<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 9, 1997
UNC INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 1-7795 54-1078297
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
175 Admiral Cochrane Drive, Annapolis, Maryland 21401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 266-7333
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events
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Amended and Restated Agreement and Plan of Merger with Greenwich Air
Services, Inc.
On March 9, 1997, UNC Incorporated (the "Registrant"), Greenwich Air
Services, Inc. ("Greenwich"), a Delaware corporation, and Condor Acquisition
Corp., a Delaware corporation and wholly-owned subsidiary of Greenwich
("Condor"), entered into an Amended and Restated Agreement and Plan of Merger
(the "Amended Merger Agreement") modifying and restating the terms of the
Agreement and Plan of Reorganization previously entered into by the parties on
February 13, 1997 (the "Original Merger Agreement") pursuant to which the
Registrant will merge with Condor (the "UNC-Greenwich Merger"), thereby becoming
a wholly-owned subsidiary of Greenwich.
The Amended Merger Agreement modifies, among other things, the
consideration to be received by holders of the Common Stock, $0.20 par value per
share of the Registrant (the "UNC Common Stock"), by virtue of the UNC-Greenwich
Merger. Pursuant to the Amended Merger Agreement, holders of UNC Common Stock
shall be entitled to receive at the Effective Time (as defined in the Amended
Merger Agreement) $15.00 in cash for each share of UNC Common Stock then
currently issued and outstanding.
Concurrently with the execution and delivery of the Amended Merger
Agreement, Greenwich, General Electric Company, a New York corporation ("GE"),
and GB Merger Corp., a wholly-owned subsidiary of GE, entered into an Agreement
and Plan of Merger pursuant to which those parties have agreed that Greenwich
will merge with GB Merger Corp. (the "GE-Greenwich Merger"), thereby becoming a
wholly-owned subsidiary of GE.
Consummation of the UNC-Greenwich Merger pursuant to the Amended Merger
Agreement is subject to a number of conditions, including approval by the
stockholders of the Registrant entitled to vote thereon, certain regulatory
approvals, and satisfaction or waiver of all conditions to the GE-Greenwich
Merger. The GE-Greenwich Merger is, in turn, subject to a number of conditions,
including approval by the Greenwich stockholders entitled to vote thereon and
certain regulatory approvals. If the GE-Greenwich Merger is terminated for any
reason, the Amended Merger Agreement provides, in effect, that the terms of the
Original Merger Agreement are revived, with certain modifications as specified
in section 6.17 of the Amended Merger Agreement. The terms and conditions of the
Original Merger Agreement were previously disclosed in the Registrant's Current
Report on Form 8-K dated February 13, 1997, which report is incorporated herein
by reference.
The terms and conditions of the Amended Merger Agreement were
determined as a result of arm's length negotiations among the Registrant,
Greenwich, and GE.
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Item 7. Financial Statements and Exhibits
---------------------------------
(a) Financial statements of businesses acquired.
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Not applicable.
(b) Pro forma financial information.
-------------------------------
Not applicable.
(c) Exhibits.
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1. Amended and Restate Agreement and Plan of Merger, dated March 9,
1997 among Greenwich Air Services, Inc., Condor Acquisition Corp.,
and UNC Incorporated.
2. Agreement and Plan of Merger dated March 9, 1997 among General
Electric Company, GB Merger Corp., and Greenwich Air Services,
Inc.
3. Press Release dated March 10, 1997
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed by the undersigned hereunto
duly authorized.
UNC INCORPORATED
Dated: March 14, 1997 By: /s/ Robert L. Pevenstein
------------------------
Robert L. Pevenstein
Senior Vice President
and Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
- -------------- -------
1 Amended and Restated Agreement and Plan of Merger, dated March
9, 1997 among Greenwich Air Services, Inc., Condor Acquisition
Corp., and UNC Incorporated
2 Agreement and Plan Merger dated March 9, 1997 among General
Electric Company, GB Merger Corp., and Greenwich Air Services,
Inc.
3 Press Release dated March 10, 1997
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<PAGE>
EXHIBIT 1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMONG
GREENWICH AIR SERVICES, INC.
CONDOR ACQUISITION CORP.
AND
UNC INCORPORATED
Dated as of March 9, 1997
<PAGE>
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this
"Agreement"), made and entered into and executed this 9th day of March 1997, by
and between GREENWICH AIR SERVICES, INC., a Delaware corporation ("Greenwich"),
CONDOR ACQUISITION CORP., a Delaware corporation and a wholly owned subsidiary
of Greenwich ("Merger Sub"), and UNC INCORPORATED, a Delaware corporation
("UNC"), amends and restates in its entirety that certain Agreement and Plan of
Reorganization, dated as of February 13, 1997 (the "Agreement Date") by and
between Greenwich and UNC (the "Prior Agreement").
RECITALS
A. Greenwich and UNC have heretofore entered into the Prior
Agreement, pursuant to which Greenwich agreed (subject to the terms and
conditions set forth therein) to acquire all of the outstanding "UNC Common
Stock Equivalents" (which term includes issued and outstanding shares of UNC
Common Stock and shares of UNC Common Stock issuable upon conversion of shares
of UNC Class B Preferred Stock and the exercise of currently outstanding options
to acquire shares of UNC Common Stock) at a value of not less than $14.00 per
UNC Common Stock Equivalent (subject to adjustment) in a merger of UNC with and
into Condor. The consideration payable to the holders of UNC Common Stock
Equivalents pursuant to the Prior Agreement was payable in shares of Greenwich
Class B Common Stock or, to the extent elected by each such holder (and subject
to the limitations contained in the Prior Agreement), in cash at the rate of
$14.00 per UNC Common Stock Equivalent.
B. Simultaneously with the execution of this Agreement,
Greenwich is entering into the GE-Greenwich Merger Agreement (as defined below),
pursuant to which GE has agreed (subject to the conditions therein set forth) to
acquire all of the issued and outstanding common stock of Greenwich.
C. In connection with the foregoing transaction, the Boards of
Directors of Greenwich and UNC have determined that it is in the best interests
of the respective stockholders of Greenwich and UNC, and accordingly Greenwich
and UNC have agreed, to amend and restate the Prior Agreement to provide for the
acquisition by Greenwich of all outstanding UNC Common Stock Equivalents for
cash at the rate of $15.00 per UNC Common Stock Equivalent, all on the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties, covenants, agreements and conditions set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
In addition to the other terms defined in this Agreement, as used
herein, the following terms shall have the meanings set forth below:
Section 1.1. "Agreement" shall mean this Amended and Restated
Agreement and Plan of Merger (including the Recitals hereto), together with the
Certificate of Merger and other Exhibits and Schedules attached hereto, as
amended from time to time in accordance with the terms hereof.
<PAGE>
Section 1.2. "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under common
control with such specified Person. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
Section 1.3. "Affiliated Group" shall mean an affiliated group as
defined in Section 1504 of the Code (or any analogous combined, consolidated or
unitary group defined under any domestic or foreign Tax law) of which any of UNC
and UNC Subsidiaries or Greenwich and Greenwich Subsidiaries are members.
Section 1.4. "AlliedSignal Agreements" shall mean the collective
reference to the following agreements, as amended from time to time: (a) the
Asset and Stock Purchase Agreement, dated May 26, 1994 between LDC Aviation
Services, Inc. ("Garrett") and AlliedSignal Corporation ("AlliedSignal"); (b)
the agreement dated April 25, 1996 between UNC and AlliedSignal, which expires
on December 31, 1997 and authorizes UNC to perform repairs on certain
AlliedSignal parts and components; and (c) the operating agreement dated June
24, 1994 between Garrett and AlliedSignal expiring June 30, 2009; copies of all
of which AlliedSignal Agreements have been furnished to Greenwich.
Section 1.5. "Audited 1996 Statements" shall mean the audited
consolidated balance sheet as at December 31, 1996 of the UNC Companies,
together with the related audited consolidated statement of income, statement of
cash flows and statement of stockholders' equity, and with all applicable notes
and schedules, all of which, when issued will have been audited by the UNC
Auditors, in accordance with GAAP and Regulation S-X, as promulgated under the
Securities Act.
Section 1.6. "Certificate of Merger" shall mean the certificate of
merger to be filed by the Constituent Corporations, in form and content
reasonably satisfactory to counsel to UNC and Greenwich.
Section 1.7. "Closing" shall have the meaning given in Section 10.1,
and the term "Closing Date" shall mean the date on which the Closing occurs.
Section 1.8. "Code" shall mean, as appropriate, the Internal Revenue
Code of 1954 or of 1986, each as amended.
Section 1.9. "Confidentiality Agreement" shall mean the
Confidentiality Agreement dated November 8, 1996 between UNC and Greenwich.
Section 1.10. "Constituent Corporations" shall mean UNC and Merger
Sub, which shall be the parties to the Merger.
Section 1.11. "Contract" shall mean any contract, agreement, lease,
license, arrangement, understanding, relationship or commitment, written or
oral.
Section 1.12. "DGCL" shall mean the Delaware General Corporation Law,
as amended.
Section 1.13. "J.P. Morgan" shall mean J.P. Morgan Securities Inc.,
financial advisors to UNC.
Section 1.14. "Effective Time" has the meaning given in Section 3.2.
<PAGE>
Section 1.15. "Employee Plan Event" shall mean, with respect to any
Employee Plan relating to the operations of any of the UNC Companies, any of the
events described in clauses (i) through (xi) below, in each case, as of the date
hereof and as of the Closing Date, as applicable:
(i) a "reportable event" (within the meaning of Section 4043 of
ERISA) for which the requirement of notice within 30 days to the PBGC is
not waived or which is described in 29 C.F.R. Section 2615.12 or 2615.15;
(ii) the failure to meet the minimum funding standard of Section
412 of the Code (whether or not waived in accordance with Section 412(d) of
the Code) or the failure to make by its due date a required installment
under Section 412(m) of the Code;
(iii) the provision by the administrator of any plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in
a distress termination described in Section 401(c) of ERISA;
(iv) the withdrawal from any plan during a plan year by a
"substantial employer" as defined in Section 4001(a)(2) of ERISA resulting
in liability pursuant to Section 4062(e) or Section 4063 of ERISA;
(v) the institution by the PBGC of proceedings to terminate any
plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination or the appointment of a trustee to
administer, any plan;
(vi) the imposition of liability pursuant to Section 4064 or 4069
of ERISA or by reason of the application of Section 4212(c) of ERISA;
(vii) the complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any multiemployer plan if there is
any potential liability therefor, or the receipt of notice from any
multiemployer plan that it is in reorganization or insolvency pursuant to
Sections 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Sections 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could give rise to
the imposition of fines, penalties, taxes or related charges under Chapter
43 of the Code or under Section 409, 502(c), 504(1) or 4071 of ERISA in
respect of any plan;
(ix) the assertion of a material claim (other than routine claims
for benefits) against any plan other than a multiemployer plan or the
assets of any plan, or against the plan sponsor in connection with any such
plan;
(x) receipt from the IRS of notice of the failure of any Qualified
Plan to qualify under Section 401(a) of the Code, or the failure of any
trust forming part of any Qualified Plan to qualify for exemption from
taxation under Section 501(a) of the Code;
(xi) the imposition of a lien on any assets of the person
maintaining or contributing to any plan pursuant to Sections 401(a)(29) or
412(n) of the Code or pursuant to ERISA.
Section 1.16. "Employee Plan" shall mean, as of the date hereof and
as of the Closing Date, as applicable, any plan, contract, commitment, program,
policy, arrangement, understanding or practice providing benefits to any
employee, former employee, director or agent of any of the UNC Companies
(whether or not the Person maintains, contributes to, or is bound by any such
plan, contract, commitment, program, policy,
<PAGE>
arrangement, understanding or practice, or under which any of the UNC Companies
contributes, has contributed or has any obligation to contribute), including,
without limitation (i) any "employee benefit plan" (within the meaning of
Section 3(3) of ERISA), (ii) any profit-sharing, deferred compensation, bonus,
stock option, stock purchase, pension, retainer, consulting, retirement,
severance, welfare or incentive plan, contract, commitment, program, policy,
arrangement, understanding or practice, (iii) any plan, contract, commitment,
program, policy, arrangement, understanding or practice providing for "fringe
benefits" or perquisites, including, without limitation, benefits relating to
automobiles, clubs, vacation, child care, parenting, sabbatical or sick leave
and medical, dental, hospitalization, life insurance and other types of
insurance, (iv) any Pension Plan, and (v) any Multiemployer Plan.
Section 1.17. "Environmental Assessment" shall mean any one or more
reviews, studies and/or reports by an independent environmental consultant,
which may include, without limitation, one or more Phase I and/or Phase II
studies, updates thereof, compliance audits, health and safety audits, and
related testing for hazardous substances, toxic substances, hazardous wastes
and/or toxic pollutants (as defined under Environmental Laws), for the purpose
of determining whether any of the UNC Companies is in compliance with
Environmental Laws, and/or whether there exists any condition or circumstance
which authorizes or may require any corrective action, cleanup, removal or other
remedial action under Environmental Laws on the part of any of the UNC Companies
or any Real Estate owned or leased by any of the UNC Companies.
Section 1.18. "Environmental Laws" shall mean and include all
federal, state and local laws, statutes, regulations, permits, orders,
ordinances, codes, rules and other governmental restrictions, requirements and
duties, including common law, relating to the treatment, storage, disposal or
release of air pollutants, water pollutants or processed waste water or
otherwise relating to human health, the environment or hazardous substances,
including but not limited to the Federal Solid Waste Disposal Act; the Federal
Clean Air Act (including, without limitation, the Clean Air Act Amendments of
1990); the Federal Water Pollution Control Act; the Hazardous Materials
Transportation Act; the Federal Toxic Substances Control Act; the Federal
Resource Conservation and Recovery Act of 1976; the National Environmental
Policy Act; the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA") and similar state laws, all amendments to any
of the foregoing statutes, and all regulations promulgated by any federal or
state agencies, including the Environmental Protection Agency, regulations of
the Nuclear Regulatory Agency, and regulations of any state department of
natural resources or state environmental protection agency now or at any time
hereinafter in effect.
The terms "hazardous substances," "release," "respond," "response,"
and all variations and derivatives thereof shall mean and include, without
limitation, all radioactive materials, asbestos and asbestos-containing
materials, PCBs, petroleum products and by-products, all solid, semi-solid,
liquid or gaseous substances which are toxic, ignitable, corrosive, carcinogenic
or otherwise dangerous to human, plant or animal health, and all substances
defined or listed as "hazardous substances," "toxic substances," "hazardous
waste," "toxic pollutants" in, or otherwise regulated under any Environmental
Law, including, without limitation, the meanings ascribed to them in CERCLA.
Section 1.19. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
Section 1.20. "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
Section 1.21. "GAAP" shall mean generally accepted accounting
principles as in effect in the United States of America at the time of the
preparation of the subject financial statement.
Section 1.22. "GE" shall mean General Electric Company, a New York
corporation.
Section 1.23. "Governmental Authority" shall mean any federal, state,
provincial, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, or any court, in each case whether of the
United States, any of its possessions or territories, or of any foreign nation.
<PAGE>
Section 1.24. "Greenwich" shall mean Greenwich Air Services, Inc., a
Delaware corporation.
Section 1.25. "Greenwich Class A Stock" shall mean the Class A voting
common stock, $.01 par value per share, of Greenwich.
Section 1.26. "Greenwich Class B Stock" shall mean the Class B
nonvoting common stock of Greenwich, $.01 par value per share.
Section 1.27. "GE/Greenwich Merger" shall mean the merger of
Greenwich with and into GE or a wholly-owned subsidiary of GE pursuant to the
GE-Greenwich Merger Agreement.
Section 1.28. "GE-Greenwich Merger Agreement" shall mean the
Agreement and Plan of Merger, dated March 9, 1997, among GE, GB Merger Corp., a
wholly-owned subsidiary of GE ("Mergerco"), and Greenwich pursuant to which it
is contemplated that as at the effective time of the GE/Greenwich Merger,
Greenwich will be merged with and into Mergerco, with Mergerco as the surviving
corporation of such GE/Greenwich Merger; a true copy of which GE-Greenwich
Merger Agreement has been furnished to UNC.
Section 1.29. "Indebtedness" shall mean, with respect to UNC, any UNC
Subsidiary and the UNC Companies, as a consolidated whole, as applicable (a) all
indebtedness, whether or not contingent, for borrowed money, (b) all obligations
for the deferred purchase price of property or services except trade accounts
payable and accrued liabilities that arise in the ordinary course of business,
(c) all obligations evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e)
all obligations as lessee under leases that have been or should be, in
accordance with GAAP, recorded as capital leases, (f) all obligations,
contingent or otherwise, under acceptance, letter of credit or similar
facilities, (g) all obligations to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock or any warrants, rights or options
to acquire such capital stock, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends but only to the extent such obligation is
payable (i) at a fixed or determinable date, whether by operation of a sinking
fund or otherwise, (ii) at the option of any other Person or (iii) upon the
occurrence of a condition not solely within their control, such as a redemption
required to be made out of future earnings, (h) all Indebtedness of others
referred to in clauses (a) through (f) above guaranteed directly or indirectly
in any manner or in effect guaranteed directly or indirectly through an
agreement (A) to pay or purchase such Indebtedness or to advance or supply funds
for the payment or purchase of such Indebtedness, (B) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss, (C) to supply funds to or
in any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether such property is received or such
services are rendered) or (D) otherwise to assure a creditor against loss, and
(i) all Indebtedness referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any encumbrance on property (including, without
limitation, accounts and contract rights) owned, even though payment of such
Indebtedness has not been assumed or become a liability.
Section 1.30. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
Section 1.31. "IRS" shall mean the Internal Revenue Service.
Section 1.32. "Knowledge of Greenwich" shall mean the actual
knowledge, after due inquiry, of those officers of Greenwich identified in
Schedule 1.45.
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Section 1.33. "Knowledge of UNC" shall mean the actual knowledge,
after due inquiry, of those officers of UNC identified in Schedule 1.46.
Section 1.34. "Law" shall mean any federal, state, provincial, local
or other law or governmental requirement of any kind, and the rules, regulations
and orders promulgated thereunder.
Section 1.35. "Merger" shall have the meaning given in Section 2.1.
Section 1.36. "Merger Consideration" means the amounts payable to
holders of shares of UNC Stock as described in Section 2.2.
Section 1.37. "Multiemployer Plan" shall mean an Employee Plan that
is a "multiemployer plan" within the meaning of Section 3(37) of ERISA, to which
any of the Sellers or Businesses contributes or has contributed or has or has
had an obligation to contribute.
Section 1.38. "Nasdaq" shall mean The Nasdaq National Market.
Section 1.39. "NYSE" shall mean The New York Stock Exchange, Inc.
Section 1.40. "Partnership" shall mean any limited or general
partnership, joint venture or other business association, other than a
Subsidiary, in which any party has a direct or indirect interest (collectively,
"Partnerships"), all of such Partnerships of Greenwich being listed on Schedule
1.53A attached hereto and all of such Partnerships of UNC being listed on
Schedule 1.53B attached hereto.
Section 1.41. "Pension Plan" shall mean an Employee Plan, other than
a Multiemployer Plan, that is either (a) covered by Title IV of ERISA or subject
to the minimum funding standards of Section 412 of the Code, or (b) an Employee
Plan in the nature of a defined contribution or defined benefit pension plan
under the laws of the United Kingdom and/or Scotland.
Section 1.42. "Person" shall mean any individual, partnership, firm,
corporation, limited liability company, association, trust, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a "person" under Section 13(d)(3) of the Exchange Act.
Section 1.43. "Permits" shall mean permits, licenses and
governmental authorizations, registrations and approvals.
Section 1.44. "Real Estate" shall mean, with respect to any of the
UNC Companies, as applicable, all of the fee or leasehold ownership right, title
and interest of such UNC Company, in and to all real estate and improvements
owned or leased by any of the UNC Companies and which is used by any of the UNC
Companies in connection with the operation of the UNC Businesses, including
without limitation, all of the real estate and improvements described on
Schedule 1.60.
Section 1.45. "Schedules" shall mean the confidential disclosure
schedules prepared by UNC and Greenwich, respectively, annexed (or deemed
annexed pursuant to Section 12.12) to this Agreement and made a part hereof, as
the same may be modified or updated by agreement of the parties through and
including the Closing Date. A disclosure contained in any one Schedule shall be
deemed to be a disclosure for any and all purposes hereunder.
Section 1.46. "SEC" shall mean the Securities and Exchange
Commission.
Section 1.47. "Securities Act" shall mean the Securities Act of 1933,
as amended.
<PAGE>
Section 1.48. "Series B Preferred Stock Purchase Agreement" shall
mean the securities purchase agreement, dated as of October 4, 1995, between UNC
and Network III Holdings, LDC, Gildea Investment Company, Iron City Partners,
Inc., Ariel Fund Ltd. and Pequod Investments, L.P., pursuant to which UNC sold
for $25 million an aggregate of 250,000 shares of UNC Series B Preferred Stock.
Section 1.49. "Stock Options" shall mean the collective reference to
(a) the various types of UNC stock options which are authorized for issuance
under the Stock Option Plans, (b) the outstanding warrants to purchase shares of
UNC Common Stock, all of which are reflected on Schedule 5.2, and (c) the right
to acquire shares of UNC Common Stock pursuant to the 7-1/2% UNC Convertible
Debentures.
Section 1.50. "Stock Option Plans" shall mean the individual and
collective reference to all qualified and nonqualified stock option plans,
incentive stock option plans, non-employee directors' stock option plans and
other rights to purchase shares of UNC Common Stock granted to employees, and
which are summarized and disclosed on Schedule 5.2.
Section 1.51. "Subsidiary" shall mean (i) each corporate entity with
respect to which a party has the right to vote (directly or indirectly through
one or more other entities or otherwise) shares representing 50% or more of the
votes eligible to be cast in the election of directors of such entity, and (ii)
each other corporate entity which constitutes a "significant subsidiary," as
defined in Rule 1-02 of Regulation S-X adopted under the Exchange Act
(collectively, "Subsidiaries"), all of the Subsidiaries of Greenwich being
listed on Schedule 1.39 and all of the Subsidiaries of UNC being listed on
Schedule 1.84.
