\n Section 6.14 Defense of Orders and Injunctions………………………………………………………………….39
\n Section 6.15 Affiliate Letters………………………………………………………………………………..39
\n Section 6.16 Preservation of Accounting and Tax Treatment………………………………………………………..39
\n Section 6.17 Accountant’s Comfort Letters………………………………………………………………………39
\n Section 6.18 Registration Agreement……………………………………………………………………………40
\n Section 6.19 New York Stock Exchange Quotation………………………………………………………………….40
\n Section 6.20 Publishing Financial Results………………………………………………………………………40
\n Section 6.21 Employee Benefit Matters………………………………………………………………………….40
\n Section 6.22 Directors of the Surviving Corporation……………………………………………………………..41<\/p>\nARTICLE 7 CONDITIONS TO THE CONSUMMATION OF THE MERGER……………………………………………………………..41
\n Section 7.1 Conditions to the Obligations of Each Party…………………………………………………………41
\n Section 7.2 Conditions to the Obligation of the Company…………………………………………………………42
\n Section 7.3 Conditions to the Obligation of the Parent Corporation
\n and the Acquisition Corporation……………………………………………………………………43<\/p>\n
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER……………………………………………………………………….44
\n Section 8.1 Termination……………………………………………………………………………………..44
\n Section 8.2 Effect of Termination…………………………………………………………………………….45
\n Section 8.3 Termination Fee………………………………………………………………………………….45<\/p>\n
ARTICLE 9 MISCELLANEOUS…………………………………………………………………………………………46
\n Section 9.1 Nonsurvival of Representations…………………………………………………………………….46
\n Section 9.2 Remedies………………………………………………………………………………………..47
\n Section 9.3 Successors and Assigns……………………………………………………………………………47
\n Section 9.4 Amendment……………………………………………………………………………………….47
\n Section 9.5 Extension and Waiver……………………………………………………………………………..47
\n Section 9.6 Severability…………………………………………………………………………………….47
\n Section 9.7 Counterparts…………………………………………………………………………………….47
\n Section 9.8 Descriptive Headings……………………………………………………………………………..47
\n Section 9.9 Notices…………………………………………………………………………………………47
\n Section 9.10 No Third Party Beneficiaries………………………………………………………………………49
\n Section 9.11 Entire Agreement…………………………………………………………………………………49
\n Section 9.12 Construction…………………………………………………………………………………….49
\n Section 9.13 Submission to Jurisdiction………………………………………………………………………..49
\n Section 9.14 Governing Law……………………………………………………………………………………49
\n<\/c><\/s><\/table>\n
EXHIBITS
\n——–<\/p>\n
Exhibit A-1 – Form of Company Affiliate Letter
\nExhibit A-2 – Form of Parent Corporation Affiliate Letter
\nExhibit B-1 – Form of Company Tax Representations
\nExhibit B-2 – Form of Parent Corporation Tax Representations<\/p>\n
-iv-<\/p>\n
5<\/p>\n
TABLE OF DEFINED TERMS<\/p>\n
Acquisition Corporation Preamble
\nAcquisition Proposal Section 6.8(g)
\nApplicable Period Section 6.8(b)
\nAverage Stock Price Section 8.1(f)
\nCertificate Section 3.1(a)
\nCharter Amendment Section 2.2(a)
\nClosing Section 1.2
\nClosing Date Section 1.2
\nCode Section 4.10(f)
\nCompany Preamble
\nCompany Common Stock Section 1.8(a)
\nCompany Disclosure Letter Section 4
\nCompany Form 10-Q Section 4
\nCompany Material Adverse Effect Section 4.1
\nCompany Plans Section 4.11(a)
\nCompany SEC Documents Section 4.5(a)
\nCompany Stockholder Approval Section 2.1(a)
\nCompany Stockholders Meeting Section 2.1(a)
\nConfidentiality Agreement Section 6.6
\nContinuing Employees Section 6.21(a)
\nDaily Per Share Price Section 8.1(f)
\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)
\nEnvironmental Law Section 4.12(b)
\nERISA Section 4.11(a)
\nExchange Agent Section 3.1
\nExchange Fund Section 3.2(a)
\nHazardous Materials Section 4.12(c)
\nHSR Act Section 4.3
\nIndemnified Parties Section 6.9(a)
\nIntellectual Property Section 4.14(b)
\nJoint Proxy Statement Section 2.1(b)
\nLien Section 4.3
\nMerger Section 1.1
\nMerger Consideration Section 1.8(c)
\nMultiemployer Plan Section 4.11(a)
\nParent Common Stock Section 1.8(a)
\nParent Corporation Preamble
\nParent Corporation Disclosure Letter Section 5
\nParent Corporation Form 10-Q Section 5<\/p>\n
-v-<\/p>\n
6<\/p>\n
Parent Corporation Material Adverse Effect Section 5.1
\nParent Corporation Plans Section 5.11(a)
\nParent Corporation Stockholder Approval Section 2.2(a)
\nParent Corporation Stockholders Meeting Section 2.2(a)
\nPermitted Liens Section 4.13
\nRegistration Statement Section 2.2(b)
\nSEC Section 2.1(b)
\nSecurities Act Section 2.1(b)
\nSecurities Exchange Act Section 1.9(d)
\nStandstill Provisions Section 6.8(e)
\nStock Options Section 1.9(a)
\nStock Plans Section 1.9(a)
\nSubsidiary Section 1.8(d)
\nSuperior Acquisition Proposal Section 6.8(h)
\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)<\/p>\n
-vi-<\/p>\n
7<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
AGREEMENT AND PLAN OF MERGER dated as of May 16, 1999 among General
\nDynamics Corporation, a Delaware corporation (the “Parent Corporation”), Tara
\nAcquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
\nthe Parent Corporation (the “Acquisition Corporation”), and Gulfstream Aerospace
\nCorporation, a Delaware corporation (the “Company”).<\/p>\n
The Boards of Directors of the Parent Corporation and the Company
\nhave each determined that a business combination between the Parent Corporation
\nand the Company is desirable and in the best interests of the Parent Corporation
\nand the Company and their respective stockholders. The Boards of Directors of
\nthe Parent Corporation and the Company accordingly have each duly adopted
\nresolutions approving this Agreement and the transactions contemplated hereby.<\/p>\n
It is intended that the merger provided for in this Agreement will
\nqualify as a reorganization within the meaning of Section 368 of the Internal
\nRevenue Code of 1986, as amended, and that for financial accounting purposes the
\nmerger will be accounted for as a pooling of interests.<\/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”). Following the Merger, the Company will continue as the
\nsurviving corporation (the “Surviving Corporation”) and the separate corporate
\nexistence of 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, on the first business day following the satisfaction or
\nwaiver of the conditions set forth in Article 7 (other than those conditions
\nthat by their nature are to be satisfied at the Closing, but subject to the
\nsatisfaction<\/p>\n
8<\/p>\n
or, where 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
Section 1.3 Effective Time. The Merger will be consummated by the
\nfiling of a certificate of merger with the Secretary of State of the State of
\nDelaware in accordance with Section 251(c) of the Delaware Act. The time the
\nMerger becomes effective in accordance with Sections 103 and 251 of the Delaware
\nAct is referred to in this Agreement as the “Effective Time.”<\/p>\n
Section 1.4 Effects of the Merger. The Merger will have the effects
\nset forth in the Delaware Act. Without limiting the generality of the foregoing,
\nas of the Effective Time, all properties, rights, privileges, powers and
\nfranchises of the Company and the Acquisition Corporation will vest in the
\nSurviving Corporation and all debts, liabilities and duties of the Company and
\nthe Acquisition Corporation will become debts, liabilities and duties of the
\nSurviving Corporation.<\/p>\n
Section 1.5 Certificate of Incorporation and Bylaws. At the Effective
\nTime, the Certificate of Incorporation and Bylaws of the Acquisition Corporation
\nin the respective forms delivered by the Parent Corporation to the Company prior
\nto the date of this Agreement will be amended and restated to change the name of
\nthe Acquisition Corporation to “Gulfstream Aerospace Corporation” or such other
\nname as the Parent Corporation may determine. The Certificate of Incorporation
\nand Bylaws of the Acquisition Corporation, as so amended and restated, will be
\nthe Certificate of Incorporation and Bylaws of the Surviving Corporation.<\/p>\n
Section 1.6 Directors. Subject to the provisions of Section 6.22, the
\ndirectors of the Acquisition Corporation at the Effective Time will be the
\ninitial directors of the Surviving Corporation and will hold office from the
\nEffective Time until their respective successors are duly elected or appointed
\nand qualified in the manner provided in the Certificate of Incorporation and
\nBylaws of the Surviving Corporation or as otherwise provided by law.<\/p>\n
Section 1.7 Officers. The officers of the Company at the Effective
\nTime will be the initial officers of the Surviving Corporation and will hold
\noffice from the Effective Time until their respective successors are duly
\nelected or appointed and qualified in the manner provided in the Certificate of
\nIncorporation and Bylaws of the Surviving Corporation or as otherwise provided
\nby law.<\/p>\n
Section 1.8 Conversion of Company Common Stock.<\/p>\n
(a) Subject to the provisions of Section 1.8(b), each share of the
\n Company’s Common Stock, par value $.01 per share (the “Company Common
\n Stock”), issued and outstanding immediately prior to the Effective Time
\n (other than shares of Company Common Stock held in the treasury of the
\n Company, held by any Subsidiary (as defined in Section 1.8(d)) of the
\n Company or held by the Parent Corporation or any Subsidiary of the Parent
\n Corporation) will, by virtue of the Merger and without any action on the
\n part of the holder thereof, be canceled and converted into the right to
\n receive, upon the<\/p>\n
-2-
\n 9<\/p>\n
surrender of the certificate formerly representing such share, one share
\n of the Parent Corporation’s Common Stock, par value $1.00 per share (the
\n “Parent Common Stock”). In the event that, subsequent to the date of this
\n Agreement but prior to the Effective Time, the outstanding shares of
\n Parent Common Stock or Company Common Stock are changed into a different
\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, the
\n number of shares of Parent Common Stock into which each share of Company
\n Common Stock will be converted as a result of the Merger will be adjusted
\n appropriately and provisions will be made for appropriate payments of
\n cash in lieu of the issuance of fractional shares of Parent Common Stock.<\/p>\n
(b) Each share of Company Common Stock held in the treasury of the
\n Company, held by any Subsidiary of the Company or held by the Parent
\n Corporation or any Subsidiary of the Parent Corporation immediately prior
\n to the Effective Time will, by virtue of the Merger and without any
\n action on the part of the holder thereof, be canceled and retired and
\n will cease to exist. For purposes of this Section 1.8(b), shares of
\n Company Common Stock owned beneficially or held of record by any plan,
\n program or arrangement sponsored or maintained for the benefit of any
\n current or former employee of the Company, the Parent Corporation or any
\n of their respective Subsidiaries will not be deemed to be held by the
\n Company, the Parent Corporation or any such Subsidiary, regardless of
\n whether the Company, the Parent Corporation or any such Subsidiary has
\n the power, directly or indirectly, to vote or control the disposition of
\n such shares.<\/p>\n
(c) The shares of Parent Common Stock to be issued upon the
\n conversion of shares of Company Common Stock pursuant to Section 1.8(a)
\n and any cash to be paid in lieu of fractional shares of Parent Common
\n Stock pursuant to Section 1.8(a) are referred to in this Agreement
\n collectively as the “Merger Consideration.”<\/p>\n
(d) The term “Subsidiary” as used in this Agreement means any
\n corporation, partnership, limited liability company or other business
\n entity 50 percent or more of the outstanding voting equity securities of
\n which are owned, directly or indirectly, by the Company or the Parent
\n Corporation, as applicable.<\/p>\n
Section 1.9 Stock Options.<\/p>\n
(a) The Parent Corporation and the Company will take all necessary
\n actions to cause each option to purchase shares of Company Common Stock
\n (a “Stock Option”) granted under any stock option plan, program,
\n agreement or arrangement of the Company or any of its Subsidiaries
\n (collectively, the “Stock Plans”) which is outstanding and unexercised
\n immediately prior to the Effective Time to be converted at the Effective
\n Time into an option to purchase the same number of shares of Parent
\n Common Stock that could have been obtained upon the exercise of such
\n Stock Option immediately prior to the Effective Time and the conversion
\n and exchange of the shares of Company Common Stock issued upon such
\n exercise for shares of Parent Common <\/p>\n
-3-
\n 10<\/p>\n
Stock as provided in Section 1.8(a). The exercise price per share
\n applicable to each such converted stock option will be the same as was
\n applicable to such Stock Option immediately prior to the Effective Time
\n (subject to adjustment pursuant to the last sentence of Section 1.8(a)).
\n Upon and following the conversion of the Stock Options pursuant to this
\n Section 1.9(a), each converted stock option will be subject to the same
\n terms and conditions as in effect immediately prior to the Effective
\n Time; provided that (i) if a form of agreement evidencing the Stock
\n Option provides for acceleration of vesting of the Stock Option upon the
\n Merger, the converted stock option will be so vested following the Merger
\n and (ii) consistent with the forms of stockholder’s agreements in use by
\n the Company prior to the date hereof, upon exercise of any converted
\n stock option, there will be no obligation that the holder thereof execute
\n a stockholder’s agreement.<\/p>\n
(b) The Company and the Parent Corporation acknowledge that,
\n consistent with the terms of such stockholder’s agreements, any
\n stockholder’s agreement entered into prior to the Effective Time by
\n reason of the exercise of a Stock Option or otherwise will cease to be of
\n any force or effect upon and following the Effective Time.<\/p>\n
(c) The Parent Corporation will take all corporate action
\n necessary to reserve for issuance a sufficient number of shares of Parent
\n Common Stock for delivery upon exercise of all of the Stock Options
\n converted into options to purchase Parent Common Stock pursuant to
\n Section 1.9(a). Not later than one day following the Effective Time, the
\n Parent Corporation will file a registration statement on Form S-8 (or any
\n successor or other appropriate form) with respect to the shares of Parent
\n Common Stock subject to the converted stock options and will deliver
\n prospectuses to the holders of such stock options. Following the
\n Effective Time, the Parent Corporation will use all reasonable efforts to
\n maintain the effectiveness of the foregoing registration statement (and
\n maintain the current status of the prospectus or prospectuses contained
\n therein) for so long as any of the converted stock options remain
\n outstanding and unexercised.<\/p>\n
(d) At the Effective Time, the Parent Corporation will assume the
\n obligations of the Company under the Stock Plans as in effect at the
\n Effective Time. No additional Stock Options will be granted pursuant to
\n the Stock Plans after the Effective Time.<\/p>\n
(e) The Board of Directors or Compensation Committee of the
\n Company and the Parent Corporation will each grant all approvals and take
\n all other actions required pursuant to Rules 16b-3(d) and 16b-3(e) under
\n the Securities Exchange Act of 1934, as amended (together with the rules
\n and regulations of the SEC thereunder, the “Securities Exchange Act”), to
\n cause the disposition in the Merger of Company Common Stock and Stock
\n Options and the acquisition in the Merger of Parent Common Stock and
\n options to acquire Parent Common Stock to be exempt from the provisions
\n of Section 16(b) of the Securities Exchange Act.<\/p>\n
-4-
\n 11<\/p>\n
Section 1.10 Conversion of Acquisition Corporation Common Stock.
\n Each share of the Common Stock, par value $1.00 per share, of the
\n Acquisition Corporation issued and outstanding immediately prior to the
\n Effective Time will, by virtue of the Merger and without any action on
\n the part of the holder thereof, be converted into one share of the Common
\n Stock, par value $1.00 per share, of the Surviving Corporation.<\/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, its Certificate of Incorporation
\nand Bylaws and the rules of the New York Stock Exchange, will:<\/p>\n
(a) duly call, give notice of, convene and hold a special meeting
\n of its stockholders (the “Company Stockholders Meeting”), to be held as
\n soon as practicable after the date of this Agreement, for the purpose of
\n submitting this Agreement for adoption and approval by the holders of a
\n majority of the outstanding shares of Company Common Stock (the “Company
\n Stockholder Approval”);<\/p>\n
(b) cooperate with the Parent Corporation in preparing and filing
\n with the Securities and Exchange Commission (the “SEC”) as promptly as
\n practicable after the date of this Agreement a Joint Proxy
\n Statement\/Prospectus and related materials (the “Joint Proxy Statement”)
\n with respect to the Company Stockholders Meeting satisfying the
\n requirements of the Securities Act of 1933, as amended (together with the
\n rules and regulations of the SEC thereunder, the “Securities Act”), and
\n the Securities Exchange Act, respond promptly to any comments raised by
\n the SEC with respect to the preliminary version of the Joint Proxy
\n Statement, and cause the definitive version of the Joint Proxy Statement
\n to be mailed to its stockholders as soon as it is legally permitted to do
\n so;<\/p>\n
(c) subject to the provisions of Section 6.8, include in the Joint
\n Proxy Statement (i) the recommendation of the Board of Directors of the
\n Company that the stockholders of the Company vote in favor of the
\n adoption and approval of this Agreement and the transactions contemplated
\n hereby and (ii) the written opinion dated as of the date of this
\n Agreement of Merrill Lynch & Co., financial advisor to the Board of
\n Directors of the Company, to the effect that as of the date of this
\n Agreement the Merger Consideration is fair to the stockholders of the
\n Company, other than the Parent Corporation and its affiliates, from a
\n financial point of view; and<\/p>\n
(d) provide the Parent Corporation with the information concerning
\n the Company required to be included in the Joint Proxy Statement and the
\n Registration Statement (as defined in Section 2.2(b)).<\/p>\n
-5-
\n 12<\/p>\n
Section 2.2 Parent Corporation Actions. The Parent Corporation,
\nacting through its Board of Directors, in accordance with applicable law, its
\nCertificate of Incorporation and Bylaws and the rules of the New York Stock
\nExchange, will:<\/p>\n
(a) duly call, give notice of, convene and hold a special meeting
\n of its stockholders (the “Parent Corporation Stockholders Meeting”), to
\n be held as soon as practicable after the date of this Agreement, for the
\n purpose of submitting for the approval of the holders of a majority of
\n the outstanding shares of Parent Common Stock (the “Parent Corporation
\n Stockholder Approval”) the proposals adopted by the Board of Directors of
\n the Parent Corporation to (i) amend and restate the Certificate of
\n Incorporation of the Parent Corporation to increase the number of shares
\n of Parent Common Stock the Parent Corporation is authorized to issue to
\n 300,000,000 shares (the “Charter Amendment”) and (ii) issue shares of
\n Parent Common Stock pursuant to the Merger;<\/p>\n
(b) file with the SEC as promptly as practicable after the date of
\n this Agreement a Registration Statement on Form S-4 (which will include
\n the Joint Proxy Statement) complying in all material respects with the
\n Securities Act and the Securities Exchange Act registering the issuance
\n of the Parent Common Stock proposed to be issued by the Parent
\n Corporation pursuant to the Merger (the “Registration Statement”),
\n respond promptly to any comments raised by the SEC with respect to the
\n preliminary version of the Joint Proxy Statement or the Registration
\n Statement, use its best efforts to cause the Registration Statement to be
\n declared effective by the SEC as promptly as practicable and cause the
\n definitive version of the Joint Proxy Statement to be mailed to its
\n stockholders as soon as it is legally permitted to do so;<\/p>\n
(c) provide the Company with the information concerning the Parent
\n Corporation and the Acquisition Corporation required to be included in
\n the Joint Proxy Statement; and<\/p>\n
(d) include in the Joint Proxy Statement (i) the recommendation of
\n the Board of Directors of the Parent Corporation that the stockholders of
\n the Parent Corporation vote in favor of the Charter Amendment and the
\n issuance of shares of Parent Common Stock pursuant to the Merger and (ii)
\n the written opinion dated as of May 13, 1999 of Bear Stearns & Co.,
\n financial advisor to the Board of Directors of the Parent Corporation, to
\n the effect that the Merger is fair, from a financial point of view, to
\n the Parent Corporation and its stockholders.<\/p>\n
Section 2.3 Cooperation. Each party will promptly advise the other of its
\nreceipt of, and will promptly furnish the other party with copies of, all
\ncomments received from the SEC with respect to the Registration Statement and
\nthe Joint Proxy Statement and will consult with the other party in responding to
\nsuch comments.<\/p>\n
-6-
\n 13<\/p>\n
ARTICLE 3<\/p>\n
EXCHANGE OF CERTIFICATES<\/p>\n
Section 3.1 Exchange 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 surrender thereof to an exchange
\nagent to be designated by the parties (the “Exchange Agent”), the Merger
\nConsideration into which the shares of Company Common Stock evidenced by such
\nCertificate were converted pursuant to the Merger. No interest will be payable
\non the Merger Consideration to be paid to any holder of a Certificate
\nirrespective of the time at which such Certificate is surrendered for exchange.
