Employees participate in after the
\n Effective Time.<\/p>\n
33
\n 40<\/p>\n
(d) The Parent Corporation will, and will cause
\n the Surviving Corporation and their respective representatives
\n to, afford any officer (as of the Effective Time) of the
\n Company and any of his or her representatives reasonable
\n access, upon reasonable notice, to such books and records of
\n the Company and the Surviving Corporation as are reasonably
\n required by such officer to determine amounts owing to such
\n officer under any Company Plan.<\/p>\n
(e) The Parent Corporation and the Company agree
\n to implement the provisions of Section 6.13(e) of the Company
\n Disclosure Letter.<\/p>\n
(f) Subject to applicable collective bargaining
\n agreements, notwithstanding any provision to the contrary
\n contained in this Agreement, through the period ending on
\n December 31, 2001, the Parent Corporation and its Subsidiaries
\n (including the Surviving Corporation) will provide severance
\n benefits and severance compensation to the Employees that, in
\n the aggregate, are not less favorable to the Employees than
\n those provided by the Company under a Company Plan to the
\n Employees immediately prior to the Effective Time.<\/p>\n
(g) Nothing contained herein will create any
\n rights in any third party, including without limitation, any
\n right to employment or right to any particular benefit (except
\n as set forth in Sections 6.13(d) and (e)). Except as
\n specifically provided, nothing contained herein shall be
\n construed as prohibiting or restricting in any way the right
\n of the Parent Company or the Company (or any successor
\n thereto) to modify, amend or terminate any employee benefit
\n plan, program or arrangement in whole or in part at any time
\n after the Effective Time.<\/p>\n
(h) The Company agrees that an independent
\n trustee, either a bank or a trust company, will act with
\n respect to the Merger on behalf of each Company Plan (and its
\n participants) that holds Company Common Stock in accordance
\n with the terms and conditions of such Plan.<\/p>\n
Section 6.14 Standstill Provisions. The restrictions on the Parent
\nCorporation and the Acquisition Corporation contained in the Standstill
\nProvisions of the Confidentiality Agreement between the Parent Corporation and
\nthe Company are hereby waived by the Company to the extent reasonably required
\nto permit the Parent Corporation and the Acquisition Corporation to comply with
\ntheir obligations or enforce their rights under this Agreement.<\/p>\n
34
\n 41<\/p>\n
ARTICLE 7<\/p>\n
CONDITIONS TO THE CONSUMMATION OF THE MERGER<\/p>\n
Section 7.1 Conditions to the Obligations of Each Party. The respective
\nobligation of each party to effect the Merger is subject to the satisfaction at
\nor prior to the Closing Date of each of the following conditions:<\/p>\n
(a) the Company will have obtained the Company
\n Stockholder Approval;<\/p>\n
(b) all applicable waiting periods (and any extensions
\n thereof) under the HSR Act will have terminated or expired;<\/p>\n
(c) all other consents, authorizations, orders and
\n approvals of or filings with any governmental commission, board or
\n other regulatory authority (other than in its capacity as a customer of
\n the Company or its Subsidiaries) required in connection with the
\n consummation of the transactions contemplated by this Agreement will
\n have been obtained or made, except where the failure to obtain or make
\n such consents, authorizations, orders, approvals or filings, from and
\n after the Closing Date, individually or in the aggregate, are not
\n reasonably likely to have a Company Material Adverse Effect; and<\/p>\n
(d) no party will be subject to any order or injunction
\n of a court of competent jurisdiction or other legal restraint which
\n prohibits the consummation of the Merger.<\/p>\n
Section 7.2 Conditions to the Obligation of the Company. The obligation
\nof the Company to effect the Merger is subject to the satisfaction at or prior
\nto the Closing Date of each of the following conditions:<\/p>\n
(a) the representations and warranties of each of the
\n Parent Corporation and the Acquisition Corporation contained herein (i)
\n that are qualified as to materiality will be true and correct and (ii)
\n that are not qualified by materiality will be true and correct in all
\n material respects, in each case (i) and (ii), as of the date of this
\n Agreement and as of the Closing Date with the same effect as though
\n made as of the Closing Date, except that the accuracy of
\n representations and warranties that by their terms speak as of a