Section 1.52. "UNC Stockholders' Meeting" shall mean the special or
annual meeting of stockholders of UNC called pursuant to Section 3.1 to consider
and approve the transactions contemplated herein, and any adjournments thereof.
Section 1.53. "UNC" shall mean UNC Incorporated, a Delaware
corporation.
Section 1.54. "UNC Businesses" shall mean, as of the specific date
referenced, the collective reference to the UNC Garrett Business, the UNC
Manufacturing Business and the UNC Lear Siegler Business, as presently conducted
by the UNC Companies and their respective business operations.
Section 1.55. "UNC Common Stock" shall mean the Common Stock, $0.20
par value per share, of UNC.
Section 1.56. "UNC Companies" shall mean UNC, its Subsidiaries and
the Partnerships in which it has an interest.
Section 1.57. "UNC Financial Statements" shall mean (a) the audited
consolidated balance sheet of UNC as of December 31, 1995, and the audited
consolidated statements of earnings, stockholders' equity and cash flows for the
fiscal year then ended, together with the notes thereto, and (b) the UNC SEC
Reports, true and correct copies of which have been provided to Greenwich by
UNC.
Section 1.58. "UNC Garrett Business" shall mean the overhaul,
maintenance and repair of gas turbine aircraft and aircraft engines and
accessories, airframe retrofits and completion and spare parts distribution,
primarily for business aircraft.
Section 1.59. "UNC Lear Siegler Business" shall mean the provision of
contract services to United States and foreign military and other government
agencies, consisting primarily of aircraft maintenance and pilot training.
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Section 1.60. "UNC Manufacturing Business" shall mean the provision
of specialized aviation product manufacturing and repair services on an
outsourced basis for the major engine and airframe OEMs and the provision of
manufactured products and repairs directly to the United States military.
Section 1.61. "UNC Material Adverse Effect" shall mean any
circumstances, change in, or effect on, the UNC Companies, when taken as a
consolidated whole, or affecting the UNC Garrett Business, the UNC Lear Siegler
Business or the UNC Manufacturing Business, whether individually or collectively
as to any one or more of such UNC Businesses, which is, or could reasonably be
expected to in the future be, materially adverse to the operations, assets or
liabilities, employee relationships, customer or supplier relationships,
earnings or results of operations, financial budgets and forecasts or the
business prospects and condition (financial or otherwise) of the UNC Companies
or any one or more of UNC Businesses, whether individually or taken as a
consolidated whole with respect to the UNC Companies.
Section 1.62. "UNC Material Contracts" shall mean the types of
Contracts referred to in Section 5.10 of this Agreement to which UNC or any of
UNC Subsidiaries is a party signatory, including, without limitation, the
AlliedSignal Agreements.
Section 1.63. "UNC Notes" shall mean the collective reference to (a)
UNC's 9-1/8% $100 million principal amount Senior Notes Due 2003 (the "9-1/8%
UNC Notes"), (b) UNC's 11% $125 million principal amount Senior Subordinated
Notes Due 2006 (the "11% UNC Notes"), and (c) UNC's 7-1/2% $64.8 million Junior
Convertible Subordinated Debentures Due 2006 (the "7-1/2% UNC Convertible
Debentures").
Section 1.64. "UNC Preferred Stock" shall mean the collective
reference to 12,000,000 authorized shares of UNC preferred stock, $1.00 par
value per share, of which (a) 250,000 shares of Series A Junior Participating
Preferred Stock are authorized for issuance, (b) 250,000 shares of UNC Series B
Preferred Stock are authorized, and (c) 250,000 of Series C Senior Cumulative
Preferred Stock are authorized.
Section 1.65. "UNC Proxy Statement" shall mean the UNC Proxy
Statement to be distributed by UNC to its stockholders in connection with the
matters to be voted upon at the UNC Stockholders Meeting, as contemplated by
Section 3.1.
Section 1.66. "UNC SEC Reports" shall mean (a) UNC's Annual Reports
on Form 10-K for the fiscal years ended December 31, 1995, December 31, 1994,
and December 31, 1993, and (b) all other documents, reports and registration
statements filed by UNC with the SEC pursuant to the Exchange Act and the
Securities Act.
Section 1.67. "UNC Series B Preferred Stock" shall mean the 250,000
authorized, issued and outstanding shares of Series B senior cumulative
convertible UNC Preferred Stock, par value $1.00 per share.
Section 1.68. "UNC Stock" shall mean UNC Common Stock or UNC Series B
Preferred Stock.
Section 1.69. "UNC Subsidiary" or "UNC Subsidiaries" shall mean the
singular or plural reference, as the case may be, to any one or more direct or
indirect Subsidiaries of UNC, all of which are listed (including their states of
incorporation and percentage of outstanding capital stock directly or indirectly
beneficially owned by UNC) on Schedule 1.84.
Section 1.70. "Taxes" shall mean any and all taxes, levies, imposts,
duties, assessments, charges and withholdings imposed or required to be
collected by or paid over to any federal, state, local or foreign Governmental
Authority or any political subdivision thereof, including without limitation
income, gross receipts, ad valorem, value added, minimum tax, franchise, sales,
-- -------
use, excise, license, real or personal property, unemployment, disability, stock
transfer, mortgage recording, estimated, withholding or other tax, governmental
fee or other like assessment or charge of any kind whatsoever, and including any
interest, penalties, fines, assessments or additions
<PAGE>
to tax imposed in respect of the foregoing, or in respect of any failure to
comply with any requirement regarding Tax Returns.
Section 1.71. "Tax Return" shall mean any report, return, information
statement, payee statement or other information required to be provided to any
federal, state, local or foreign Governmental Authority, or otherwise retained,
with respect to Taxes or the UNC Benefit Plans.
Section 1.72. "Salomon" shall mean Salomon Brothers Inc, financial
advisors to Greenwich.
Section 1.73. "UNC 1996 Management Statements" shall mean the
unaudited financial statements of UNC included in confidential Annex 1.73 to
this Agreement.
ARTICLE II
THE MERGER
Section 2.1. The Merger.
----------
(a) Subject to the terms and conditions of this Agreement,
at the Effective Time, Merger Sub shall be merged with and into UNC (the
"Merger") and the separate existence of Merger Sub shall thereupon cease, with
UNC being the surviving corporation in the Merger (the "Surviving Corporation").
Upon the effectiveness of the Merger, UNC shall possess all of the rights,
privileges, powers and franchises of all of the Constituent Corporations, and
all property, real, personal and mixed, and all debts due to any of the
Constituent Corporations on whatever account, including stock subscriptions and
all other things in action, of or belonging to each of the Constituent
Corporations shall be vested in the Surviving Corporation; and all property,
rights, privileges, powers and franchises, and all and every other interest
shall be thereafter as effectually the property of the Surviving Corporation as
they were of the Constituent Corporations, and the title to any Real Estate
vested by deed or otherwise in any of the Constituent Corporations shall not
revert or be in any way impaired by reason of the Merger; but all rights of
creditors and all liens upon any property of any of the Constituent Corporations
shall be preserved unimpaired, and all debts, liabilities and duties of the
Constituent Corporations shall thenceforth attach to the Surviving Corporation,
and may be enforced against it to the same extent as if said debts, liabilities
and duties had been incurred or contracted by it.
(b) The Certificate of Merger shall be in form and substance
satisfactory to the parties hereto and their respective legal counsel.
(c) The Certificate of Incorporation of Merger Sub as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, and thereafter may be amended in
accordance with its terms and as provided by law.
(d) The Bylaws of Merger Sub as in effect at the Effective
Time shall be the Bylaws of the Surviving Corporation.
(e) The entire board of directors of the Surviving
Corporation shall consist of (i) the existing directors of Merger Sub at the
Effective Time or (ii) such other Persons as shall be determined solely by GE
pursuant to the terms and conditions of the GE-Greenwich Merger Agreement (the
"Surviving Corporation Board"). The members of the Surviving Corporation Board
shall serve until their respective successors are duly elected and qualified in
the manner provided in the Certificate of Incorporation and Bylaws of the
Surviving Corporation, or as otherwise provided by law. All of the members of
the Board of Directors of UNC shall tender their written resignations effective
as of the Effective Time.
(f) The officers of the Surviving Corporation shall
initially consist of the persons listed in Schedule 2.1(f) or such other persons
acceptable to the Surviving Corporation Board; which officers shall
<PAGE>
serve until their successors are duly elected and qualified in the manner
provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation, or as otherwise provided by law.
(g) Restructuring. The parties agree that, at the request of
-------------
Greenwich, one or more other Persons may be added or substituted as Constituent
Corporations, and that a Constituent Corporation other than UNC may be
designated as the Surviving Corporation, in the Merger, provided that there is
no diminution or impairment of the rights and benefits inuring to the benefit of
the stockholders, officers, or directors of UNC hereunder and no increase in the
obligations or potential obligations of any of the foregoing as a result
thereof.
Section 2.2. Conversion of Securities. At the Effective Time, by
------------------------
virtue of the Merger and without any action on the part of Merger Sub, UNC, or
any holder of the securities of either:
(a) Common Shares. Each share of UNC Common Stock issued
-------------
and outstanding immediately before the Effective Time (other than Treasury
Shares to be canceled pursuant to Section 2.2(c) and any Dissenting Shares (as
hereinafter defined)) shall be canceled and shall be converted automatically
into the right to receive an amount equal to $15.00 in cash (the "Merger
Consideration") payable, without interest, to the holder of such share upon
surrender, in the manner provided in Section 2.3, of the certificate that
formerly evidenced such share.
(b) Preferred Shares. Each share of UNC Series B Preferred
----------------
Stock issued and outstanding immediately before the Effective Time shall be
canceled and shall be converted automatically into the right to receive an
amount equal to $15.00 in cash multiplied by the number of shares (including any
fraction of a share) of UNC Common Stock into which such share of UNC Series B
Preferred Stock is convertible immediately before the Effective Time.
(c) Treasury Shares. All issued and outstanding shares of
---------------
UNC Stock which are held by UNC, any Subsidiary of UNC, Greenwich, Merger Sub or
any other Subsidiary of Greenwich ("Treasury Shares") shall be canceled and no
consideration shall be issued in respect thereof.
(d) Dissenting Shares. Notwithstanding the foregoing
-----------------
provisions or any other provision of this Agreement to the contrary, shares of
UNC Stock held by any holder who shall have taken the necessary steps under the
DGCL to dissent and demand payment and is otherwise entitled to such payment
under the DGCL, if the DGCL provides for such payment in connection with the
Merger ("Dissenting Shares"), shall not be converted into the right to receive
Merger Consideration at or after the Effective Time unless and until the holder
of such Dissenting Shares withdraws his or her demand for such appraisal with
the consent of UNC, if required by the DGCL, or becomes ineligible for such
appraisal. If a holder of Dissenting Shares shall withdraw his or her demand for
such appraisal with the consent of UNC, if required by the DGCL, or shall become
ineligible for such appraisal (through failure to perfect or otherwise), then,
as of the Effective Time or the occurrence of such event, whichever last occurs,
such holder's Dissenting Shares shall automatically be converted into and
represent the right to receive the Merger Consideration as provided above. UNC
shall give Greenwich (i) prompt notice of any written demands for appraisal,
withdrawals of demands for appraisal and any other instruments served pursuant
to Section 262 of the DGCL received by UNC, and (ii) the opportunity to direct
all negotiations and proceedings with respect to demands for appraisal under
Section 262 of the DGCL. UNC will not voluntarily make any payment with respect
to any demands for appraisal and will not, except with the prior written consent
of Greenwich, settle or offer to settle any such demands. Each holder of
Dissenting Shares shall have only such rights and remedies as are granted to
such a holder under Section 262 of the DGCL.
(e) Shares of Merger Sub. Each share of Common Stock, par
--------------------
value $.01 per share, of Merger Sub issued and outstanding immediately before
the Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of Common Stock, par value $.01 per share, of
the Surviving Corporation.
<PAGE>
Section 2.3. Surrender of Certificates; Stock Transfer Books. (a)
-----------------------------------------------
Before the Effective Time, Merger Sub shall designate a bank or trust company to
act as agent (the "Paying Agent") for the holders of shares of UNC Stock in
connection with the Merger. From and after the Effective Time Greenwich shall
cause funds to be deposited with the Paying Agent sufficient to pay the amounts
to which the holders of shares of UNC Stock shall become entitled pursuant to
Section 2.2. Such funds shall be invested by the Paying Agent as directed by the
Surviving Corporation, provided that such investments shall be in obligations of
or guaranteed by the United States of America or of any agency thereof and
backed by the full faith and credit of the United States of America, in
commercial paper obligations rated A-1 or P-1 or better by Moody's Investors
Services, Inc. or Standard & Poor's Corporation, respectively, or in deposit
accounts, certificates of deposit or banker's acceptances of, repurchase or
reverse repurchase agreements with, or Eurodollar time deposits purchased from,
commercial banks with capital, surplus and undivided profits aggregating in
excess of $1 billion (based on the most recent financial statements of such bank
which are then publicly available to the SEC or otherwise).
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each person who was, at the Effective
Time, a holder of record of shares of UNC Stock entitled to receive the Merger
Consideration pursuant to Section 2.2 a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
certificates evidencing such shares of UNC Stock ("UNC Certificates") shall
pass, only upon proper delivery of the UNC Certificates to the Paying Agent) and
instructions for use in effecting the surrender of the UNC Certificates pursuant
to such letter of transmittal. Upon surrender to the Paying Agent of a UNC
Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such
UNC Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of UNC Stock formerly evidenced by such UNC
Certificate, and such UNC Certificate shall then be cancelled. No interest shall
accrue or benefit the holder of such UNC Certificate.
(c) At any time after six (6) months from the Effective
Time, the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of shares of UNC Stock (including, without limitation,
all interest and other income received by the Paying Agent in respect of all
funds made available to it), and thereafter such holders shall be entitled to
look to the Surviving Corporation (subject to abandoned property, escheat and
other similar laws) only as general creditors thereof with respect to any Merger
Consideration that may be payable upon due surrender of the UNC Certificates
held by them.
(d) After the Effective Time, there shall be no transfers on
the stock transfer books of UNC of any shares of UNC Stock that were outstanding
immediately before the Effective Time. If, after the Effective Time, UNC
Certificates are presented to Greenwich or UNC for transfer, they shall be
cancelled and exchanged for payment of the applicable amount of Merger
Consideration as provided in Section 2.2, in accordance with the procedures set
forth in this Section 2.3.
(e) Notwithstanding the foregoing, neither Greenwich nor UNC
shall be liable to any holder of shares of UNC Common Stock or UNC Series B
Preferred Stock for any payment of the per share cash portion of the Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Section 2.4. Transfer Taxes. If cash is to be paid to a person other
--------------
than the holder in whose name the certificate representing shares of UNC Stock
surrendered in exchange therefor is registered, it shall be a condition of such
exchange that the certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
exchange shall pay to the Paying Agent any transfer or other taxes required by
reason of the payment of such cash to a person other than the registered holder
of the certificate surrendered or shall establish to the satisfaction of the
Paying Agent that such tax has been paid or is not applicable.
2.5. Stock Options. All unexercised UNC Stock Options which shall be
-------------
outstanding as at the Effective Time shall be canceled and converted into the
right to receive, in full consideration of such securities, a cash payment equal
to the product of: (A) the aggregate number of shares of UNC Common Stock
-------
issuable upon
<PAGE>
exercise of such unexercised UNC Stock Options (the "Unexercised Option Shares")
by (B) the difference between $15.00 and the applicable exercise price per share
----------
attributable to such Unexercised Option Shares (the "Spread").
ARTICLE III
STOCKHOLDER APPROVAL
Section 3.1. Stockholder Approvals.
---------------------
(a) Greenwich hereby covenants to UNC that Greenwich shall
perform its obligations under the GE-Greenwich Merger Agreement with respect to
the submission of the GE/Greenwich Merger Agreement for consideration and
approval to the holders of shares of Greenwich Class A Stock.
(b) This Agreement shall be submitted for consideration and
approval to the holders of shares of UNC Common Stock, at a special or annual
meeting of stockholders duly held for such purpose by UNC. UNC shall promptly
take all steps necessary to duly call, give notice of, convene, and hold such
meeting as soon as practicable following the date upon which the UNC Proxy
Statement shall be approved by the SEC.
(c) The UNC Board of Directors shall recommend that the UNC
stockholders approve and adopt this Agreement and the Certificate of Merger and
the transactions contemplated hereby and thereby, and such recommendation shall
be contained in the UNC Proxy Statement. The Greenwich Board of Directors shall
recommend that the Greenwich stockholders entitled to vote thereon approve the
GE-Greenwich Merger Agreement and the transactions contemplated thereby, and
such recommendation shall be contained in the Proxy Statement of Greenwich in
connection with the GE/Greenwich Merger.
Section 3.2. Effective Time of the Merger. As promptly as
----------------------------
practicable following the satisfaction or, if permissible, waiver of the
conditions set forth in Articles VII, VIII, and IX, the parties hereto shall
cause the Merger to be consummated by filing the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL, and the
Merger shall become effective in accordance with the terms of the Certificate of
Merger at the time and date contemplated therein (such time and date being
referred to herein as the "Effective Time").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF GREENWICH AND MERGER SUB
Each of Greenwich and Merger Sub represents and warrants to UNC as
follows:
Section 4.1. Organization and Authority of the Greenwich and Merger
------------------------------------------------------
Sub. Each of Greenwich and Merger Sub is duly organized, validly existing and
- ---
in good standing under the laws of its respective jurisdiction of organization.
Each of Greenwich and Merger Sub has full corporate or partnership power to
carry on its respective business as it is now being conducted and to own,
operate and hold under lease its assets and properties as, and in the places
where, such properties and assets now are owned, operated or held. Each of
Greenwich and Merger Sub is duly qualified as a foreign entity to do business,
and is in good standing, in each jurisdiction where the failure to be so
qualified would have a material adverse effect on the ability of each of
Greenwich and Merger Sub to consummate the Merger.
Section 4.2. Authority Relative to this Agreement. The execution,
------------------------------------
delivery and performance of this Agreement and of all of the other documents and
instruments required hereby by Greenwich and Merger Sub are within the corporate
power of Greenwich and Merger Sub. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Greenwich and Merger Sub and no other
corporate proceedings on the part of Greenwich and Merger Sub are necessary to
authorize this Agreement or to consummate the transactions contemplated herein
(other than the
<PAGE>
approval of the GE-Greenwich Merger Agreement by a majority of the total votes
cast by holders of Greenwich Class A Stock). This Agreement and all of the other
documents and instruments required hereby have been or will be duly and validly
executed and delivered by Greenwich and Merger Sub and (assuming the due
authorization, execution and delivery hereof and thereof by UNC) constitute or
will constitute valid and binding agreements of Greenwich and Merger Sub,
enforceable against Greenwich and Merger Sub in accordance with their respective
terms, except to the extent that enforceability may be governed by equitable
principles, applicable bankruptcy laws, and other rights affecting creditors
generally.
Section 4.3. Consents and Approvals; No Violations. Except for (i)
-------------------------------------
any applicable requirements of the Securities Act, the Exchange Act, the HSR
Act, Nasdaq and any applicable filings under state securities, "Blue Sky" or
takeover laws, (ii) the filing and recordation of a certificate of merger as
required by the DGCL and (iii) those required filings, registrations, consents
and approvals listed in Schedule 4.4, no filing or registration with, and no
permit, authorization, consent or approval of, any public body or authority is
necessary or required in connection with the execution and delivery of this
Agreement by Greenwich and Merger Sub or for the consummation by Greenwich and
Merger Sub of the transactions contemplated by this Agreement, where the failure
to obtain such permit, authorization, consent or approval would have a material
adverse effect on the ability of Greenwich and Merger Sub to consummate the
Merger. Assuming that all filings, registrations, permits, authorizations,
consents and approvals contemplated by the immediately preceding sentence have
been duly made or obtained, neither the execution, delivery and performance of
this Agreement nor the consummation of the transactions contemplated hereby by
Greenwich and Merger Sub will (i) conflict with or result in any breach of any
provision of the Certificates of Incorporation, bylaws, partnership or joint
venture agreements or other organizational documents of Greenwich or Merger Sub,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, or otherwise result in any
diminution of any of the rights of Greenwich or Merger Sub with respect to, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, Contract or other instrument or obligation to which Greenwich or Merger
Sub is a party or by which it or any of them or any of their properties or
assets may be bound, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Greenwich or Merger Sub or any of
their properties or assets, except, in the case of subsections (ii) or (iii)
------
above, for violations, breaches or defaults that would not have a material
adverse effect on the ability of Greenwich and Merger Sub to consummate the
Merger and that will not prevent or delay the consummation of the transactions
contemplated hereby.
Section 4.4. Fees and Expenses of Brokers and Others. None of
---------------------------------------
Greenwich, Merger Sub or any Affiliates of Greenwich (a) has had any dealings,
negotiations or communications with any broker or other intermediary in
connection with the transactions contemplated by this Agreement, (b) is
committed to any liability for any brokers' or finders' fees or any similar fees
in connection with the transactions contemplated by this Agreement, or (c) has
retained any broker or other intermediary to act on its behalf in connection
with the transactions contemplated by this Agreement, except that Greenwich has
engaged Salomon to represent it as its financial advisor in connection with the
transactions contemplated by this Agreement, and shall pay all of Salomon's fees
and expenses in connection with such engagement.
Section 4.5. Accuracy of Information. Neither this Agreement nor any
-----------------------
other document provided by Greenwich or Merger Sub or their employees or agents
to UNC in connection with the transactions contemplated herein contains an
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained therein not misleading.
Section 4.6 GE-Greenwich Merger Agreement. Greenwich has furnished
-----------------------------
to UNC a true and complete copy of the GE-Greenwich Merger Agreement, which GE-
Greenwich Merger Agreement has been duly authorized by the Board of Directors of
Greenwich, and to the Knowledge of Greenwich, by the Board of Directors of GE.