\nCertificates surrendered for exchange by any holder that is an “affiliate” of
\nthe Company for purposes of Rule 145(c) under the Securities Act will not be
\nexchanged until the Parent Corporation has received a letter from such holder as
\nprovided in Section 6.15.<\/p>\n
Section 3.2 Exchange Agent; Exchange Procedures.<\/p>\n
(a) As soon as reasonably practicable following the Effective
\n Time, the Parent Corporation will deposit, or cause to be deposited, with
\n the Exchange Agent, in trust for the benefit of holders of Certificates,
\n certificates representing the Merger Consideration and the amount of any
\n dividends or distributions payable in accordance with the provisions of
\n Section 3.2(b) (the “Exchange Fund”).<\/p>\n
(b) As soon as reasonably practicable after the Effective Time,
\n the Parent Corporation will instruct the Exchange Agent to mail to each
\n record holder of a Certificate (i) a letter of transmittal (which will
\n specify that delivery will be effected, and risk of loss and title to
\n such Certificates will pass, only upon delivery of the Certificate to the
\n Exchange Agent and will be in such form and have such other provisions as
\n the Parent Corporation will reasonably specify) and (ii) instructions for
\n use in effecting the surrender of Certificates for certificates
\n representing shares of Parent Common Stock. Commencing immediately after
\n the Effective Time, upon the surrender to the Exchange Agent of such
\n Certificate or Certificates, together with a duly executed and completed
\n letter of transmittal and all other documents and other materials
\n required by the Exchange Agent to be delivered in connection therewith,
\n the holder will be entitled to receive a certificate or certificates
\n representing the number of shares of Parent Common Stock into which the
\n Certificate or Certificates so surrendered have been converted in
\n accordance with the provisions of Section 1.8. Unless and until any
\n Certificate or Certificates are so surrendered, no dividend or other
\n distribution, if any, payable to the holders of record of shares of
\n Parent Common Stock as of any date subsequent to the Effective Time will
\n be paid to the holders of such Certificate or Certificates in respect of
\n the shares of Parent Common Stock into which such Certificates are
\n convertible. Upon the surrender of any Certificate or Certificates, the
\n record holder of the certificate or certificates representing shares of
\n Parent Common Stock issued in exchange therefor will be entitled to
\n receive (i) at the time of surrender, the amount of any dividends or
\n other distributions (net of any applicable tax <\/p>\n
-7-
\n 14<\/p>\n
withholdings) having a record date after the Effective Time and a payment
\n date prior to the surrender date, payable in respect of such shares of
\n Parent Common Stock and (ii) at the appropriate payment date, the amount
\n of dividends or other distributions (net of any applicable tax
\n withholdings) having a record date after the Effective Time and a payment
\n date subsequent to the date of such surrender, payable in respect of such
\n shares of Parent Common Stock.<\/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 records of the
\nCompany at the Effective Time, a certificate or certificates representing the
\nnumber of shares of Parent Common Stock into which such Company Common Stock has
\nbeen converted in the Merger will be issued to the transferee together with a
\ncash payment in respect of dividends and distributions, if any, in accordance
\nwith the provisions of Section 3.2(b), only if the Certificate is surrendered as
\nprovided in Section 3.1, accompanied by all documents required to evidence and
\neffect such transfer and by evidence of payment of any applicable stock transfer
\ntaxes.<\/p>\n
Section 3.4 Termination of Exchange Fund. Any portion of the Exchange
\nFund which remains undistributed one year after the Effective Time will be
\ndelivered to the Parent Corporation upon demand, and each holder of Company
\nCommon Stock who has not theretofore surrendered Certificates in accordance with
\nthe provisions of this Article 3 will thereafter look only to the Parent
\nCorporation for satisfaction of such holder’s claims for shares of Parent Common
\nStock and any dividends or distributions payable in accordance with the
\nprovisions of Section 3.2(b).<\/p>\n
Section 3.5 Lost Certificates. If any Certificate has been lost,
\nstolen or 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 Surviving Corporation, the posting by such person of a bond in such
\nreasonable amount as the Surviving Corporation may direct as indemnity against
\nany claim that may be made against it with respect to such Certificate, the
\nExchange Agent will deliver in exchange for such lost, stolen or destroyed
\ncertificate the shares of Parent Common Stock issuable pursuant to Section 1.8,
\nand unpaid dividends and distributions, if any, on shares of Parent Common Stock
\ndeliverable in respect thereof, pursuant to this Agreement.<\/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 and the right to receive dividends and distributions, if any, in
\naccordance with the provisions of Section 3.2(b).<\/p>\n
-8-
\n 15<\/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 required by law to be deducted
\nor 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 exchange prior to the
\nsixth anniversary of the Closing Date, or prior to such earlier date as of which
\nsuch Certificate or the Merger Consideration payable upon the surrender thereof
\nwould 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 and
\npublicly available prior to the date of this Agreement, as disclosed in the
\ndraft of the Quarterly Statement on Form 10-Q for the Company’s fiscal quarter
\nended March 31, 1999 (the “Company Form 10-Q”) delivered to the Parent
\nCorporation prior to the date of this Agreement or as disclosed in the letter
\ndated as of the date of this Agreement from the Company to the Parent
\nCorporation (the “Company Disclosure Letter”):<\/p>\n
Section 4.1 Organization. The Company and each of its Subsidiaries is
\na corporation duly organized and validly existing under the laws of the
\njurisdiction of its incorporation and has all requisite power and authority to
\nown, lease and operate its properties and to carry on its business as presently
\nbeing conducted. The Company and each of its Subsidiaries is in good standing
\nunder the laws of the jurisdiction of its incorporation and is duly qualified to
\nconduct business as a foreign corporation in each other jurisdiction where such
\nqualification is required, except where the failure to be so qualified and in
\ngood standing would not have a material adverse effect on the business,
\nfinancial condition, operations or results of operations of the Company and its
\nSubsidiaries taken as a whole or the ability of the Company to consummate the
\nMerger and to perform its obligations under this Agreement (a “Company Material
\nAdverse Effect”). The Company has delivered to the Parent Corporation correct
\nand complete copies of its charter and bylaws, as presently in effect, and will
\nmake available to the Parent Corporation after the date of this Agreement
\ncorrect and complete copies of the charter and bylaws, as presently in effect,
\nof each of its 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<\/p>\n
-9-
\n 16<\/p>\n
consummate the Merger and the other transactions contemplated hereby and to
\nperform its obligations hereunder. The Board of Directors of the Company, at a
\nmeeting thereof duly called and held, has duly adopted resolutions by the
\nrequisite majority vote approving this Agreement, the Merger and the other
\ntransactions contemplated hereby, determining that the terms and conditions of
\nthis Agreement, the Merger and the other transactions contemplated hereby are
\nfair to and in the best interests of the Company and its stockholders and
\nrecommending that the Company’s stockholders adopt and approve this Agreement.
\nThe foregoing resolutions of the Board of Directors of the Company have not been
\nmodified, supplemented or rescinded and remain in full force and effect as of
\nthe date of this Agreement. In connection with its adoption of the foregoing
\nresolutions, the Board of Directors of the Company received the written opinion
\nof Merrill Lynch & Co., financial advisor to the Board of Directors of the
\nCompany, dated as of the date of this Agreement to the effect that, as of such
\ndate, the Merger Consideration is fair to the stockholders of the Company, other
\nthan the Parent Corporation and its affiliates, from a financial point of view.
\nThe foregoing opinion has not been modified, supplemented or rescinded prior to
\nthe date of this Agreement. The Company will deliver to the Parent Corporation
\npromptly after the date of this Agreement correct and complete copies of the
\nforegoing resolutions and opinion. This Agreement constitutes the valid and
\nlegally binding obligation of the Company, enforceable against the Company in
\naccordance with its terms and conditions.<\/p>\n
Section 4.3 Noncontravention; Consents. Except for (a) certain
\nfilings and approvals necessary to comply with the applicable requirements of
\nthe Securities Act, the Securities Exchange Act and the “blue sky” laws and
\nregulations of various states, (b) certain filings and approvals necessary to
\ncomply with the requirements of the New York Stock Exchange with respect to the
\ndelisting of the Company Common Stock, (c) the filing of a Notification and
\nReport Form and related material with the Federal Trade Commission and the
\nAntitrust Division of the United States Department of Justice under the
\nHart-Scott-Rodino Act of 1976, as amended (the “HSR Act”), (d) certain filings
\nand approvals which may be necessary to comply with the rules and regulations of
\nthe Federal Aviation Administration and (e) the filing of a certificate of
\nmerger pursuant to the Delaware Act, neither the execution and delivery of this
\nAgreement by the Company, nor the consummation by the Company of the
\ntransactions contemplated hereby, will constitute a violation of, be in conflict
\nwith, constitute or create (with or without notice or lapse of time or both) a
\ndefault under, give rise to any right of termination, cancellation, amendment or
\nacceleration with respect to, or result in the creation or imposition of any
\nlien, encumbrance, security interest or other claim (a “Lien”) upon any property
\nof the Company or any of its Subsidiaries pursuant to (i) the charter or bylaws
\nof the Company or any of its Subsidiaries, (ii) any constitutional provision,
\nlaw, rule, regulation, permit, order, writ, injunction, judgment or decree to
\nwhich the Company or any of its Subsidiaries is subject or (iii) any agreement
\nor commitment 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, would not have a Company
\nMaterial Adverse Effect.<\/p>\n
-10-
\n 17<\/p>\n
Section 4.4 Capitalization.<\/p>\n
(a) As of the date of this Agreement, the authorized capital stock
\n of the Company consists of 300,000,000 shares of Company Common Stock. As
\n of May 2, 1999, 71,607,043 shares of Company Common Stock were issued and
\n outstanding, 18,212,231 shares were held by the Company as treasury
\n shares and 4,715,946 shares were reserved for issuance upon the exercise
\n of outstanding Stock Options. All of the issued and outstanding shares of
\n capital stock of the Company have been duly authorized and are validly
\n issued, fully paid and nonassessable.<\/p>\n
(b) Other than Stock Options to acquire an aggregate of 4,715,946
\n shares of Company Common Stock granted by the Company to current and
\n former directors, officers, employees and advisors of the Company and its
\n Subsidiaries pursuant to the Stock Plans, there are no outstanding or
\n authorized options, warrants, purchase rights, subscription rights,
\n conversion rights, exchange rights or other contracts or commitments that
\n could require the Company or any of its Subsidiaries to issue, sell or
\n otherwise cause to become outstanding any of its capital stock. There are
\n no outstanding stock appreciation, phantom stock, profit participation or
\n similar rights with respect to the Company or any of its Subsidiaries.<\/p>\n
(c) Neither the Company nor any of its Subsidiaries is a party to
\n any voting trust, proxy or other agreement or understanding with respect
\n to the voting of any capital stock of the Company or any of its
\n Subsidiaries.<\/p>\n
(d) The Board of Directors of the Company has not declared any
\n dividend or distribution with respect to the Company Common Stock the
\n record or payment date for which is on or after the date of this
\n Agreement.<\/p>\n
(e) All of the outstanding shares of the capital stock of each of
\n the Company’s Subsidiaries have been validly issued, are fully paid and
\n nonassessable and are owned by the Company or one of its Subsidiaries,
\n free and clear of any Lien. Except for its Subsidiaries set forth in the
\n Company Disclosure Letter, the Company does not control directly or
\n indirectly or have any direct or indirect equity participation in any
\n corporation, partnership, limited liability company, joint venture or
\n other entity.<\/p>\n
Section 4.5 Company Reports; Joint Proxy Statement.<\/p>\n
(a) The Company has since October 9, 1996 filed all reports,
\n forms, statements and other documents (collectively, together with all
\n financial statements included or incorporated by reference therein and
\n the Company Form 10-Q, the “Company SEC Documents”) required to be filed
\n by the Company with the SEC pursuant to the provisions of the Securities
\n Act or the Securities Exchange Act. Each of the Company SEC Documents, as
\n of its filing date, complied in all material respects with the applicable
\n requirements of the Securities Act and the Securities Exchange Act. None
\n of the Company SEC Documents, as of their respective filing dates,
\n contained any untrue statement of a material fact or omitted to state a
\n material fact required to<\/p>\n
-11-
\n 18<\/p>\n
be stated therein or necessary in order to make the statements therein,
\n in light of the circumstances under which they were made, not misleading.
\n No Subsidiary of the Company is required to file any reports, forms,
\n statements or other documents pursuant to the Securities Act or the
\n Securities Exchange Act.<\/p>\n
(b) Each of the consolidated financial statements (including
\n related notes) included in the Company SEC Documents presented fairly in
\n all material respects the consolidated financial condition, cash flows
\n and results of operations of the Company and its Subsidiaries for the
\n respective periods or as of the respective dates set forth therein. Each
\n of the financial statements (including related notes) included in the
\n Company SEC Documents has been prepared in accordance with United States
\n generally accepted accounting principles, consistently applied during the
\n periods involved, except (i) as noted therein, (ii) to the extent
\n required by changes in United States generally accepted accounting
\n principles or (iii) in the case of unaudited interim financial
\n statements, normal recurring year-end audit adjustments.<\/p>\n
(c) The Company has delivered to the Parent Corporation correct
\n and complete copies of any proposed or contemplated amendments or
\n 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. The Company has delivered to the Parent Corporation a
\n correct and complete copy of the most recent draft of the Company Form
\n 10-Q.<\/p>\n
(d) The Joint Proxy Statement will comply in all material respects
\n with the applicable requirements of the Securities Exchange Act and will
\n not, at the time the definitive Joint Proxy Statement is filed with the
\n SEC and mailed to the stockholders of the Company, contain any untrue
\n statement of material fact or omit to state any material fact required to
\n be stated therein or necessary in order to make the statements therein,
\n in light of the circumstances under which they were made, not misleading.