\n specified date will be determined as of such date; and<\/p>\n
(b) each of the Parent Corporation and the Acquisition
\n Corporation will have in all material respects performed and complied
\n with all of its obligations under this Agreement required to be
\n performed by it at or prior to the Closing Date.<\/p>\n
The Parent Corporation and the Acquisition Corporation will furnish the
\nCompany with a customary bring down certificate with respect to the satisfaction
\nof the conditions set forth in Sections 7.2(a) and (b).<\/p>\n
35
\n 42<\/p>\n
Section 7.3 Conditions to the Obligation of the Parent Corporation and
\nthe Acquisition Corporation. The obligation of the Parent Corporation and the
\nAcquisition Corporation to effect the Merger is subject to the satisfaction at
\nor prior to the Closing Date of each of the following conditions:<\/p>\n
(a) the representations and warranties of the Company
\n contained herein (i) that are subject to a Company Material Adverse
\n Effect qualification will be true and correct and (ii) that are not
\n subject to a Company Material Adverse Effect qualification will be true
\n and correct, except that this clause (ii) will be deemed satisfied so
\n long as any failures of such representations and warranties, taken
\n together, are not reasonable likely to have a Company Material Adverse
\n Effect, in each case (i) and (ii), as of the date of this Agreement and
\n as of the Closing Date with the same effect as though made as of the
\n Closing Date, except that the accuracy of representations and
\n warranties that by their terms speak as of a specified date will be
\n determined as of such date; and<\/p>\n
(b) the Company will have in all material respects
\n performed and complied with all of its obligations under this Agreement
\n required to be performed by it at or prior to the Closing Date;<\/p>\n
The Company will furnish the Parent Corporation with a customary bring
\ndown certificate with respect to the satisfaction of the conditions set forth in
\nSections 7.3(a) and (b) .<\/p>\n
Section 7.4 Frustration of Closing Conditions. None of the Company, the
\nParent Corporation or the Acquisition Corporation may rely on the failure of any
\ncondition set forth in Section 7.1, 7.2 or 7.3, as the case may be, to be
\nsatisfied if such party’s breach of this Agreement has been a principal reason
\nthat such condition has not been satisfied.<\/p>\n
ARTICLE 8<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
Section 8.1 Termination . This Agreement may be terminated and the
\nMerger may be abandoned at any time prior to the Effective Time (notwithstanding
\nthe receipt of the Company Stockholder Approval):<\/p>\n
(a) with the mutual written consent of the Parent
\n Corporation and the Company;<\/p>\n
(b) by the Parent Corporation or the Company if any court
\n of competent jurisdiction or other governmental agency has issued a
\n final order, decree or ruling or taken any other final action
\n restraining, enjoining or otherwise prohibiting the consummation of the
\n Merger, and such order, decree, ruling or other action is or has become
\n nonappealable;<\/p>\n
36
\n 43<\/p>\n
(c) by the Parent Corporation if (i) the Company has
\n breached any of its representations, warranties or covenants set forth
\n in this Agreement, which breach (A) would give rise to the failure of a
\n condition set forth in Section 7.3 and (B)is not cured within 30 days
\n after the date written notice of such breach is given by the Parent
\n Corporation to the Company, (ii) the Board of Directors of the Company
\n has withdrawn or amended in any manner adverse to the Parent
\n Corporation and the Acquisition Corporation its recommendation and
\n approval of the Merger, (iii) the Company Stockholder Approval has not
\n been obtained at a meeting duly called for such purpose or (iv) the
\n Merger has not been consummated on or before March 31, 2001; or<\/p>\n
(d) by the Company if (i) either the Parent Corporation
\n or the Acquisition Corporation has breached any of its representations,
\n warranties or covenants set forth in this Agreement, which breach (A)
\n would give rise to the failure of a condition set forth in Section 7.2
\n and (B) is not cured within 30 days after the date written notice of
\n such breach is given by the Company to the Parent Corporation, (ii) the
\n Company Stockholder Approval has not been obtained at a meeting called
\n for such purpose or (iii) the Merger has not been consummated on or
\n before March 31, 2001.<\/p>\n
Section 8.2 Effect of Termination. In the event of the termination and