<PAGE>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF UNC
UNC represents and warrants to Greenwich and Merger Sub as follows:
Section 5.1. Organization and Authority of the UNC Companies. Each
-----------------------------------------------
of the UNC Companies is duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of organization. Each of the UNC
Companies has full corporate or partnership power to carry on its respective
business as it is now being conducted and to own, operate and hold under lease
its assets and properties as, and in the places where, such properties and
assets now are owned, operated or held. Each of the UNC Companies is duly
qualified as a foreign entity to do business, and is in good standing, in each
jurisdiction where the failure to be so qualified would have a UNC Material
Adverse Effect. Schedule 1.84 constitutes a true and complete list of all of
the Subsidiaries of UNC, and Schedule 1.53B constitutes a true and complete list
of all of the Partnerships in which UNC has an interest. The copies of the
Amended and Restated Certificate of Incorporation and the Bylaws of UNC which
have been delivered to Greenwich are complete and correct and in full force and
effect on the date hereof.
Section 5.2. Capitalization. The authorized capital stock of UNC
--------------
consists of: (a) 12,000,000 authorized shares of UNC Preferred Stock, $1.00 par
value per share, of which, on the Agreement Date (i) 250,000 shares of Series A
Junior Participating Preferred Stock are authorized, none of which are issued,
(ii) 250,000 shares of Series B Preferred Stock are authorized, issued and
outstanding, and (iii) 250,000 shares of Series C Senior Cumulative Preferred
Stock are authorized, none of which are issued; and (b) 50,000,000 authorized
shares of UNC Common Stock, of which, as at December 31, 1996 (i) 18,276,681
shares of UNC Common Stock are issued and outstanding, (ii) 486,500 shares of
UNC Common Stock are held in treasury, (iii) shares of UNC Common Stock are
reserved for issuance pursuant to outstanding Stock Options granted under UNC
Stock Option Plans as described in Schedule 5.2 and (iv) an aggregate of
3,571,429 shares of UNC Common are reserved for issuance upon conversion of UNC
Series B Preferred Stock. All shares of capital stock of UNC which are
outstanding as of the date hereof and which are reserved for issuance pursuant
to UNC Preferred Stock and UNC Stock Options, are duly authorized, and are, or
when issued will be, validly issued, fully paid and nonassessable, and are, or
when issued will not be, not subject to, nor were they issued in violation of,
any preemptive rights. Except as set forth in Schedule 5.2 and in this Section
5.2, there are no shares of capital stock of UNC authorized or outstanding, and
there are no subscriptions, options, conversion or exchange rights, warrants or
other agreements, claims or commitments of any nature whatsoever obligating UNC
or any UNC Subsidiary to issue, transfer, deliver or sell, or cause to be
issued, transferred, delivered or sold, additional shares of the capital stock
of UNC or any UNC Subsidiary or obligating UNC or any UNC Subsidiary to grant,
extend or enter into any such agreement or commitment. UNC has not, since
December 31, 1995, declared or paid any dividend on, or declared or made any
distribution with respect to, or authorized or effected any split-up or any
other recapitalization of, any of the UNC Common Stock, or directly or
indirectly redeemed, purchased or otherwise acquired any of its outstanding
capital stock or agreed to take any such action and will not take any such
action during the period between the date of this Agreement and the Effective
Time. Except as set forth on Schedule 5.2, there are no outstanding options,
warrants, subscriptions, conversion or exchange rights, agreements, claims,
commitments, or other rights to purchase or acquire any capital stock of UNC or
any of the other UNC Companies, and there are no Contracts pursuant to which UNC
or any of the other UNC Companies is bound to sell or issue any shares of its
capital stock, nor are there any Contracts obligating UNC or any of the other
UNC Companies to enter into or grant any such securities or rights. All
outstanding shares of UNC Common Stock are duly listed for trading on the NYSE.
(b) Set forth in Schedule 1.84 is the name, percentage
ownership and jurisdiction of incorporation of each UNC or any UNC Subsidiary.
All the outstanding shares of capital stock of each UNC Subsidiary have been
validly issued and are fully paid, nonassessable and are not subject to, nor
were they issued in violation of, any preemptive rights. All outstanding shares
of capital stock of UNC Subsidiaries are owned, directly or indirectly, by UNC,
and, except as disclosed in Schedule 1.84 or in the UNC Financial Statements,
are owned free and clear of all liens, charges, encumbrances, security
interests, equities, options, restrictions on voting rights or rights of
disposition, and claims or third party rights of whatever nature. Except for UNC
Subsidiaries, UNC does
<PAGE>
not own, directly or indirectly, any capital stock or other equity securities of
any corporation, partnership, joint venture or other entity or have any direct
or indirect equity or ownership interest in any corporation, partnership, joint
venture or other entity, other than as disclosed on Schedule 5.2 or Schedule
1.53B.
Section 5.3. Authority Relative to this Agreement. The execution,
------------------------------------
delivery and performance of this Agreement and of all of the other documents and
instruments required hereby by UNC are within the corporate power of UNC. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of UNC and no other corporate proceedings on the part of UNC are
necessary to authorize this Agreement or to consummate the transactions
contemplated herein (other than, with respect to the Merger, the approval of the
Certificate of Merger by a majority of the outstanding shares of UNC Common
Stock and UNC Series B Preferred Stock at the UNC Stockholders Meeting). This
Agreement and all of the other documents and instruments required hereby have
been or will be duly and validly executed and delivered by UNC and (assuming the
due authorization, execution and delivery hereof and thereof by Greenwich)
constitute or will constitute valid and binding agreements of UNC, enforceable
against UNC in accordance with their respective terms, except to the extent that
enforceability may be governed by equitable principles, applicable bankruptcy
laws, and other rights affecting creditors generally.
Section 5.4. Consents and Approvals; No Violations. Except for (i)
-------------------------------------
any applicable requirements of the Securities Act, the Exchange Act, the HSR
Act, and any applicable filings under state securities, "Blue Sky" or takeover
laws, (ii) the filing and recordation of a certificate of merger as required by
the DGCL and (iii) those required filings, registrations, consents and approvals
listed in Schedule 5.4, no filing or registration with, and no permit,
authorization, consent or approval of, any public body or authority is necessary
or required in connection with the execution and delivery of this Agreement by
UNC or for the consummation by UNC of the transactions contemplated by this
Agreement. Assuming that all filings, registrations, permits, authorizations,
consents and approvals contemplated by the immediately preceding sentence and
the other provisions of this Agreement have been duly made or obtained, neither
the execution, delivery and performance of this Agreement nor the consummation
of the transactions contemplated hereby by UNC will (i) conflict with or result
in any breach of any provision of the Certificates of Incorporation, bylaws,
partnership or joint venture agreements or other organizational documents of any
of the UNC Companies, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, or otherwise
result in any diminution of any of the rights of the UNC Companies with respect
to, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, Contract or other instrument or obligation to which any of
the UNC Companies is a party or by which it or any of them or any of their
properties or assets may be bound, or (iii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to any of the UNC Companies or
any of their properties or assets except, in the case of subsections (ii) or
(iii) above, for violations, breaches or defaults that would not have a UNC
Material Adverse Effect and that will not prevent or delay the consummation of
the transactions contemplated hereby.
Section 5.5. Reports and Financial Statements.
--------------------------------
(a) The UNC SEC Reports complied, as of their respective
dates of filing, in all material respects with all applicable requirements of
the Securities Act, the Exchange Act and the rules and regulations of the SEC.
As of their respective dates, none of such forms, reports or documents,
including without limitation any financial statements or schedules included
therein, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading in light of the circumstances under which they
were made.
(b) Each of the balance sheets (including the related notes
and schedules) included in the UNC SEC Reports fairly presented the consolidated
financial position of the UNC Companies as of the respective dates thereof, and
the other related financial statements (including the related notes and
schedules) included therein fairly presented the results of operations and cash
flows of the UNC Companies for the respective fiscal periods or as of the
respective dates set forth therein. Each of the financial statements (including
the related notes and schedules) included in the UNC SEC Reports (i) complied as
to form with the applicable accounting requirements
<PAGE>
and rules and regulations of the SEC, and (ii) was prepared in accordance with
GAAP consistently applied during the periods presented, except as otherwise
noted therein and subject to normal year-end and audit adjustments in the case
of any unaudited interim financial statements.
(c) Except for UNC, none of the UNC Companies is required to
file any forms, reports or other documents with the SEC, Nasdaq, the NYSE or any
other foreign or domestic securities exchange or Governmental Authority with
jurisdiction over securities laws. UNC has timely filed all reports,
registration statements and other filings required to be filed by it with the
SEC.
(d) The balance sheet as of December 31, 1996 included in the
UNC 1996 Management Statements fairly presents the consolidated financial
position of the UNC Companies as of that date and the other related financial
statements included therein fairly present the results of operations and cash
flows of the UNC Companies for the year then ended. The UNC 1996 Management
Statements have been prepared in accordance with GAAP consistently applied
during the period presented.
(e) The balance sheet (including the related notes and
schedules) included in the Audited 1996 Statements will, when issued, fairly
present the consolidated financial position of the UNC Companies as of the
respective dates thereof, and the other related financial statements (including
the related notes and schedules) included therein will fairly present the
results of operations and cash flows of the UNC Companies for the respective
fiscal periods or as of the respective dates set forth therein. The Audited 1996
Statements (including the related notes and schedules) will, when issued, (i)
comply as to form with the applicable accounting requirements and rules and
regulations of the SEC, (ii) will have been prepared in accordance with GAAP
consistently applied during the periods presented, except as otherwise noted
therein, and (iii) will not, except as set forth in Schedule 5.5, differ
materially from the UNC 1996 Management Statements.
Section 5.6. Absence of Certain Events. Except as set forth in the
-------------------------
UNC SEC Reports filed before the date of this Agreement or as otherwise
specifically disclosed in Schedule 5.6, none of the UNC Companies has suffered
any change in its business, financial condition, results of operations or
prospects that has had or will have a UNC Material Adverse Effect upon the UNC
Companies. Except as disclosed in the UNC SEC Reports or in Schedule 5.6, or as
otherwise specifically contemplated by this Agreement, there has not been: (i)
any entry into any agreement or understanding or any amendment of any agreement
or understanding between any of the UNC Companies on the one hand, and any of
their respective directors, officers or employees on the other hand, providing
for employment of any such director, officer or employee or any general or
material increase in the compensation, severance or termination benefits payable
or to become payable by any of the UNC Companies to any of their respective
directors, officers or employees (except, in each case, in the ordinary course
of business that are consistent with past practices and that, in the aggregate,
do not result in a material increase in benefits or compensation expense), or
any adoption of or increase in any bonus, insurance, pension or other employee
benefit plan, payment or arrangement (including, without limitation, the
granting of stock options or stock appreciation rights or the award of
restricted stock) made to, for or with any such director, officer or employee;
(ii) any labor dispute that has had or is expected to have a UNC Material
Adverse Effect; (iii) any entry by any of the UNC Companies into any material
commitment, agreement, license or transaction (including, without limitation,
any borrowing, capital expenditure, sale of assets or any mortgage, pledge, lien
or encumbrances made on any of the properties or assets of any of the UNC
Companies) other than in the ordinary and usual course of business; (iv) any
change in the accounting policies or practices of UNC; (v) any damage,
destruction or loss, whether covered by insurance or not, which has had or will
have a UNC Material Adverse Effect; or (vi) any agreement to do any of the
foregoing.
Section 5.7. UNC Proxy Statement. None of the information with
-------------------
respect to the UNC Companies to be included in the UNC Proxy Statement or any
amendments thereof or supplements thereto, at the time of the mailing of the UNC
Proxy Statement or any amendments thereof or supplements thereto and at the time
of the UNC Stockholders' Meeting, will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The UNC Proxy
Statement will comply as to form in all material
<PAGE>
respects with the provisions of the Securities Act, the Exchange Act and the
rules and regulations promulgated thereunder, except that no representation is
made by UNC with respect to information supplied by Greenwich or any affiliate
of Greenwich for inclusion in the UNC Proxy Statement.
Section 5.8. Litigation. There is no action, suit, proceeding or, to
----------
the Knowledge of UNC, investigation pending or, to the Knowledge of UNC,
threatened against or relating to any of the UNC Companies at law or in equity,
or before any federal, state, provincial, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, whether in the
United States or otherwise, that is expected, in the reasonable judgment of UNC,
to have a UNC Material Adverse Effect upon the UNC Companies or that seeks
restraint, prohibition, damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby. To its
Knowledge, UNC has furnished to Greenwich, copies of all attorneys' audit
letters, and has furnished or will upon request furnish to Greenwich such other
documents available to UNC as may be requested by Greenwich in respect of
pending litigation affecting the UNC Companies.
Section 5.9. Title to and Sufficiency of Assets.
----------------------------------
(a) As of the date hereof the UNC Companies own, and as of
the Effective Time the UNC Companies will own, good and marketable title to all
of their assets constituting personal property which is material to any of the
UNC Subsidiaries or any UNC Business (excluding, for purposes of this sentence,
assets held under leases), free and clear of any and all mortgages, liens,
encumbrances, charges, claims, restrictions, pledges, security interests or
impositions, except as disclosed in UNC Financial Statements or in Schedule 5.9.
Such assets, together with all assets held by the UNC Companies under leases,
include all tangible and intangible personal property, Contracts and rights
necessary or required for the operation of the UNC Businesses by the UNC
Companies in accordance with past practice.
(b) As of the date hereof the UNC Companies own, and as of
the Effective Time the UNC Companies will own, good and marketable title to all
of their Real Estate which is material to any of the UNC Subsidiaries or any UNC
Business (excluding, for purposes of this sentence, Real Estate leases), free
and clear of any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions, except as disclosed in
UNC Financial Statements or in Schedule 5.9. Such Real Estate assets, together
with all Real Estate assets held by the UNC Companies under leases, are adequate
for the operation of the UNC Businesses by the UNC Companies as presently
conducted. The leases to all Real Estate occupied by UNC which is material to
the operation of the UNC Businesses are in full force and effect and no event
has occurred which with the passage of time, the giving of notice, or both,
would constitute a default or event of default by any of the UNC Companies or,
to the Knowledge of UNC, any other Person who is a party signatory thereto.
<PAGE>
Section 5.10. Contracts.
---------
(a) Before the Agreement Date UNC has provided Greenwich
with access to, and upon Greenwich's request UNC shall at all times subsequent
to the Agreement Date furnish Greenwich with true and correct copies of, all of
the Contracts to which any UNC Company is a party that constitute: (i) a lease
of any interest in any real property; (ii) a lease of any personal property with
aggregate annual rental payments in excess of $100,000; (iii) an option to
acquire or lease any interest in real property or a right of first refusal with
respect thereto; (iv) an agreement to purchase or sell a capital asset or an
interest in any business entity for a price in excess of $100,000 or a right of
first refusal with respect thereto; (v) an agreement relating to the borrowing
or lending of money or the purchase or sale of securities; (vi) a guaranty,
contribution agreement or other agreement that includes any indemnification,
contribution or support obligation; (vii) an agreement limiting in any material
respect the ability of any UNC Company to compete in any line of business or
with any person; (viii) a customer supply or services agreement to which any of
the UNC Companies is a party or by which any of the UNC Companies is bound
pursuant to which the total amount payable (or reasonably expected to be
payable) to the UNC Companies in any calendar year exceeds $250,000 (a "Material
Customer Agreement"); (ix) an employment or consulting agreement to which any of
the UNC Companies is a party or by which any of the UNC Companies is bound; and
(ix) any other agreement involving an amount over its term in excess of $250,000
(collectively, a "UNC Material Contract"). In addition to the UNC Material
Contracts, UNC shall furnish Greenwich with true and complete copies of all
other Contracts which Greenwich shall reasonably request.
(b) With respect to UNC Material Contracts, except where a
breach of the warranties contained in this Section 5.10 would not have a UNC
---
Material Adverse Effect: (i) the UNC Companies have performed and, to the
Knowledge of UNC, every other party has performed, each material term, covenant
and condition of each of the Material Contracts to which any UNC Company is a
party that is to be performed by any of them at or before the date hereof, (ii)
all of such UNC Material Contracts are in full force and effect and no event has
occurred which, with the passage of time or the giving of notice or both, would
constitute a default, event of default or other breach by UNC or applicable UNC
Subsidiary party thereto which would entitle the other Person who is a signatory
to such UNC Material Contract to terminate the same or declare a default or
event of default thereunder; (iii) neither UNC or any UNC Subsidiary has UNC
Knowledge of that the other Person to any such Material Contract intends to
terminate or amend such UNC Material Contract in any respect, (iv) UNC or the
applicable UNC Subsidiary party to such UNC Material Contract maintain good
business relationships with the other Person to such UNC Material Contract, and
(v) UNC or the applicable UNC Subsidiary party to such UNC Material Contract has
no reason to believe that the other Person to any such UNC Material Contract
does not intend to continue to conduct business with UNC or such UNC Subsidiary
upon the expiration of the stated term of such UNC Material Contract.
Section 5.11. Labor Matters.
-------------
(a) Except as set forth in Schedule 5.11, with respect to
employees of the UNC Companies: (i) to the Knowledge of UNC, no senior
executive, key employee or group of employees has any plans to terminate
employment with any of the UNC Companies; (ii) there is no unfair labor practice
charge or complaint against any UNC Company pending or, to the Knowledge of UNC,
threatened before the National Labor Relations Board or any other comparable
authority; (iii) there is no demand for recognition made by any labor
organization or petition for election filed with the National Labor Relations
Board or any other comparable authority, (iv) no grievance or any arbitration
proceeding arising out of or under collective bargaining agreements is pending
and, to the Knowledge of UNC, no claims therefor have been threatened; (v) the
consummation of the Merger and related transactions contemplated by this
Agreement will not give rise to termination of any existing collective
bargaining agreement or permit any labor organization to reopen negotiations in
respect of wages, hours or working conditions under any of such existing
collective bargaining agreements; and (vi) there is no litigation, arbitration
proceeding, governmental investigation, administrative charge, citation or
action of any kind pending or, to the Knowledge of UNC, proposed or threatened
against any UNC Company relating to employment, employment practices, terms and
conditions of employment or wages and hours.
(b) Except as identified in Schedule 5.11, no UNC Company
has any collective bargaining relationship or duty to bargain with any Labor
Organization (as such term is defined in Section 2(5) of
<PAGE>
the National Labor Relations Act, as amended), and no UNC Company has recognized
any labor organization as the collective bargaining representative of any of its
employees.
Section 5.12. Employee Benefit Plans.
----------------------
(a) Schedule 5.12 sets forth a true and complete list of
each Employee Plan within the meaning of Section 4001 of ERISA, for the benefit
of any employee or former employee of any of the UNC Companies or any ERISA
Affiliate. Schedule 5.12 sets forth each of the Employee Plans that is an
"employee benefit plan," as that term is defined in Section 3(3) of ERISA (the
"ERISA Plans").
(b) With respect to each Employee Plan, UNC has heretofore
delivered or will deliver to Greenwich upon request true and complete copies of
each of the following documents:
(i) a copy thereof;
(ii) a copy of the most recent annual report and
actuarial report, if required under ERISA and the most recent report prepared
with respect thereto in accordance with Statement of Financial Accounting
Standards No. 87, Employer's Accounting for Pensions;
(iii) a copy of the most recent Summary Employee Plan
Description required under ERISA with respect thereto;
(iv) if the Employee Plan is funded through a trust
or any third party funding vehicle, a copy of the trust or other funding
agreement and the latest financial statements thereof; and
(v) the most recent determination letter received
from the Internal Revenue Service with respect to each Employee Plan intended to
qualify under Section 401 of the Code.
(c) Except as set forth in Schedule 5.12, no Employee Plan
(or other employee benefit plan, program, agreement or arrangement to which UNC,
any UNC Subsidiary or any ERISA Affiliate made, or was required to make,
contributions during the five (5) year period ending on the Closing Date) is
subject to Title IV of ERISA.
(d) Except as set forth in Schedule 5.12, neither UNC, any
UNC Subsidiary nor any ERISA Affiliate, nor any ERISA Plan, nor any trust
created thereunder, nor, to UNC's Knowledge, any trustee or administrator
thereof has engaged in a transaction in connection with which UNC, any UNC
Subsidiary nor any ERISA Affiliate, any ERISA Plan, any such trust, or any
trustee or administrator thereof, or any party dealing with any ERISA Plan or
any such trust could be subject to either a civil penalty assessed pursuant to
Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976
of the Code, which, in either case, if sustained would have a UNC Material
Adverse Effect.
(e) Except as set forth in Schedule 5.12, no ERISA Employee
Plan or any trust established thereunder has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, as of the last day of the most recent fiscal year of each
ERISA Plan ended prior to the Closing Date; and all contributions required to be
made with respect thereto (whether pursuant to the terms of any ERISA Plan or
otherwise) on or prior to the Closing Date have been timely made.
(f) Except as set forth in Schedule 5.12, no ERISA Plan is a
"multiemployer pension plan," as defined in Section 3(37) of ERISA, nor is any
ERISA Plan a plan described in Section 4063(a) of ERISA.
(g) Except as set forth in Schedule 5.12, each Employee Plan
has been operated and administered in all material respects in accordance with
its terms and applicable law, including but not limited to ERISA and the Code.
<PAGE>
(h) Except as set forth in Schedule 5.12, each ERISA Plan
intended to be "qualified" within the meaning of Section 401(a) of the Code is
so qualified and the trusts maintained thereunder are exempt from taxation under
Section 501(a) of the Code.
(i) Except as set forth in Schedule 5.12, no Employee Plan
provides benefits, including without limitation death or medical benefits
(whether or not insured), with respect to current or former employees of UNC or
an ERISA Affiliate beyond their retirement or other termination of service
(other than (i) coverage mandated by applicable law or (ii) death benefits or
retirement benefits under any "employee pension plan," as that term is defined
in Section 3(2) of ERISA).
(j) Except as set forth in Schedule 5.12, the consummation
of the transactions contemplated by this Agreement will not (i) entitle any
current or former employee or officer of UNC, any UNC Subsidiary or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement or (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due any such employee
or officer, whether pursuant to any Employee Plan or any employment agreement
with such existing or former officer or employee of UNC, any UNC Subsidiary or
any ERISA Affiliate.