\n No representation or warranty is made herein by the Company with respect
\n to any information supplied by the Parent Corporation for inclusion in
\n the Joint Proxy Statement. For purposes of this Section 4.5(d), all
\n information included in the Joint Proxy Statement concerning or related
\n to the Parent Corporation and its Subsidiaries, including the Acquisition
\n Corporation, will be deemed to have been supplied by the Parent
\n Corporation.<\/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 become due) except for (a) liabilities
\nand obligations reflected in the Company SEC Documents and (b) other liabilities
\nand obligations which, individually or in the aggregate, would not have a
\nCompany Material Adverse Effect.<\/p>\n
Section 4.7 Absence of Material Adverse Change. Since December 31,
\n1998, there has not occurred any event, change, effect or development which,
\nindividually or in the aggregate, would have a Company Material Adverse Effect.<\/p>\n
-12-
\n 19<\/p>\n
Section 4.8 Litigation and Legal Compliance.<\/p>\n
(a) The Company Disclosure Letter sets forth each instance in
\n which the Company or any of its Subsidiaries is (i) subject to any
\n material unsatisfied judgment order, decree, stipulation, injunction or
\n charge or (ii) a party to or, to the Company’s knowledge, threatened to
\n be made a party to any material charge, complaint, action, suit,
\n proceeding, hearing or, to the Company’s knowledge, investigation of or
\n in any court or quasi-judicial or administrative agency of any federal,
\n state, local or foreign jurisdiction, except for judgments, orders,
\n decrees, stipulations, injunctions, charges, complaints, actions, suits,
\n proceedings, hearings and investigations which, individually or in the
\n aggregate, would not have a Company Material Adverse Effect. There are no
\n judicial or administrative actions, proceedings or, to the Company’s
\n knowledge, investigations pending or, to the Company’s knowledge,
\n threatened that question the validity of this Agreement or any action
\n taken or to be taken by the Company in connection with this Agreement
\n which would have a Company Material Adverse Effect.<\/p>\n
(b) Except for instances of noncompliance which, individually or
\n in the aggregate, would not have a Company Material Adverse Effect, the
\n Company and its Subsidiaries have complied with each constitutional
\n provision, law, rule, regulation, permit, order, writ, injunction,
\n judgment or decree to which the Company or any of its Subsidiaries is
\n subject.<\/p>\n
Section 4.9 Contract Matters.<\/p>\n
(a) Neither the Company nor any of its Subsidiaries is in default
\n or violation of (and no event has occurred which with notice or the lapse
\n of time or both would constitute a default or violation) of any term,
\n condition or provision of any note, mortgage, indenture, loan agreement,
\n other evidence of indebtedness, guarantee, license, lease, agreement or
\n other contract, instrument or contractual obligation to which the Company
\n or any of its Subsidiaries is a party or by which any of their respective
\n assets is bound or subject, except for defaults and violations which,
\n individually or in the aggregate, would not have a Company Material
\n Adverse Effect.<\/p>\n
Section 4.10 Tax Matters.<\/p>\n
(a) The Company and each of its Subsidiaries have timely filed all
\n required returns, declarations, reports, claims for refund or information
\n returns and statements, including any schedule or attachment thereto
\n (collectively “Tax Returns”), relating to any federal, state, local or
\n foreign net income, gross income, gross receipts, sales, use, ad valorem,
\n transfer, franchise, profits, license, lease, service, service use,
\n withholding, payroll, employment, excise, severance, stamp, occupation,
\n premium, property, windfall profits, customs, duties or other tax, fee,
\n assessment or charge, including any interest, penalty or addition thereto
\n and including any liability for the taxes of any other person or entity
\n under Treasury Regulation Section 1.1502-6 (or any similar state, local
\n or foreign law, rule or regulation), and any liability in respect of any
\n tax as a transferee<\/p>\n
-13-
\n 20<\/p>\n
or successor, by law, contract or otherwise (collectively “Taxes”), and
\n all such Tax Returns are accurate and complete in all respects, except to
\n the extent any such failure to file or any such inaccuracy in any filed
\n Tax Return, individually or in the aggregate, would not have a Company
\n Material Adverse Effect. All Taxes owed by the Company or any of its
\n Subsidiaries (whether or not shown on any Tax Return) have been paid or
\n adequately reserved for in accordance with generally accepted accounting
\n principles in the financial statements of the Company, except to the
\n extent any such failure to pay or reserve, individually or in the
\n aggregate, would not have a Company Material Adverse Effect.<\/p>\n
(b) The most recent financial statements contained in the Company
\n SEC Documents reflect adequate reserves in accordance with generally
\n accepted accounting principles for all Taxes payable by the Company and
\n its Subsidiaries for all Tax periods and portions thereof through the
\n date of such financial statements, except to the extent that any failure
\n to so reserve, individually or in the aggregate, would not have a Company
\n Material Adverse Effect. No deficiency with respect to Taxes has been
\n proposed, asserted or assessed against the Company or any of its
\n Subsidiaries and no requests for waivers of the time to assess any such
\n Taxes are pending, except to the extent any such deficiency or request
\n for waiver, individually or in the aggregate, would not have a Company
\n Material Adverse Effect.<\/p>\n
(c) 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
(d) Except for Liens for current Taxes not yet due and payable or
\n which are being contested in good faith, there is no Lien affecting any
\n of the assets or properties of the Company or any of its Subsidiaries
\n that arose in connection with any failure or alleged failure to pay any
\n Tax, except for Liens which, individually or in the aggregate, would not
\n have a Company Material Adverse Effect.<\/p>\n
(e) Neither the Company nor any of its Subsidiaries is a party to
\n any Tax allocation or Tax sharing agreement.<\/p>\n
(f) Neither the Company nor any of its Subsidiaries has made any
\n payments, is obligated to make any payments or is a party to any
\n agreement that under any circumstances could obligate it to make any
\n payments that will not be fully deductible under Sections 280G or 162(m)
\n of the Internal Revenue Code of 1986, as amended (the “Code”). <\/p>\n
Section 4.11 Employee Benefit Matters.<\/p>\n
(a) The Company Disclosure Letter lists each plan, program or
\n arrangement constituting a material employee welfare benefit plan (an
\n “Employee Welfare Benefit Plan”) as defined in Section 3(1) of the
\n Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or
\n a material employee pension benefit plan (an<\/p>\n
-14-
\n 21<\/p>\n
“Employee Pension Benefit Plan”) as defined in Section 3(2) of ERISA, and
\n each other material employee benefit plan, program or arrangement or
\n employment practice maintained by the Company or any of its Subsidiaries
\n with respect to any of its current or former employees or to which the
\n Company or any of the Company Subsidiaries contributes or is required to
\n contribute with respect to any of its current or former employees
\n (collectively, the “Company Plans”). With respect to each Company Plan:<\/p>\n
(i) such Company Plan (and each related trust, insurance
\n contract or fund) has been administered in a manner consistent in all
\n respects with its written terms and complies in form and operation
\n with the applicable requirements of ERISA, the Code and other
\n applicable laws, except for failures of administration or compliance
\n that would not have a Company Material Adverse Effect;<\/p>\n
(ii) all required reports and descriptions (including Form
\n 5500 Annual Reports, Summary Annual Reports, PBGC-1’s and Summary
\n Plan Descriptions) have been filed or distributed appropriately with
\n respect to such Company Plan, except for failures of filing or
\n distribution that would not have a Company Material Adverse Effect;<\/p>\n
(iii) the requirements of Part 6 of Subtitle B of Title I
\n of ERISA and Section 4980B of the Code have been met with respect to
\n each such Company Plan which is an Employee Welfare Benefit Plan,
\n except for failures that would not have a Company Material Adverse
\n Effect;<\/p>\n
(iv) all material contributions, premiums or other
\n payments (including all employer contributions and employee salary
\n reduction contributions) that are due have been paid to each such
\n Company Plan;<\/p>\n
(v) each such Company Plan which is an Employee Pension
\n Benefit Plan intended to be a “qualified plan” under Section 401(a)
\n of the Code has received a favorable determination letter from the
\n Internal Revenue Service and no event has occurred which could
\n reasonably be expected to cause the loss or denial of such
\n qualification under Section 401(a) of the Code;<\/p>\n
(vi) the Company has made available or prior to the
\n Closing Date will make available to the Parent Corporation, upon its
\n request, correct and complete copies of the plan documents and
\n summary plan descriptions, the most recent determination letter
\n received from the Internal Revenue Service, the most recent Form 5500
\n Annual Report, the most recent actuarial report, the most recent
\n audited financial statements, and all related trust agreements,
\n insurance contracts and other funding agreements that implement such
\n Company Plan (but excluding the failure to make available any such
\n document which is not material). The valuation summaries provided by
\n the Company to the Parent Corporation reasonably represent the assets
\n and liabilities attributable to Company Plans calculated in
\n accordance with the Company’s past practices,<\/p>\n
-15-
\n 22<\/p>\n
but excluding any failure that would not have a Company Material
\n Adverse Effect;<\/p>\n
(vii) no Company Plan which is an Employee Pension Benefit
\n Plan has been amended in any manner which would require the posting
\n of security under Section 401(a)(29) of the Code or Section 307 of
\n ERISA; and<\/p>\n
(viii) neither the Company nor any of its Subsidiaries has
\n communicated to any employee (excluding internal memoranda to
\n management) any plan or commitment, whether or not legally binding,
\n to create any additional material employee benefit plan or to
\n materially modify or change any Company Plan affecting any employee
\n or terminated employee of the Company or any of its Subsidiaries, but
\n excluding any such action that does not materially increase the
\n liability of the Company or its Subsidiaries.<\/p>\n
(b) With respect to each Employee Welfare Benefit Plan or Employee
\n Pension Benefit Plan that the Company or any of its Subsidiaries
\n maintains or ever has maintained, or to which any of them contributes,
\n ever has contributed or ever has been required to contribute:<\/p>\n
(i) no such Employee Pension Benefit Plan (other than any
\n Multiemployer Plan) has been completely or partially terminated
\n (other than any termination that would not have a Company Material
\n Adverse Effect), no reportable event (as defined in Section 4043 of
\n ERISA) as to which notices would be required to be filed with the
\n Pension Benefit Guaranty Corporation has occurred but has not yet
\n been so reported (but excluding any failure to report which would not
\n have a Company Material Adverse Effect), and no proceeding by the
\n Pension Benefit Guaranty Corporation to terminate such Employee
\n Pension Benefit Plan (other than any Multiemployer Plan) has been
\n instituted; and<\/p>\n
(ii) there have been no non-exempt prohibited transactions
\n (as defined in Section 406 of ERISA and Section 4975 of the Code)
\n with respect to such plan, no fiduciary has any liability for breach
\n of fiduciary duty or any other failure to act or comply in connection
\n with the administration or investment of the assets of such plan, and
\n no action, suit, proceeding, hearing or, to the Company’s knowledge,
\n investigation with respect to the administration or the investment of
\n the assets of such plan (other than routine claims for benefits) is
\n pending or, to the Company’s knowledge, threatened, but excluding,
\n from each of the foregoing, events or circumstances that would not
\n have a Company Material Adverse Effect.<\/p>\n
(c) Neither the Company nor any of its Subsidiaries contributes to
\n or has any liability (including withdrawal liability) under any
\n Multiemployer Plan, which liability would have a Company Material Adverse
\n Effect. None of the transactions contemplated by this Agreement will
\n trigger any withdrawal or termination liability<\/p>\n
-16-
\n 23<\/p>\n
under any Multiemployer Plan set forth in the Company Disclosure Letter,
\n which liability would have a Company Material Adverse Effect.<\/p>\n
(d) Other than pursuant to a Company Plan, neither the Company nor
\n any of its Subsidiaries has any obligation to provide medical, health,
\n life insurance or other welfare benefits for current or future retired or
\n terminated employees, their spouses or their dependents (other than in
\n accordance with Section 4980B of the Code), except for obligations that
\n would not have a Company Material Adverse Effect.<\/p>\n
(e) No Company Plan contains any provision that would prohibit the
\n transactions contemplated by this Agreement, would give rise to any
\n severance, termination or other payments as a result of the transactions
\n contemplated by this Agreement (alone or together with the occurrence of
\n any other event), or would cause any payment, acceleration or increase in
\n benefits provided by any Company Plan as a result of the transactions
\n contemplated by this Agreement (alone or together with the occurrence of
\n any other event), but excluding from this paragraph (e) any payment,
\n acceleration or increase which is not material.<\/p>\n
(f) Any individual who is classified as a non-employee for
\n purposes of receiving benefits (such as an independent contractor, leased
\n employee, consultant or special consultant) regardless of treatment for
\n other purposes, is not unintentionally eligible to participate in any
\n Company Plan, except where such treatment would not have a Company
\n Material Adverse Effect.<\/p>\n
Section 4.12 Environmental Matters.<\/p>\n
(a) With respect to the current and former operations and
\n properties of the Company and its Subsidiaries, and in each case except
\n for matters which, individually or in the aggregate, would not have a
\n Company Material Adverse Effect, (i) the Company and its Subsidiaries
\n have complied in all respects with all Environmental Laws (as defined in
\n Section 4.12(b)) in connection with the ownership, use, maintenance and
\n operation of all real property owned or leased by them and otherwise in
\n connection with their operations, (ii) neither the Company nor any of its
\n Subsidiaries has any liability, whether contingent or otherwise, under
\n any Environmental Law, (iii) no notices of any violation or alleged
\n violation of, non-compliance or alleged noncompliance with or any
\n liability under, any Environmental Law have been received by the Company
\n or any of its Subsidiaries since January 1, 1994, (iv) there are no
\n administrative, civil or criminal writs, injunctions, decrees, orders or
\n judgments outstanding or any administrative, civil or criminal actions,
\n suits, claims, proceedings or, to the Company’s knowledge, investigations
\n pending or, to the Company’s knowledge, threatened, relating to
\n compliance with or liability under any Environmental Law affecting the
\n Company or any of its Subsidiaries and (v) 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 permit
\n the Company and its<\/p>\n
-17-
\n 24<\/p>\n
Subsidiaries to continue to comply in all material respects with all
\n applicable Environmental Laws.<\/p>\n
(b) The term “Environmental Law” as used in this Agreement means
\n any law, rule, regulation, permit, order, writ, injunction, judgment or
\n decree with respect to the preservation of the environment or the
\n promotion of worker health and safety, including any law, rule,
\n regulation, permit, order, writ, injunction, judgment or decree relating
\n to Hazardous Materials (as defined in Section 4.12(c)), drinking water,
\n surface water, groundwater, wetlands, landfills, open dumps, storage
\n tanks, underground storage tanks, solid waste, waste water, storm water
\n run-off, noises, odors, air emissions, waste emissions or wells. Without
\n limiting the generality of the foregoing, the term will encompass each of
\n the following statutes and the regulations promulgated thereunder, and
\n any similar applicable state, local or foreign law, rule or regulation,
\n each as amended (i) the Comprehensive Environmental Response,
\n Compensation, and Liability Act of 1980, (ii) the Solid Waste Disposal
\n Act, (iii) the Hazardous Materials Transportation Act, (iv) the Toxic
\n Substances Control Act, (v) the Clean Water Act, (vi) the Clean Air Act,
\n (vii) the Safe Drinking Water Act, (viii) the National Environmental
\n Policy Act of 1969, (ix) the Superfund Amendments and Reauthorization Act
\n of 1986, (x) Title III of the Superfund Amendments and Reauthorization
\n Act, (xi) the Federal Insecticide, Fungicide and Rodenticide Act and
\n (xii) the provisions of the Occupational Safety and Health Act of 1970
\n relating to the handling of and exposure to Hazardous Materials and
\n similar substances.<\/p>\n
(c) The term “Hazardous Materials” as used in this Agreement means
\n each and every element, compound, chemical mixture, contaminant,
\n pollutant, material, waste or other substance that is defined, determined
\n or identified as hazardous or toxic under any Environmental Law or the
\n spilling, leaking, pumping, pouring, emitting, emptying, discharging,
\n injecting, storing, escaping, leaching, dumping, discarding, burying,
\n abandoning or disposing into the environment of which is prohibited under
\n any Environmental Law. Without limiting the generality of the foregoing,
\n the term will include (i) “hazardous substances” as defined in the
\n Comprehensive Environmental Response, Compensation, and Liability Act of
\n 1980, the Superfund Amendments and Reauthorization Act of 1986, or Title
\n III of the Superfund Amendments and Reauthorization Act and regulations
\n promulgated thereunder, each as amended, (ii) “hazardous waste” as
\n defined in the Solid Waste Disposal Act and regulations promulgated
\n thereunder, each as amended, (iii) “hazardous materials” as defined in
\n the Hazardous Materials Transportation Act and the regulations
\n promulgated thereunder, each as amended, (iv) “chemical substance or
\n mixture” as defined in the Toxic Substances Control Act and regulation
\n promulgated thereunder, each as amended, (v) petroleum and petroleum
\n products and byproducts and (vi) asbestos.<\/p>\n
Section 4.13 Title. The Company and its Subsidiaries now have and at
\nthe Effective Time will have good and, in the case of real property, marketable
\ntitle to all the properties and assets purported to be owned by them, free and
\nclear of all Liens except (a) Liens for current Taxes or assessments not
\ndelinquent, (b) builder, mechanic, warehousemen, materialmen, contractor,
\nworkmen, repairmen, carrier or other similar Liens arising and<\/p>\n
-18-
\n 25<\/p>\n
continuing in the ordinary course of business for obligations that are not
\ndelinquent, (c) the rights, if any, of vendors having possession of tooling of
\nthe Company and its Subsidiaries, (d) liens arising from the receipt by the
\nCompany and its Subsidiaries of progress payments by the United States
\ngovernment, (e) Liens securing rental payments under capital lease arrangements
\nand (f) other Liens which, individually or in the aggregate, would not have a
\nCompany Material Adverse Effect (collectively, “Permitted Liens”).<\/p>\n
Section 4.14 Intellectual Property Matters.<\/p>\n
(a) The Company and its Subsidiaries own or have the right to use
\n pursuant to valid license, sublicense, agreement or permission all items
\n of Intellectual Property (as defined in Section 4.14(b)) necessary for
\n their operations as presently conducted and as presently proposed to be
\n conducted, except where the failure to have such rights, individually or
\n in the aggregate, would not have a Company Material Adverse Effect.
\n Neither the Company nor any of its Subsidiaries has received any charge,
\n complaint, claim, demand or notice alleging any interference,
\n infringement, misappropriation or violation of the Intellectual Property
\n rights of any third party, except for interferences, infringements,
\n misappropriations and violations which, individually or in the aggregate,
\n would not have a Company Material Adverse Effect. To the Company’s
\n knowledge, no third party has interfered with, infringed upon,
\n misappropriated or otherwise come into conflict with any Intellectual
\n Property rights of the Company or any of its Subsidiaries, except for
\n misappropriations and violations which, individually or in the aggregate,
\n would not have a Company Material Adverse Effect.<\/p>\n
(b) The term “Intellectual Property” as used in this Agreement
\n means, collectively, patents, patent disclosures, trademarks, service
\n marks, trade dress, logos, trade names, copyrights and mask works, and
\n all registrations, applications, reissuances, continuations,
\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, computer
\n data bases and related documentation and materials, data, documentation,
\n trade secrets, confidential business information (including ideas,
\n formulas, compositions, inventions, know-how, manufacturing and
\n production processes and techniques, research and development
\n information, drawings, designs, plans, proposals and technical data,
\n financial, marketing and business data and pricing and cost information)
\n and other intellectual property rights (in whatever form or medium).<\/p>\n
Section 4.15 Year 2000 Compliance Matters. Except for matters which,
\nindividually and in the aggregate, would not have a Company Material Adverse
\nEffect, all computer systems and computer software used by the Company and its
\nSubsidiaries and all computer systems and computer software incorporated in
\nproducts manufactured by the Company and its Subsidiaries (a) recognize, or are
\nbeing adapted so that, prior to December 31, 1999, they will recognize, the
\nadvent of the year 2000 without any material adverse change in operation
\nassociated with such recognition, (b) can correctly recognize and manipulate, or
\nare being adapted so that, prior to December 31, 1999, they can recognize and
\nmanipulate, date information relating to dates prior to, on and after January 1,
\n2000 and (c) to the Company’s<\/p>\n
-19-
\n 26<\/p>\n
knowledge, can suitably interact with other year 2000 compliant computer systems
\nand computer software in a way that does not compromise their ability to
\ncorrectly recognize the advent of the year 2000 or to recognize and manipulate
\ndate information relating to dates prior to, on or after January 1, 2000. The
\ncosts of the adaptations to computer systems and computer software being made by
\nthe Company and its Subsidiaries in order to achieve year 2000 compliance are
\nnot presently expected to have a Company Material Adverse Effect.<\/p>\n
Section 4.16 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 could reasonably
\nbe expected to result in a material labor strike, dispute, slow-down or work
\nstoppage or otherwise which, individually or in the aggregate, would have a
\nCompany Material Adverse Effect. The Company is not aware of any organizational
\neffort presently being made or threatened by or on behalf of any labor union
\nwith respect to employees of the Company or any of its Subsidiaries. To the
\nCompany’s knowledge, as of the date of this Agreement no executive, key employee
\nor group of employees of the Company or any of its Subsidiaries has any plan to
\nterminate employment with the Company and its Subsidiaries, which termination
\nwould have a Company Material Adverse Effect.<\/p>\n
Section 4.17 State Takeover Laws. The resolutions adopted by the
\nBoard of Directors of the Company approving this Agreement are sufficient to
\ncause the provisions of Section 203 of the Delaware Act to be inapplicable to
\nthis Agreement, the Merger and the other transactions contemplated hereby. To
\nthe Company’s knowledge, no other fair price, moratorium, control share
\nacquisition or other form of antitakeover statute, rule or regulation of any
\nstate or jurisdiction applies or purports to apply to this Agreement, the Merger
\nor the other transactions contemplated hereby.<\/p>\n
Section 4.18 Parent Common Stock Ownership. Neither the Company nor
\nany of its Subsidiaries owns any shares of Parent Common Stock or any securities
\nexercisable or exchangeable for or convertible into shares of Parent Common
\nStock.<\/p>\n
Section 4.19 Accounting and Tax Matters. Neither the Company nor any
\nof its Subsidiaries has taken or agreed to take any action that would prevent
\naccounting for the Merger in accordance with the pooling of interests method of
\naccounting under the requirements of APB No. 16 or prevent the Merger from
\nconstituting a reorganization within the meaning of Section 368(a) of the Code.<\/p>\n
Section 4.20 Brokers’ Fees. Except for the fees and expenses payable
\nby the Company to Merrill Lynch & Co. and Goldman Sachs & Co., neither the
\nCompany nor any of its Subsidiaries has any liability or obligation to pay any
\nfees or commissions to any financial advisor, broker, finder or agent with
\nrespect to the transactions contemplated by this Agreement. The Company has
\ndelivered to the Parent Corporation a correct and complete copy of the
\nengagement letter between the Company and Merrill Lynch & Co. relating to the
\ntransactions contemplated by this Agreement. The Company Disclosure Letter sets
\nforth the<\/p>\n
-20-
\n 27<\/p>\n
fees payable to Merrill Lynch & Co. and Goldman Sachs & Co. in connection with
\nthis Agreement.<\/p>\n
ARTICLE 5<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE PARENT CORPORATION<\/p>\n
The Parent Corporation represents and warrants to the Company that
\nexcept as disclosed in the reports, schedules, forms, statements and other
\ndocuments filed by the Parent Corporation with the SEC and publicly available
\nprior to the date of this Agreement, as disclosed in the draft of the Quarterly
\nStatement on Form 10-Q for the Parent Corporation’s fiscal quarter ended March
\n31, 1999 (the “Parent Corporation Form 10-Q”) delivered to the Parent
\nCorporation prior to the date of this Agreement or as disclosed in the letter
\ndated as of the date of this Agreement from the Parent Corporation to the
\nCompany (the “Parent Corporation Disclosure Letter”):<\/p>\n
Section 5.1 Organization. The Parent Corporation and each of its
\nSubsidiaries is a corporation duly organized and validly existing under the laws
\nof the jurisdiction of its incorporation and has all requisite power and
\nauthority to own, lease and operate its properties and to carry on its business
\nas presently being conducted. The Parent Corporation and each of its
\nSubsidiaries is in good standing under the laws of the jurisdiction of its
\nincorporation and is duly qualified to conduct business as a foreign corporation
\nin each other jurisdiction where such qualification is required, except where
\nthe failure to be so qualified and in good standing would not have a material
\nadverse effect on the business, financial condition, operations or results of
\noperations of the Parent Corporation and its Subsidiaries taken as a whole or
\nthe ability of the Parent Corporation to consummate the Merger and to perform
\nits obligations under this Agreement (a “Parent Corporation Material Adverse
\nEffect”). The Parent Corporation has delivered to the Company correct and
\ncomplete copies of its charter and bylaws, as presently in effect, and will make
\navailable to the Company after the date of this Agreement correct and complete
\ncopies of the charter and bylaws, as presently in effect, of each of its
\nSubsidiaries.<\/p>\n
Section 5.2 Authorization of Transaction; Enforceability. Subject to
\nobtaining the Parent Corporation Stockholder Approval, each of the Parent
\nCorporation 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. The Parent
\nCorporation has executed a written consent in lieu of a special meeting of the
\nsole stockholder of the Acquisition Corporation in accordance with Section 228
\nof the Delaware Act adopting and approving this Agreement. The Board of
\nDirectors of the Parent Corporation, at a meeting thereof duly called and held,
\nhas duly adopted resolutions by the requisite majority 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 fair to and in the best interests of
\nthe Parent Corporation and its stockholders, approving and setting forth the
\nCharter Amendment and declaring its advisability, and recommending that the
\nParent Corporation’s stockholders approve and adopt<\/p>\n
-21-
\n 28<\/p>\n
the Charter Amendment and the issuance of the Parent Common Stock in the Merger.