\nabandonment of this Agreement pursuant to Section 8.1, this Agreement will
\nforthwith become void and will be deemed to have terminated without liability to
\nany party (except for any liability of any party then in willful material breach
\nof any covenant or agreement); provided that the provisions of the
\nConfidentiality Agreement and the last sentence of Section 6.5, this Section
\n8.2, Section 8.3 and Article 9 (other than the exception clause in Section 9.10)
\nof this Agreement will continue in full force and effect notwithstanding such
\ntermination and abandonment.<\/p>\n
37
\n 44<\/p>\n
Section 8.3 Termination Fee.<\/p>\n
(a) If an Acquisition Proposal has been made to the
\n Company or its stockholders or any person has announced an intention to
\n make an Acquisition Proposal and thereafter<\/p>\n
(i) the Parent Corporation terminates this
\n Agreement pursuant to Section 8.1(c)(ii) or Section
\n 8.1(c)(iii),<\/p>\n
(ii) the Company terminates this Agreement
\n pursuant to Section 8.1(d)(ii), or<\/p>\n
(iii) a vote of the stockholders of the Company
\n does not occur and either the Parent Corporation terminates
\n this Agreement pursuant to Section 8.1(c) (iv) or the Company
\n terminates this Agreement pursuant to Section 8.1(d)(iii)<\/p>\n
and<\/p>\n
(x) the Company enters into an agreement with
\n respect to a Third Party Acquisition within 12 months of the
\n date of such termination, or<\/p>\n
(y) a Third Party Acquisition occurs within 12
\n months after the date of such termination,<\/p>\n
then the Company will pay to the Parent Corporation, within one
\n business day following the occurrence of such event referred to in
\n clause (x) or clause (y), a termination fee equal to $10 million (the
\n “Termination Fee”), payable by wire transfer of immediately available
\n funds to an account designated by the Parent Corporation.<\/p>\n
(b) The term “Third Party Acquisition” as used in this
\n Agreement means (i) the acquisition of the Company by merger or
\n otherwise by any person (including for purposes of this Section 8.3(b)
\n any “person” or “group” as defined in Section 13(d)(3) of the
\n Securities Exchange Act) or entity other than the Parent Corporation or
\n any of its affiliates, (ii) the acquisition by any person or entity
\n other than the Parent Corporation or any of its affiliates of more than
\n 50 percent of the consolidated assets (determined based on book or fair
\n market value) of the Company and its Subsidiaries or (iii) the
\n acquisition by any person or entity other than the Parent Corporation
\n or any of its affiliates of more than 50 percent of the outstanding
\n shares of Company Common Stock, (iv) the adoption by the Company of any
\n plan of liquidation or the declaration by the Company of any
\n extraordinary dividend or distribution (including any distribution of
\n any shares of the capital stock of any material Subsidiary) of cash or
\n property constituting more than 50 percent of the consolidated assets
\n (determined based on book or fair market value) of the Company and its
\n Subsidiaries or (v) the purchase by the Company or any of its
\n Subsidiaries of more than 50 percent of the outstanding shares of
\n Company Common Stock.<\/p>\n
(c) Except as specifically provided in this Section 8.3,
\n each party will bear its own expenses incurred in connection with the
\n transactions contemplated by this Agreement, whether or not such
\n transactions are consummated.<\/p>\n
38
\n 45<\/p>\n
(d) The Company acknowledges that the agreements
\n regarding the payment of fees contained in this Section 8.3 are an
\n integral part of the transactions contemplated by this Agreement and
\n that, in the absence of such agreements, the Parent Corporation and the
\n Acquisition Corporation would not have entered into this Agreement. The
\n Company accordingly agrees that in the event the Company fails to pay
\n the Termination Fee promptly, the Company will in addition to the
\n payment of such amount also pay to the Parent Corporation all of the
\n reasonable costs and expenses (including reasonable attorneys’ fees and
\n expenses) incurred by the Parent Corporation in the enforcement of its
\n rights under this Section 8.3, together with interest on such amount at
\n a rate of 11 percent per annum from the date upon which such payment
\n was due, to and including the date of payment. Provided that the
\n Company was not in breach of the provisions of Section 6.7, payment of
\n the Termination Fee will constitute full and complete satisfaction, and
\n will constitute the Parent Corporation’s sole and exclusive remedy for