(k) Except as set forth in Schedule 5.12, there are no
pending, or to UNC's Knowledge, threatened or anticipated claims by or on behalf
of any Employee Plan, by any employee or beneficiary covered under any such
Employee Plan, or otherwise involving any such Employee Plan (other than routine
claims for benefits).
Section 5.13. Tax Matters.
-----------
(a) Definitions. As used in this Agreement:
-----------
(i) "Tax Ruling" means a written ruling of a taxing
authority relating to Taxes.
(ii) "Closing Agreement" means a written and legally
binding agreement with a taxing authority relating to Taxes.
(b) Representations. Except for representations and
---------------
warranties made with respect to federal and state income Taxes, all
representations and warranties made in this Section 5.13(b) with respect to
Taxes are made to the best Knowledge of UNC. Subject to the foregoing, and
except as set forth in Schedule 5.13:
(i) Filing of Tax Returns. UNC and each of UNC
Subsidiaries have filed all Tax Returns required to be filed by each of them and
such Tax Returns are in all material respects true, complete and correct and
filed on a timely basis.
(ii) Payment of Taxes. UNC and each of UNC
Subsidiaries have, within the time and in the manner prescribed by law, paid all
Taxes that are currently due and payable, except for those contested in good
faith and for which adequate reserves have been taken.
(iii) Tax Liens. There are no tax liens upon the
assets of UNC or of any of UNC Subsidiaries except for statutory liens for
current Taxes not yet due.
(iv) Withholding Taxes. UNC and each of UNC
Subsidiaries have complied in all material respects with the provisions of the
Code relating to the withholding of Taxes, as well as similar provisions under
any other laws, and have, within the time and in the manner prescribed by law,
withheld and paid over to the proper governmental authorities all amounts
required.
<PAGE>
(v) Extensions of Time for Filing. Neither UNC nor
any of UNC Subsidiaries has requested any extension of time within which to file
any Tax Return, which Tax Return has not since been filed.
(vi) Waivers of Statute of Limitations. Neither UNC
nor any of UNC Subsidiaries has executed any outstanding waivers or comparable
consents regarding the application of the statute of limitations with respect to
any Taxes or Tax Returns.
(vii) No Deficiencies. The statute of limitations for
the assessment of any federal income Taxes has expired for all income Tax
Returns of UNC and of each of UNC Subsidiaries or such income Tax Returns have
been examined by the Internal Revenue Service for all periods. No deficiency for
any income Taxes has been proposed, asserted or assessed against UNC or any of
UNC Subsidiaries which has not been resolved and paid in full. There are no
deficiencies for state income Taxes which individually, or in the aggregate,
would have a UNC Material Adverse Effect.
(viii) Audit, Administrative and Court Proceedings. No
audits or other administrative proceedings or court proceedings are presently
pending with regard to any Taxes or Tax Returns of UNC or any of UNC
Subsidiaries.
(ix) Powers of Attorney. No power of attorney
currently in force has been granted by UNC or any of UNC Subsidiaries concerning
any Taxes or Tax Returns.
(x) Tax Rulings. Neither UNC nor any of UNC
Subsidiaries has received a Tax Ruling or entered into a Closing Agreement with
any taxing authority that would have a UNC Material Adverse Effect.
(xi) Tax Sharing Agreements. Neither UNC nor any UNC
Subsidiary is a party to any agreement relating to allocating or sharing of
Taxes which has not been disclosed on its Tax Returns.
Section 5.14 Insurance and Reinsurance. Schedule 5.14 sets forth
-------------------------
all insurance and reinsurance policies relating to UNC and any UNC Subsidiary.
UNC and each UNC Subsidiary has given any and all notices and made any and all
payments required to maintain such policies in full force and effect. Except as
set forth in Schedule 5.14: neither UNC nor any UNC Subsidiary has received
notice of default under any such policy, and has not received written notice or,
to the knowledge of UNC or any UNC Subsidiary, oral notice of any pending or
threatened termination or cancellation, coverage limitation or reduction or
material premium increase with respect to such policy.
Section 5.15 Officers' and Directors' Liability Insurance. UNC has
--------------------------------------------
heretofore delivered to Greenwich a copy of its officers' and directors'
liability insurance policy.
Section 5.16. Compliance with Law. The conduct of the UNC
-------------------
Businesses of the UNC Companies and their use of their assets does not violate
or conflict, and has not violated or conflicted, with any Law, which violation
or conflict could have a UNC Material Adverse Effect.
Section 5.17 Environmental Matters. The conduct of the UNC
---------------------
Businesses of the UNC Companies, and their ownership, use or occupancy of any
properties for which the UNC Companies have liability under Environmental Laws,
does not violate or conflict, and has not violated or conflicted, with any
Environmental Law, which violation or conflict could have a UNC Material Adverse
Effect.
Section 5.18. Transactions With Affiliates. For purposes of this
----------------------------
Section, the term "Affiliate" means (a) any holder of 2% or more of the voting
securities of UNC, (b) any director, officer or senior executive of
<PAGE>
the UNC Companies, (c) any person, firm or corporation that directly or
indirectly controls, is controlled by or is under common control with any of the
UNC Companies or (d) any member of the immediate family of any of such persons.
Except as set forth in Schedule 5.18 or in the UNC SEC Reports, since
December 31, 1995, the UNC Companies have not, in the ordinary course of
business or otherwise, (a) purchased, leased or otherwise acquired any material
property or assets or obtained any material services from, (b) sold, leased or
otherwise disposed of any material property or assets or provided any material
services to (except with respect to remuneration for services rendered in the
ordinary course of business as a director, officer or employee of one or more of
the UNC Companies), (c) entered into or modified in any manner any Contract
with, or (d) borrowed any money from, or made or forgiven any loan or other
advance (other than expense or similar advances made in the ordinary course of
business) to, any Affiliate. Except as set forth in Schedule 5.18 or in the UNC
SEC Reports, (a) the Contracts of the UNC Companies do not include any material
obligation or commitment between any of the UNC Companies and any Affiliate, (b)
the assets of the UNC Companies do not include any receivable or other
obligation or commitment from an Affiliate to any of the UNC Companies and (c)
the liabilities of the UNC Companies do not include any payable or other
obligation or commitment from any of the UNC Companies to any Affiliate. To the
Knowledge of UNC and except as set forth in Schedule 5.18 or in the UNC SEC
Reports, no Affiliate of any of the UNC Companies is a party to any Contract
with any customer or supplier of UNC that affects in any material manner the
business, financial condition or results of operation of any of the UNC
Companies.
Section 5.19. Fees and Expenses of Brokers and Others. None of the
---------------------------------------
UNC Companies (a) has had any dealings, negotiations or communications with any
broker or other intermediary in connection with the transactions contemplated by
this Agreement, (b) is committed to any liability for any brokers' or finders'
fees or any similar fees in connection with the transactions contemplated by
this Agreement or (c) has retained any broker or other intermediary to act on
its behalf in connection with the transactions contemplated by this Agreement,
except that UNC has engaged J.P. Morgan and Fieldstone Partners ("Fieldstone")
to represent it in connection with such transactions, and shall pay all of J.P.
Morgan's and Fieldstone's fees and expenses in connection with such engagement,
up to a maximum amount of fees not to exceed $4.0 million in the aggregate.
Greenwich shall have no responsibility for any of such fees or expenses.
Section 5.20. Accuracy of Information. Neither this Agreement nor
-----------------------
any other document provided by the UNC Companies or their employees or agents to
Greenwich in connection with the transactions contemplated herein contains an
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained therein not misleading.
Section 5.21. Absence of Undisclosed Liabilities. None of the UNC
----------------------------------
Companies have, as of the date hereof, or will have, as of the Effective Time,
any liabilities or obligations of any kind, whether absolute, accrued, asserted
or unasserted, contingent or otherwise, that would be required to be disclosed
on a consolidated balance sheet of UNC prepared as of such date, in accordance
with GAAP, except liabilities, obligations or contingencies that were (a)
reflected on or accrued or reserved against in the consolidated balance sheet of
UNC as of September 30, 1996, included in the UNC SEC Reports or reflected in
the notes thereto, or (b) incurred after the date of such balance sheet in the
ordinary course of business and consistent with past practices and which,
individually or in the aggregate, would not have a UNC Material Adverse Effect.
None of the UNC Companies is a party to any Contract, or subject to any charter
or other corporate or partnership restriction, or subject to any judgment,
order, writ, injunction, decree, rule or regulation, which will have a UNC
Material Adverse Effect.
Section 5.22. Opinion of Financial Advisor. UNC has received the
----------------------------
oral opinion of J.P. Morgan dated March 9, 1997, to the effect that the Merger
Consideration and other transactions contemplated by this Agreement are fair to
the stockholders of UNC from a financial point of view and a written opinion to
that effect will be delivered to UNC not later than March 14, 1997.
Section 5.23. DGCL Section 203. UNC has approved the Merger and the
----------------
transactions contemplated hereby so as to cause: (i) the restrictions on
business combinations with interested stockholders set forth in section 203 of
the DGCL to be inapplicable to Greenwich, Merger Sub, the Merger and the
transactions
<PAGE>
contemplated hereby and (ii) any other applicable anti-takeover statute or other
applicable statute prohibiting or restricting business combinations to be
inapplicable to Greenwich, Merger Sub, the Merger and the transactions
contemplated hereby.
ARTICLE VI
COVENANTS AND AGREEMENTS
Section 6.1. Conduct of the Businesses of UNC and Greenwich.
----------------------------------------------
(a) UNC Companies. Except as otherwise expressly provided in
-------------
this Agreement, during the period from the date of this Agreement to the
Effective Time, the UNC Companies will conduct their respective operations
according to their ordinary and usual course of business and consistent with
past practice, and will use their best efforts to preserve intact their business
organizations, to keep available the services of their officers and employees
and to maintain satisfactory relationships with licensors, licensees, suppliers,
contractors, distributors, customers and others having material business
relationships with them. Without limiting the generality of the foregoing, and
except as otherwise expressly provided in this Agreement, before the Effective
Time, none of the UNC Companies will, without the prior written consent of
Greenwich:
(i) amend its Articles or Certificate of
Incorporation, bylaws, partnership or joint venture agreements or other
organizational documents;
(ii) authorize for issuance or issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any stock of any class or any
other securities or interests, including, without limitation, any additional
shares of UNC Common Stock or shares of UNC Preferred Stock, except as may be
required by the existing terms of the Series B Preferred Stock Agreement, any
UNC Employee Plan, or any issued and outstanding UNC Stock Options disclosed
pursuant to this Agreement;
(iii) split, combine or reclassify any shares of its
capital stock or declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock, or redeem or otherwise acquire any of its securities or any
securities of their respective Subsidiaries and Partnerships;
(iv) (A) except in the ordinary course of business,
incur or assume any Indebtedness not currently outstanding (provided, that
except for additional advances used for general working capital purposes which
are currently permitted under existing senior secured lines of credit, UNC shall
not incur any additional Indebtedness for money borrowed), (B) except in the
ordinary course of business, assume, guarantee, endorse or otherwise become
liable or responsible for the obligations of any person, other than a Subsidiary
or Partnership, (C) make any loans, advances or capital contributions to, or
investments in, any other person (other than customary loans or advances to
employees and non-affiliated customers in accordance with past practice),
(D) except in the ordinary course of business, enter into any Material Contract,
or alter, amend, modify or exercise any option under any existing Material
Contract, (E) enter into any other Contract, or alter, amend, modify or exercise
any option under any existing Contract (other than a Material Contract), except
in the ordinary course of business or in connection with the transactions
contemplated by this Agreement, or (F) make or commit to any single capital
expenditure which is in excess of $100,000 or capital expenditures which are, in
the aggregate, in excess of $1.0 million, except for capital expenditures
------
(x) required to be made under Contracts entered into before the Agreement Date,
and (y) which are reflected in the 1997 UNC capital budget previously furnished
to Greenwich and (z) which are legally required to be made under such Contracts;
<PAGE>
(v) enter into, adopt or amend (except as may be
required by Law or as provided in this Agreement) any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation right,
restricted stock, pension, retirement, deferred compensation, employment,
consulting, severance or other employee benefit agreements, trusts, plans, funds
or other arrangements for the benefit or welfare of any director, officer or
employee, or increase in any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any existing
plan or arrangement (including, without limitation, the granting of stock
options, stock appreciation rights, shares of restricted stock or performance
units) or enter into any Contract to do any of the foregoing (except, in each of
the above instances, for normal increases or other payments in the ordinary
course of business that are consistent with past practices and that, in the
aggregate, do not result in a material increase in benefits or compensation
expense; provided, that UNC shall give Greenwich 72 hours notice before
--------
effecting any change in compensation for any employee whose current annual base
compensation equals or exceeds $100,000, even if Greenwich's approval shall not
be required hereunder);
(vi) except as otherwise permitted in this
Section 6.1, acquire, sell, lease or dispose of any Real Estate or other
material assets, other than inventory in the ordinary course of business;
(vii) accelerate the collection of accounts
receivable, delay the payment of accounts payable or take any action with
respect to credit, collection and fiscal policies and practices, other than in
the ordinary course of business and in a manner consistent with past practice
with respect to accounting policies or practices;
(viii) make any material Tax election or settle or
compromise any material federal, state, local or foreign income Tax liability;
(ix) except for the payment of professional fees,
pay, discharge or satisfy any material claims, liabilities or obligations
(absolute, accrued or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction in the ordinary course of business of
liabilities reflected or reserved against in UNC's most recent quarterly or
annual financial statements or incurred in the ordinary course of business since
the date thereof; or
(x) hold any meeting of its stockholders except to
the extent required by the request of the stockholders entitled to call a
meeting under UNC's bylaws or the DGCL;
(xi) take any action that would or is reasonably
likely to result in any of the covenants and agreements set forth in this
Article VI or any of the conditions set forth in Article VII not being satisfied
as of the Closing Date; or
(xii) agree in writing or otherwise to take any of
the foregoing actions.
(b) Greenwich. Except as otherwise expressly provided in this
---------
Agreement, during the period from the date of this Agreement to the Effective
Time, Greenwich hereby agrees to conduct its operations as required pursuant to
the terms of its covenants and agreements under the GE-Greenwich Merger
Agreement.
(c) Provision of UNC Information. UNC agrees that, during the
----------------------------
period from the Agreement Date to the Effective Time: (i) UNC will cause its
representatives to meet, upon request, with representatives of Greenwich to
discuss its operations and business prospects; (ii) UNC will provide Greenwich
and its representatives full and prompt access to all financial statements,
accounting work papers, documents, agreements, and other instruments which may
be reasonably requested, and (iii) UNC will promptly advise Greenwich of the
occurrence of any UNC Material Adverse Effect with respect to the UNC Companies.
Section 6.2. No Solicitation. UNC agrees that it shall not, after
---------------
the date hereof and before the Effective Time, directly or indirectly, through
any officer, director, employee, agent or otherwise, solicit, initiate
<PAGE>
or encourage submission of proposals or offers from any person relating to any
acquisition or purchase of all or (other than in the ordinary course of
business) a substantial portion of the assets of, or any equity interest in, any
UNC Company or any business combination involving any UNC Company or, except to
the extent required by fiduciary obligations under applicable Law as advised by
counsel, participate in any negotiations regarding, or furnish to any other
person any information with respect to, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt by
any other person to do or seek any of the foregoing. UNC shall promptly advise
Greenwich if any such proposal or offer, or any inquiry or contact with any
person with respect thereto, is made, shall promptly inform Greenwich of all the
terms and conditions thereof, and shall furnish to Greenwich copies of any such
written proposal or offer and the contents of any communications in response
thereto. UNC shall not waive any provisions of any "standstill" agreements
between UNC and any party, except to the extent that such waiver is, as advised
by counsel, required by fiduciary obligations under applicable Law.
Section 6.3. The UNC Proxy Statement.
-----------------------
(a) UNC shall, as soon as practicable following the
execution of this Agreement, file with the SEC a draft of the UNC Proxy
Statement (in a form mutually acceptable to UNC and Greenwich) as preliminary
proxy materials under the Exchange Act, and shall seek confidential treatment
with respect thereto, and Greenwich shall cooperate with UNC in preparing such
proxy materials. UNC shall respond promptly to any comments made by the SEC with
respect thereto, and Greenwich shall cooperate with UNC in preparing such
responses.
(b) Upon resolution of any SEC comments with respect to the
draft UNC Proxy Statement, or at such other time as may be mutually determined
by the parties hereto, Greenwich and UNC shall each use their respective best
efforts to cause the UNC Proxy Statement to be approved by the SEC under the
Exchange Act as soon as practicable, and UNC shall cause the UNC Proxy Statement
to be mailed to its stockholders at the earliest practicable time after approval
of the same by the SEC; provided, however, that UNC will not file any amendment
or supplement to the UNC Proxy Statement without first furnishing to Greenwich a
copy thereof for review and will not file any such proposed amendment or
supplement to which Greenwich shall reasonably and promptly object.
(c) If, at any time when the UNC Proxy Statement is
required to be delivered to the stockholders of UNC under the Exchange Act, any
event occurs as a result of which either the UNC Proxy Statement as then amended
or supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements contained therein, in
light of the circumstances under which they were made, not misleading, or if it
shall be necessary to amend the UNC Proxy Statement or to supplement such Proxy
Statement in order to comply with the Exchange Act or the rules thereunder, UNC
shall prepare and file with the SEC an amendment or supplement that will correct
such statement or omission or effect such compliance, and Greenwich shall
cooperate with UNC in preparing such amendment or supplement.
Section 6.4. Access to Information; Confidentiality Agreements.
-------------------------------------------------
(a) Between the date of this Agreement and the
Effective Time, the parties hereto will give one another and their authorized
representatives reasonable access during normal business hours to all plants,
offices, warehouses and other facilities and to all books and records of one
another, will permit one another to make such inspections as each may reasonably
request and will cause their officers and those of their Subsidiaries and
Partnerships to furnish such financial and operating data and other information
with respect to their businesses and properties as may from time to time
reasonably be requested. Subject to Section 6.7, all such information shall be
kept confidential in accordance with the Confidentiality Agreement.
(b) Notwithstanding the execution of this
Agreement, the Confidentiality Agreement shall remain in full force and effect
through the Effective Time, at which time the Confidentiality Agreement shall
terminate and be of no further force and effect. Each party hereto hereby waives
the provisions of
<PAGE>
the Confidentiality Agreement as and to the extent necessary to permit the
solicitation of votes of the stockholders of Greenwich and UNC pursuant to the
UNC Proxy Statement and to permit consummation of the transactions contemplated
hereby. Each party further acknowledges that the Confidentiality Agreement shall
survive any termination of this Agreement pursuant to Section 11.1.
(c) Notwithstanding anything to the contrary
contained in this Section 6.4 or in the Confidentiality Agreement, each of UNC
and Greenwich hereby agrees to furnish to GE and its designated representatives
all data, financial statements, projections, contracts, agreements, instruments,
writings and other materials concerning the UNC Businesses and the Greenwich
Businesses, and to permit representatives of GE full and complete access to the
personnel and facilities of each of the UNC Businesses and Greenwich Businesses,
to enable GE to verify the accuracy of the representations and warranties of UNC
contained in this Agreement and of Greenwich contained in the GE-Greenwich
Merger Agreement, subject to the respective provisions of the Confidentiality
Agreement and the confidentiality agreement dated March 4, 1997 between
Greenwich and GE.
Section 6.5. Best Efforts. Subject to the terms and conditions
------------
herein provided and subject to fiduciary obligations under applicable Law as
advised by counsel, each of the parties hereto agrees to use its best efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper and advisable under applicable Law, to consummate and
make effective the transactions contemplated by this Agreement and the GE-
Greenwich Merger Agreement. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers and directors of each party to this Agreement
shall take all such necessary action. Greenwich and UNC shall execute any
additional instruments necessary to consummate the transactions contemplated
hereby.
Section 6.6. Consents. UNC and Greenwich shall each use its best
--------
efforts to obtain consents of all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by this Agreement
and the GE-Greenwich Merger Agreement.
Section 6.7. Public Announcements. The parties hereto have agreed
--------------------
upon the text of a joint press release announcing, among other things, the
execution of this Agreement, which joint press release shall be disseminated
promptly following the execution hereof. UNC and Greenwich will consult with
each other and with GE before issuing any additional press release or otherwise
making any additional public statement with respect to this Agreement, the
Certificate of Merger, the Merger, the GE-Greenwich Merger Agreement, the
GE/Greenwich Merger or the transactions contemplated herein or therein and shall
not issue any such press release or make any such public statement before such
consultation or as to which the other party or GE promptly and reasonably
objects, except as may be required by Law in the written opinion of such party's
or GE's counsel or by obligations pursuant to any listing agreement with any
national securities exchange or inter-dealer quotation system, in which case the
party proposing to issue such press release or make such public announcement
shall use its best efforts to consult in good faith with the other party before
issuing any such press release or making any such public announcements.
Section 6.8. [Intentionally omitted]
Section 6.9. Indemnification; Insurance.
--------------------------
(a) Except as may be limited by applicable Law, from the
Effective Time and for a period of seven (7) years thereafter, Greenwich shall
cause the Surviving Corporation to maintain all rights of indemnification
existing in favor of the directors and officers of UNC on terms no less
favorable than those provided in the certificate of incorporation and bylaws of
UNC on the date of this Agreement with respect to matters occurring before the
Effective Time.
<PAGE>
(b) Greenwich shall cause to be maintained in effect for
three (3) years from the Effective Time the current policies for directors' and
officers' liability insurance maintained by UNC (provided that Greenwich may
substitute therefor policies of at least the same coverage containing terms and
conditions that are not materially less advantageous) with respect to matters
occurring before the Effective Time, to the extent such insurance is available
to Greenwich in the market.
(c) Greenwich hereby agrees to guarantee the performance
by Merger Sub of its obligations under this Section 6.9.
Section 6.10. Board of Directors Approval. UNC agrees that the UNC
---------------------------
Board of Directors will recommend that its stockholders adopt this Agreement and
approve the Merger unless advised in writing by its counsel that such
recommendation will constitute a violation of its fiduciary duties to its
stockholders.
Section 6.11. UNC Stock Options. UNC agrees not to grant any further
-----------------
Stock Options following the Agreement Date through and including the Effective
Time of the Merger.