\nThe foregoing resolutions of the Board of Directors of the Company have not been
\nmodified, supplemented or rescinded and remain in full force and effect as of
\nthe date of this Agreement. In connection with its adoption of the foregoing
\nresolutions, the Board of Directors of the Parent Corporation received the
\nwritten opinion of Bear Stearns & Co. Inc., financial advisor to the Board of
\nDirectors of the Parent Corporation, that the Merger is fair, from a financial
\npoint of view, to the Parent Corporation and its stockholders. The foregoing
\nopinion has not been modified, supplemented or rescinded prior to the date of
\nthis Agreement. The Parent Corporation will deliver to the Company promptly
\nafter the date of this Agreement correct and complete copies of the foregoing
\nresolutions and opinion. This Agreement constitutes the valid and legally
\nbinding obligation of each of the Parent Corporation and the Acquisition
\nCorporation, enforceable against the Parent Corporation and the Acquisition
\nCorporation in accordance with its terms and conditions.<\/p>\n
Section 5.3 Noncontravention; Consents. Except for (a) certain
\nfilings and approvals necessary to comply with the applicable requirements of
\nthe Securities Act, the Securities Exchange Act and the “blue sky” laws and
\nregulations of various states, (b) the approval by the New York Stock Exchange
\nof the listing, upon official notice of issuance, of the shares of Parent Common
\nStock proposed to be issued pursuant to the Merger, (c) the filing of 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, (d) certain filings and approvals which may be necessary to
\ncomply with the rules and regulations of the Federal Aviation Administration and
\n(e) the filing of a certificate of merger pursuant to the Delaware Act, neither
\nthe execution and delivery of this Agreement by the Parent Corporation or the
\nAcquisition Corporation, nor the consummation by the Parent Corporation or the
\nAcquisition Corporation of the transactions contemplated hereby, will constitute
\na violation of, be in conflict with, constitute or create (with or without
\nnotice or lapse of time or both) a default under, give rise to any right of
\ntermination, cancellation, amendment or acceleration with respect to, or result
\nin the creation or imposition of any Lien upon any property of the Parent
\nCorporation or any of its Subsidiaries pursuant to (i) the charter or bylaws of
\nthe Parent Corporation or any of its Subsidiaries, (ii) any constitutional
\nprovision, law, rule, regulation, permit, order, writ, injunction, judgment or
\ndecree to which the Parent Corporation or any of its Subsidiaries is subject or
\n(iii) any agreement or commitment to which the Parent Corporation or any of its
\nSubsidiaries is a party or by which the Parent Corporation, any of its
\nSubsidiaries or any of their respective properties is bound or subject, except,
\nin the case of clauses (ii) and (iii) above, for such matters which,
\nindividually or in the aggregate, would not have a Parent Corporation Material
\nAdverse Effect.<\/p>\n
Section 5.4 Capitalization.<\/p>\n
(a) As of the date of this Agreement, the authorized capital stock
\n of the Parent Corporation consists of 250,000,000 shares divided into
\n 200,000,000 shares of Parent Common Stock and 50,000,000 shares of
\n Preferred Stock, par value $1.00 per share. As of May 11, 1999,
\n 127,569,456 shares of Parent Common Stock were issued and outstanding,
\n 41,205,216 shares were held by the Parent Corporation as treasury shares
\n and 4,926,641 shares were reserved for issuance upon the exercise of
\n options<\/p>\n
-22-
\n 29<\/p>\n
or other rights to purchase or otherwise acquire shares of Parent Common
\n Stock granted by the Parent Corporation to current and former directors,
\n officers and employees of the Parent Corporation and its Subsidiaries. No
\n shares of the Parent Corporation’s Preferred Stock are issued or
\n outstanding. All of the issued and outstanding shares of capital stock of
\n the Parent Corporation have been duly authorized and are validly issued,
\n fully paid and nonassessable.<\/p>\n
(b) Other than options and other rights to purchase or otherwise
\n acquire an aggregate of 4,926,641 shares of Parent Common Stock granted
\n by the Parent Corporation to current and former directors, officers and
\n employees of the Parent Corporation and its Subsidiaries pursuant to
\n various stock option, restricted stock and similar plans, programs and
\n arrangements of the Parent Corporation and its Subsidiaries, there are no
\n outstanding or authorized options, warrants, purchase rights,
\n subscription rights, conversion rights, exchange rights or other
\n contracts or commitments that could require the Parent Corporation or any
\n of its Subsidiaries to issue, sell or otherwise cause to become
\n outstanding any of its capital stock. There are no outstanding stock
\n appreciation, phantom stock, profit participation or similar rights with
\n respect to the Parent Corporation or any of its Subsidiaries.<\/p>\n
(c) Neither the Parent Corporation nor any of its Subsidiaries is
\n a party to any voting trust, proxy or other agreement or understanding
\n with respect to the voting of any capital stock of the Parent Corporation
\n or any of its Subsidiaries.<\/p>\n
(d) All of the outstanding shares of the capital stock of each of
\n the Parent Corporation’s Subsidiaries have been validly issued, are fully
\n paid and nonassessable and are owned by the Parent Corporation or one of
\n its Subsidiaries, free and clear of any Lien. Except for its Subsidiaries
\n set forth in the Parent Corporation Disclosure Letter, the Company does
\n not control directly or indirectly or have any direct or indirect equity
\n participation in any corporation, partnership, limited liability company,
\n joint venture or other entity. The Acquisition Corporation has been
\n formed solely for purposes of the transactions contemplated by this
\n Agreement and has not conducted any business or engaged in any activities
\n prior to the date of this Agreement.<\/p>\n
Section 5.5 Parent Corporation Reports; Joint Proxy and Registration
\nStatements.<\/p>\n
(a) The Parent Corporation has since January 1, 1994 filed all
\n reports, forms, statements and other documents (collectively, together
\n with all financial statements included or incorporated by reference
\n therein and the Parent Corporation Form 10-Q, the “Parent Corporation SEC
\n Documents”) required to be filed by the Parent Corporation with the SEC
\n pursuant to the provisions of the Securities Act or the Securities
\n Exchange Act. Each of the Parent Corporation SEC Documents, as of its
\n filing date, complied in all material respects with the applicable
\n requirements of the Securities Act and the Securities Exchange Act. None
\n of the Parent Corporation SEC Documents, as of their respective filing
\n dates, contained any untrue statement of a material fact or omitted to
\n state a material fact required to be stated therein or necessary<\/p>\n
-23-
\n 30<\/p>\n
in order to make the statements therein, in light of the circumstances
\n under which they were made, not misleading. No Subsidiary of the Parent
\n Corporation is required to file any reports, forms, statements or other
\n documents pursuant to the Securities Act of the Securities Exchange Act.<\/p>\n
(b) Each of the consolidated financial statements (including
\n related notes) included in the Parent Corporation SEC Documents presented
\n fairly in all material respects the consolidated financial condition,
\n cash flows and results of operations of the Parent Corporation and its
\n Subsidiaries for the respective periods or as of the respective dates set
\n forth therein. Each of the financial statements (including related notes)
\n included in the Parent Corporation 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 Parent Corporation has delivered to the Company correct
\n and complete copies of any proposed or contemplated amendments or
\n modifications to the Parent Corporation SEC Documents (including any
\n exhibit documents included therein) that have not yet been filed by the
\n Parent Corporation with the SEC. The Parent Corporation has delivered to
\n the Company a correct and complete copy of the most recent draft of the
\n Parent Corporation Form 10-Q.<\/p>\n
(d) The Joint Proxy Statement and the Registration Statement will
\n comply in all material respects with the applicable requirements of the
\n Securities Act and the Securities Exchange Act and will not, at the time
\n the definitive Joint Proxy Statement is filed with the SEC and mailed to
\n the stockholders of the Parent Corporation and at the time the
\n Registration Statement is declared effective by the SEC, 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 the
\n Parent Corporation with respect to any information supplied by the
\n Company for inclusion in the Joint Proxy Statement or the Registration
\n Statement. For purposes of this Section 5.5(d), all information included
\n in the Joint Proxy Statement and the Registration Statement concerning or
\n related to the Company and its Subsidiaries will be deemed to have been
\n supplied by the Company.<\/p>\n
Section 5.6 No Undisclosed Liabilities. The Parent Corporation and
\nits Subsidiaries have no liabilities or obligations (whether absolute or
\ncontingent, liquidated or unliquidated, or due or to become due) except for (a)
\nliabilities and obligations reflected in the Parent Corporation SEC Documents
\nand (b)other liabilities and obligations which, individually or in the
\naggregate, would not have a Parent Corporation Material Adverse Effect.<\/p>\n
-24-
\n 31<\/p>\n
Section 5.7 Absence of Material Adverse Change. Since December 31,
\n1998, there has not occurred any event, change, effect or development which,
\nindividually or in the aggregate, would have a Parent Corporation Material
\nAdverse Effect.<\/p>\n
Section 5.8 Litigation and Legal Compliance.<\/p>\n
(a) The Parent Corporation Disclosure Letter sets forth each
\n instance in which the Parent Corporation or any of its Subsidiaries is
\n (i) subject to any material unsatisfied judgment order, decree,
\n stipulation, injunction or charge or (ii) a party to or, to the Parent
\n Corporation’s knowledge, threatened to be made a party to any material
\n charge, complaint, action, suit, proceeding, hearing or, to the Parent
\n Corporation’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, would not have a Parent Corporation Material Adverse Effect.
\n There are no judicial or administrative actions, proceedings or, to the
\n Parent Corporation’s knowledge, investigations pending or, to the Parent
\n Corporation’s knowledge, threatened that question the validity of this
\n Agreement or any action taken or to be taken by the Parent Corporation in
\n connection with this Agreement which would have a Parent Corporation
\n Material Adverse Effect.<\/p>\n
(b) Except for instances of noncompliance which, individually or
\n in the aggregate, would not have a Parent Corporation Material Adverse
\n Effect, the Parent Corporation and its Subsidiaries have complied with
\n each constitutional provision, law, rule, regulation, permit, order,
\n writ, injunction, judgment or decree to which the Parent Corporation or
\n any of its Subsidiaries is subject.<\/p>\n
Section 5.9 Contract Matters.<\/p>\n
(a) Neither the Parent Corporation nor any of its Subsidiaries is
\n in default or violation of (and no event has occurred which with notice
\n or 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 Parent Corporation or any of its Subsidiaries is a party or by
\n which any of their respective assets is bound or subject, except for
\n defaults and violations which, individually or in the aggregate, would
\n not have a Parent Corporation Material Adverse Effect.<\/p>\n
Section 5.10 Tax Matters.<\/p>\n
(a) The Parent Corporation and each of its Subsidiaries have
\n timely filed all required Tax Returns and all such Tax Returns are
\n accurate and complete in all respects, except to the extent any such
\n failure to file or any such inaccuracy in any filed Tax Return,
\n individually or in the aggregate, would not have a Parent Corporation<\/p>\n
-25-
\n 32<\/p>\n
Material Adverse Effect. All Taxes owed by the Parent Corporation or any
\n of its Subsidiaries (whether or not shown on any Tax Return) have been
\n paid or adequately reserved for in accordance with generally accepted
\n accounting principles in the financial statements of the Parent
\n Corporation, except to the extent any such failure to pay or reserve,
\n individually or in the aggregate, would not have a Parent Corporation
\n Material Adverse Effect.<\/p>\n
(b) The most recent financial statements contained in the Parent
\n Corporation SEC Documents reflect adequate reserves in accordance with
\n generally accepted accounting principles for all Taxes payable by the
\n Parent Corporation and its Subsidiaries for all Tax periods and portions
\n thereof through the date of such financial statements, except to the
\n extent that any failure to so reserve, individually or in the aggregate,
\n would not have a Parent Corporation Material Adverse Effect. No
\n deficiency with respect to Taxes has been proposed, asserted or assessed
\n against the Parent Corporation 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 in
\n the aggregate, would not have a Parent Corporation Material Adverse
\n Effect.<\/p>\n
(c) The federal income Tax Returns of the Parent Corporation and
\n each of its Subsidiaries consolidated in such Tax Returns have been
\n examined by and settled with the Internal Revenue Service for all Tax
\n years through 1989.<\/p>\n
(d) Except for Liens for current Taxes not yet due and payable or
\n which are being contested in good faith, there is no Lien affecting any
\n of the assets or properties of the Parent Corporation or any of its
\n Subsidiaries that arose in connection with any failure or alleged failure
\n to pay any Tax, except for Liens which, individually or in the aggregate,
\n would not have a Parent Corporation Material Adverse Effect.<\/p>\n
(e) Neither the Parent Corporation nor any of its Subsidiaries is
\n a party to any Tax allocation or Tax sharing agreement.<\/p>\n
Section 5.11 Employee Benefit Matters.<\/p>\n
(a) The Parent Corporation Disclosure Letter lists each plan,
\n program or arrangement constituting a material Employee Welfare Benefit
\n Plan or a material Employee Pension Benefit Plan and each other material
\n employee benefit plan, program or arrangement or employment practice
\n maintained by the Parent Corporation or any of its Subsidiaries with
\n respect to any of its current or former employees or to which the Parent
\n Corporation or any of the Parent Corporation Subsidiaries contributes or
\n is required to contribute with respect to any of its current or former
\n employees (collectively, the “Parent Corporation Plans”). With respect to
\n each Parent Corporation Plan:<\/p>\n
(i) such Parent Corporation Plan (and each related trust,
\n insurance contract or fund) has been administered in a manner
\n consistent in all respects<\/p>\n
-26-
\n 33<\/p>\n
with its written terms and complies in form and operation with the
\n applicable requirements of ERISA, the Code and other applicable laws,
\n except for failures of administration or compliance that would not
\n have a Parent Corporation Material Adverse Effect;<\/p>\n
(ii) all required reports and descriptions (including Form
\n 5500 Annual Reports, Summary Annual Reports, PBGC-1’s and Summary
\n Plan Descriptions) have been filed or distributed appropriately with
\n respect to such Parent Corporation Plan, except for failures of
\n filing or distribution that would not have a Parent Corporation
\n Material Adverse Effect;<\/p>\n
(iii) the requirements of Part 6 of Subtitle B of Title I
\n of ERISA and Section 4980B of the Code have been met with respect to
\n each such Parent Corporation Plan which is an Employee Welfare
\n Benefit Plan, except for failures that would not have a Parent
\n Corporation Material Adverse Effect;<\/p>\n
(iv) all material contributions, premiums or other
\n payments (including all employer contributions and employee salary
\n reduction contributions) that are due have been paid to each such
\n Parent Corporation Plan;<\/p>\n
(v) each such Parent Corporation Plan which is an Employee
\n Pension Benefit Plan intended to be a “qualified plan” under Section
\n 401(a) of the Code has received a favorable determination letter from
\n the Internal Revenue Service and no event has occurred which could
\n reasonably be expected to cause the loss or denial of such
\n qualification under Section 401(a) of the Code;<\/p>\n
(vi) the Parent Corporation has made available or prior to
\n the Closing Date will make available to the Company, upon its
\n request, correct and complete copies of the plan documents and
\n summary plan descriptions, the most recent determination letter
\n received from the Internal Revenue Service, the most recent Form 5500
\n Annual Report, the most recent actuarial report, the most recent
\n audited financial statements, and all related trust agreements,
\n insurance contracts and other funding agreements that implement such
\n Parent Corporation Plan (but excluding the failure to make available
\n any such document which is not material). The valuation summaries
\n provided by the Parent Corporation to the Company reasonably
\n represent the assets and liabilities attributable to the Parent
\n Corporation Plans calculated in accordance with the Parent
\n Corporation’s past practices, but excluding any failure that would
\n not have a Parent Corporation Material Adverse Effect;<\/p>\n
(vii) no Parent Corporation Plan which is an Employee
\n Pension Benefit Plan has been amended in any manner which would
\n require the posting of security under Section 401(a)(29) of the Code
\n or Section 307 of ERISA; and<\/p>\n
-27-
\n 34<\/p>\n
(viii) neither the Parent Corporation nor any of its
\n Subsidiaries has communicated to any employee (excluding internal
\n memoranda to management) any plan or commitment, whether or not
\n legally binding, to create any additional material employee benefit
\n plan or to materially modify or change any Parent Corporation Plan
\n affecting any employee or terminated employee of the Parent
\n Corporation or any of its Subsidiaries, but excluding any such action
\n that does not materially increase the liability of the Parent
\n Corporation or its Subsidiaries.<\/p>\n
(b) With respect to each Employee Welfare Benefit Plan or Employee
\n Pension Benefit Plan that the Parent Corporation 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 than any
\n Multiemployer Plan) has been completely or partially terminated
\n (other than any termination that would not have a Parent Corporation
\n Material Adverse Effect, no reportable event (as defined in Section
\n 4043 of ERISA) as to which notices would be required to be filed with
\n the Pension Benefit Guaranty Corporation has occurred but has not yet
\n been so reported (excluding any such failure to report which would
\n not have a Parent Corporation Material Adverse Effect), and no
\n proceeding by the Pension Benefit Guaranty Corporation to terminate
\n such Employee Pension Benefit Plan (other than any Multiemployer
\n Plan) has been instituted; and<\/p>\n
(ii) there have been no non-exempt prohibited transactions
\n (as defined in Section 406 of ERISA and Section 4975 of the Code)
\n with respect to such plan, no fiduciary has any liability for breach
\n of fiduciary duty or any other failure to act or comply in connection
\n with the administration or investment of the assets of such plan, and
\n no action, suit, proceeding, hearing or, to the Parent Corporation’s
\n knowledge, investigation with respect to the administration or the
\n investment of the assets of such plan (other than routine claims for
\n benefits) is pending or, to the Parent Corporation’s knowledge,
\n threatened, but excluding, from each of the foregoing, events or
\n circumstances that would not have a Parent Corporation Material
\n Adverse Effect.<\/p>\n
(c) None of the transactions contemplated by this Agreement will
\n trigger any withdrawal or termination liability under any Multiemployer
\n Plan set forth in the Parent Corporation Disclosure Letter, which
\n liability would have a Parent Corporation Material Adverse Effect.<\/p>\n
(d) Other than pursuant to a Parent Corporation Plan, neither the
\n Parent Corporation nor any of its Subsidiaries has any obligation to
\n provide medical, health, life insurance or other welfare benefits for
\n current or future retired or terminated employees, their spouses or their
\n dependents (other than in accordance with Section<\/p>\n
-28-
\n 35<\/p>\n
4980B of the Code), except for obligations that would not have a Parent
\n Corporation Material Adverse Effect.<\/p>\n
(e) No Parent Corporation Plan contains any provision that would
\n prohibit the transactions contemplated by this Agreement, would give rise
\n 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, acceleration
\n or increase in benefits provided by any Parent Corporation 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 this
\n paragraph (e) any payment, acceleration or increase which is not
\n material.<\/p>\n
(f) Any individual who is classified as a non-employee for
\n purposes of receiving benefits (such as an independent contractor, leased
\n employee, consultant or special consultant) regardless of treatment for
\n other purposes, is not unintentionally eligible to participate in any
\n Parent Corporation Plan, except where such treatment would not have a
\n Parent Corporation Material Adverse Effect.<\/p>\n
Section 5.12 Environmental Matters. With respect to the current and
\nformer operations and properties of the Parent Corporation and its Subsidiaries,
\nand in each case except for matters which, individually or in the aggregate,
\nwould not have a Parent Corporation Material Adverse Effect, (a) the Parent
\nCorporation and its Subsidiaries have complied in all respects with all
\nEnvironmental Laws in connection with the ownership, use, maintenance and
\noperation of all real property owned or leased by them and otherwise in
\nconnection with their operations, (b) neither the Parent Corporation nor any of
\nits Subsidiaries has any liability, whether contingent or otherwise, under any
\nEnvironmental Law, (c) no notices of any violation or alleged violation of,
\nnon-compliance or alleged noncompliance with or any liability under, any
\nEnvironmental Law have been received by the Parent Corporation or any of its
\nSubsidiaries since January 1, 1994, (d) there are no administrative, civil or
\ncriminal writs, injunctions, decrees, orders or judgments outstanding or any
\nadministrative, civil or criminal actions, suits, claims, proceedings or, to the
\nParent Corporation’s knowledge, investigations pending or, to the Parent
\nCorporation’s knowledge, threatened, relating to compliance with or liability
\nunder any Environmental Law affecting the Parent Corporation or any of its
\nSubsidiaries and (e) to the knowledge of the Parent Corporation, no material
\nchanges or alterations in the practices or operations of the Parent Corporation
\nor any of its Subsidiaries as presently conducted are anticipated to be required
\nin the future in order to permit the Parent Corporation and its Subsidiaries to
\ncontinue to comply in all material respects with all applicable Environmental
\nLaws.<\/p>\n
Section 5.13 Title. The Parent Corporation and its Subsidiaries now
\nhave and at the Effective Time will have good and, in the case of real property,
\nmarketable title to all the properties and assets purported to be owned by them,
\nfree and clear of all Liens except Permitted Liens.<\/p>\n
Section 5.14 Intellectual Property Matters. The Parent Corporation
\nand its Subsidiaries own or have the right to use pursuant to valid license,
\nsublicense, agreement or<\/p>\n
-29-
\n 36<\/p>\n
permission all items of Intellectual Property necessary for their operations as
\npresently conducted and as presently proposed to be conducted, except where the
\nfailure to have such rights, individually or in the aggregate, would not have a
\nParent Corporation Material Adverse Effect. Neither the Parent Corporation nor
\nany of its Subsidiaries has received any charge, complaint, claim, demand or
\nnotice alleging any interference, infringement, misappropriation or violation of
\nthe Intellectual Property rights of any third party, except for interferences,
\ninfringements, misappropriations and violations which, individually or in the
\naggregate, would not have a Parent Corporation Material Adverse Effect. To the
\nParent Corporation’s knowledge, no third party has interfered with, infringed
\nupon, misappropriated or otherwise come into conflict with any Intellectual
\nProperty rights of the Parent Corporation or any of its Subsidiaries, except for
\nmisappropriations and violations which, individually or in the aggregate, would