\n any loss, liability, damage or claim arising out of or in connection
\n with any such termination of this Agreement or the facts and
\n circumstances resulting in or related to this Agreement.<\/p>\n
ARTICLE 9<\/p>\n
MISCELLANEOUS<\/p>\n
Section 9.1 Nonsurvival of Representations. The representations and
\nwarranties contained in this Agreement will not survive the Merger or the
\ntermination of this Agreement.<\/p>\n
Section 9.2 Remedies. The parties agree that irreparable damage would
\noccur in the event that the provisions of this Agreement were not performed in
\naccordance with their specific terms. It is accordingly agreed that the parties
\nwill be entitled to specific performance of the terms of this Agreement, without
\nposting a bond or other security, this being in addition to any other remedy to
\nwhich they are entitled at law or in equity.<\/p>\n
Section 9.3 Successors and Assigns. No party hereto may assign or
\ndelegate any of such party’s rights or obligations under or in connection with
\nthis Agreement without the written consent of the other parties hereto. Except
\nas otherwise expressly provided herein, all covenants and agreements contained
\nin this Agreement by or on behalf of any of the parties hereto or thereto will
\nbe binding upon and enforceable against the respective successors and assigns of
\nsuch party and will be enforceable by and will inure to the benefit of the
\nrespective successors and permitted assigns of such party.<\/p>\n
Section 9.4 Amendment. This Agreement may be amended by the execution
\nand delivery of an written instrument by or on behalf of the Parent Corporation,
\nthe Acquisition Corporation and the Company at any time before or after the
\nCompany Stockholder Approval, provided that after the date of the Company
\nStockholder Approval, no amendment to this Agreement will be made without the
\napproval of stockholders of the Company to the extent such approval is required
\nunder the Virginia Act.<\/p>\n
39
\n 46<\/p>\n
Section 9.5 Extension and Waiver. At any time prior to the Effective
\nTime, the parties may extend the time for performance of or waive compliance
\nwith any of the covenants or agreements of the other parties to this Agreement
\nand may waive any breach of the representations or warranties of such other
\nparties. No agreement extending or waiving any provision of this Agreement will
\nbe valid or binding unless it is in writing and is executed and delivered by or
\non behalf of the party against which it is sought to be enforced.<\/p>\n
Section 9.6 Severability. Whenever possible, each provision of this
\nAgreement will be interpreted in such manner as to be effective and valid under
\napplicable law, but if any provision of this Agreement is held to be prohibited
\nby or invalid under applicable law, such provision will be ineffective only to
\nthe extent of such prohibition or invalidity, without invalidating the remainder
\nof this Agreement.<\/p>\n
Section 9.7 Counterparts. This Agreement may be executed simultaneously
\nin two or more counterparts, any one of which need not contain the signatures of
\nmore than one party, but all such counterparts taken together will constitute
\none and the same Agreement.<\/p>\n
Section 9.8 Descriptive Headings. The descriptive headings of this
\nAgreement are inserted for convenience only and do not constitute a part of this
\nAgreement.<\/p>\n
Section 9.9 Notices. All notices, demands or other communications to be
\ngiven or delivered under or by reason of the provisions of this Agreement will
\nbe in writing and will be deemed to have been given when delivered personally to
\nthe recipient or when sent to the recipient by telecopy (receipt confirmed), one
\nbusiness day after the date when sent to the recipient by reputable express
\ncourier service (charges prepaid) or three business days after the date when
\nmailed to the recipient by certified or registered mail, return receipt
\nrequested and postage prepaid. Such notices, demands and other communications
\nwill be sent to the Parent Corporation and the Company at the addresses
\nindicated below:<\/p>\n
If to the Parent
\n Corporation General Dynamics Corporation
\n 3190 Fairview Park Drive
\n Falls Church, Virginia 22041-4523
\n Attention: David A. Savner, Esq.
\n Senior Vice President and
\n General Counsel
\n Facsimile No: (703) 876-3125<\/p>\n
With a copy (which will
\n not constitute notice) to: Jenner & Block
\n One IBM Plaza, 40th Floor
\n Chicago, IL 60611
\n Attention: Charles J. McCarthy, Esq.
\n Facsimile No.: (312) 840-7745<\/p>\n
40
\n 47<\/p>\n
If to the Company: Primex Technologies, Inc.