Section 6.12. Best Efforts, etc. Subject to the terms and
-----------------
conditions herein provided, each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement and, including obtaining any consents, authorizations, exemptions
and approvals from, and making all filings with, any insurance department,
governmental, regulatory or public body or authority which are necessary or, in
the judgment of the parties, desirable in connection with the transactions
contemplated by this Agreement.
Section 6.13. HSR Act. UNC and Greenwich shall, as soon as
-------
practicable, file Notification and Report Forms under the HSR Act with the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use best efforts to
respond as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation.
Section 6.14. Interim Financials. Prior to the Effective Time, UNC
------------------
will deliver to Greenwich as soon as available but in no event later than 30
days after the end of any fiscal quarter, a consolidated statement of financial
position of UNC and its Subsidiaries as at the last day of such fiscal quarter
and the consolidated statements of income and changes in financial position of
such party and its Subsidiaries for the fiscal period then ended (which
statements may be unaudited) prepared in conformity with the requirements of
Form 10-Q under the Exchange Act.
Section 6.15. Material Events. At all times prior to the Effective
---------------
Time, each party shall promptly notify the others in writing of the occurrence
of any event which will or may result in the failure to satisfy any of the
conditions specified in Articles VII, VIII or IX hereof.
Section 6.16. Rights Agreement. The UNC Board of Directors will
----------------
take all necessary action (including, but not limited to redemption) so that, as
of the Effective Time, (i) the Rights Agreement dated as of September 25, 1987,
between UNC and Manufacturers Hanover Trust Company, as amended on May 16, 1996,
in respect of the potential issuance of Series A Preferred Stock (the "Rights
Agreement") will be terminated and none of Greenwich, GE, or any of their
respective Affiliates will be deemed to be an "Acquiring Person" or an "Adverse
Person" (as such terms are defined in the Rights Agreement) for purposes
thereof, and (iii) a "Distribution Date" (as such term is defined in the Rights
Agreement) shall not occur by virtue of the Merger or the GE-Greenwich Merger
Agreement. UNC will take any and all action reasonably requested by Greenwich to
ensure and
<PAGE>
confirm that UNC, Greenwich, and their respective Affiliates will not have any
obligations in connection with the Rights or the Rights Agreement in connection
with the Merger.
Section 6.17 Reversion to Prior Agreement. If the Greenwich-GE
----------------------------
Merger shall have been terminated for any reason (i) Greenwich shall promptly
notify UNC of such termination, and (ii) this Agreement shall be automatically
deemed, without any action by any party hereto, to be further amended, restated
and modified, so that all of the terms and conditions set forth in the Prior
Agreement shall, for all purposes, be deemed to be the terms and conditions of
this Agreement; provided, however, that the term "Outside Effective Time" shall
be amended to mean the date that is 120 days from the date of the notice
delivered by Greenwich to UNC pursuant to this Section 6.17; and provided
further that (A) the term "UNC Common Stock Equivalents shall be deemed to
include any shares of UNC Common Stock issuable upon conversion of the 7-1/2%
UNC Convertible Debentures and (B) the provisions of Section 2.1(g) herein shall
be deemed to be incorporated by reference in the Prior Agreement. Each of
Greenwich and UNC shall thereafter take all actions necessary, including,
without limitation, the execution and delivery of applicable agreements, to
implement the intent of this Section 6.17.
Section 6.18. Amendment of GE-Greenwich Merger Agreement. Without
------------------------------------------
the prior written consent of UNC, Greenwich shall not consent to any amendment
of, or otherwise waive the benefit of, Sections 5.01, 6.06, or 8.01(b) of the
GE-Greenwich Merger Agreement, agree to terminate the GE-Greenwich Merger
Agreement (pursuant to Section 8.01 of the GE-Greenwich Merger Agreement or
otherwise), or otherwise modify or amend the GE-Greenwich Merger Agreement in
any respect that could materially impair or adversely affect the rights or
benefits inuring (directly or indirectly) thereunder to any of the UNC Companies
or their officers, directors, or stockholders. Greenwich further agrees to
cooperate and consult with UNC with respect to, and otherwise keep UNC informed
of developments relating to, satisfaction of the conditions to consummation of
the GE/Greenwich Merger.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
The respective obligation of each party to consummate the Merger is
subject to the satisfaction at or before the Effective Time of the following
conditions precedent:
Section 7.1 Greenwich Stockholder Approval. The transactions
------------------------------
contemplated by the GE-Greenwich Merger Agreement shall have been approved by
the affirmative vote of the holders of Greenwich Class A Stock at a special
stockholders' meeting of Greenwich by the requisite vote in accordance with the
DGCL;
Section 7.2 UNC Stockholder Approval. The transactions
------------------------
contemplated by this Agreement shall have been approved, and this Agreement
shall have been adopted, by the affirmative vote of the holders of a majority of
the outstanding shares of UNC Common Stock at the UNC Stockholders' Meeting;
Section 7.3 Absence of Order. No order, decree or injunction
----------------
shall have been enacted, entered, promulgated or enforced by any United States
court of competent jurisdiction or any United States governmental authority
which prohibits the consummation of the Merger or the GE/Greenwich Merger;
provided, however, that the parties hereto shall use their best efforts to have
any such order, decree or injunction vacated or reversed;
Section 7.4 Certain Approvals. Any waiting period applicable to
-----------------
the Merger and the GE/Greenwich Merger under the HSR Act shall have terminated
or expired, all applicable requirements of the Exchange Act shall have been
satisfied and any applicable filings under state securities, "Blue Sky" or
takeover laws shall have been made;
Section 7.5 Other Consents and Approvals. All other necessary and
----------------------------
material governmental, regulatory, stockholder and third party lender, customer
or other clearances, consents, licenses or approvals shall have been received.
<PAGE>
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF GREENWICH AND MERGER SUB
Each and every obligation of Greenwich and Merger Sub under this
Agreement shall be subject to the satisfaction, on or before the Closing Date,
of each of the following conditions, each of which may be waived by Greenwich
and Merger Sub as provided herein except as otherwise provided by law.
Section 8.1 Representations and Warranties True. The
-----------------------------------
representations and warranties of UNC contained in this Agreement shall be true
and correct in all material respects as of the Agreement Date and shall be
deemed to have been made again at and as of the Closing Date and shall then be
true and correct in all material respects, and at the Closing UNC shall have
delivered to Greenwich a certificate to that effect signed by the Chief
Executive Officer and the principal financial officer of UNC.
Section 8.2 UNC's Performance. Each of the obligations of UNC
-----------------
to be performed by it on or before the Closing Date pursuant to the terms of
this Agreement shall have been duly performed in all material respects by the
Closing Date, including all covenants and agreements of UNC set forth in Article
V and Article VI hereof, and at the Closing UNC shall have delivered to
Greenwich a certificate to that effect signed by the Chief Executive Officer and
the principal financial officer of UNC.
Section 8.3 Resignation. As at the Effective Time, Dan A. Colussy
-----------
shall tender his resignation as Chairman and Chief Executive Officer of UNC.
Such resignation, however, shall not in any way limit or affect Dan A. Colussy's
right to receive his allocable payments contemplated by Section 9.4 and Section
2.2(e).
Section 8.4 Certificates. UNC shall have furnished Greenwich with
------------
such certificates of its officers and others to evidence compliance with the
conditions set forth in this Article VIII as may be reasonably requested by
Greenwich.
Section 8.5 SERP Termination. Subject to the satisfaction of
----------------
Section 9.3, on or before the Closing Date UNC shall have terminated, effective
as of the Agreement Date, any further obligations it has or may have had in
connection with any supplemental executive retirement plans, other than
obligations that have vested as of the Agreement Date.
Section 8.6 Consummation of the GE/Greenwich Merger. All
---------------------------------------
conditions to the consummation of the GE/Greenwich shall have been satisfied or
waived.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF UNC
Each and every obligation of UNC under this Agreement shall be subject
to the satisfaction, on or before the Closing Date, of each of the following
conditions, each of which may be waived by UNC as provided herein except as
otherwise provided by law:
Section 9.1 Representations and Warranties True. The
-----------------------------------
representations and warranties of Greenwich and Merger Sub contained in this
Agreement shall be true and correct in all material respects as of the Agreement
Date and shall be deemed to have been made again at and as of the Closing Date
and shall then be true and correct in all material respects, and at the Closing,
Greenwich and Merger Sub shall have each delivered to UNC a certificate to that
effect signed by the Chief Executive Officer and the principal financial officer
of Greenwich.
Section 9.2 Greenwich's and Merger Sub's Performance. Each of the
----------------------------------------
obligations of Greenwich and Merger Sub to be performed by them on or before the
Closing Date pursuant to the terms hereof
<PAGE>
shall have been duly performed and complied with in all material respects by the
Closing Date and at the Closing, Greenwich and Merger Sub shall have each
delivered to UNC a certificate to that effect signed by the Chief Executive
Officer and principal financial officer of Greenwich.
Section 9.3 Certificates. Greenwich shall have furnished UNC with
------------
such certificates of their respective officers and others to evidence compliance
with the conditions set forth in this Article IX as may be reasonably requested
by UNC.
Section 9.4 Modification and Assumption of SERP/CIC Payments.
------------------------------------------------
On or before the Closing Date, Greenwich shall have paid the amounts necessary
to fund supplemental executive retirement plan and change-in-control payment
obligations of the UNC Companies as of the Closing Date. Notwithstanding the
foregoing, promptly after the date of this Agreement but before the mailing of
the UNC Proxy Statement, UNC and Greenwich shall consult with GE and UNC and
Greenwich shall use their best efforts to obtain the consent of the employees
who are parties thereto to amend and restructure the existing compensation
arrangements applicable to such employees so that, to the extent possible, no
"parachute payments" (within the meaning of Section 280G(b)(2) of the Code) are
made and no remuneration for which a deduction would be disallowed by reason of
the application of Section 162(m) of the Code is paid to such employees and that
each such employee is afforded alternative compensation arrangements of
substantially equivalent value; provided, however, that obtaining such consent
shall not be a condition to the obligations of Greenwich, Merger Sub, or UNC
under this Agreement.
ARTICLE X
CLOSING
Section 10.1 Time and Place. A closing (the "Closing") shall take
--------------
place to confirm the satisfaction or waiver of the conditions to Closing
contained in Articles VII, VIII and IX at the offices of Greenberg, Traurig,
Hoffman, Rosen, Lipoff & Quentel, PA, 153 East 53rd Street, New York, New York,
at 1:00 P.M., local time, or at such other place, at such other time, or on such
other date as the Greenwich and UNC may mutually agree upon for the Closing to
take place.
ARTICLE XI
TERMINATION; AMENDMENT; WAIVER
Section 11.1 Termination. Notwithstanding adoption of this
-----------
Agreement by stockholders of UNC and Greenwich, this Agreement may be
terminated, and the Merger abandoned, at any time prior to the Effective Time of
the Merger:
(a) by the mutual consent of the Boards of Directors of
Greenwich and UNC; or
(b) by either Greenwich or UNC if the Merger shall not
have been consummated on or before September 30, 1997 (the "Outside Effective
Time"); provided, however, that the right to terminate this Agreement under this
Section 11.1(b) shall not be available to any party whose act or omission (which
act or omission was solely within such party's control), shall have resulted in
the Outside Effective Time's having passed without the Merger having been
consummated; and provided further that Greenwich shall be deemed to have agreed
to extend the Outside Effective Time as and to the extent that the outside date
for consummation of the GE/Greenwich Merger may from time to time be extended;
or
(c) by either Greenwich or UNC, if any court of competent
jurisdiction in the United States or other United States governmental body shall
have issued an order, judgment or decree (other than a temporary restraining
order) restraining, enjoining or otherwise prohibiting the Merger and such
order, judgment or decree shall have become final and nonappealable; or
<PAGE>
(d) by Greenwich, if any of the following events have
occurred:
(i) the Merger contemplated by this Agreement is
voted upon by holders of UNC Common Stock at the UNC Stockholders' Meeting, and
the votes are not sufficient to satisfy the condition set forth in Section 7.2;
or
(ii) the UNC Board does not recommend in the UNC
Proxy Statement that UNC's stockholders adopt and approve the Merger, this
Agreement and the transactions contemplated hereby and thereby; or
(iii) after recommending in the UNC Proxy Statement
that UNC's stockholders adopt and approve the Merger, this Agreement and the
transactions contemplated hereby, the UNC Board withdraws, modifies or amends
such recommendation in any respect materially adverse to Greenwich; or
(iv) if there shall occur a breach by UNC of any
representation or warranty set forth in this Agreement, which breach has a UNC
Material Adverse Effect and is within the actual knowledge of any Person listed
in Schedule 1.46, or UNC shall breach any covenant or agreement contained in
this Agreement which makes consummation of the transaction contemplated hereby
either impossible or impracticable for Greenwich.
(e) by UNC if, before the Effective Time, a Person or
group makes a bona fide proposal with respect to the acquisition of all or
substantially all of UNC's outstanding capital stock or assets, that the Board
of Directors of UNC believes in good faith after consultation with its financial
advisors, is more favorable, from a financial point of view, to the stockholders
of UNC than the proposal set forth in this Agreement (a "Superior Proposal");
provided that Greenwich does not (in its sole option) elect to make, within ten
- --------
Business Days after receiving notice of such Superior Proposal, an offer that
the Board of Directors of UNC believes, in good faith after consultation with
its financial advisors, is at least as favorable, from a financial point of
view, to the UNC stockholders as such Superior Proposal; or
(f) by Greenwich, if there shall have occurred and shall
be continuing a UNC Material Adverse Effect.
Section 11.2 Effect of Termination. In the event of the termination
---------------------
of this Agreement and the Merger by either Greenwich or UNC, this Agreement
shall become void and there shall be no liability hereunder on the part of
Greenwich or UNC or their respective officers or directors except, in each case,
as otherwise provided in Sections 11.3 and 12.1 hereof, which Sections shall
survive any such termination and continue in effect thereafter.
Section 11.3 Termination Payments and Expenses.
---------------------------------
(a) If this Agreement is terminated:
(i) by Greenwich, pursuant to clauses (ii), (iii) or
(iv) of Section 11.1(d); or
(ii) by UNC, pursuant to Section 11.1(e);
then UNC shall promptly pay to Greenwich the sum of $20 million.
(b) Each party hereto acknowledges that the agreements
contained in this Section 11.3 are an integral part of the transactions
contemplated by this Agreement and that, without these agreements, none of the
parties hereto would enter into this Agreement. Accordingly, if any party hereto
fails to pay any amounts pursuant to this Section 11.3, and, in order to obtain
such payment, legal action is commenced which results in a judgment therefor,
the liable party will pay the plaintiff's reasonable costs (including reasonable
<PAGE>
attorneys' fees) in connection with such suit, together with interest computed
on any amounts determined pursuant to this Section 11.3 (computed from the date
when such amounts were due and payable pursuant to this Section 11.3) and such
costs (computed from the date or dates incurred) at the prime rate of interest
announced from time to time by Citibank, N.A. The parties' obligations pursuant
to this Section 11.3 will survive any termination of this Agreement.
(c) In the event that Greenwich shall terminate this
Agreement by reason of any of the events specified in Section 11.1, none of the
Greenwich Companies nor their Affiliates shall have any liability or obligation
to any of the UNC Companies or their Affiliates under this Agreement, or
otherwise.
(d) The remedies of Greenwich set forth in this
Section 11.3 constitute full and complete liquidated damages and represent the
sole and exclusive remedies at law of such party as a result of the termination
of this Agreement pursuant to Section 11.3.
(e) Nothing herein contained shall prevent a party
otherwise entitled to seek specific performance of this Agreement from applying
to and obtaining from a court of competent jurisdiction such equitable relief as
such court may deem proper in the circumstances.
(f) Except as provided in this Section 11.3, all costs and
expenses incurred in connection with this Agreement shall be paid in accordance
with Section 12.1.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Expenses. Except as provided in Section 11.3, all
--------
costs and expenses incurred in connection with this Agreement, and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expenses.
Section 12.2 No Survival of Representations and Warranties. The
---------------------------------------------
respective representations and warranties, obligations, covenants and agreements
of UNC, Greenwich and Merger Sub contained herein or in any Exhibit or Schedule,
certificate or letter delivered pursuant hereto shall expire with, and be
terminated and extinguished by, the effectiveness of the Merger.
Section 12.3 Headings. The descriptive headings of the several
--------
Articles and Sections of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.
Section 12.4 Notices. All notices or other communications required
-------
hereunder shall be in writing and shall be deemed given on the date delivered if
delivered personally (including by reputable overnight courier), on the date
transmitted if sent by telecopy (which is confirmed) or 72 hours after mailing
if mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Greenwich, to:
Greenwich Air Services, Inc.
4590 NW 36th Street
Miami International Airport, Building 23
Miami, Florida 33122
Attention: Eugene P. Conese, Sr.,
Chairman and Chief Executive Officer
Telecopy: (305) 526-7005
<PAGE>
with a copy to: Greenberg Traurig Hoffman Rosen Lipoff & Quentel
153 East 53rd Street
New York, New York 10022
Attention: Stephen A. Weiss, Esq.
Telecopy: (212) 223-7161
(b) if to UNC, to:
UNC Incorporated
175 Admiral Cochrane Drive
Annapolis, Maryland 21401
Attention: Dan A. Colussy, Chairman and Chief
Executive Officer
Telecopy: (410) 224-0439
with a copy to: Neuberger, Quinn, Gielen, Rubin & Gibber, P.A.,
One South Street
Baltimore, Maryland 21202
Attention: Michael L. Quinn, Esq.
Telecopy: (410) 332-8594
Section 12.5 Assignment. This Agreement and all of the provisions
----------
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but neither this Agreement
nor any of the rights, interests, or obligations hereunder, shall be assigned by
any of the parties hereto without the prior written consent of the other
parties, except that Greenwich may assign all of its rights, interests and
obligations hereunder to GE or to any wholly owned subsidiary of GE, provided
that such GE or such GE Subsidiary agrees in writing to be bound by all of the
terms, conditions and provisions contained herein. Such assignment may be
effected by merging UNC with and into GE or such GE Subsidiary simultaneously
with or subsequent to the Effective Time.
Section 12.6 Complete Agreement. This Agreement, including the
------------------
schedules, exhibits and other writings referred to herein or delivered pursuant
hereto, and the Confidentiality Agreement together contain the entire
understanding of the parties with respect to the Merger and the related
transactions and supersede all prior arrangements or understandings with respect
thereto.
Section 12.7 Modifications, Amendments and Waivers. At any time
-------------------------------------
prior to the Effective Time of the Merger (notwithstanding any stockholder
approval), if authorized by their respective Boards of Directors and to the
extent permitted by law, (i) the parties hereto may, by written agreement,
modify, amend or supplement any term or provision of this Agreement and (ii) any
term or provision of this Agreement may be waived by the party which is, or
whose stockholders are, entitled to the benefits thereof; provided, however,
that after this Agreement is adopted by holders of UNC Common Stock, no such
amendment or modification shall be made which would reduce the amount or change
the type of consideration into which UNC Common Stock is to be converted as
provided in this Agreement or which in any way materially adversely affects the
rights of such stockholders, without the further approval of such stockholders.
Any written instrument or agreement referred to in this paragraph shall be
validly and sufficiently authorized for the purposes of this Agreement if signed
on behalf of Greenwich and UNC by a person authorized to sign this Agreement.
Section 12.8 Counterparts. This Agreement may be executed in two
------------
or more counterparts all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
<PAGE>
Section 12.9 Governing Law. This Agreement shall be governed by
-------------
the laws of the State of Delaware (regardless of the laws that might be
applicable under principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect and performance.
Section 12.10 Accounting Terms. All accounting terms used herein
----------------
which are not expressly defined in this Agreement shall have the respective
meanings given to them in accordance with GAAP.
Section 12.11 Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 12.12 Schedules to Prior Agreement. The Schedules to the
----------------------------
Prior Agreement shall constitute and be deemed the Schedules to this Agreement.
<PAGE>
IN WITNESS WHEREOF, Greenwich, and UNC have caused this Agreement to
be signed by their respective officers hereunto duly authorized, all as of the
date first written above.
GREENWICH AIR SERVICES, INC.
By:
----------------------------------------
Name: Eugene P. Conese, Sr.
Title: Chairman and Chief Executive Officer
ATTEST:
CONDOR ACQUISITION CORP.
By:
----------------------------------------
Name: Eugene P. Conese, Sr.
Title: Chairman and Chief Executive Officer
ATTEST:
UNC INCORPORATED
By:
----------------------------------------
Name: Dan A. Colussy
Title: Chairman and Chief Executive Officer
ATTEST:
<PAGE>
EXHIBIT 2
================================================================================
AGREEMENT AND PLAN OF MERGER
Among
GENERAL ELECTRIC COMPANY,
GB MERGER CORP.
and
GREENWICH AIR SERVICES, INC.