\nnot have a Parent Corporation Material Adverse Effect..<\/p>\n
Section 5.15 Year 2000 Compliance Matters. Except for matters which,
\nindividually and in the aggregate, would not have a Parent Corporation Material
\nAdverse Effect, all computer systems and computer software used by the Parent
\nCorporation and its Subsidiaries and all computer systems and computer software
\nincorporated in products manufactured by the Parent Corporation and its
\nSubsidiaries (a) recognize, or are being adapted so that, prior to December 31,
\n1999, they will recognize, the advent of the year 2000 without any material
\nadverse change in operation associated with such recognition, (b) can correctly
\nrecognize and manipulate, or are being adapted so that, prior to December 31,
\n1999, they can recognize and manipulate, date information relating to dates
\nprior to, on and after January 1, 2000 and (c) to the Parent Corporation’s
\nknowledge, can suitably interact with other year 2000 compliant computer systems
\nand computer software in a way that does not compromise their ability to
\ncorrectly recognize the advent of the year 2000 or to recognize and manipulate
\ndate information relating to dates prior to, on or after January 1, 2000. The
\ncosts of the adaptations to computer systems and computer software being made by
\nthe Parent Corporation and its Subsidiaries in order to achieve year 2000
\ncompliance are not presently expected to have a Parent Corporation Material
\nAdverse Effect.<\/p>\n
Section 5.16 Labor Matters. There are no controversies pending or, to
\nthe Parent Corporation’s knowledge, threatened between the Parent Corporation or
\nany of its Subsidiaries and any of their current or former employees or any
\nlabor or other collective bargaining unit representing any such employee that
\ncould reasonably be expected to result in a material labor strike, dispute,
\nslow-down or work stoppage or otherwise which, individually or in the aggregate,
\nwould have a Parent Corporation Material Adverse Effect. The Parent Corporation
\nis not aware of any organizational effort presently being made or threatened by
\nor on behalf of any labor union with respect to employees of the Parent
\nCorporation or any of its Subsidiaries. To the Parent Corporation’s knowledge,
\nas of the date of this Agreement no executive, key employee or group of
\nemployees of the Parent Corporation or any of its Subsidiaries has any plan to
\nterminate employment with the Parent Corporation and its Subsidiaries, which
\ntermination would have a Parent Corporation Material Adverse Effect.<\/p>\n
Section 5.17 Company Common Stock Ownership. Neither the Parent
\nCorporation nor any of its Subsidiaries owns any shares of Company Common Stock
\nor any<\/p>\n
-30-
\n 37<\/p>\n
securities exercisable or exchangeable for or convertible into shares of Company
\nCommon Stock.<\/p>\n
Section 5.18 Accounting and Tax Matters. Neither the Parent
\nCorporation nor any of its Subsidiaries has taken or agreed to take any action
\nthat would prevent accounting for the Merger in accordance with the pooling of
\ninterests method of accounting under the requirements of APB No. 16 or prevent
\nthe Merger from constituting a reorganization within the meaning of Section
\n368(a) of the Code.<\/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 that may be necessary, proper or advisable. The foregoing will
\nnot be deemed to require the Parent Corporation to enter into any agreement,
\nconsent decree or other commitment requiring the Parent Corporation or any of
\nits Subsidiaries to divest or hold separate any assets (including any assets of
\nthe Company or any of its Subsidiaries) or to take any other action that would
\nhave a Parent Corporation Material Adverse Effect.<\/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, from and after the date of this Agreement through the
\nClosing Date, the Company will, and will cause each of its Subsidiaries to,
\nconduct its operations in accordance with its ordinary course of business,
\nconsistent with past practice, and in accordance with such covenant will not,
\nand will not cause or permit any of its Subsidiaries to:<\/p>\n
(a) amend its charter or bylaws or file any certificate of
\n designation or similar instrument with respect to any shares of its
\n authorized but unissued capital stock;<\/p>\n
-31-
\n 38<\/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 respect to
\n its capital stock (other than dividends payable by a Subsidiary of the
\n Company to the Company or another Subsidiary), issue or authorize the
\n issuance of any shares of its capital stock (other than in connection
\n with the exercise of currently outstanding Stock Options and any other
\n Stock Options issued in accordance with this Agreement) or any other
\n securities exercisable or exchangeable for or convertible into shares of
\n its capital stock, or repurchase, redeem or otherwise acquire for value
\n any shares of its capital stock or any other securities exercisable or
\n exchangeable for or convertible into shares of its capital stock;<\/p>\n
(d) merge or consolidate with any entity;<\/p>\n
(e) sell, lease or otherwise dispose of any of its capital assets,
\n including any shares of the capital stock of any of its Subsidiaries,
\n other than sales, leases or other dispositions of machinery, equipment,
\n tools, vehicles and other operating assets no longer required in its
\n operations made in the ordinary course of business, consistent with past
\n practice;<\/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 purchase of
\n assets, purchase of stock, merger or otherwise) or enter into any joint
\n venture;<\/p>\n
(h) create, incur, assume or suffer to exist any indebtedness for
\n borrowed money (including capital lease obligations), other than
\n indebtedness existing as of the date of this Agreement, borrowings under
\n existing credit lines in the ordinary course of business, consistent with
\n past practice, and intercompany indebtedness among the Company and its
\n Subsidiaries arising in the ordinary course of business, consistent with
\n past practice;<\/p>\n
(i) create, incur, assume or suffer to exist any Lien (other than
\n Permitted Liens) affecting any of its material assets or properties;<\/p>\n
(j) except as required as the result of changes in United States
\n generally accepted accounting principles, change any of the accounting
\n principles or practices used by it or revalue in any material respect any
\n of its assets or properties, other than write-downs of inventory or
\n accounts receivable in the ordinary course of business, consistent with
\n 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, grant
\n any general or uniform <\/p>\n
-32-
\n 39<\/p>\n
increase in the rates of pay of its employees or grant any general or
\n uniform increase in the benefits under any bonus or pension plan or other
\n contract or commitment;<\/p>\n
(l) except for any increase required under the terms of any
\n collective bargaining agreement or consulting or employment agreement in
\n effect on the date of this Agreement, increase the compensation payable
\n or to become payable to officers and salaried employees with a base
\n salary in excess of $75,000 per year or increase any bonus, insurance,
\n pension or other benefit plan, payment or arrangement made to, for or
\n with any such officers or salaried employees;<\/p>\n
(m) enter into any material contract or commitment or engage in
\n any material transaction with any affiliated person or entity (other than
\n the Company or its Subsidiaries) or enter into any material contract or
\n commitment or engage in any material transaction with any unaffiliated
\n person or entity which, to the Company’s knowledge, is reasonably likely
\n to result in a material financial loss to the Company and its
\n Subsidiaries taken as a whole;<\/p>\n
(n) make any material Tax election or settle or compromise any
\n material Tax liability;<\/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 threatened suit,
\n action or proceeding; or<\/p>\n
(q) commit to do any of the foregoing.<\/p>\n
Section 6.4 Interim Conduct of the Parent Corporation. Except as the
\nCompany may approve, which approval will not be unreasonably withheld, from and
\nafter the date of this Agreement through the Closing Date, the Parent
\nCorporation will not declare or pay any dividend or distribution with respect to
\nits capital stock (other than the declaration and payment of regular quarterly
\ncash dividends in amounts consistent with past practice).<\/p>\n
Section 6.5 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, to keep available to the Company and its
\nSubsidiaries after the Closing Date the present officers and employees of the
\nCompany and its Subsidiaries as a group and to preserve the present
\nrelationships of the Company and its Subsidiaries with suppliers and customers
\nand others having business relations with the Company and its Subsidiaries, in
\neach case so that there will not be a Company Material Adverse Effect.<\/p>\n
-33-
\n 40<\/p>\n
Section 6.6 Full Access. Each party will, and will cause its
\nSubsidiaries and its and their representatives to, afford the other party and
\nthe representatives of the other party reasonable access, upon reasonable notice
\nat all reasonable times to all premises, properties, books, records, contracts
\nand documents of or pertaining to such party and its Subsidiaries. Without
\nlimiting the generality of the foregoing, the Company acknowledges and agrees
\nthat the Parent Corporation and its representatives and agents may, with prior
\nnotice to the Company and subject to the prior approval of the Company (which
\nwill not be unreasonably withheld or delayed), conduct customary environmental
\nassessments of the real property and facilities owned or leased by the Company
\nand its Subsidiaries. Notwithstanding the foregoing, neither party will be
\nrequired to provide access or to disclose information where such access or
\ndisclosure would contravene any law or contract or would result in the waiver of
\nany legal privilege or work-product protection. Any information disclosed will
\nbe subject to the provisions of the Confidentiality Agreement between the
\nCompany and the Parent Corporation (the “Confidentiality Agreement”).<\/p>\n
Section 6.7 Notice of Developments. Each party will give prompt
\nwritten notice to the other party of any material development affecting such
\nparty or any of its Subsidiaries. Each party will give prompt written notice to
\nthe other of any material development affecting the ability of the parties to
\nconsummate the transactions contemplated by this Agreement. No such written
\nnotice of a material development will be deemed to have amended any of the
\ndisclosures set forth in the Company Disclosure Letter or the Parent 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
Section 6.8 Acquisition Proposals.<\/p>\n
(a) The Company and each of its Subsidiaries, and each of their
\n respective directors, officers, employees, agents and representatives,
\n will immediately cease any discussions or negotiations presently being
\n conducted with respect to any Acquisition Proposal (as defined in Section
\n 6.8(g)). The Company and its Subsidiaries will not and will use their
\n best efforts to cause their respective directors, officers, employees,
\n agents and representatives not to (i) initiate or solicit, directly or
\n indirectly, any inquiries with respect to, or the making of, any
\n Acquisition Proposal or (ii) except as expressly permitted in accordance
\n with Section 6.8(b), 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. The Company will be
\n responsible for any breach of the provisions of this Section 6.8 by any
\n director, officer, employee, agent or representative of the Company or
\n any of its Subsidiaries.<\/p>\n
(b) Notwithstanding the provisions of Section 6.8(a) but subject
\n to the other provisions of this Section 6.8, the Company may engage in
\n discussions or negotiations with, furnish information and data to,
\n withdraw, modify or amend its recommendation and approval of the Merger
\n and enter into a letter of intent, agreement in principle, acquisition
\n agreement or similar agreement with any party that submits an Acquisition<\/p>\n
-34-
\n 41<\/p>\n
Proposal to the Company after the date of this Agreement and on or prior
\n to June 30, 1999 (the “Applicable Period”) which the Board of Directors
\n of the Company by majority vote determines in its good faith judgment
\n could reasonably be expected to result in a Superior Acquisition Proposal
\n (as defined in Section 6.8(h)).<\/p>\n
(c) Nothing in this Section 6.8 will prevent the Board of
\n Directors of the Company from taking, and disclosing to the Company’s
\n stockholders, a position contemplated by Rules 14d-9 and 14e-2
\n promulgated under the Securities Exchange Act with respect to any
\n publicly announced unsolicited tender offer or otherwise from making any
\n disclosure to its stockholders if, in its good faith judgment based on
\n the opinion of outside legal counsel, failure to so disclose would be
\n inconsistent with its obligations under applicable law; provided that the
\n Board of Directors will not recommend that the stockholders of the
\n Company tender their shares of Company Common Stock in connection with
\n any such tender offer unless (i) such tender offer is determined to be a
\n Superior Acquisition Proposal in accordance with the provisions of
\n Section 6.8(h) and (ii) the Company has provided the Parent Corporation
\n with not less than five business days prior written notice of any such
\n action.<\/p>\n
(d) The Company will within 24 hours after its receipt of any
\n Acquisition Proposal provide the Parent Corporation with a copy of such
\n Acquisition Proposal or, in connection with any non-written Acquisition
\n Proposal, a written statement setting forth in reasonable detail the
\n terms and conditions of such Acquisition Proposal, including the identity
\n of the acquiring party. The Company will promptly inform the Parent
\n Corporation of the status and content of any discussions or negotiations
\n involving any Acquisition Proposal. In connection with any determination
\n by the Board of Directors of the Company that an Acquisition Proposal is
\n a Superior Acquisition Proposal, the Company will within 24 hours after
\n the making of such determination provide the Parent Corporation with a
\n written summary in reasonable detail of the reasons for such
\n determination.<\/p>\n
(e) In no event will the Company provide any non-public
\n information regarding the Company or any of its Subsidiaries to any party
\n making an Acquisition Proposal unless such party enters into a written
\n confidentiality agreement containing confidentiality provisions
\n substantially similar to those contained in the Confidentiality
\n Agreement. In the event the Company enters into any confidentiality
\n agreement with a party pursuant to the provisions of this Section 6.8(e)
\n that does not include terms and conditions that are substantially similar
\n to those contained in the sixth paragraph of the Confidentiality
\n Agreement (the “Standstill Provisions”), then the Parent Corporation and
\n its Subsidiaries will be released from their obligations under the
\n Standstill Provisions to the same extent as such party.<\/p>\n
(f) The Company will not enter into any letter of intent,
\n agreement in principle, acquisition agreement or similar agreement with
\n respect to any Superior Acquisition Proposal unless (i) the Company has
\n provided the Parent Corporation with not less than five business days
\n prior written notice of such action and (ii) such action<\/p>\n
-35-
\n 42<\/p>\n
is taken by the Company concurrently with or after the termination of
\n this Agreement in accordance with the provisions of Section 8.1(e).<\/p>\n
(g) The term “Acquisition Proposal” as used in this Agreement
\n means any bona fide proposal, whether or not in writing, made by a party
\n to acquire beneficial ownership (as defined under Rule 13(d) promulgated
\n under the Securities Exchange Act) of all or a material portion of the
\n assets of, or any material equity interest in, the Company and
\n Subsidiaries taken as a whole pursuant to a merger, consolidation or
\n other business combination, sale of shares of capital stock, sale of
\n assets, tender or exchange offer or similar transaction involving the
\n Company or any of its Subsidiaries, including any single or multi-step
\n transaction or series of related transactions that is structured to
\n permit such party to acquire such beneficial ownership.<\/p>\n
(h) The term “Superior Acquisition Proposal” as used in this
\n Agreement means an unsolicited written Acquisition Proposal that the
\n Board of Directors of the Company by majority vote determines in its good
\n faith judgment after consulting with the Company’s outside financial and
\n legal advisors (i) is reasonably capable of being completed, taking into
\n account all legal, financial, regulatory and other aspects of such
\n proposal, and (ii) presents to the Company and its stockholders more
\n favorable financial and other terms, taken as a whole, than the Merger.<\/p>\n
(i) No action taken in respect of an Acquisition Proposal or a
\n Superior Acquisition Proposal which is permitted by the provisions of
\n this Section 6.8, including any withdrawal, modification or amendment of
\n the recommendation and approval of the Merger by the Board of Directors
\n of the Company and the public announcement thereof permitted by the
\n provisions of this Section 6.8, will constitute a breach of any other
\n provision of this Agreement.<\/p>\n
Section 6.9 Indemnification.<\/p>\n
(a) From and after the Closing Date, the Parent Corporation will
\n cause the Surviving Corporation to indemnify, defend and hold harmless
\n each person who is now, or has been at any time prior to the Effective
\n Time, an officer or director of the Company or any of its present or
\n former Subsidiaries or corporate parents (collectively, the “Indemnified
\n Parties”) from and against all losses, claims, damages and expenses
\n (including reasonable attorney’s fees and expenses) arising out of or
\n relating to actions or omissions, or alleged actions or omissions,
\n occurring at or prior to the Effective Time to the fullest extent
\n permitted from time to time by the Delaware Act or any other applicable
\n laws as presently or hereafter in effect.<\/p>\n
(b) Any determination required to be made with respect to whether
\n any Indemnified Party may be entitled to indemnification will, if
\n requested by such Indemnified Party, be made by independent legal counsel
\n selected by the Indemnified Party and reasonably satisfactory to the
\n Surviving Corporation.<\/p>\n
-36-
\n 43<\/p>\n
(c) For a period of six years after the Closing Date, the Parent
\n Corporation will cause to be maintained in effect the policies of
\n 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 currently
\n maintained by the Company directors and officers liability insurance and
\n fiduciary liability insurance policies with reputable and financially
\n sound carriers providing for no less favorable coverage. Notwithstanding
\n the provisions of this Section 6.9(c), the Parent Corporation will not be
\n obligated to make annual premium payments with respect to such policies
\n of insurance to the extent such premiums exceed 200 percent of the annual
\n premiums paid by the Company as of the date of this Agreement. If the
\n annual premium costs necessary to maintain such insurance coverage exceed
\n the foregoing amount, the Parent Corporation will maintain the most
\n advantageous policies of directors and officers liability insurance and
\n fiduciary liability insurance obtainable for an annual premium equal to
\n the foregoing amount.<\/p>\n
(d) To the fullest extent permitted from time to time under the
\n law of the State of Delaware, the Parent Corporation will cause the
\n Surviving Corporation to pay on an as-incurred basis the reasonable fees
\n and expenses of each Indemnified Party (including reasonable fees and
\n expenses of counsel) in advance of the final disposition of any action,
\n suit, proceeding or investigation that is the subject of the right to
\n indemnification, subject to reimbursement in the event such Indemnified
\n Party is not entitled to indemnification.<\/p>\n
(e) The certificate of incorporation and bylaws of the Surviving
\n Corporation will contain the same provisions providing for exculpation of
\n director and officer liability and indemnification on the same basis as
\n set forth in the certificate of incorporation and bylaws of the Company
\n in effect on the date of this Agreement. For a period of six years after
\n the Closing Date, the Parent Corporation will cause the Surviving
\n Corporation to maintain in effect such provisions in the certificate of
\n incorporation and bylaws of the Surviving Corporation providing for
\n exculpation of director and officer liability and indemnification to the
\n fullest extent permitted from time to time under the law of the State of
\n Delaware, which provisions will not be amended, except as required by
\n applicable law or except to make changes permitted by applicable law that
\n would enlarge the scope of the Indemnified Parties’ indemnification
\n rights thereunder. The foregoing will not be deemed to restrict the right
\n of the Surviving Corporation to modify the provisions of its certificate
\n of incorporation or bylaws relating to exculpation of director and
\n officer liability or indemnification with respect to events or
\n occurrences after the Closing Date so long as such modifications do not
\n adversely affect the rights of the Indemnified Parties hereunder.<\/p>\n
(f) In the event of any action, suit, investigation or proceeding,
\n the Indemnified Party will be entitled to control the defense thereof
\n with counsel of its own choosing reasonably acceptable to the Parent
\n Corporation, and the Parent Corporation<\/p>\n
-37-
\n 44<\/p>\n
and the Surviving Corporation will cooperate in the defense thereof;
\n provided that neither the Parent Corporation nor the Surviving
\n Corporation will be liable for the fees of more than one counsel for all
\n Indemnified Parties, other than local counsel, unless the use of a single
\n counsel 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 the
\n Surviving Corporation will be liable for any settlement effected without
\n its written consent (which consent will not be unreasonably withheld).<\/p>\n
(g) The rights of each Indemnified Party hereunder will be in
\n addition to any other rights such Indemnified Party may have under the
\n certificate of incorporation or bylaws of the Surviving Corporation or
\n any of their respective Subsidiaries, under the law of the State of
\n Delaware or otherwise. Notwithstanding anything to the contrary contained
\n in this Agreement or otherwise, the provisions of this Section 6.9 will
\n survive the consummation of the Merger, and each Indemnified Party will,
\n for all purposes, be a third party beneficiary of the covenants and
\n agreements contained in this Section 6.9 and, accordingly, will be
\n treated as a party to this Agreement for purposes of the rights and
\n remedies relating to enforcement of such covenants and agreements and
\n will be entitled to enforce any such rights and exercise any such
\n remedies directly against the Parent Corporation and the Surviving
\n Corporation. The Parent Corporation will cause the Surviving Corporation
\n to pay all reasonable expenses, including reasonable attorneys’ fees,
\n that may be incurred by an Indemnified Party in enforcing the indemnity
\n and other obligations provided for in this Section 6.9.<\/p>\n
Section 6.10 Public Announcements. The initial press release
\nannouncing the transactions contemplated by this Agreement will be a joint press
\nrelease. Thereafter, the Parent Corporation and the Company will consult with
\none another before issuing any press releases or otherwise making any public
\nannouncements with respect to the transactions contemplated by this Agreement
\nand, except as may be required by applicable law or by the rules and regulations
\nof the New York Stock Exchange, will not issue any such press release or make
\nany such announcement prior to such consultation.<\/p>\n
Section 6.11 Preservation of Programs and Agreements. From and after
\nthe date of this Agreement through the Closing Date, neither party nor any of
\nits Subsidiaries will enter into any agreement which such party knows or has
\nreason to know is reasonably likely to cause a major customer of the other party
\nor any of its Subsidiaries to terminate any material program or agreement.<\/p>\n
Section 6.12 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
-38-
\n 45<\/p>\n
Section 6.13 Standstill Provisions. The restrictions on the Parent
\nCorporation and the Acquisition Corporation contained in the Standstill
\nProvisions are hereby waived by the Company to the extent reasonably required to