\n 10101 9th Street North
\n St. Petersburg, FL 33716
\n Attention: George H. Pain
\n Vice President and
\n General Counsel
\n Facsimile No.: (727) 578-8286<\/p>\n
With a copy (which will
\n not constitute notice) to Cravath, Swaine & Moore
\n 825 Eighth Avenue
\n New York, NY 10019
\n Attention: Robert I. Townsend, III, Esq.
\n Facsimile No.: (212) 474-3700<\/p>\n
or to such other address or to the attention of such other party as the
\nrecipient party has specified by prior written notice to the sending party.<\/p>\n
Section 9.10 No Third Party Beneficiaries. This Agreement will not
\nconfer any rights or remedies upon any person or entity other than the Parent
\nCorporation, the Acquisition Corporation and the Company and their respective
\nsuccessors and permitted assigns, except that the respective beneficiaries as of
\nthe Closing Date of the provisions of Section 6.8 and Sections 6.13(d) and (e)
\nwill, for all purposes, be third party beneficiaries of the covenants and
\nagreements contained therein and, accordingly, will be treated as a party to
\nthis Agreement for purposes of the rights and remedies relating to enforcement
\nof such covenants and agreements and will be entitled to enforce any such rights
\nand exercise any such remedies directly against the Parent Corporation and the
\nSurviving Corporation.<\/p>\n
Section 9.11 Entire Agreement. This Agreement (including the
\nConfidentiality Agreement, the Company Disclosure Letter and the other documents
\nreferred to herein) constitutes the entire agreement among the parties and
\nsupersedes any prior understandings, agreements or representations by or among
\nthe parties, written or oral, that may have related in any way to the subject
\nmatter hereof.<\/p>\n
Section 9.12 Construction. The language used in this Agreement will be
\ndeemed to be the language chosen by the parties to express their mutual intent
\nand no rule of strict construction will be applied against any party. The use of
\nthe word “including” in this Agreement means “including without limitation” and
\nis intended by the parties to be by way of example rather than limitation. As
\nused in this Agreement, the qualification “to the Company’s knowledge” and
\nclauses of similar effect will mean the actual knowledge by any executive
\nofficer of the Company or of its Subsidiaries (or other officer or manager of
\nthe Company or of its Subsidiaries if such officer or manager has primary
\nresponsibility over the subject matter in question) of the <\/p>\n
41
\n 48<\/p>\n
existence or absence of facts which would contradict a particular representation
\nand warranty of the Company.<\/p>\n
Section 9.13 Submission to Jurisdiction. Each of the parties to this
\nAgreement submits to the jurisdiction of any state or federal court sitting in
\nAlexandria, Virginia, in any action or proceeding arising out of or relating to
\nthis Agreement, agrees that all claims in respect of the action or proceeding
\nmay be heard and determined in any such court, and agrees not to bring any
\naction or proceeding arising out of or relating to this Agreement in any other
\ncourt. Each of the parties to this Agreement waives any defense of inconvenient
\nforum to the maintenance of any action or proceeding so brought and waives any
\nbond, surety or other security that might be required of any other party with
\nrespect thereto.<\/p>\n
Section 9.14 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
\nVALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE SCHEDULES HERETO WILL BE
\nGOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE COMMONWEALTH
\nOF VIRGINIA, EXCEPT THE DELAWARE ACT SHALL GOVERN THE CORPORATE MERGER
\nPROCEDURES AND EFFECT WITH RESPECT TO THE ACQUISITION CORPORATION.<\/p>\n
* * * *<\/p>\n
42
\n 49<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
\nAgreement on the date first written above.<\/p>\n
GENERAL DYNAMICS CORPORATION<\/p>\n
By: \/s\/ Nicholas D. Chabraja
\n —————————————
\n Nicholas D. Chabraja
\n Chairman and Chief Executive Officer<\/p>\n
MARS ACQUISITION CORPORATION<\/p>\n
By: \/s\/ Arthur J. Veith
\n —————————————
\n Arthur J. Veitch
\n President<\/p>\n
PRIMEX TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ James G. Hascall
\n —————————————
\n James G. Hascall
\n Chairman and Chief Executive Officer<\/p>\n
43<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7614],"corporate_contracts_industries":[9475],"corporate_contracts_types":[9622,9626],"class_list":["post-43054","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-general-dynamics-corp","corporate_contracts_industries-aerospace__ships","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43054"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43054"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43054"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}