Dated March 9, 1997
================================================================================
<PAGE>
Index of Defined Terms
----------------------
<TABLE>
<CAPTION>
Defined Term Location of Definition
- ------------ ----------------------
<S> <C>
Additional Payments Section 2.04(c)
affiliate Section 9.03(a)
Affiliated Person Section 3.23(a)
Agreement Recitals
American Stock Transfer and Trust Section 6.14
Average Parent Share Price Section 2.03(a)
beneficial owner Section 9.03(b)
Blue Sky Laws Section 3.05(b)
business day Section 9.03(c)
Cash Consideration Section 2.03(a)
Cash Election Section 2.03(b)
Cash Election Number Section 2.03(b)
Cash Election Shares Section 2.03(b)
Cash Fraction Section 2.03(b)
Certificate of Merger Section 1.02
Certificates Section 2.04(b)
Change of Control Section 8.03(a)
Closing Agreement Section 3.14(a)(i)
Closing Date Section 1.02
Code Recitals
Combination Section 8.03(a)
Commonly Controlled Entity Section 3.10(a)
Company Recitals
Company Aeroderivative Business Section 9.03(d)
Company Benefit Plans Section 3.10(a)
Company Businesses Section 9.03(e)
Company Class A Stock Section 2.01
Company Class B Stock Section 2.01
Company Commercial Aircraft Business Section 9.03(f)
Company Common Stock Section 2.01
Company Disclosure Schedule Article III
Company Financial Advisor Section 3.24
Company Foreign Benefit Plan Section 3.10(h)
Company Government Business Section 9.03(g)
Company Group Section 9.03(h)
Company Indemnified Parties Section 6.06(e)
Company Intellectual Property Section 3.13
Company Licenses Section 3.13
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Company Material Adverse Effect Section 3.01
Company 1996 Balance Sheet Section 3.07(d)
Company Pension Plans Section 3.10(a)
Company Permits Section 3.06(c)
Company Preferred Stock Section 3.03
Company SEC Reports Section 3.07(a)
Company Stock Option Section 2.06(a)
Company Stock Option Plan Section 2.06(a)
Competing Transaction Section 6.05(a)
Confidentiality Agreement Section 6.04(a)
control Section 9.03(i)
controlled by Section 9.03(i)
Current Offering Section 6.12
Delaware Law Recitals
Effective Time Section 1.02
Election Deadline Section 2.03(e)
Election Form Record Date Section 2.03(d)
Environmental Law Section 3.15(a)(ii)
Environmental Permit Section 3.15(a)(iii)
ERISA Section 3.10(a)
ESPP Section 3.03
Exchange Act Section 3.05(b)
Exchange Agent Section 2.04(a)
Exchange Fund Section 2.04(a)
Form of Election Section 2.03(d)
Governmental Authority Section 9.03(j)
Government Contracts Section 3.16(c)
Greenberg, Traurig Section 2.03(c)
Hazardous Substances Section 3.15(a)(i)
HSR Act Section 3.05(b)
Indemnified Parties Section 6.06(e)
Knowledge Section 9.03(k)
Laws Section 3.05(a)
Liens Section 3.12(a)
Material Contracts Section 3.16(a)
Merger Recitals
Merger Consideration Section 2.03(a)
Merger Sub Recitals
NASD Section 3.05(b)
NASDAQ/NMS Section 3.03
Net Option Spread Section 2.06(a)
NYSE Section 2.03(a)
Option and Voting Agreement Recitals
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Option Spread Section 2.06(a)
Parent Recitals
Parent Break-Up Fee Section 8.03(a)
Parent Common Stock Section 2.03(a)
Parent Material Adverse Effect Section 4.01
Parent SEC Reports Section 4.06(a)
PBGC Section 3.10(g)
person Section 9.03(l)
Proxy Statement Section 6.01(a)
Real Estate Section 9.03(m)
Registration Statement Section 6.01(a)
Representatives Section 6.04(b)
SEC Section 3.07(a)
Securities Act Section 3.05(b)
Stock Consideration Section 2.03(a)
Stockholders' Meeting Section 6.02(a)
subsidiaries Section 9.03(n)
subsidiary Section 9.03(n)
Subsidiary Section 3.01
Superior Proposal Section 6.05(b)
Superior Proposal Notice Section 6.05(b)
Surviving Corporation Section 1.01
Tax Return Section 3.14(a)(ii)
Tax Ruling Section 3.14(a)(iii)
Taxes Section 3.14(a)(iv)
Terminating Company Breach Section 8.01(e)
Terminating Parent Breach Section 8.01(d)
UNC Section 6.15
UNC Indemnified Parties Section 6.06(e)
UNC Merger Section 6.15
UNC Merger Agreement Section 6.15
under common control with Section 9.03(i)
Valuation Period Section 2.03(a)
Welfare Plans Section 3.10(a)
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER dated March 9, 1997 (this "Agreement")
---------
among GENERAL ELECTRIC COMPANY, a New York corporation ("Parent"), GB MERGER
------
CORP., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger
------
Sub"), and GREENWICH AIR SERVICES, INC., a Delaware corporation (the "Company").
- --- -------
WHEREAS, the parties hereto desire to cause the Company, upon the
terms and subject to the conditions of this Agreement and in accordance with the
General Corporation Law of the State of Delaware ("Delaware Law"), to merge with
------------
and into Merger Sub (the "Merger");
------
WHEREAS, the Board of Directors of the Company has (i) determined that
the Merger is fair to the holders of shares of Company Common Stock (as such
term is defined in Section 2.01) and is in the best interests of such
stockholders and (ii) approved this Agreement and the transactions contemplated
hereby and recommended unanimously that the holders of shares of Company Class A
Stock (as such term is defined in Section 2.01) approve and adopt this
Agreement;
WHEREAS, the Board of Directors of Parent has determined that the
Merger is in the best interests of Parent and its stockholders and, as sole
stockholder of Merger Sub, has approved and adopted this Agreement and the
transactions contemplated hereby;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization under the provisions of Section 368(a)
of the United States Internal Revenue Code of 1986, as amended (the "Code"); and
----
WHEREAS, as a condition and inducement to Parent's and Merger Sub's
entering into this Agreement and incurring the obligations set forth herein,
concurrently with the execution and delivery of this Agreement, Parent is
entering into a Stock Option and Voting Agreement with certain stockholders of
the Company, dated the date hereof (the "Option and Voting Agreement"), pursuant
---------------------------
to which, among other things, such stockholders have agreed, subject to the
terms and conditions contained therein, to vote all shares of Class A Common
Stock then owned by such stockholders to approve and adopt this Agreement, and
have granted to Parent an option to acquire their shares of Company Common Stock
upon the terms and subject to the conditions set forth therein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained and intending to be legally bound
hereby, Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
----------
SECTION 1.01. The Merger. Upon the terms and subject to the
----------
conditions set forth in Article VII, and in accordance with Section 251 of
Delaware Law, at the Effective Time (as defined below), the Company shall be
merged with and into Merger Sub. As a result of the Merger, the separate
corporate existence of the Company shall cease, and Merger Sub shall be the
surviving corporation of the Merger (the "Surviving Corporation").
---------------------
SECTION 1.02. Effective Time; Closing. As promptly as practicable,
-----------------------
and in no event later than five business days after the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII (other than those
conditions that can only be satisfied on the Closing Date (as defined below)),
the parties hereto shall
<PAGE>
cause the Merger to be consummated by filing a certificate of merger (the
"Certificate of Merger") with the Secretary of State of the State of Delaware,
---------------------
in such form as is required by, and executed in accordance with, Section 251 of
Delaware Law. The term "Effective Time" means the date and time of the filing of
--------------
the Certificate of Merger with the Secretary of State of the State of Delaware
(or such later time as may be agreed by the parties hereto and specified in the
Certificate of Merger). Immediately prior to the filing of the Certificate of
Merger, a closing will be held at the offices of Shearman & Sterling, 599
Lexington Avenue, New York, New York (or such other place as the parties may
agree) (the date on which such closing takes place being the "Closing Date").
------------
SECTION 1.03. Effect of the Merger. At the Effective Time, the
--------------------
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities, obligations, restrictions, disabilities
and duties of each of the Company and Merger Sub shall become the debts,
liabilities, obligations, restrictions, disabilities and duties of the Surviving
Corporation.
SECTION 1.04. Certificate of Incorporation; By-laws.
-------------------------------------
(a) Subject to the terms of Section 6.06, at the Effective Time, the
Certificate of Incorporation of the Surviving Corporation shall be the
Certificate of Incorporation of Merger Sub as in effect immediately prior to the
Effective Time, except that Article I thereof shall be amended as of the
Effective Time to read as follows: "the name of the Corporation is Greenwich
Air Services, Inc."
(b) Subject to the terms of Section 6.06, at the Effective Time, the
By-laws of Merger Sub, as in effect immediately prior to the Effective Time,
shall be the By-laws of the Surviving Corporation until thereafter amended as
provided by law, the Certificate of Incorporation of the Surviving Corporation
and such By-laws.
SECTION 1.05. Directors and Officers. The directors of Merger Sub
----------------------
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
--------------------------------------------------
SECTION 2.01. Capital Stock of Merger Sub. As of the Effective Time,
---------------------------
by virtue of the Merger and without any action on the part of the holder of any
shares of Company Class A Common Stock, par value $.01 per share (the "Company
-------
Class A Stock"), or Company Class B Common Stock, par value $.01 per share (the
- -------------
"Company Class B Stock" and, together with the Company Class A Stock, the
---------------------
"Company Common Stock"), or any shares of capital stock of Merger Sub, each
- ---------------------
share of common stock, par value $.01 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock, par value $.01
per share, of the Surviving Corporation.
SECTION 2.02. Cancellation of Treasury Stock and Parent Owned Stock.
-----------------------------------------------------
As of the Effective Time, by virtue of the Merger and without any action on the
part of the holder of any shares of Company Common Stock or any shares of
capital stock of Merger Sub, each share of Company Common Stock issued and held
immediately prior to the Effective Time in the Company's treasury or by any of
the Company's direct or indirect wholly owned subsidiaries and each share of
Company Common Stock that is owned by Parent, Merger Sub or any
<PAGE>
3
other wholly-owned subsidiary of Parent shall automatically be cancelled and
retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor.
SECTION 2.03. Conversion of Company Common Stock. (a) As of the
----------------------------------
Effective Time, by virtue of the Merger and without any action on the part of
the holder of any shares of Company Common Stock or any shares of capital stock
of Merger Sub, except as otherwise provided in this Section 2.03 and subject to
Section 2.04(f), each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than shares to be cancelled in
accordance with Section 2.02) shall be converted into the right to receive the
number of shares of common stock, par value $0.32 per share, of Parent ("Parent
Common Stock") determined by dividing $31.00 by the Average Parent Share Price
(as defined below) and rounding the result to the nearest one thousandth of a
share (the "Stock Consideration") or, in the event the holder thereof shall have
-------------------
made the election provided for herein, such share of Company Common Stock shall
be converted into the right to receive in cash from Parent, without interest, an
amount equal to $31.00 (the "Cash Consideration") (or a combination of shares of
------------------
Parent Common Stock and cash determined in accordance with Section 2.03(b)) (the
"Merger Consideration"); provided, however, that, in any event, if, between the
-------------------- -------- -------
first day of the Valuation Period (as defined below) and the Effective Time, the
outstanding shares of Parent Common Stock shall have been changed into a
different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Stock Consideration shall be correspondingly adjusted to
the extent appropriate to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares.
The "Average Parent Share Price" means the average of the last sales prices per
--------------------------
share of Parent Common Stock on the New York Stock Exchange, Inc. (the "NYSE")
----
Composite Tape for the 10 consecutive trading days ending on the trading day
which is five days prior to the Closing Date (the "Valuation Period"). As of
----------------
the Effective Time, all such shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of Company
Common Stock shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration.
(b) Cash Election; Cash Election Adjustments. Each holder of record
----------------------------------------
of Company Common Stock as of the record date for the Stockholders' Meeting (as
defined in Section 6.02) will be entitled, with respect to each share of Company
Common Stock held by such holder, to elect to receive the Cash Consideration (a
"Cash Election"); provided, however, that if the aggregate number of shares of
------------- -------- -------
Company Common Stock covered by Cash Elections ("Cash Election Shares") exceeds
--------------------
55% of the number of shares of Company Common Stock outstanding immediately
prior to the Effective Time (the "Cash Election Number"), the Cash Election
--------------------
Shares shall be converted into the right to receive Parent Common Stock and cash
in the following manner:
each Cash Election Share shall be converted into the right to receive
(i) an amount in cash, without interest, equal to the product of (x)
the Cash Consideration and (y) a fraction (the "Cash Fraction"), the
-------------
numerator of which shall be the Cash Election Number and the
denominator of which shall be the total number of Cash Election
Shares, and (ii) such number of shares of (rounded to the nearest one
thousandth of a share) Parent Common Stock equal to the product of (x)
the Cash Consideration divided by the Average Parent Share Price and
(y) a fraction equal to one minus the Cash Fraction.
(c) Adjustments Relating to Tax Opinions. If either (i) the tax
------------------------------------
opinion of counsel to Parent referred to in Section 7.02(c) cannot be rendered
(as reasonably determined by counsel to Parent and concurred in by Greenberg,
Traurig, Hoffman, Rosen, Lipoff & Quentel ("Greenberg, Traurig")) or (ii) the
------------------
tax opinion of Greenberg, Traurig referred to in Section 7.03(b) cannot be
rendered (as reasonably determined by Greenberg, Traurig and concurred in by
counsel to Parent), in either case as a result of the Merger potentially failing
to satisfy continuity of interest requirements under applicable federal income
tax principles relating to reorganizations under Section 368(a) of the Code,
then Parent shall reduce to the minimum extent necessary to enable the relevant
tax opinion or opinions, as the case may be, to be rendered, the Cash Election
Number.
<PAGE>
4
(d) Exercise of Election. All Cash Elections shall be made on a form
--------------------
designed for that purpose and mutually acceptable to the Company and Parent (a
"Form of Election") and mailed to holders of record of shares of Company Common
- -----------------
Stock as of the record date for the Stockholders' Meeting or such other date as
Parent and the Company shall mutually agree (the "Election Form Record Date").
-------------------------
Parent and the Company shall make available one or more Forms of Election as may
be reasonably requested by all persons who become holders (or beneficial owners)
of Company Common Stock between the Election Form Record Date and the close of
business on the day prior to the Election Deadline (as defined below).
Elections shall be made by holders of Company Common Stock by mailing to the
Exchange Agent (as defined in Section 2.04) a Form of Election. To be
effective, a Form of Election must be properly completed, signed and submitted
to the Exchange Agent and accompanied by the Certificates (as defined in Section
2.04(b)) representing the shares of Company Common Stock as to which the
election is being made (or an appropriate guarantee of delivery by an
appropriate trust company in the United States or a member of a registered
national securities exchange or the National Association of Securities Dealers,
Inc.). Parent will have the discretion, which it may delegate in whole or in
part to the Exchange Agent, to reasonably determine whether Forms of Election
have been properly completed, signed and submitted or revoked and to disregard
immaterial defects in Forms of Election. The decision of Parent (or the
Exchange Agent) in such matters shall be conclusive and binding. The Exchange
Agent shall make a good faith effort to notify any person of any defect not
waived by Parent in a Form of Election submitted to the Exchange Agent. The
Exchange Agent shall also make all computations contemplated by this Section
2.03 and all such computations shall, absent manifest error, be conclusive and
binding on the holders of Company Common Stock.
(e) Election Deadline. A Form of Election must be received by the
-----------------
Exchange Agent (as defined below) by the close of business on the last business
day prior to the Closing Date (the "Election Deadline") in order to be
-----------------
effective. Any holder of Company Common Stock who has made an election by
submitting a Form of Election to the Exchange Agent may at any time prior to the
Election Deadline change such holder's election by submitting a revised Form of
Election, properly completed and signed, that is received by the Exchange Agent
prior to the Election Deadline. Any holder of Company Common Stock may at any
time prior to the Election Deadline revoke his election and withdraw his
Certificates deposited with the Exchange Agent by written notice to the Exchange
Agent received by the Election Deadline. As soon as practicable after the
Election Deadline, the Exchange Agent shall determine the allocation of the cash
portion of the Merger Consideration and the stock portion of the Merger
Consideration and shall notify Parent of its determination. Promptly after such
notification, Parent shall issue a press release announcing in reasonable detail
the results of the Exchange Agent's allocation of the Merger Consideration.
(f) Deemed Non-Election. For the purposes hereof, a holder of record
-------------------
of Company Common Stock who does not submit a Form of Election which is received
and accepted as such by the Exchange Agent prior to the Election Deadline shall
be deemed not to have made a Cash Election.
SECTION 2.04. Exchange of Certificates. (a) Exchange Agent. From
------------------------ --------------
and after the Effective Time, (i) Parent shall make available to a bank or trust
company designated by Parent and reasonably satisfactory to the Company (the
"Exchange Agent"), for the benefit of the holders of shares of Company Common
- ---------------
Stock, for exchange in accordance with this Article II through the Exchange
Agent, (i) certificates evidencing such number of shares of Parent Common Stock
issuable to holders of Company Common Stock in the Merger pursuant to Section
2.03 and (ii) cash in the amount required to be exchanged for shares of Company
Common Stock in the Merger pursuant to Section 2.03 (such certificates for
shares of Parent Common Stock, together with any dividends or distributions with
respect thereto, and such cash, being hereinafter referred to as the "Exchange
--------
Fund"). The Exchange Agent shall, pursuant to written instructions jointly
- ----
furnished by Parent and the Company, deliver the cash and the Parent Common
Stock contemplated to be issued pursuant to Section 2.03 out of the Exchange
Fund. Except as contemplated by Section 2.04(g) hereof, the Exchange Fund shall
not be used for any other purpose.
<PAGE>
5
(b) Exchange Procedures. As promptly as practicable after the
-------------------
Effective Time, Parent shall cause the Exchange Agent to mail to each holder of
a certificate or certificates (to the extent such certificates have not already
been submitted to the Exchange Agent with Forms of Election) which immediately
prior to the Effective Time represented outstanding shares of Company Common
Stock (the "Certificates") (i) a letter of transmittal (which shall be in
------------
customary form and shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for the Merger Consideration.
(c) Exchange of Certificates. Upon surrender to the Exchange Agent of
------------------------
a Certificate for cancellation, together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto, and such
other documents as may be reasonably required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor (A)
a certificate representing that number of whole shares of Parent Common Stock,
if any, to which such holder is entitled pursuant to this Article II and (B) a
check in the amount equal to the cash, if any, to which such holder is entitled
pursuant to the provisions of this Article II (including any cash in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.04(f) and any dividends or other distributions to which
such holder is entitled pursuant to Section 2.04(d) (together, the "Additional
----------
Payments")), and the Certificate so surrendered shall forthwith be cancelled.
- --------
In the event of a transfer of ownership of shares of Company Common Stock which
is not registered in the transfer records of the Company, the applicable Merger
Consideration and Additional Payments, if any, may be issued to a transferee if
the Certificate representing such shares of Company Common Stock is presented to
the Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have been
paid. Until surrendered as contemplated by this Section 2.04, each Certificate
shall be deemed at all times after the Effective Time to represent only the
right to receive upon such surrender the applicable Merger Consideration with
respect to the shares of Company Common Stock formerly represented thereby and
Additional Payments, if any.
(d) Distributions with Respect to Unsurrendered Certificates. No
--------------------------------------------------------
dividends or other distributions declared or made after the Effective Time with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Common Stock the holder thereof is entitled to receive upon
surrender thereof, and no cash payment in lieu of any fractional shares shall be
paid to any such holder pursuant to Section 2.04(f), until the holder of such
Certificate shall surrender such Certificate. Subject to the effect of escheat,
tax or other applicable Laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing whole shares of
Parent Common Stock issued in exchange therefor, without interest, (i) promptly,
the amount of any cash payable with respect to a fractional share of Parent
Common Stock to which such holder is entitled pursuant to Section 2.04(f) and
the amount of dividends or other distributions with a record date after the
Effective Time and theretofore paid with respect to such whole shares of Parent
Common Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole shares of Parent Common Stock. After the Effective Time, each
outstanding Certificate which theretofore represented shares of Company Common
Stock shall, until surrendered for exchange in accordance with this Section
2.04, be deemed for all purposes to evidence ownership of the number of shares
of Parent Common Stock into which the shares of Company Common Stock (which,
prior to the Effective Time, were represented thereby) shall have been so
converted.
(e) No Further Rights in Company Common Stock. All shares of Parent
-----------------------------------------
Common Stock issued or cash paid upon conversion of the shares of Company Common
Stock in accordance with the terms hereof (including any cash paid pursuant to
Section 2.04(d) or (f)) shall be deemed to have been issued in full satisfaction
of all rights pertaining to such shares of Company Common Stock.
<PAGE>
6
(f) No Fractional Shares. No certificates or scrip representing
--------------------
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Certificates, and such fractional share interests will not entitle
the owner thereof to vote or to any other rights of a stockholder of Parent.
Each holder of a fractional share interest shall be paid an amount in cash equal
to the product obtained by multiplying (i) such fractional share interest to
which such holder (after taking into account all fractional share interests then
held by such holder) would otherwise be entitled by (ii) the Average Parent
Share Price. As promptly as practicable after the determination of the amount
of cash, if any, to be paid to holders of fractional share interests, the
Exchange Agent shall so notify Parent, and Parent shall deposit such amount with
the Exchange Agent and shall cause the Exchange Agent to forward payments to
such holders of fractional share interests subject to and in accordance with the
terms of Sections 2.04(b), (c) and (d).
(g) Termination of Exchange Fund. Any portion of the Exchange Fund
----------------------------
(including any shares of Parent Common Stock) which remains undistributed to the
holders of Company Common Stock for six months after the Effective Time shall be
delivered to Parent, upon demand, and any holders of Company Common Stock who
have not theretofore complied with this Article II shall thereafter look only to
Parent for the applicable Merger Consideration and any Additional Payments to
which they are entitled. Any portion of the Exchange Fund remaining unclaimed
by holders of shares of Company Common Stock as of a date which is immediately
prior to such time as such amounts would otherwise escheat to or become property
of any government entity shall, to the extent permitted by applicable Law,
become the property of Parent free and clear of any claims or interest of any
person previously entitled thereto.
(h) No Liability. None of the Exchange Agent, Parent or the Surviving
------------
Corporation shall be liable to any holder of Certificates for any shares of
Parent Common Stock (or dividends or distributions with respect thereto), or
cash delivered to a public official pursuant to any abandoned property, escheat
or similar law.
(i) Withholding Rights. Each of the Surviving Corporation and Parent
------------------
shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Certificates such amounts as
it is required to deduct and withhold with respect to the making of such payment
under the Code, or any provision of state, local or foreign tax law. To the
extent that amounts are so withheld by the Surviving Corporation or Parent, as
the case may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Certificates in respect of
which such deduction and withholding was made by the Surviving Corporation or
Parent, as the case may be.
(j) Lost Certificates. If any Certificate shall have been lost,
-----------------
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the applicable Merger Consideration and Additional Payments, if any.
(k) Further Assurances. If, at any time after the Effective Time, the
------------------
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Merger Sub or the Company acquired or to
be acquired by the Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Agreement, the officers of the
Surviving Corporation shall be authorized to execute and deliver, in the name
and on behalf of each of the Merger Sub and the Company or otherwise, all such
deeds, bills of sale, assignments and assurances and to take and do, in such
names and on such behalves or otherwise, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and
<PAGE>
7
under such rights, properties or assets in the Surviving Corporation or
otherwise to carry out the purposes of this Agreement.