\npermit the Parent Corporation and the Acquisition Corporation to comply with
\ntheir obligations or enforce their rights under this Agreement.<\/p>\n
Section 6.14 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 that would have a Parent
\nCorporation Material Adverse Effect.<\/p>\n
Section 6.15 Affiliate Letters. Promptly following the date of this
\nAgreement, the Company will deliver to the Parent Corporation a list of the
\nnames and addresses of those persons who were, or will be, in the Company’s
\nreasonable judgment, “affiliates” of the Company within the meaning of Rule
\n145(c) under the Securities Act as of the record date for the Company
\nStockholders Meeting. The Company will use its best efforts to deliver to the
\nParent Corporation a letter, in substantially the form of Exhibit A-1 attached
\nto this Agreement, from each person identified in the foregoing list. Promptly
\nfollowing the date of this Agreement, the Parent Corporation will deliver to the
\nCompany a list of the names and addresses of those persons who were or will be,
\nin the Parent Corporation’s reasonable judgment, “affiliates” of the Parent
\nCorporation within the meaning of Rule 145(c) under the Securities Act as of the
\nrecord date for the Parent Corporation Stockholders Meeting. The Parent
\nCorporation will use its best efforts to deliver to the Company a letter, in
\nsubstantially the form of Exhibit A-2 attached to this Agreement, from each
\nperson identified in the foregoing list. The Parent Corporation will be entitled
\nto place appropriate legends on the certificates evidencing the Parent Common
\nStock held by or issued to persons delivering such letters and to issue stop
\ntransfer instructions to the transfer agent for the Parent Common Stock
\nconsistent with the terms of such letters.<\/p>\n
Section 6.16 Preservation of Accounting and Tax Treatment. From and
\nafter the date of this Agreement (a) the Parent Corporation and the Company and
\ntheir respective Subsidiaries will use their best efforts to cause the Merger to
\nbe accounted for as a pooling of interests in accordance with APB No. 16 and to
\nconstitute a reorganization within the meaning of Section 368(a) of the Code and
\n(b) neither the Parent Corporation nor the Company, nor any of their respective
\nSubsidiaries, will knowingly take or omit to take any action that would prevent
\nthe accounting for the Merger in accordance with the pooling of interests method
\nof accounting under the requirements of APB No. 16 or prevent the Merger from
\nconstituting a reorganization within the meaning of Section 368(a) of the Code.<\/p>\n
Section 6.17 Accountant’s Comfort Letters. Each party will use its
\nbest efforts to cause to be delivered to the other party two letters from its
\nindependent public accountants, one dated a date within two business days before
\nthe date on which the Registration Statement becomes effective and one dated the
\nClosing Date, in form and substance reasonably<\/p>\n
-39-
\n 46<\/p>\n
satisfactory to the recipient and customary in scope and substance for comfort
\nletters delivered by independent accountants in connection with registration
\nstatements similar to the Registration Statement.<\/p>\n
Section 6.18 Registration Agreement. On or prior to the Closing Date,
\nthe Parent Corporation will enter into an agreement, in the form of the
\nRegistration Agreement attached to the Company Disclosure Letter, with certain
\nstockholders of the Company to provide such stockholders with registration
\nrights with respect to the Parent Common Stock to be received in the Merger and
\nwill have complied with the provisions thereof referring to actions to be taken
\nprior to the date of such Registration Agreement.<\/p>\n
Section 6.19 New York Stock Exchange Quotation. The Parent
\nCorporation will use its best efforts to cause the Parent Common Stock issuable
\nin the Merger or otherwise pursuant to the terms of this Agreement to be
\napproved for listing on the New York Stock Exchange, subject to official notice
\nof issuance, as promptly as practicable after the date of this Agreement and in
\nany event prior to the Closing Date.<\/p>\n
Section 6.20 Publishing Financial Results. The Parent Corporation
\nwill prepare and publicly release, as soon as practicable and in any event
\nwithin 10 business days following the end of the first accounting month ending
\nat least 30 days after the Closing Date, a report filed with the SEC on Form 8-K
\nor any other public filing, statement or announcement which includes the
\ncombined financial results (including combined sales and net income) of the
\nParent Corporation and the Company for a period of at least 30 days of combined
\noperations of the Parent Corporation and the Company following the Closing Date.<\/p>\n
Section 6.21 Employee Benefit Matters.<\/p>\n
(a) Subject to the provisions of any collective bargaining
\n agreement to which the Company or any of its Subsidiaries is a party as
\n of the date of this Agreement, until (or in respect of the period ending
\n on) December 31, 2000, the Parent Corporation will cause to be maintained
\n for the employees of the Company and its Subsidiaries as of the Closing
\n Date (collectively, the “Continuing Employees”) salary levels not less
\n than the salary levels provided by the Company and its Subsidiaries as of
\n the Closing Date and benefits and benefit levels (including cash
\n incentive compensation benefits and benefit levels) which are
\n substantially comparable to the benefits and benefit levels provided by
\n the Company and its Subsidiaries through the Company Plans as of the
\n Closing Date. The foregoing covenant will not apply to any equity-based
\n compensation plan or arrangement.<\/p>\n
(b) The Continuing Employees will be credited with their years of
\n service with the Company and its Subsidiaries for purposes of determining
\n eligibility and vesting (but not benefit accrual) under any employee
\n benefit plans, programs, arrangements and employment practices of the
\n Parent Corporation and its Subsidiaries in which the Continuing Employees
\n participate following the Closing Date. To the extent that any such
\n employee benefit plan, program, arrangement or employment practice in
\n which a Continuing Employee participates following the Closing Date<\/p>\n
-40-
\n 47<\/p>\n
provides medical, dental, vision or other welfare benefits, the Parent
\n Corporation will cause all pre-existing condition exclusions, waiting
\n periods and actively at work requirements thereunder to be waived for
\n such Continuing Employee and his or her covered dependents and the Parent
\n Corporation will cause any eligible expenses incurred by such Continuing
\n Employee on or before the Closing Date to be taken into account
\n thereunder for purposes of satisfying any deductible, coinsurance and
\n maximum out-of-pocket requirements applicable to such Continuing Employee
\n and his or her covered dependents for the applicable plan year.<\/p>\n
(c) The Company agrees that an independent trustee, either a bank
\n or a trust company, will act with respect to the Merger on behalf of each
\n Company Plan (and its participants) that holds Company Common Stock in
\n accordance with the terms and conditions of such Plan.<\/p>\n
Section 6.22 Directors of the Surviving Corporation. Until at least
\nthe first anniversary of the Closing Date, the Parent Corporation will, and will
\ncause the Surviving Corporation to, take all actions necessary to cause Theodore
\nJ. Forstmann to be elected as a director and the non-executive Chairman of the
\nBoard of Directors of the Surviving Corporation and to cause Sandra J. Horbach
\nto be elected as a member of the Board of Directors of the Surviving Corporation
\neffective as of the Effective Time. Notwithstanding that they will be directors
\nof the Surviving Corporation and not directors of the Parent Corporation, the
\nforegoing individuals will be entitled as directors of the Surviving Corporation
\nafter the Effective Time to exculpation, indemnification and reimbursement of
\nexpenses pursuant to terms and conditions identical to the terms and conditions
\napplicable to the directors of the Parent Corporation included in the
\nCertificate of Incorporation and Bylaws of the Parent Corporation and will be
\nentitled to coverage under the directors and officers liability and fiduciary
\nliability insurance policies and any indemnification agreements maintained or
\nentered into by the Parent Corporation on the same terms as applicable to the
\ndirectors of the Parent Corporation.<\/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
\nrespective obligation of each party to effect the Merger is subject to the
\nsatisfaction at or prior to the Closing Date of each of the following
\nconditions:<\/p>\n
(a) the Company will have obtained the Company Stockholder
\n Approval;<\/p>\n
(b) the Parent Corporation will have obtained the Parent
\n Corporation Stockholder Approval;<\/p>\n
(c) the Registration Statement will have been declared effective
\n in accordance with the provisions of the Securities Act, and no stop
\n order suspending such <\/p>\n
-41-
\n 48<\/p>\n
effectiveness will have been issued and remain in effect, and the Parent
\n Corporation will have received all state securities law authorizations
\n necessary to issue the Parent Common Stock pursuant to the Merger;<\/p>\n
(d) the Parent Common Stock to be issued to the stockholders of
\n the Company pursuant to the Merger will have been approved for listing on
\n the New York Stock Exchange, subject only to official notice of issuance;<\/p>\n
(e) all applicable waiting periods under the HSR Act will have
\n terminated or expired;<\/p>\n
(f) all other consents, authorizations, orders and approvals of or
\n filings with any governmental commission, board or other regulatory
\n authority (other than in its capacity as a customer of the Company or its
\n Subsidiaries) required in connection with the consummation of the
\n transactions contemplated by this Agreement will have been obtained or
\n made, except where the failure to obtain or make such consents,
\n authorizations, orders, approvals or filings would not, from and after
\n the Closing Date, individually or in the aggregate have a Company
\n Material Adverse Effect; and<\/p>\n
(g) neither party will be subject to any order or injunction of a
\n court of competent jurisdiction in the United States which prohibits the
\n consummation of the transactions contemplated by this Agreement.<\/p>\n
Section 7.2 Conditions to the Obligation of the Company. The
\nobligation of the Company 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 Parent Corporation
\n set forth in Section 5 will be true and correct in all material respects
\n at and as of the Closing Date as though then made, except as contemplated
\n by this Agreement and except that any representation or warranty made as
\n of a date other than the date of this Agreement will continue on the
\n Closing Date to be true and correct in all material respects as of the
\n specified date;<\/p>\n
(b) each of the Parent Corporation and the Acquisition Corporation
\n will have in all material respects performed and complied with all of its
\n obligations under this Agreement required to be performed by it at or
\n prior to the Closing Date;<\/p>\n
(c) the Company will have received a written opinion, dated as of
\n the Closing Date, from Deloitte & Touche LLP, the Company’s independent
\n public accountants, to the effect that they concur with the Company’s
\n conclusion that no conditions exist that would preclude the Company’s
\n ability to be a party to a business combination with the Parent
\n Corporation to be accounted for using the pooling of interests method of
\n accounting in accordance with the requirements of APB No. 16; and<\/p>\n
-42-
\n 49<\/p>\n
(d) the Company will have received a written opinion, dated as of
\n the Closing Date, from Fried, Frank, Harris, Shriver & Jacobson, counsel
\n to the Company, to the effect that the Merger will be treated for federal
\n income tax purposes as a reorganization within the meaning of Section
\n 368(a) of the Code. In rendering the foregoing opinion, counsel will be
\n permitted to rely upon and assume the accuracy of representations
\n provided by the parties in substantially the forms attached as Exhibits
\n B-1 and B-2 to this Agreement.<\/p>\n
The Parent Corporation and the Acquisition Corporation will furnish
\nthe Company with a customary bring down certificate with respect to the
\nsatisfaction of the conditions set forth in Sections 7.2(a) and (b).<\/p>\n
Section 7.3 Conditions to the Obligation of the Parent Corporation
\nand the Acquisition Corporation. The obligation of the Parent Corporation and
\nthe Acquisition Corporation to effect the Merger is subject to the satisfaction
\nat or prior to the Closing Date of each of the following conditions:<\/p>\n
(a) the representations and warranties of the Company set forth in
\n Section 4 will be true and correct in all material respects at and as of
\n the Closing Date as though then made, except as contemplated by this
\n Agreement and except that any representation or warranty made as of a
\n date other than the date of this Agreement will continue on the Closing
\n Date to be true and correct in all material respects as of the specified
\n date;<\/p>\n
(b) the Company will have in all material respects performed and
\n complied with all of its obligations under this Agreement required to be
\n performed by it at or prior to the Closing Date;<\/p>\n
(c) the Parent Corporation will have received a written opinion,
\n dated as of the Closing Date, from Arthur Andersen LLP, the Parent
\n Corporation’s independent public accountants, to the effect that the
\n business combination between the Parent Corporation and the Company
\n contemplated by this Agreement should be treated as a “pooling of
\n interests” in conformity with generally accepted accounting principles as
\n described in APB No. 16; and<\/p>\n
(d) the Parent Corporation will have received a written opinion,
\n dated as of the Closing Date, from Jenner & Block, counsel to the Parent
\n Corporation, to the effect that the Merger will be treated for federal
\n income tax purposes as a reorganization within the meaning of Section
\n 368(a) of the Code. In rendering the foregoing opinion, counsel will be
\n permitted to rely upon and assume the accuracy of representations
\n provided by the parties in substantially the forms attached as Exhibits
\n B-1 and B-2 to this Agreement.<\/p>\n
-43-
\n 50<\/p>\n
The Company will furnish the Parent Corporation with a customary
\nbring down certificate with respect to the satisfaction of the conditions set
\nforth in Sections 7.3(a) and (b).<\/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 or the Parent Corporation
\nStockholder Approval):<\/p>\n
(a) with the written consent of the Parent Corporation and the
\n Company;<\/p>\n
(b) by the Parent Corporation or the Company if any court of
\n competent jurisdiction or other governmental agency has issued a final
\n order, decree or ruling or taken any other final action restraining,
\n enjoining or otherwise prohibiting the consummation of the Merger, and
\n such order, decree, ruling or other action is or has become
\n nonappealable;<\/p>\n
(c) by the Parent Corporation if (i) the Company has materially
\n breached any of its representations or warranties set forth in this
\n Agreement and such breach is not cured within 45 days after the date
\n written notice of such breach is given by the Parent Corporation to the
\n Company, (ii) the Company has materially breached any of its covenants or
\n agreements contained in this Agreement and such breach is not cured
\n within 45 days after the date written notice of such breach is given by
\n the Parent Corporation to the Company, (iii) the Board of Directors of
\n the Company 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, (iv) the Company Stockholder Approval has not
\n been obtained at a meeting duly called for such purpose or (v) the Merger
\n has not been consummated on or before December 31, 1999 (unless the
\n failure of the Merger to have been consummated results primarily from the
\n Parent Corporation or the Acquisition Corporation breaching any
\n representation, warranty, covenant or agreement contained in this
\n Agreement);<\/p>\n
(d) by the Company if (i) the Parent Corporation has materially
\n breached any of its representations or warranties set forth in this
\n Agreement and such breach is not cured within 45 days after the date
\n written notice of such breach is given by the Company to the Parent
\n Corporation, (ii) the Parent Corporation or the Acquisition Corporation
\n has materially breached any of its covenants or agreements contained in
\n this Agreement and such breach is not cured within 45 days after the date
\n written notice of such breach is given by the Company to the Parent
\n Corporation, (iii) the Parent Stockholder Approval has not been obtained
\n at a meeting duly called for such purpose or (iv) the Merger has not been
\n consummated on or before December 31, 1999 (unless the failure of the
\n Merger to have been consummated results primarily from the Company
\n breaching any representation, warranty, covenant or agreement contained
\n in this Agreement); or<\/p>\n
-44-
\n 51<\/p>\n
(e) by the Company if a party has made a Superior Acquisition
\n Proposal and the Company enters into any letter of intent, agreement in
\n principle, acquisition agreement or other agreement with respect to such
\n Superior Acquisition Proposal in accordance with the provisions of
\n Section 6.8; provided that termination of this Agreement pursuant to this
\n Section 8.1(e) will not become effective until the payment by the Company
\n to the Parent Corporation of the termination fee provided in Section 8.3.<\/p>\n
(f) by the Parent Corporation or the Company prior to the third
\n trading day preceding the Company Stockholders Meeting if the Average
\n Stock Price of the Parent Common Stock is less than $63 per share. The
\n “Average Stock Price” means the average of the Daily Per Share Prices (as
\n hereinafter defined) for the fifteen consecutive trading days ending on
\n the fifth trading day prior to the Company Stockholders Meeting. The
\n “Daily Per Share Price” for any trading day means the weighted average of
\n the per share selling prices (as reported on the New York Stock Exchange
\n Composite Transaction Tape) for that day.<\/p>\n
Section 8.2 Effect of Termination. In the event of the termination
\nand abandonment 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 wilful breach of any
\ncovenant or agreement); provided that the provisions of the Confidentiality
\nAgreement and Section 8.3 of this Agreement will continue in full force and
\neffect notwithstanding such termination and abandonment.<\/p>\n
Section 8.3 Termination Fee.<\/p>\n
(a) If (i) the Parent Corporation terminates this Agreement
\n pursuant to the provisions of Section 8.1(c)(iii) or Section 8.1(c)(iv)
\n and the Company enters into an agreement with respect to a Third Party
\n Acquisition (as defined in Section 8.3(b)), or a Third Party Acquisition
\n occurs within 12 months after the date of such termination, and such
\n agreement was entered into, or such Third Party Acquisition was publicly
\n announced, concurrently with or prior to the date of the termination of
\n this Agreement or (ii) the Company terminates this Agreement pursuant to
\n the provisions of Section 8.1(e), then, in each case, the Company will
\n pay to the Parent Corporation, within one business day following the
\n occurrence of such event (in the case of a termination under clause (i)
\n above) or the delivery of notice of such termination (in the case of a
\n termination under clause (ii) above), a termination fee equal to $150
\n million (the “Termination Fee”), payable by wire transfer of immediately
\n available funds to an account designated by the Parent Corporation.<\/p>\n
(b) The term “Third Party Acquisition” as used in this Agreement
\n means (i) the acquisition of the Company by merger or otherwise by any
\n person (including for purposes of this Section 8.3(b) any “person” or
\n “group” as defined in Section 13(d)(3) of the Securities Exchange Act) or
\n entity other than the Parent Corporation or the Acquisition Corporation,
\n (ii) the acquisition by any person or entity other than the Parent
\n Corporation or the Acquisition Corporation of more than 50 percent of the<\/p>\n
-45-
\n 52<\/p>\n
consolidated assets (determined based on book or fair market value) of
\n the Company and its Subsidiaries, (iii) the acquisition by any person or
\n entity other than the Parent Corporation or the Acquisition Corporation
\n of more than 50 percent of the outstanding shares of Company Common
\n Stock, (iv) the adoption by the Company of any plan of liquidation or the
\n declaration by the Company of any extraordinary dividend or distribution
\n (including any distribution of any shares of the capital stock of any
\n material Subsidiary) of cash or property constituting more than 50
\n percent of the consolidated assets (determined based on book or fair
\n market value) of the Company and its Subsidiaries or (v) the purchase by
\n the Company or any of its Subsidiaries of more than 50 percent of the
\n outstanding shares of Company Common Stock.<\/p>\n
(c) Except as specifically provided in this Section 8.3, each
\n 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
(d) In the event of any breach of the covenants set forth in
\n Section 6.8, nothing contained in this Section 8.3 will prevent the
\n Parent Corporation or the Acquisition Corporation from challenging, by
\n injunction or otherwise, the termination or attempted termination of this
\n Agreement pursuant to the provisions of Section 8.1 (e), but acceptance
\n by the Parent Corporation of the payment of the Termination Fee will
\n constitute a full and complete waiver by the Parent Corporation of all of
\n its rights under this Section 8.3(d) or otherwise.<\/p>\n
(e) The Company acknowledges that the agreements regarding the
\n payment of fees contained in this Section 8.3 are an integral part of the
\n transactions contemplated by this Agreement and that, in the absence of
\n such agreements, the Parent Corporation and the Acquisition Subsidiary
\n would not have entered into this Agreement. The Company accordingly
\n agrees that in the event the Company fails to pay the Termination Fee
\n promptly, the Company will in addition to the payment of such amount also
\n pay to the Parent Corporation all of the reasonable costs and expenses
\n (including reasonable attorneys’ fees and expenses) incurred by the
\n Parent Corporation in the enforcement of its rights under this Section
\n 8.3, together with interest on such amount at a rate of 10 percent per
\n annum from the date upon which such payment was due, to and including the
\n date of payment. Provided that the Company was not in breach of the
\n provisions of Section 6.8, payment of the Termination Fee will constitute
\n full and complete satisfaction, and will constitute the Parent
\n Corporation’s sole and exclusive remedy for any loss, liability, damage
\n or claim arising out of or in connection with any such termination of
\n this Agreement or the facts and circumstances resulting in or related to
\n 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
-46-
\n 53<\/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 party hereto. Except as
\notherwise expressly provided herein, all covenants and agreements contained in
\nthis Agreement by or on behalf of any of the parties hereto or thereto will be
\nbinding 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 and the Parent Corporation Stockholder Approval;
\nprovided that after the date of the Company Stockholder Approval, no amendment
\nto this Agreement will be made without the approval of stockholders of the
\nCompany to the extent such approval is required under the Delaware Act.<\/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
\nsimultaneously in two or more counterparts, any one of which need not contain
\nthe signatures of more than one party, but all such counterparts taken together
\nwill constitute one 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
\nbe given or delivered under or by reason of the provisions of this Agreement
\nwill be in writing and will be deemed to have been given when delivered
\npersonally to the recipient or when sent to the<\/p>\n
-47-
\n 54<\/p>\n
recipient by telecopy (receipt confirmed), one business day after the date when
\nsent to the recipient by reputable express courier service (charges prepaid) or
\nthree business days after the date when mailed to the recipient by certified or
\nregistered mail, return receipt requested and postage prepaid. Such notices,
\ndemands and other communications will be sent to the Parent Corporation and the
\nCompany at the addresses indicated 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
\n will not constitute
\n notice) to: Jenner & Block
\n 601 13th Street, N.W.