SECTION 2.05. Stock Transfer Books. At the Effective Time, the stock
--------------------
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company. From and after the Effective Time, the holders of
Certificates shall cease to have any rights with respect to such shares of
Company Common Stock, except as otherwise provided herein or by law. On or
after the Effective Time, any Certificates presented to the Exchange Agent or
Parent for any reason shall be converted into the applicable Merger
Consideration and Additional Payments, if any.
SECTION 2.06. Company Stock Options. (a) Each option (a "Company
--------------------- -------
Stock Option") outstanding, whether or not exercisable and whether or not
- ------------
vested, at the Effective Time under the Company's 1992 Employee Incentive and
Non-Qualified Stock Option Plan or any other plans (the "Company Stock Option
--------------------
Plans") shall be cancelled by the Company immediately prior to the Effective
- -----
Time, and each holder of a cancelled Company Stock Option shall be entitled to
receive at the Effective Time or as soon as practicable thereafter from the
Company in consideration for the cancellation of such Company Stock Option an
amount (the "Option Spread") equal to the product of (i) the number of shares of
-------------
Company Common Stock previously subject to such Company Stock Option and (ii)
the excess, if any, of the Cash Consideration over the exercise price per share
of Company Common Stock previously subject to such Company Stock Option. The
Option Spread, after reduction for applicable tax withholding, if any (the "Net
---
Option Spread"), shall be paid in cash or, if a holder of Company Stock Options
- -------------
so elects in writing at least 10 days prior to the Effective Time with respect
to any portion of such holder's Company Stock Options, in a number of shares of
Parent Common Stock determined by dividing (i) the aggregate Net Option Spread
payable to such holder by (ii) the Average Parent Share Price (subject to
adjustment in accordance with the proviso in the first sentence of Section
2.03(a) hereof).
(b) Not later than 40 days prior to the expected Effective Time, the
Company shall provide each holder of a Company Stock Option an election form
pursuant to which each holder may make the election specified in Section
2.06(a).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
Except as disclosed in a separate disclosure schedule referring to the
Sections contained in this Agreement, which has been delivered by the Company to
Parent prior to the execution of this Agreement (the "Company Disclosure
------------------
Schedule"), the Company hereby represents and warrants to the Parent and Merger
- --------
Sub that:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of
--------------------------------------------
the Company and each subsidiary of the Company (each, a "Subsidiary") is a
----------
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the requisite corporate
power and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the lack of such power, authority and approval would
not, individually or in the aggregate, have a Company Material Adverse Effect
(as defined below). Each of the Company and each Subsidiary is duly qualified
or licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except for such failures to be so qualified or licensed and
in good standing that would not, individually or in the aggregate, have a
Company Material Adverse Effect. The term "Company Material Adverse Effect"
-------------------------------
means any circumstances, change in, or effect on, the Company Group, when taken
as a consolidated whole, or affecting the Company Commercial Aircraft Business,
the Company Government Business
<PAGE>
8
or the Company Aeroderivative Business, whether individually or collectively as
to any one or more of such Company Businesses, which is, or could reasonably be
expected in the future to be, materially adverse to the operations, assets or
liabilities, employee relationships, customer or supplier relationships,
earnings or results of operations, financial projections or forecasts, or the
business prospects and condition (financial or otherwise) of the Company Group
or any one or more of the Company Businesses, whether individually or taken as a
consolidated whole with respect to the Company Group. A true and complete list
of all the Subsidiaries, together with the jurisdiction of incorporation of each
Subsidiary and the percentage of the outstanding capital stock of each
Subsidiary owned by the Company and each other Subsidiary, is set forth in
Section 3.01 of the Company Disclosure Schedule. Except as set forth in Section
3.01 of the Company Disclosure Schedule, the Company does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
business association or entity.
SECTION 3.02. Certificate of Incorporation and By-laws. The Company
----------------------------------------
has heretofore furnished to Parent complete and correct copies of the
Certificates of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Subsidiary. Such
Certificates of Incorporation, By-laws and equivalent organizational documents
are in full force and effect. Neither the Company nor any Subsidiary is in
violation of any provision of its Certificate of Incorporation, By-laws or
equivalent organizational documents.
SECTION 3.03. Capitalization. The authorized capital stock of the
--------------
Company consists of (i) 25,000,000 shares of Company Class A Stock, (ii)
25,000,000 shares of Company Class B Stock, and (iii) 2,500,000 shares of
preferred stock, par value $.01 per share, issuable in such series and with such
rights and designations as the Board of Directors of the Company may from time
to time determine (the "Company Preferred Stock"). As of December 31, 1996, (a)
-----------------------
6,971,213 shares of Company Class A Stock were issued and outstanding, all of
which were validly issued, fully paid and nonassessable, (b) 2,900 shares of
Company Class A Stock were held in the treasury of the Company or the
Subsidiaries, (c) 142,875 shares of Company Class A Stock were reserved for
future issuance pursuant to the Company Stock Option Plans, (d) 9,778,176 shares
of Company Class B Stock were issued and outstanding, all of which were validly
issued, fully paid and nonassessable, (e) 47,231 shares of Company Class B Stock
were held in the treasury of the Company or the Subsidiaries, (f) 377,875 shares
of Company Class B Stock were reserved for future issuance pursuant to the
Company Stock Option Plan, (g) 185,531 shares of Company Class B Stock were
reserved for future issuance pursuant to the Company's 1995 Employee Stock
Purchase Plan (the "ESPP") and (h) no shares of Company Preferred Stock were
----
issued and outstanding. All publicly traded shares of Company Class A Stock and
Company Class B Stock have been approved for trading on the National Association
of Securities Dealers, Inc. Automated Quotation/National Market System
("NASDAQ/NMS"). Set forth in Section 3.03 of the Company Disclosure Schedule is
- ------------
a summary setting forth the number of outstanding Company Options, stock
incentive rights or any other rights to acquire shares of Company Common Stock
pursuant to the Company Stock Option Plan and the exercise price therefor as of
December 31, 1996. From December 31, 1996 through the date of this Agreement,
the Company has not issued, sold, pledged, disposed of, granted, encumbered, or
authorized the issuance, sale, pledge, disposition, grant or encumbrance of any
shares of capital stock of any class of the Company or any Subsidiary or any
rights to acquire such shares or other equity interests in the Company or any
Subsidiary, except pursuant to the exercise of Company Options that were
outstanding as of December 31, 1996 and those additional Company Options granted
since December 31, 1996 that are set forth in Section 3.03 of the Company
Disclosure Schedule, and except for the authorization to issue shares of Company
Class B Stock pursuant to the UNC Merger Agreement, which authorization has been
conditionally revoked and rescinded in connection with the execution and
delivery of this Agreement. Except as set forth in this Section 3.03 or in
Section 3.03 of the Company Disclosure Schedule, and except for the
authorization to issue shares of Company Class B Stock pursuant to the UNC
Merger Agreement, which authorization has been conditionally revoked and
rescinded in connection with the execution and delivery of this Agreement, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or
<PAGE>
9
unissued capital stock of the Company or any Subsidiary or obligating the
Company or any Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Subsidiary. All shares of Company
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. Except as
disclosed in Section 3.03 of the Company Disclosure Schedule, there are no
outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of Company Class A Stock or
Company Class B Stock or any capital stock of or any equity interests in any
Subsidiary. Except as disclosed in Section 3.03 of the Company Disclosure
Schedule, each outstanding share of capital stock of each Subsidiary is duly
authorized, validly issued, fully paid and nonassessable and each such share
owned by the Company or any Subsidiary is free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or such other Subsidiary's voting rights, charges
and other encumbrances of any nature whatsoever.
SECTION 3.04. Authority Relative to this Agreement. The Company has
------------------------------------
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the Merger.
The execution and delivery of this Agreement by the Company and the consummation
by the Company of the Merger have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the Merger
(other than, with respect to the Merger, the adoption of this Agreement by the
holders of a majority of the shares of Company Class A Stock and the filing and
recordation of appropriate merger documents as required by Delaware Law). This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by Parent and Merger Sub,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
SECTION 3.05. No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws or equivalent
organizational documents of the Company or any Subsidiary, as applicable, (ii)
conflict with or violate any domestic (federal, state or local) or foreign law,
rule, regulation, order, judgment or decree (collectively, "Laws") applicable to
----
the Company or any Subsidiary or by which any property or asset of the Company
or any Subsidiary is bound or affected, except for such conflicts or violations
that, individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect, or (iii) result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of the Company or any Subsidiary pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary or any property
or asset of the Company or any Subsidiary is bound or affected, except as
disclosed in Section 3.05(a) of the Company Disclosure Schedule and except for
any such breaches, defaults or other occurrences that, individually or in the
aggregate, would not have a Company Material Adverse Effect and will not prevent
or delay the consummation of the transactions contemplated by this Agreement.
(b) Except as disclosed in Section 3.05(b) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company do not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic, foreign or
supranational, except (i) for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Securities Act of
------------
1933, as
<PAGE>
10
amended (the "Securities Act"), state securities or "blue sky" laws ("Blue Sky
-------------- --------
Laws"), state takeover laws, the pre-merger notification requirements of the
- ----
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act"), and filing and recordation of
-------
appropriate merger documents as required by Delaware Law and the rules of the
National Association of Securities Dealers ("NASD") and (ii) where failure to
----
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect.
SECTION 3.06. Compliance with Laws; Permits. (a) Neither the
-----------------------------
Company nor any Subsidiary is in conflict with, or in default or violation of,
(i) any Laws applicable to the Company or any Subsidiary or by which any
property or asset of the Company or any Subsidiary is bound or affected, or (ii)
any of the Company Permits (as defined below), except for any such conflicts,
defaults or violations that do not, individually or in the aggregate, have a
Company Material Adverse Effect.
(b) Except where non-compliance would not have a Company Material
Adverse Effect, the Company and the Subsidiaries have complied with all
applicable federal procurement laws and regulations including, without
limitation, the Truth in Negotiations Act, the Foreign Corrupt Practices Act,
the Office of Federal Procurement Policy Act Amendments of 1988 ("Procurement
Integrity" Amendments), the Cost Principles and Cost Accounting Standards, and
the Federal Acquisition Regulations and all supplements thereto, in connection
with the Government Contracts (as defined below), and to the Company's
Knowledge, no person has made any allegation that the Company or any Subsidiary
has not so complied.
(c) Each of the Company and the Subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exceptions, consents, certificates, approvals and orders from all federal,
state, local and foreign authorities and agencies, including without limitation,
the Federal Aviation Administration, necessary for the Company or any of its
Subsidiaries, to own, lease and operate its properties or to carry on the
Company Businesses (as hereinafter defined) (the "Company Permits"), and no
---------------
suspension or cancellation of any of the Company Permits is pending or, to the
Company's Knowledge, threatened, except where the failure to have, or the
suspension or cancellation of, any of the Company Permits, individually or in
the aggregate, would not have a Company Material Adverse Effect.
SECTION 3.07. SEC Filings; Financial Statements.
--------------------------------
(a) The Company has filed all forms, reports and documents required to
be filed by it with the Securities and Exchange Commission (the "SEC") since
---
September 30, 1993 and has made available to the Parent all registration
statements filed by the Company with the SEC, including all exhibits filed in
connection therewith (on all forms applicable to the registration of securities)
since September 30, 1993 and prior to the date of this Agreement (collectively,
the "Company SEC Reports"), and has heretofore made available to Parent complete
-------------------
(i.e., unredacted) copies of each exhibit (which is in effect as of the date
----
hereof) to the Company SEC Reports filed with the SEC. The Company SEC Reports
(i) were prepared in all material respects in accordance with the requirements
of the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations thereunder and (ii) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
(b) Except as disclosed in the Company SEC Reports, no Subsidiary is
required to file any form, report or other document with the SEC.
(c) Each of the consolidated financial statements (including, in each
case, any notes and schedules thereto) contained in the Company SEC Reports
complied as to form with the applicable accounting requirements and rules and
regulations of the SEC and was prepared in accordance with United States
generally
<PAGE>
11
accepted accounting principles applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto), and each
fairly presented the consolidated financial position, results of operations and
cash flows of the Company and the consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein in accordance
with United States generally accepted accounting principles (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments which
were not and are not expected, individually or in the aggregate, to have a
Company Material Adverse Effect).
(d) Except as and to the extent set forth on the consolidated balance
sheet of the Company and the consolidated Subsidiaries as of September 30, 1996,
including the notes thereto (the "Company 1996 Balance Sheet"), neither the
--------------------------
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise) that would be required to
be reflected on a balance sheet, or in the notes thereto, prepared in accordance
with United States generally accepted accounting principles, except for
liabilities and obligations (i) disclosed in any Company SEC Report filed since
September 30, 1996 and prior to the date of this Agreement, (ii) incurred since
September 30, 1996 in the ordinary course of business which, individually or in
the aggregate, do not have a Company Material Adverse Effect, or (iii) incurred
pursuant to this Agreement.
(e) The Company has heretofore furnished to Parent complete and
correct copies of all material amendments and modifications that have not been
filed by the Company with the SEC to all agreements, documents and other
instruments that previously had been filed by the Company with the SEC and are
currently in effect.
SECTION 3.08. Absence of Certain Changes or Events. Since September
------------------------------------
30, 1996, except as contemplated by this Agreement, disclosed in Section 3.08 of
the Company Disclosure Schedule, or disclosed in any Company SEC Report filed
since September 30, 1996, the Company and the Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since September 30, 1996, there has not been (a) any event or
events having, individually or in the aggregate, a Company Material Adverse
Effect, (b) any change by the Company in its accounting methods, principles or
practices, (c) any revaluation by the Company of any material asset (including,
without limitation, any writing down or writing up of the value of inventory,
writing off of notes or accounts receivable or reversing of any accruals or
reserves), other than in the ordinary course of business consistent with past
practice, (d) any entry by the Company or any Subsidiary into any commitment or
transaction material to the Company and the Subsidiaries taken as a whole,
except in the ordinary course of business and consistent in all material
respects with past practice, (e) other than regular dividends, of which $.01 per
share of Company Common Stock was paid in February 1996 and $.012 per share of
Company Common Stock was paid in January 1997, any declaration, setting aside or
payment of any dividend or distribution in respect of any capital stock of the
Company or any redemption, purchase or other acquisition of any of its
securities, or (f) other than pursuant to the contracts referred to in Section
3.10 or as expressly provided for in this Agreement, any increase in or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any officers or key employees of the Company or any
Subsidiary, except in the ordinary course of business consistent in all material
respects with past practice. The results of operations for the most recently
completed fiscal quarter are not materially lower than the results of operations
for the immediately preceding fiscal quarter, and there is no reason to believe
that the results of operations for the current fiscal quarter will be materially
lower than the results of operations for the Company's most recently completed
fiscal quarter.
SECTION 3.09. Absence of Litigation.
---------------------
(a) Except as disclosed in the Company SEC Reports or in Section 3.09
of the Company Disclosure Schedule, there is no claim, action, proceeding or
investigation pending or, to the Company's
<PAGE>
12
Knowledge, threatened against the Company or any Subsidiary, or any property or
asset of the Company or any Subsidiary, before any court, arbitrator or
Governmental Authority, which, individually or when aggregated with other
claims, actions, proceedings or investigations or product liability claims,
actions, proceedings or investigations which are reasonably likely to result
from facts and circumstances that have given rise to such a claim, action,
proceeding or investigation, would have a Company Material Adverse Effect. As of
the date hereof, neither the Company nor any Subsidiary nor any property or
asset of the Company or any Subsidiary is subject to any order, writ, judgment,
injunction, decree, determination or award having, individually or in the
aggregate, a Company Material Adverse Effect.
(b) Neither the Company nor any Subsidiary has received notice from
any source that the Company or any Subsidiary may be liable with respect to
product liability or worker's compensation claims, except for such claims that,
if determined adversely to the Company and the Subsidiaries, would not,
individually or in the aggregate, have a Company Material Adverse Effect.
SECTION 3.10. Employee Benefit; ERISA.
-----------------------
(a) Section 3.10(a) of the Company Disclosure Schedule contains a
list of all "employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
-----
(sometimes referred to herein as "Company Pension Plans"), "employee welfare
---------------------
benefit plans" (as defined in Section 3(1) of ERISA) (sometimes referred to
herein as "Welfare Plans"), and each other plan, arrangement or policy (written
-------------
or oral) relating to stock options, stock purchases, compensation, deferred
compensation, severance, fringe benefits or other employee benefits, in each
case maintained, or contributed to, by the Company or any of the Subsidiaries or
any other person or entity that, together with the Company is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code (each,
together with the Company, a "Commonly Controlled Entity"), for the benefit of
--------------------------
any current or former employees, officers, agents or directors of the Company or
any of its subsidiaries (all of the foregoing being herein called "Company
-------
Benefit Plans"). The Company has made available to Parent true and complete
- -------------
copies of (w) each Company Benefit Plan (or, in the case of any unwritten
Company Benefit Plans, descriptions thereof), (x) the most recent annual report
on Form 5500 filed with the Internal Revenue Service with respect to each
Company Benefit Plan (if any such report was required), (y) the most recent
summary plan description (or similar document) for each Company Benefit Plan for
which a summary plan description is required or was otherwise provided to plan
participants or beneficiaries and (z) each trust agreement and group annuity
contract relating to any Company Benefit Plan.
(b) Except as disclosed in Section 3.10(b) of the Company Disclosure
Schedule or where non-disclosure would not have a Company Material Adverse
Effect, all Company Pension Plans and related trusts that are intended to be
tax-qualified plans have been, since the effective date of the Tax Reform Act of
1986, the subject of determination letters from the Internal Revenue Service to
the effect that such Company Pension Plans and related trusts are qualified and
exempt from federal income taxes under Sections 401(a) and 501(a), respectively,
of the Code, and no such determination letter has been revoked nor, to the
Knowledge of the Company, has revocation been threatened; no event has occurred
and no circumstances exist that would adversely affect the tax qualification of
such Company Pension Plan nor has any such Company Pension Plan been amended
since the date of its most recent determination letter or application therefor
in any respect that would adversely affect its qualification or materially
increase its costs or require security under Section 302 of ERISA.
(c) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect: (i) each Company Benefit Plan has been
administered in accordance with its terms; (ii) the Company Benefit Plans are,
and have been administered, in compliance with the applicable provisions of
ERISA, the Code, and all other applicable laws; (iii) there are no
investigations by any governmental agency, termination proceedings or other
claims (except claims for benefits payable in the normal operation of the
Company Benefit Plans), suits or proceedings against or involving any Company
Benefit Plan or asserting any rights to or claims for benefits under
<PAGE>
13
any Company Benefit Plan that could give rise to any liability, and there are
not any facts that would reasonably be expected to give rise to any liability in
the event of any such investigation, claim, suit or proceeding.
(d) No Commonly Controlled Entity is required to contribute to any
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA or, except as set
forth in Section 3.10(d) of the Company Disclosure Schedule, has withdrawn from
any such multiemployer plan where such withdrawal has resulted or would result
in any material "withdrawal liability" (within the meaning of Section 4201 of
ERISA) that has not been fully paid. Except as set forth in Section 3.10(d) of
the Company Disclosure Schedule, no Commonly Controlled Entity would incur any
material withdrawal liability if it were to withdraw from a multiemployer plan
with respect to which it currently has a contribution obligation. No Commonly
Controlled Entity, nor any officer of any Commonly Controlled Entity, nor any of
the Company Benefit Plans which are subject to ERISA, including the Company
Pension Plans, any trusts created thereunder or any trustee or administrator
thereof, has engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) or any other breach of
fiduciary responsibility that could subject any Commonly Controlled Entity or
any officer of any Commonly Controlled Entity to any tax or penalty on
prohibited transactions imposed by such Section 4975 or to any material
liability under Section 502(i) or (l) of ERISA. Neither any of such Company
Benefit Plans nor any of such trusts has been terminated, nor has there been any
"reportable event" (as that term is defined in Section 4043 of ERISA) with
respect thereto, during the last five years.
(e) Except as set forth in Section 3.10(e) of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to any
agreement, contract or arrangement that could result, separately or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of Section 280G of the Code.
(f) Except as set forth in Section 3.10(f) of the Company Disclosure
Schedule, to the Knowledge of the Company, the disallowance of a deduction under
Section 162(m) of the Code for employee remuneration will not apply to any
amount paid or payable by the Company or any Subsidiary.
(g) Except as would not have a Company Material Adverse Effect, no
liability under Title IV of ERISA has been incurred by any Commonly Controlled
Entity that has not been satisfied in full, and no condition exists that
presents a material risk to any Commonly Controlled Entity of incurring a
liability under such Title, other than liability for premiums due the Pension
Benefit Guaranty Corporation ("PBGC") (which premiums have been paid when due).
----
To the extent this representation applies to sections 4064, 4069 or 4204 of
Title IV of ERISA, it is made not only with respect to each Company Pension Plan
but also with respect to any employee benefit plan, program, agreement or
arrangement subject to Title IV of ERISA to which the Company or any Commonly
Controlled Entity made, or was required to make, contributions during the five
(5) year period ending on the Closing Date. Except as would not have a Company
Material Adverse Effect, no Company Pension Plan or any trust established
thereunder has incurred any "accumulated funding deficiency" (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived, as of
the last day of the most recent fiscal year of each Company Pension Plan ended
prior to the Closing Date; and all contributions required to be made with
respect thereto (whether pursuant to the terms of any Company Pension Plan or
otherwise) on or prior to the Closing Date have been timely made.
(h) With respect to each Company Benefit Plan not subject to United
States Law (a "Company Foreign Benefit Plan"), except as would not have a
----------------------------
Company Material Adverse Effect, (i) the fair market value of the assets of each
funded Company Foreign Benefit Plan, the liability of each insurer for any
Company Foreign Benefit Plan funded through insurance or the book reserve
established for any Company Foreign Benefit Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations, as of the Effective Time, with respect to all current and former
participants in such plan according to the actuarial assumptions and valuations
most recently used to determine employer contributions to such Company Foreign
<PAGE>
14
Benefit Plan and no transaction contemplated by this Agreement shall cause such
assets or insurance obligations or book reserve to be less than such benefit
obligations; and (ii) each Company Foreign Benefit Plan required to be
registered has been registered and has been maintained in good standing with the
appropriate regulatory authorities.