\n Washington, D.C. 20005
\n Attention: Craig A. Roeder, Esq.
\n Facsimile No: (202) 639-6066<\/p>\n
If to the Company: Gulfstream Aerospace Corporation
\n 500 Gulfstream Road
\n Savannah, Georgia 31402
\n Attention: Ira Berman, Esq.
\n Senior Vice President and
\n General Counsel
\n Facsimile No: (912) 965-4764<\/p>\n
With a copy (which
\n will not constitute
\n notice) to: Fried, Frank, Harris, Shriver & Jacobson
\n One New York Plaza
\n New York, New York 10004
\n Attention: Stephen Fraidin, P.C.
\n Aviva Diamant, Esq.
\n Facsimile No: (212) 859-4000<\/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
-48-
\n 55<\/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 of
\nthe provisions of Sections 1.9, 6.9, 6.18, 6.20 and 6.22 will, for all purposes,
\nbe third party beneficiaries of the covenants and agreements contained therein
\nand, accordingly, will be treated as a party to this Agreement for purposes of
\nthe rights and remedies relating to enforcement of such covenants and agreements
\nand will be entitled to enforce any such rights and exercise any such remedies
\ndirectly against the Parent Corporation and the Surviving Corporation.<\/p>\n
Section 9.11 Entire Agreement. This Agreement (including the
\nConfidentiality Agreement and the other documents referred to herein)
\nconstitutes the entire agreement among the parties and supersedes any prior
\nunderstandings, agreements or representations by or among the parties, written
\nor oral, that may have related in any way to the subject matter hereof.<\/p>\n
Section 9.12 Construction. The language used in this Agreement will
\nbe deemed to be the language chosen by the parties to express their mutual
\nintent and no rule of strict construction will be applied against any party. The
\nuse of the word “including” in this Agreement means “including without
\nlimitation” and is intended by the parties to be by way of example rather than
\nlimitation.<\/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
\nWilmington, Delaware, 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
\nCONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE SCHEDULES
\nHERETO WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF
\nTHE STATE OF DELAWARE.<\/p>\n
* * * * *<\/p>\n
-49-
\n 56<\/p>\n
* * * * *<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed and delivered
\nthis Agreement 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
TARA ACQUISITION CORPORATION<\/p>\n
By \/s\/ DAVID A. SAVNER
\n ————————————–
\n David A. Savner
\n President<\/p>\n
GULFSTREAM AEROSPACE CORPORATION<\/p>\n
By \/s\/ THEODORE J. FORSTMANN
\n ————————————–
\n Theodore J. Forstmann
\n Chairman and Chief Executive Officer<\/p>\n
57<\/p>\n
EXHIBIT A-1<\/p>\n
FORM OF COMPANY AFFILIATE LETTER<\/p>\n
General Dynamics Corporation
\n3190 Fairview Park Drive
\nFalls Church, Virginia 22042-4523<\/p>\n
Ladies and Gentlemen:<\/p>\n
General Dynamics Corporation, a Delaware corporation, Tara
\nAcquisition Corporation, a Delaware corporation, and Gulfstream Aerospace
\nCorporation, a Delaware corporation, are parties to an Agreement and Plan of
\nMerger dated as of May 16, 1999 (the “Merger Agreement”). All capitalized terms
\nused but not defined in this letter will have the respective meanings give such
\nterms in the Merger Agreement.<\/p>\n
The undersigned, a record holder and beneficial owner of shares of
\nCompany Common Stock, is entitled to receive shares of Parent Common Stock in
\nconnection with the Merger. The undersigned acknowledges that the undersigned
\nmay be deemed an “affiliate” of the Company within the meaning of Rule 145
\n(“Rule 145”) promulgated under the Securities Act or Accounting Series Releases
\n130 and 135, as amended, of the SEC (the “Releases”). Nothing contained in this
\nletter, however, is intended or should be construed as an admission that the
\nundersigned is an affiliate of the Company or as a waiver of any rights that the
\nundersigned may have to object to any claim that the undersigned is such an
\naffiliate on or after the date of this letter.<\/p>\n
If in fact the undersigned were an affiliate of the Company under the
\nSecurities Act, the undersigned’s ability to sell, assign or transfer the Parent
\nCommon Stock received by the undersigned pursuant to the Merger may be
\nrestricted unless such transaction is registered under the Securities Act or an
\nexemption from such registration is available. The undersigned (i) understands
\nthat such exemptions are limited and that, except as provided for in the Merger
\nAgreement and the registration agreement referred to in the Merger Agreement,
\nthe Parent Corporation is not under any obligation to effect any such
\nregistration and (ii) has obtained advice of counsel to the extent the
\nundersigned has felt necessary as to the nature and conditions of such
\nexemptions, including information with respect to the applicability to the sale
\nof such securities of Rules 144 and 145(d) promulgated under the Securities Act.<\/p>\n
The undersigned agrees with the Parent Corporation that the
\nundersigned will not sell, assign or transfer any shares of Parent Common Stock
\nreceived by the undersigned in exchange for shares of Company Common Stock
\npursuant to the Merger except (i) pursuant to an effective registration
\nstatement under the Securities Act, (ii) in conformity with Rule 145 <\/p>\n
58<\/p>\n
promulgated under the Securities Act or (iii) in a transaction that, in the
\nopinion of counsel reasonably satisfactory to Parent or as described in a
\n“no-action” or interpretive letter from the staff of the SEC, is not required to
\nbe registered under the Securities Act.<\/p>\n
The undersigned further agrees with Parent Corporation that, until
\nafter such time as a report including results covering at least 30 days of
\ncombined operations of the Company and the Parent Corporation has been published
\nby the Parent Corporation or the Merger Agreement has been terminated in
\naccordance with its terms, the undersigned will not reduce its risk (within the
\nmeaning of the Releases) with respect to (i) any shares of Company Common Stock
\nheld by it or (ii) any shares of Parent Common Stock received by it in the
\nMerger. The Parent Corporation will promptly notify the undersigned when such
\nreport has been published by the Parent Corporation.<\/p>\n
The Parent Corporation will prepare and publicly release, as soon as
\npracticable and in any event within 10 business days following the end of the
\nfirst accounting month ending at least 30 days after the Closing Date, a report
\nfiled with the SEC on Form 8-K or any other public filing, statement or
\nannouncement which includes the combined financial results (including combined
\nsales and net income) of the Parent Corporation and the Company for a period of
\nat least 30 days of combined operations of the Parent Corporation and the
\nCompany following the Closing Date.<\/p>\n
In the event of a sale or other disposition pursuant to Rule 145 of
\nParent Common Stock received by the undersigned in the Merger, the undersigned
\nwill supply the Parent Corporation with evidence of its compliance with Rule 145
\nby delivering to the Parent Corporation a letter in the form of Annex I hereto.
\nThe undersigned understands that the Parent Corporation may instruct its
\ntransfer agent to withhold the transfer of any Parent Common Stock disposed of
\nby the undersigned, but that upon receipt of such evidence of compliance the
\ntransfer agent will effectuate the transfer of the Parent Common Stock sold as
\nindicated in the letter.<\/p>\n
The undersigned acknowledges and agrees that the Parent Common Stock
\nissued to the undersigned will all be in certificated form and that appropriate
\nlegends will be placed on certificates representing Parent Common Stock received
\nby the undersigned in the Merger or held by a transferee thereof, which legends
\nwill be removed by delivery of substitute certificates upon receipt of an
\nopinion in form and substance reasonably satisfactory to the Parent Corporation
\nor a “no action” or interpretive letter from the staff of the SEC to the effect
\nthat such legends are no longer required for purposes of the Securities Act or
\nupon the receipt of the letters referred to in the preceding paragraph.<\/p>\n
The Parent Corporation covenants that for so long and to the extent
\nnecessary to permit the undersigned to sell the shares of Parent Common Stock
\npursuant to Rule 145 and, to the extent applicable, Rule 144 under the
\nSecurities Act, the Parent Corporation will (i) use its best efforts to file, on
\na timely basis, all reports and data required to be filed by it with the SEC
\npursuant to Section 13 of the Securities Exchange Act and to furnish to the
\nundersigned upon request a written statement as to whether the Parent
\nCorporation has complied with such reporting requirements during the 12 months
\npreceding any proposed sale of shares of Parent<\/p>\n
A-1-2
\n 59<\/p>\n
Common Stock by the undersigned under Rule 145 and (ii) otherwise take such
\naction as may be reasonably available to permit the sale or other disposition of
\nthe Parent Common Stock by the undersigned under Rule 145 in accordance with the
\nterms thereof..<\/p>\n
The undersigned acknowledges that the undersigned has carefully read
\nthis letter and understands the requirements hereof and the limitations imposed
\nupon the distribution, sale, transfer or other disposition of Parent Common
\nStock and that the receipt by the Parent Corporation of this letter is a
\nmaterial inducement and a condition to the Parent Corporation’s obligation to
\nconsummate the Merger.<\/p>\n
Very truly yours,<\/p>\n
Dated:<\/p>\n
A-1-3
\n 60<\/p>\n
ANNEX I
\n TO EXHIBIT A-1<\/p>\n
General Dynamics Corporation
\n3190 Fairview Park Drive
\nFalls Church, Virginia 22042-4523<\/p>\n
Ladies and Gentlemen:<\/p>\n
On ___________, the undersigned sold the shares of the Common Stock,
\npar value $1.00 per share , of General Dynamics Corporation (the “Parent
\nCorporation”) described below (the “Shares”). The Shares were received by the
\nundersigned in connection with the merger of Tara Acquisition Corporation, a
\nsubsidiary of the Parent Corporation, with and into Gulfstream Aerospace
\nCorporation.<\/p>\n
Based upon the most recent report or statement filed by the Parent
\nCorporation with the Securities and Exchange Commission, the Shares sold by the
\nundersigned were within the prescribed limitations set forth in Rule 144(e)
\npromulgated under the Securities Act of 1933, as amended (the “Securities Act”).<\/p>\n
The undersigned hereby represents that the Shares were sold in
\n“brokers’ transactions” within the meaning of Section 4(4) of the Securities Act
\nor in transactions directly with a “market maker” as that term is defined in
\nSection 3(a)(38) of the Securities Exchange Act of 1934, as amended. The
\nundersigned further represents that the undersigned has not solicited or
\narranged for the solicitation of orders to buy the Shares, and that the
\nundersigned has not made any payment in connection with the offer or sale of the
\nShares to any person other than to the broker who executed the order in respect
\nof such sale.<\/p>\n
Very truly yours,<\/p>\n
Dated:<\/p>\n
A-1-4
\n 61<\/p>\n
EXHIBIT A-2<\/p>\n
FORM OF PARENT CORPORATION AFFILIATE LETTER<\/p>\n
Gulfstream Aerospace Corporation
\n500 Gulfstream Road
\nSavannah, Georgia 31402-2206<\/p>\n
General Dynamics Corporation
\n3190 Fairview Park Drive
\nFalls Church, Virginia 22042-4523<\/p>\n
Ladies and Gentlemen:<\/p>\n
General Dynamics Corporation, a Delaware corporation, Tara
\nAcquisition Corporation, a Delaware corporation, and Gulfstream Aerospace
\nCorporation, a Delaware corporation, are parties to an Agreement and Plan of
\nMerger dated as of May 16 , 1999 (the “Merger Agreement”). All capitalized terms
\nused but not defined in this letter will have the respective meanings give such
\nterms in the Merger Agreement.<\/p>\n
The undersigned is the record holder and beneficial owner of shares
\nof Parent Common Stock. The undersigned acknowledges that the undersigned may be
\ndeemed an “affiliate” of the Parent Corporation within the meaning of Accounting
\nSeries Releases 130 and 135, as amended, of the SEC (the “Releases”). Nothing
\ncontained in this letter, however, is intended or should be construed as an
\nadmission that the undersigned is an affiliate of the Parent Corporation or as a
\nwaiver of any rights that the undersigned may have to object to any claim that
\nthe undersigned is such an affiliate on or after the date of this letter.<\/p>\n
The undersigned agrees with Parent Corporation that, until after such
\ntime as a report including results covering at least 30 days of combined
\noperations of the Company and the Parent Corporation has been published by the
\nParent Corporation or the Merger Agreement has been terminated in accordance
\nwith its terms, the undersigned will not reduce its risk (within the meaning of
\nthe Releases) with respect to any shares of Parent Common Stock held of record
\nor owned beneficially by the undersigned. The Parent Corporation will promptly
\nnotify the undersigned when such report has been published by the Parent
\nCorporation.<\/p>\n
62<\/p>\n
The undersigned acknowledges that the undersigned has carefully read
\nthis letter and understands the requirements hereof and the limitations imposed
\nupon the distribution, sale, transfer or other disposition of Parent Common
\nStock and that the receipt by the Parent Corporation of this letter is a
\nmaterial inducement and a condition to the Company’s obligation to consummate
\nthe Merger.<\/p>\n
Very truly yours,<\/p>\n
Dated:<\/p>\n
A-2-2
\n 63<\/p>\n
EXHIBIT B-1<\/p>\n
FORM OF COMPANY TAX REPRESENTATIONS<\/p>\n
[Letterhead of the Company]<\/p>\n
[ ], 1999<\/p>\n
Jenner & Block
\n601 13th Street, N.W.
\nWashington, D.C. 20005<\/p>\n
Fried, Frank, Harris, Shriver & Jacobson
\nOne New York Plaza
\nNew York, New York 10004<\/p>\n
Ladies and Gentlemen:<\/p>\n
In connection with the legal opinions to be delivered pursuant to
\nSections 7.2(d) and 7.3(d)of the Agreement and Plan of Merger (the “Merger
\nAgreement”) dated as of May 16, 1999, by and among General Dynamics Corporation,
\na Delaware corporation (the “Parent Corporation”), Tara Acquisition Corporation,
\na Delaware corporation and a wholly owned subsidiary of the Parent Corporation
\n(the “Acquisition Corporation”), and Gulfstream Aerospace Corporation, a
\nDelaware corporation (the “Company”), and in connection with the filing with the
\nSecurities Exchange Commission (the “SEC”) of the registration statement on Form
\nS-4 (the “Registration Statement”) relating to the Merger Agreement, which
\nincludes the joint proxy statement\/prospectus of the Parent Corporation and the
\nCompany, the undersigned certifies and represents on behalf of the Parent
\nCorporation and the Acquisition Corporation, after due inquiry and
\ninvestigation, as follows (any capitalized term used but not defined herein
\nhaving the meaning given to such term in the Merger Agreement):<\/p>\n
1. The facts relating to the contemplated merger (the “Merger”) of
\nthe Acquisition Corporation with and into the Company as described in the
\nRegistration Statement and the documents described in the Registration
\nStatement, as amended through the date hereof, are, insofar as such facts
\npertain to the Company, true, correct and complete in all material respects. The
\nMerger will be consummated in accordance with the Merger Agreement.<\/p>\n
2. The formula set forth in the Merger Agreement pursuant to which
\neach issued and outstanding share of common stock of the Company, par value $.01
\nper share (“Company Common Stock”) will be converted into the right to receive
\nCommon Stock, par value $1.00 per share, of the Parent Corporation (“Parent
\nCommon Stock”) is the result of arm’s length bargaining and such formula was
\ndesigned to result in the fair market value of the Parent Common Stock<\/p>\n
64<\/p>\n
received by the stockholders of the Company approximately equaling the aggregate
\nfair market value of the Company Common Stock surrendered in the exchange..<\/p>\n
3. Cash payments, if any, to be made to stockholders of the Company
\nin lieu of fractional shares of Parent Common Stock that would otherwise be
\nissued to such stockholders in the Merger represent a mere mechanical rounding
\noff and will be made solely for the purpose of saving the Parent Corporation the
\nexpense and inconvenience of issuing and transferring fractional shares of
\nParent Common Stock, and do not represent separately bargained for
\nconsideration. The total cash consideration that will be paid in the Merger to
\nstockholders of the Company in lieu of fractional shares of Parent Common Stock
\nwill not exceed one percent of the total consideration that will be issued in
\nthe Merger to stockholders of the Company in exchange for their shares of
\nCompany Common Stock. The fractional share interests of each stockholder of the
\nCompany will be aggregated, and no stockholder of the Company, with the possible
\nexception of stockholders whose holdings are in separate accounts or with
\ndifferent brokers, will receive cash in lieu of fractional shares in an amount
\ngreater than one full share of Parent Common Stock.<\/p>\n
4. Neither the Company nor any corporation related to the Company has
\nacquired or redeemed or has any present plan or intention to acquire or redeem
\nany Company Common Stock in contemplation of the Merger, after the Merger, or
\notherwise as part of a plan of which the Merger is a part. To the best knowledge
\nof the management of the Company, neither the Parent Corporation nor any
\ncorporation that is related to the Parent Corporation has a present plan or
\nintention to purchase Company Common Stock or any Parent Common Stock. For
\npurposes of this representation letter, two corporations will be treated as
\nrelated to one another if immediately prior to or immediately after the Merger
\n(a) the corporations are members of the same affiliated group (within the
\nmeaning of Section 1504 of the Internal revenue Code of 1986, as amended (the
\n“Code”), but determined without regard to Section 1504(b) of the Code) or (b)
\none corporation owns 50 percent or more of the total combined voting power of
\nall classes of stock of the other corporation that are entitled to vote or 50
\npercent or more of the total value of shares of all classes of stock of the
\nother corporation (applying the attribution rules of Section 318 of the Code, as
\nmodified pursuant to Section 304(c)(3)(B) of the Code).<\/p>\n
5. The Company has not made, and does not have any present plan or
\nintention to make, any distributions (other than regular, normal dividends made
\nin the ordinary course of business) prior to, in contemplation of or otherwise
\nin connection with, the Merger.<\/p>\n
6. The Parent Corporation, the Acquisition Corporation, the Company
\nand holders of Company Common Stock will each pay their respective expenses, if
\nany, incurred in connection with the Merger.<\/p>\n
7. Immediately following the Merger, the Company will hold (a) at
\nleast 90 percent of the fair market value of the net assets and at least 70
\npercent of the fair market value of the gross assets that were held by the
\nCompany immediately prior to the Merger and (b) at least 90 percent of the fair
\nmarket value of the net assets and at least 70 percent of the fair market value
\nof the gross assets that were held by the Acquisition Corporation immediately
\nprior to the Merger. For purposes of this representation, amounts paid to
\nstockholders who receive cash or other property<\/p>\n
B-1-2
\n 65<\/p>\n
(including cash in lieu of fractional shares of Parent Common Stock) in
\nconnection with the Merger, assets of the Company used to pay its reorganization
\nexpenses and all redemptions and distributions made by the Company (other than
\nregular, normal dividends made in the ordinary course of business) immediately
\npreceding, or in contemplation of, the Merger will be included as assets held by
\nthe Company immediately prior to the Merger.<\/p>\n
8. At the Effective Time, the Company will not have outstanding any
\nwarrants, options, convertible securities or any other type of right pursuant to
\nwhich any person could acquire Company Common Stock that, if exercised or
\nconverted, would affect Parent Corporation’s acquisition or retention of control
\nof the Company as defined in Section 368(c) of the Code.<\/p>\n
9. In connection with the Merger, Company Common Stock will be
\nconverted solely into Parent Common Stock (except for cash paid in lieu of
\nfractional shares of Parent Common Stock).<\/p>\n
10. The Company is not an investment company as defined in Section
\n368(a)(2)(F)(iii) and (iv) of the Code.<\/p>\n
11. The Company will not take any position on any federal, state or
\nlocal income or franchise tax return, or take any other tax reporting position,
\nthat is inconsistent with the treatment of the Merger as a reorganization within
\nthe meaning of Section 368(a) of the Code, unless otherwise required by a
\n“determination” (as defined in Section 1313(a)(1) of the Code) or by applicable
\nstate or local tax law (and then only to the extent required by such applicable
\nstate or local tax law).<\/p>\n
12. None of the compensation received by any stockholder-employee of
\nthe Company in respect of periods at or prior to the Effective Time represents
\nseparate consideration for, or is allocable to, any of its Company Common Stock.
\nNone of the Parent Common Stock that will be received by stockholder-employees
\nin the Merger represents separately bargained for consideration or is allocable
\nto any employment agreement or arrangement. The compensation paid to any
\nstockholder-employees will be commensurate with amounts paid to third parties.<\/p>\n
13. There is no intercorporate indebtedness existing between the
\nParent Corporation (or any of its subsidiaries, including the Acquisition
\nCorporation) and the Company (or any of its subsidiaries) that was issued or
\nacquired, or will be settled, at a discount.<\/p>\n
14. The Company is not under the jurisdiction of a court in a Title
\n11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.<\/p>\n
15. It is the Company’s present intention to pay all transfer taxes
\nattributable to the Merger out of the Company’s own funds (and not out of funds
\nprovided, directly or indirectly, by the Parent Corporation).<\/p>\n
16. The Merger Agreement, the Registration Statement and the other
\ndocuments described in the Registration Statement, all as amended through the
\ndate hereof, represent the entire understanding of the Company with respect to
\nthe Merger.<\/p>\n
B-1-3
\n 66<\/p>\n
17. No assets of the Company have been sold, transferred or otherwise
\ndisposed of which would prevent the Parent Corporation from continuing the
\n“historic business” of the Company or from using a significant portion of the
\n“historic business assets” of the Company in a business following the Merger (as
\nsuch terms are defined in Treasury Regulations Section 1.368-1(d)).<\/p>\n
18. Neither the Company nor any of its subsidiaries has constituted
\neither a “distributing corporation” or a “controlled corporation” (within the
\nmeaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
\nqualifying for tax-free treatment under Section 355 of the Code and subject to
\n355(e) of the Code (a) in the two years prior to the date of the Merger
\nAgreement or (b) in a distribution which could otherwise constitute part of a
\n“plan” or “series of related transactions” (within the meaning of Section 355(e)
\nof the Code) in conjunction with the Merger.<\/p>\n
19. As of the time of the Merger, the fair market value of the assets
\nof the Company will equal or exceed the sum of its liabilities, plus the amount
\nof liabilities, if any, to which such assets are subject.<\/p>\n
20. The undersigned is authorized to make all the representations set
\nforth herein.<\/p>\n
The undersigned acknowledges that (a) the opinions to be delivered
\npursuant to Sections 7.2(d) and 7.3(d) of the Merger Agreement will be based on
\nthe accuracy of the representations set forth herein and on the accuracy of the
\nrepresentations and warranties and the satisfaction of the covenants and
\nobligations contained in the Merger Agreement and the various other documents
\nrelated thereto and (b) such opinions will be subject to certain limitations and
\nqualifications including that it may not be relied upon if any such
\nrepresentations or warranties are not accurate or if any such covenants or
\nobligations are not satisfied in all material respects.<\/p>\n
B-1-4
\n 67<\/p>\n
The undersigned acknowledges that such opinions will not address any
\ntax consequences of the Merger or any action taken in connection therewith
\nexcept as expressly set forth in such opinions.<\/p>\n
Very truly yours,<\/p>\n
GULFSTREAM AEROSPACE CORPORATION<\/p>\n
By
\n ————————–
\n [Name and Title]<\/p>\n
B-1-5
\n 68<\/p>\n
EXHIBIT B-2<\/p>\n
FORM OF PARENT CORPORATION TAX REPRESENTATIONS<\/p>\n
[Letterhead of the Parent Corporation]<\/p>\n
[ ], 1999<\/p>\n
Jenner & Block
\n601 13th Street, N.W.
\nWashington, D.C. 20005<\/p>\n
Fried, Frank, Harris, Shriver & Jacobson
\nOne New York Plaza
\nNew York, New York 10004<\/p>\n
Ladies and Gentlemen:<\/p>\n
In connection with the legal opinions to be delivered pursuant to
\nSections 7.2(d) and 7.3(d) of the Agreement and Plan of Merger (the “Merger
\nAgreement”) dated as of May 16, 1999, by and among General Dynamics Corporation,
\na Delaware corporation (the “Parent Corporation”), Tara Acquisition Corporation,
\na Delaware corporation and a wholly owned subsidiary of the Parent Corporation
\n(the “Acquisition Corporation”), and Gulfstream Aerospace Corporation, a
\nDelaware corporation (the “Company”), and in connection with the filing with the
\nSecurities Exchange Commission (the “SEC”) of the registration statement on Form
\nS-4 (the “Registration Statement”) relating to the Merger Agreement, which
\nincludes the joint proxy statement\/prospectus of the Parent Corporation and the
\nCompany, the undersigned certifies and represents on behalf of the Parent
\nCorporation and the Acquisition Corporation, after due inquiry and
\ninvestigation, as follows (any capitalized term used but not defined herein
\nhaving the meaning given to such term in the Merger Agreement):<\/p>\n
1. The facts relating to the contemplated merger (the “Merger”) of
\nthe Acquisition Corporation with and into the Company as described in the
\nRegistration Statement and the documents described in the Registration
\nStatement, as amended through the date hereof, are, insofar as such facts
\npertain to the Parent Corporation and the Acquisition Corporation, true, correct
\nand complete in all material respects. The Merger will be consummated in
\naccordance with the Merger Agreement.<\/p>\n
2. The formula set forth in the Merger Agreement pursuant to which
\neach issued and outstanding share of common stock of the Company, par value $.01
\nper share (“Company <\/p>\n
69<\/p>\n
Common Stock”) will be converted into the right to receive Common Stock, par
\nvalue $1.00 per share, of the Parent Corporation (“Parent Common Stock”) is the
\nresult of arm’s length bargaining and such formula was designed to result in the
\nfair market value of the Parent Common Stock received by the stockholders of the
\nCompany approximately equaling the aggregate fair market value of the Company
\nCommon Stock surrendered in the exchange.<\/p>\n
3. Cash payments, if any, to be made to stockholders of the Company
\nin lieu of fractional shares of Parent Common Stock that would otherwise be
\nissued to such stockholders in the Merger represent a mere mechanical rounding
\noff and will be made solely for the purpose of saving the Parent Corporation the
\nexpense and inconvenience of issuing and transferring fractional shares of
\nParent Common Stock, and do not represent separately bargained for
\nconsideration. The total cash consideration that will be paid in the Merger to
\nstockholders of the Company in lieu of fractional shares of Parent Common Stock
\nwill not exceed one percent of the total consideration that will be issued in
\nthe Merger to stockholders of the Company in exchange for their shares of
\nCompany Common Stock. The fractional share interests of each stockholder of the
\nCompany will be aggregated, and no stockholder of the Company, with the possible
\nexception of stockholders whose holdings are in separate accounts or with
\ndifferent brokers, will receive cash in lieu of fractional shares in an amount
\ngreater than one full share of Parent Common Stock.<\/p>\n
4. The Parent Corporation has no present plan or intention, following
\nthe Merger, to reacquire, or to cause any corporation that is related to the
\nParent Corporation to acquire, any Parent Common Stock. To the best knowledge of
\nthe management of the Parent Corporation, no corporation that is related to the
\nParent Corporation has a present plan or intention to purchase any Parent Common
\nStock. For purposes of this representation letter, two corporations will be
\ntreated as related to one another if immediately prior to or immediately after
\nthe Merger (a) the corporations are members of the same affiliated group (within
\nthe meaning of Section 1504 of the Internal Revenue Code of 1986, as amended
\n(the “Code”), but determined without regard to Section 1504(b) of the Code) or
\n(b) one corporation owns 50 percent or more of the total combined voting power
\nof all classes of stock of the other corporation that are entitled to vote or 50
\npercent or more of the total value of shares of all classes of stock of the
\nother corporation (applying the attribution rules of Section 318 of the Code, as
\nmodified pursuant to Section 304(c)(3)(B) of the Code).<\/p>\n
5. The Parent Corporation has no present plan or intention to make
\nany distributions after the Merger to holders of Parent Common Stock (other than
\nregular, normal dividends made in the ordinary course of business).<\/p>\n
6. The Parent Corporation has no present plan or intention to cause
\ndistributions with respect to the Company Common Stock (other than regular,
\nnormal dividends made in the ordinary course of business.)<\/p>\n
7. Neither the Parent Corporation nor the Acquisition Corporation
\n(nor any other subsidiary of the Parent Corporation) has acquired, or, except as
\na result of the Merger, will acquire, or has owned in the past five years, any
\nCompany Common Stock.<\/p>\n
B-2-2
\n 70<\/p>\n
8. Prior to the Merger, the Parent Corporation will own all the
\ncapital stock of the Acquisition Corporation and will be in control of
\nAcquisition Corporation within the meaning of Section 368(c) of the Code. The
\nParent Corporation has no present plan or intention to cause the Company to
\nissue additional shares of its stock that would result in the Parent Corporation
\nowning less than all the capital stock of the Company after the Merger.<\/p>\n
9. The Parent Corporation has no present plan or intention, following
\nthe Merger, to liquidate the Company, to merge the Company with and into another
\ncorporation, to sell or otherwise dispose of any of the stock of the Company, to
\ncause the Company to distribute to the Parent Corporation or any of its
\nsubsidiaries any assets of the Company or the proceeds of any borrowings
\nincurred by the Company, or to cause the Company to sell or otherwise dispose of
\nany of the assets held by the Company at the time of the Merger, except for
\ndispositions of such assets in the ordinary course of business and transfers
\ndescribed in Section 368(a)(2)(C) of the Code or Treasury Regulations Section
\n1.368-1(d).<\/p>\n
10. Immediately following the Merger, the Company will hold (a) at
\nleast 90 percent of the fair market value of the net assets and at least 70
\npercent of the fair market value of the gross assets that were held by the
\nCompany immediately prior to the Merger and (b) at least 90 percent of the fair
\nmarket value of the net assets and at least 70 percent of the fair market value
\nof the gross assets that were held by the Acquisition Corporation immediately
\nprior to the Merger. For purposes of this representation, amounts paid to
\nstockholders who receive cash or other property (including cash in lieu of
\nfractional shares of Parent Common Stock) in connection with the Merger, assets
\nof the Company used to pay its reorganization expenses and all redemptions and
\ndistributions made by the Company (other than regular, normal dividends made in
\nthe ordinary course of business) immediately preceding, or in contemplation of,
\nthe Merger will be included as assets held by the Company immediately prior to
\nthe Merger.<\/p>\n
11. The Parent Corporation, the Acquisition Corporation, the Company
\nand holders of Company Common Stock will each pay their respective expenses, if
\nany, incurred in connection with the Merger.<\/p>\n
12. Following the Merger, the Parent Corporation will cause the
\nCompany to continue its “historic business” or to use a significant portion of
\nits “historic business assets” in a business (as such terms are defined in
\nTreasury Regulations Section 1.368-1(d)).<\/p>\n
13. Neither the Parent Corporation nor the Acquisition Corporation is
\nan investment company as defined in Section 368(a)(2)(F)(iii) and (iv) of the
\nCode.<\/p>\n
14. Neither the Parent Corporation nor the Acquisition Corporation
\nwill take any position on any federal, state or local income or franchise tax
\nreturn, or take any other tax reporting position, that is inconsistent with the
\ntreatment of the Merger as a reorganization within the meaning of Section 368(a)
\nof the Code, unless otherwise required by a “determination” (as defined in
\nSection<\/p>\n
B-2-3
\n 71<\/p>\n
1313(a)(1) of the Code) or by applicable state or local tax law (and then only
\nto the extent required by such applicable state or local tax law).<\/p>\n
15. None of the compensation received by any stockholder-employee of
\nthe Company in respect of periods after the Effective Time represents separate
\nconsideration for, or is allocable to, any of their Company Common Stock. None
\nof the Parent Common Stock that will be received by any stockholder-employee in
\nthe Merger represents separately bargained for consideration or is allocable to
\nany employment agreement or arrangement. The compensation paid to any
\nstockholder-employees will be for services actually rendered and will be
\ncommensurate with amounts paid to third parties.<\/p>\n
16. There is no intercorporate indebtedness existing between The
\nParent Corporation (or any of its subsidiaries, including the Acquisition
\nCorporation) and the Company (or any of its subsidiaries) that was issued or
\nacquired, or will be settled, at a discount.<\/p>\n
17. Neither the Parent Corporation nor the Acquisition Corporation is
\nunder the jurisdiction of a court in a Title 11 or similar case within the
\nmeaning of Section 368(a)(3)(A) of the Code.<\/p>\n
18. Neither the Parent Corporation nor the Acquisition Corporation
\n(nor any other subsidiary of the Parent Corporation) has constituted either a
\n“distributing corporation” or a “controlled corporation” (within the meaning of
\nSection 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
\ntax-free treatment under Section 355 of the Code and subject to Section 355(e)
\nof the Code (a) in the two years prior to the date of the Merger Agreement or
\n(b) in a distribution which could otherwise constitute part of a “plan” or
\n“series of related transactions” (within the meaning of Section 355(e) of the
\nCode) in conjunction with the Merger.<\/p>\n
19. In connection with the Merger, Company Common Stock will be
\nconverted solely into Parent Common Stock (except for cash paid in lieu of
\nfractional shares of Parent Common Stock). For purposes of this representation,
\nCompany Common Stock redeemed for cash or other property furnished directly or
\nindirectly by the Parent Corporation will be considered as acquired by the
\nParent Corporation for other than Parent Common Stock. Further, no liabilities
\nof the Company or any holders of Company Common Stock will be assumed by the
\nParent Corporation, nor will any of the Company Common Stock acquired by the
\nParent Corporation in connection with the Merger be subject to any liabilities.<\/p>\n
20. The Merger Agreement, the Registration Statement and the other
\ndocuments described in the Registration Statement all as amended through the
\ndate hereof represent the entire understanding of the Parent Corporation and the
\nAcquisition Corporation with respect to the Merger.<\/p>\n
21. The Acquisition Corporation is a corporation newly formed for the
\npurpose of participating in the Merger and at no time prior to the Merger has
\nhad assets or liabilities (other than nominal assets contributed upon the
\nformation of the Acquisition Corporation, which assets are<\/p>\n
B-2-4
\n 72<\/p>\n
not subject to any liabilities and will be held by Company as the surviving
\ncorporation following the Merger) or business operations.<\/p>\n
22. The Merger is being undertaken for purposes of enhancing the
\nbusiness of the Parent Corporation and for other good and valid business
\npurposes of the Parent Corporation.<\/p>\n
23. The undersigned is authorized to make all the representations set
\nforth herein on behalf of the Parent Corporation and the Acquisition
\nCorporation.<\/p>\n
The undersigned acknowledges that (a) the opinions to be delivered
\npursuant to Sections 7.2(d) and 7.3(d) of the Merger Agreement will be based on
\nthe accuracy of the representations set forth herein and on the accuracy of the
\nrepresentations and warranties and the satisfaction of the covenants and
\nobligations contained in the Merger Agreement and the various other documents
\nrelated thereto and (b) such opinions will be subject to certain limitations and
\nqualifications including that it may not be relied upon if any such
\nrepresentations or warranties are not accurate or if any such covenants or
\nobligations are not satisfied in all material respects.<\/p>\n
The undersigned acknowledges that such opinions will not address any
\ntax consequences of the Merger or any action taken in connection therewith
\nexcept as expressly set forth in such opinions.<\/p>\n
Very truly yours,<\/p>\n
GENERAL DYNAMICS CORPORATION<\/p>\n
By
\n ————————-
\n [Name and Title]<\/p>\n
B-2-5<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7614,7704],"corporate_contracts_industries":[9473,9475],"corporate_contracts_types":[9622,9626],"class_list":["post-43055","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-general-dynamics-corp","corporate_contracts_companies-gulfstream-aerospace-corp","corporate_contracts_industries-aerospace__aircraft","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\/43055","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=43055"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43055"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43055"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}