(i) The Company and each of its Subsidiaries have not incurred any
liability under, and have complied in all respects with, the Worker Adjustment
and Retraining Notification Act of 1988 and the regulations promulgated
thereunder.
SECTION 3.11. Labor Matters.
-------------
(a) Except as set forth in Section 3.11(a) of the Company Disclosure
Schedule, with respect to employees of the Company: (i) to the Knowledge of the
Company, no senior executive or key employee has any plans to terminate
employment with the Company or any of its Subsidiaries; (ii) there is no unfair
labor practice charge or complaint against the Company or any of its
Subsidiaries pending or, to the Knowledge of the Company, threatened before the
National Labor Relations Board or any other comparable authority; (iii) there is
no demand for recognition made by any labor organization or petition for
election filed with the National Labor Relations Board or any other comparable
authority which, individually or in the aggregate, would have a Company Material
Adverse Effect; (iv) no grievance or any arbitration proceeding arising out of
or under collective bargaining agreements is pending and, to the Knowledge of
Company, no claims therefor have been threatened other than grievances or
arbitrations incurred in the ordinary course of business which, individually or
in the aggregate, would not have a Company Material Adverse Effect; (v) the
consummation of the Merger and related transactions contemplated by this
Agreement will not give rise to termination of any existing collective
bargaining agreement or permit any labor organization to reopen negotiations in
respect of wages, hours or working conditions under any such existing collective
bargaining agreements; and (vi) there is no litigation, arbitration proceeding,
governmental investigation, administrative charge, citation or action of any
kind pending or, to the Knowledge of the Company or any of its Subsidiaries,
proposed or threatened against the Company relating to employment, employment
practices, terms and conditions of employment or wages and hours which,
individually or in the aggregate, would have a Company Material Adverse Effect.
(b) Except as identified in Section 3.11(b) of the Company Disclosure
Schedule, none of the Company nor any of its Subsidiaries has any collective
bargaining relationship or duty to bargain with any Labor Organization (as such
term is defined in Section 2(5) of the National Labor Relations Act, as
amended), and none of the Company nor any of its Subsidiaries has recognized any
labor organization as the collective bargaining representative of any of its
employees.
SECTION 3.12. Title to and Sufficiency of Assets.
----------------------------------
(a) As of the date hereof the Company and the Subsidiaries own, and as
of the Effective Time the Company and the Subsidiaries will own, good and
marketable title to all of their assets constituting personal property which is
material to their business (excluding, for purposes of this sentence, assets
held under leases), free and clear of any and all mortgages, liens,
encumbrances, charges, claims, restrictions, pledges, security interests or
impositions (collectively, "Liens"), except as set forth in the Company SEC
-----
Reports or Section 3.12(a) of the Company Disclosure Schedule. Such assets,
together with all assets held by the Company and the Subsidiaries under leases,
include all tangible and intangible personal property, contracts and rights
necessary or required for the operation of the businesses of the Company
Businesses.
(b) As of the date hereof the Company and the Subsidiaries own, and as
of the Effective Time the Company and the Subsidiaries will own, good and
marketable title to all of their Real Estate which is material to such persons
(excluding, for purposes of this sentence, Real Estate leases), free and clear
of any and all Liens, except as set forth in the Company SEC Reports or in
Section 3.12(b) of the Company Disclosure Schedule
<PAGE>
15
or such other Liens on Real Estate which would not, individually or in the
aggregate, have a Company Material Adverse Effect. Such Real Estate assets,
together with all Real Estate assets held by the Company and the Subsidiaries
under leases, are adequate for the operation of the Company Businesses as
presently conducted. The leases to all Real Estate occupied by the Company and
the Subsidiaries which are material to the operation of the Company Businesses
are in full force and effect and no event has occurred which with the passage of
time, the giving of notice, or both, would constitute a default or event of
default by the Company or any Subsidiary or, to the Knowledge of the Company,
any other person who is a party signatory thereto, other than such defaults or
events of default which, individually or in the aggregate, would not have a
Company Material Adverse Effect.
SECTION 3.13. Intellectual Property. "Company Intellectual Property"
--------------------- -----------------------------
means all trademarks, trademark registrations, trademark rights, trade names,
trade name rights, patents, patent rights, patent applications, industrial
models, inventions, invention disclosures, copyrights, copyright registrations,
servicemarks, servicemark registrations, servicemark rights, trade secrets,
applications for trademarks and for servicemarks, know-how and other proprietary
rights, data and information of any nature or form used or held for use in
connection with the businesses of the Company and the Subsidiaries as currently
conducted or as currently contemplated by the Company, together with all
applications currently pending for any of the foregoing. Except as disclosed in
the Company SEC Reports, the Company and the Subsidiaries own or possess
adequate licenses or other valid rights to use all of the Company Intellectual
Property that is necessary or appropriate for the conduct or contemplated
conduct of the Company's or Subsidiaries' businesses. Section 3.13(a) of the
Company Disclosure Schedule lists each material license or other agreement
pursuant to which the Company has the right to use Company Intellectual Property
utilized in connection with any product of the Company and the Subsidiaries, the
cancellation or expiration of which would have a Company Material Adverse Effect
(the "Company Licenses"). There are no pending, and between the date hereof and
----------------
the Effective Time, there shall not be any pending, or to the Company's
Knowledge, threatened interferences, re-examinations, oppositions or nullities
involving any patents, patent rights or applications therefor of the Company or
any Subsidiary, except such as may be commenced by Parent or any subsidiary of
Parent and except such as would not, individually or in the aggregate, have a
Company Material Adverse Effect. There is no breach or violation by the Company
under, and, to the Company's Knowledge, there is no breach by any other party
to, any Company License that is reasonably likely to give rise to any
termination or any loss of rights thereunder. The Company has put in place
policies and procedures to maintain the confidentiality of, and trade secret
rights to, the processes and formulas, research and development results and
other know-how of the Company, the value of which to the Company is dependent
upon the maintenance of the confidentiality thereof and, to the Knowledge of the
Company, such policies and procedures have been complied with. The conduct of
the business of the Company and the Subsidiaries as currently conducted or
contemplated does not and will not infringe upon or conflict with, in any way,
any license, trademark, trademark right, trade name, trade name right, patent,
patent right, industrial model, invention, service mark, service right,
copyright or any other intellectual property rights of any third party that,
individually or in the aggregate, would have a Company Material Adverse Effect.
Except as disclosed in the Company SEC Reports, there are no infringements of
any Company Intellectual Property which, individually or in the aggregate, would
have a Company Material Adverse Effect. Except as set forth in Section 3.13(b)
of the Company Disclosure Schedule, neither the Company nor any Subsidiary has
licensed or otherwise permitted the use by any third party of any proprietary
information or Company Intellectual Property on terms or in a manner which,
individually or in the aggregate, would have a Company Material Adverse Effect.
SECTION 3.14. Tax Matters. (a) Definitions. As used in this
----------- -----------
Agreement:
(i) "Closing Agreement" means a written and legally binding agreement
-----------------
with a taxing authority relating to Taxes.
(ii) "Tax Return" means any report, return, information statement,
----------
payee statement or other information required to be provided to any
federal, state, local or foreign Governmental Authority, or otherwise
retained, with respect to Taxes or the Company Benefit Plans.
<PAGE>
16
(iii) "Tax Ruling" means a written ruling of a taxing authority
----------
relating to Taxes.
(iv) "Taxes" means any and all taxes, levies, imposts, duties,
-----
assessments, charges and withholdings imposed or required to be collected
by or paid over to any federal, state, local, supra-national or foreign
Governmental Authority or any political subdivision thereof, including
without limitation income, gross receipts, ad valorem, value added, minimum
tax, franchise, sales, use, excise, license, real or personal property,
unemployment, disability, stock transfer, mortgage recording, estimated,
withholding or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, and including any interest, penalties,
fines, assessments or additions to tax imposed in respect of the foregoing,
or in respect of any failure to comply with any requirement regarding Tax
Returns.
(b) Representations. Except for representations and warranties made
---------------
with respect to federal and state income Taxes, all representations and
warranties made in this Section 3.14(b) with respect to Taxes are made to the
best Knowledge of the Company. Subject to the foregoing, and except as set forth
in Section 3.14(b) of the Company Disclosure Schedule or as would not,
individually or in the aggregate, have a Company Material Adverse Effect:
(i) Filing of Tax Returns. The Company and each of the Subsidiaries
---------------------
have filed all Tax Returns required to be filed by each of them and such
Tax Returns are in all material respects true, complete and correct and
filed on a timely basis.
(ii) Payment of Taxes. The Company and each of the Subsidiaries
----------------
have, within the time and in the manner prescribed by law, paid all Taxes
that are currently due and payable, except for those contested in good
faith and for which adequate reserves have been taken.
(iii) Tax Liens. There are no tax liens upon the assets of the
---------
Company or of any of the Subsidiaries except for statutory liens for
current Taxes not yet due.
(iv) Withholding Taxes. The Company and each of the Subsidiaries
-----------------
have complied in all material respects with the provisions of the Code
relating to the withholding of Taxes, as well as similar provisions under
any other Laws, and have, within the time and in the manner prescribed by
Law, withheld and paid over to the proper governmental authorities all
amounts required.
(v) Extensions of Time for Filing. Neither the Company nor any of
-----------------------------
the Subsidiaries has requested any extension of time within which to file
any Tax Return, which Tax Return has not since been filed.
(vi) Waivers of Statute of Limitations. Neither the Company nor any
---------------------------------
of the Subsidiaries has executed any outstanding waivers or comparable
consents regarding the application of the statute of limitations with
respect to any Taxes or Tax Returns.
(vii) No Deficiencies. The statute of limitations for the assessment
---------------
of any federal income Taxes has expired for all income Tax Returns of the
Company and of each of the Subsidiaries or such income Tax Returns have
been examined by the Internal Revenue Service for all periods. No
deficiency for any income Taxes has been proposed, asserted or assessed
against the Company or any of the Subsidiaries which has not been resolved
and paid in full. There are no deficiencies for state income Taxes which
individually, or in the aggregate, would have a Company Material Adverse
Effect.
<PAGE>
17
(viii) Audit, Administrative and Court Proceedings. No audits or
-------------------------------------------
other administrative proceedings or court proceedings are presently pending
with regard to any Taxes or Tax Returns of the Company or any of the
Subsidiaries.
(ix) Powers of Attorney. No power of attorney currently in force
------------------
has been granted by the Company or any of the Subsidiaries concerning any
Taxes or Tax Returns.
(x) Tax Rulings. Neither the Company nor any of the Subsidiaries
-----------
has received a Tax Ruling or entered into a Closing Agreement with any
taxing authority that would have a Company Material Adverse Effect.
(xi) Tax Sharing Agreements. Neither the Company nor any Subsidiary
----------------------
is a party to any agreement relating to allocating or sharing of Taxes
which has not been disclosed on its Tax Returns.
SECTION 3.15. Environmental Matters.
---------------------
(a) For purposes of this Agreement, the following terms shall have the
following meanings: (i) "Hazardous Substances" means (A) petroleum and
--------------------
petroleum products, by-products or breakdown products, radioactive materials,
asbestos-containing materials and polychlorinated biphenyls, and (B) any other
chemicals, materials or substances regulated as toxic or hazardous or as a
pollutant, contaminant or waste under any applicable Environmental Law; (ii)
"Environmental Law" means any law, past, present or future and as amended, and
- ------------------
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, or common law, relating to
pollution or protection of the environment, health or safety or natural
resources, including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Substances; and (iii) "Environmental Permit" means any permit, approval,
--------------------
identification number, license or other authorization required under any
applicable Environmental Law.
(b) Except as disclosed in Section 3.15(b) of the Company Disclosure
Schedule, the Company and the Subsidiaries are and have been in compliance with
all applicable Environmental Laws, have obtained all Environmental Permits and
are in compliance with their requirements, and have resolved all past non-
compliance with Environmental Laws and Environmental Permits without any
pending, on-going or future obligation, cost or liability, except in each case
for the notices set forth in Section 3.15(b) of the Company Disclosure Schedule
or where such non-compliance would not, individually or in the aggregate, have a
Company Material Adverse Effect.
(c) Except as disclosed in Section 3.15(c) of the Company Disclosure
Schedule, neither the Company nor any of the Subsidiaries has (i) placed, held,
located, released, transported or disposed of any Hazardous Substances on,
under, from or at any of the Company's or any of the Subsidiaries' properties or
any other properties, other than in a manner that would not, in all such cases
taken individually or in the aggregate, result in a Company Material Adverse
Effect, (ii) any Knowledge or reason to know of the presence of any Hazardous
Substances on, under, emanating from, or at any of the Company's or any of the
Subsidiaries' properties or any other property but arising from the Company's or
any of the Subsidiaries' current or former properties or operations, other than
in a manner that would not result in a Company Material Adverse Effect, or (iii)
any Knowledge or reason to know, nor has it received any written notice (A) of
any violation of or liability under any Environmental Laws, (B) of the
institution or pendency of any suit, action, claim, proceeding or investigation
by any Governmental Entity or any third party in connection with any such
violation or liability, (C) requiring the response to or remediation of
Hazardous Substances at or arising from any of the Company's or any of the
Subsidiaries' current or former properties or operations or any other
properties, (D) alleging noncompliance by the Company or any of the Subsidiaries
with the terms of any Environmental Permit in any manner reasonably likely to
require material expenditures or to result in material liability or (E)
demanding payment for response to or remediation of Hazardous
<PAGE>
18
Substances at or arising from any of the Company's or any of the Subsidiaries'
current or former properties or operations or any other properties, except in
each case for the notices set forth in Section 3.15(c) of the Company Disclosure
Schedule.
(d) Except as disclosed in Section 3.15(d) of the Company Disclosure
Schedule, no Environmental Law imposes any obligation upon the Company or any of
the Subsidiaries arising out of or as a condition to any transaction
contemplated by this Agreement, including any requirement to modify or to
transfer any permit or license, any requirement to file any notice or other
submission with any Governmental Authority, the placement of any notice,
acknowledgement or covenant in any land records, or the modification of or
provision of notice under any agreement, consent order or consent decree.
Except as disclosed in Section 3.15(d) of the Company Disclosure Schedule, no
Lien has been placed upon any of the Company's or the Subsidiaries' properties
under any Environmental Law.
(e) The Company and the Subsidiaries have provided Parent with copies
of any environmental assessment or audit report or other similar studies or
analyses currently in the possession of or available to the Company or any of
the Subsidiaries relating to any real property currently or formerly owned,
leased or occupied by the Company or any of the Subsidiaries.
SECTION 3.16. Material Contracts; Government Contracts.
----------------------------------------
(a) The contracts and agreements listed in Section 3.05 of the
Disclosure Schedule and all other contracts, agreements and arrangements that
are material to the Company and the Subsidiaries or, although not so material,
are of unique value to the Company and the Subsidairies are referred to herein
collectively as the "Material Contracts".
------------------
(b) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, each Company License and each Material Contract
is a legal, valid and binding agreement, neither the Company nor any of the
Subsidiaries (or to the Knowledge of the Company, any other party thereto) is in
default under any of the Company Licenses or Material Contracts, and none of the
Company Licenses or Material Contracts has been cancelled by the other party
thereto; each Material Contract and Company License is in full force and effect
and no event has occurred which, with the passage of time or the giving of
notice or both, would constitute a default, event of default or other breach by
the Company or applicable Subsidiary party thereto which would entitle the other
party to such Material Contract or Company License to terminate the same or
declare a default or event of default thereunder; the Company and the
Subsidiaries are not in receipt of any claim of default under any such
agreement; the Company or the applicable Subsidiary party to such Material
Contract or Company License maintains good business relationships with the other
party to such agreement. The Company has made available to Parent true and
complete copies of all Company Licenses and all Material Contracts. The Company
is not a party to any contracts or agreements that limit the ability of the
Company or any Subsidiary or, after the Effective Time, Parent or any of its
affiliates, to compete in any line of business or with any person or in any
geographic area or during any period of time, or to solicit any customer or
client.
(c) Section 3.16(c) of the Company Disclosure Schedule contains a
complete list of all material bids, quotations and proposals made by, all
contracts and agreements between, and all commitments or sale or purchase orders
by, the Company or any of the Subsidiaries ("Government Contracts") with or to
--------------------
the United States government, a foreign government or a department or agency of
the United States government or a foreign government, including, without
limitation, all contracts to supply goods and services, and all subcontracts
awarded to the Company or any of the Subsidiaries.
(d) All of the Government Contracts have been legally awarded and are
binding on the parties thereto and, except as may be disclosed in Section
3.16(d) of the Company Disclosure Schedule or as would
<PAGE>
19
not have a Company Material Adverse Effect, the Company and the Subsidiaries are
in compliance in all material respects with all terms and conditions in
Government Contracts, including all terms and conditions incorporated expressly
by reference or by operation of law therein.
(e) Except as set forth in Section 3.16(e) of the Company Disclosure
Schedule, as of the date of this Agreement, to the Company's Knowledge the
Company and the Subsidiaries have not received any notice, written or, to the
Company's Knowledge, oral, of material performance or administrative
deficiencies relating to or involving any Government Contract, other than
routine contract management interchanges such as deficiency reports, waivers,
technical deficiencies, discrepancies and similar type actions.
(f) Except as set forth in Section 3.16(f) of the Company Disclosure
Schedule, neither the Company, any of the Company's affiliates nor any of their
respective directors, officers or employees is currently debarred or suspended
from participation in the award of Government Contracts or from otherwise
conducting business with the U.S. government or any agency thereof, nor, to the
Company's Knowledge, are there facts or circumstances reasonably likely to form
the basis of a debarment or suspension proceeding.
(g) As of the date of this Agreement, except as set forth in
Section 3.16(g) of the Company Disclosure Schedule or as would not have a
Company Material Adverse Effect, the Company has not received any written notice
of any "stop orders", "cure notices", "show cause notices" or any "terminations
for convenience or default" of any Government Contract and, as at the Closing
Date, the Company shall not have received any such notices under any material
Government Contract.
(h) Except as set forth in Section 3.16(h) of the Disclosure
Schedule, as of the date of this Agreement, there are no Government Contracts
for the sale of goods or services for which, at the time of the most recent
scheduled contract milestone, the work schedule was delinquent in any respect
which could have a Company Material Adverse Effect.
(i) Except as would not have a Company Material Adverse Effect, as
of the date of this Agreement there is no outstanding bid for a Government
Contract for the sale of goods or services where performance of contractual
effort will be begun prior to contract award without advance funding or customer
acknowledgment that pre-contract costs will be incorporated in the resultant
contract nor are there any existing letter contracts having no defined contract
value relating to or involving Government Contracts where performance will
continue while awaiting additional contractual funding.
(j) As of the date of this Agreement there is no cost type
Government Contract which is material to the Company Government Business with a
ceiling, cap or share ratio, which is or is likely to be exceeded.
(k) The Company's pricing, cost accounting, estimating, material
management and accounting, property and resource planning and procurement
systems have been properly disclosed in all material respects to and, to the
extent required by applicable regulations, approved by the United States
government and such disclosures are in all material respects in compliance with
applicable federal procurement law regulations, including the Cost Principles
and Cost Accounting Standards.
SECTION 3.17. Suppliers. Except as set forth in Section 3.17 of the
---------
Company Disclosure Schedule, neither the Company nor any Subsidiary has received
any notice or has any reason to believe that any significant supplier will not
sell raw materials, supplies, merchandise and other goods to the Company or any
Subsidiary at any time after the Effective Time on terms and conditions
substantially similar to those used in its current sales to the Company and the
Subsidiaries, subject only to general and customary price increases, unless
<PAGE>
20
comparable raw materials, supplies, merchandise or other goods are readily
available from other sources on comparable terms and conditions.
SECTION 3.18. Tax Treatment. Neither the Company nor, to the
-------------
Company's Knowledge, any of its affiliates has taken, agreed to take, or will
take any action that would prevent the Merger from constituting a transaction
qualifying under Section 368(a) of the Code. Neither the Company nor, to the
Company's Knowledge, any of its affiliates or agents is aware of any agreement,
plan or other circumstance that would prevent the Merger from qualifying under
Section 368(a) of the Code, and to the Company's Knowledge, the Merger will so
qualify.
SECTION 3.19. Insurance. All material fire and casualty, general
---------
liability, business interruption, product liability, and sprinkler and water
damage insurance policies maintained by the Company or any of its Subsidiaries
are with reputable insurance carriers, provide full and adequate coverage for
all normal risks incident to the business of the Company and the Subsidiaries
and their respective properties and assets, and are in character and amount at
least equivalent to that carried by persons engaged in similar businesses and
subject to the same or similar perils or hazards, except for any such failures
to maintain insurance policies that, individually or in the aggregate, would not
have a Company Material Adverse Effect. The Company and each Subsidiary have
made any and all payments required to maintain such policies in full force and
effect. Except as set forth in Section 3.19 of the Company Disclosure Schedule,
neither the Company nor any Subsidiary has received notice of default under any
such policy, and has not received written notice or, to the Knowledge of the
Company, oral notice of any pending or threatened termination or cancellation,
coverage limitation or reduction or material premium increase with respect to
such policy.
SECTION 3.20. Approval of Company Board and Independent Directors.
---------------------------------------------------
The Board of Directors of the Company has approved unanimously the execution and
delivery of this Agreement and the Option and Voting Agreement for purposes of
Section 203 of Delaware Law and for purposes of Section 7 of Article VII of the
Company's By-Laws. A separate resolution approving the execution and delivery of
this Agreement and the Option and Voting Agreement for purposes of Section 203
of Delaware Law and for purposes of Section 7 of Article VII of the Company's
By-Laws has been adopted unanimously by the independent directors of the Company
pursuant to a separate vote. A separate resolution approving the execution and
delivery of the Consulting Agreement has been adopted unanimously by the
independent directors of the Company pursuant to a separate vote.
SECTION 3.21. Stockholder Vote Required. The affirmative vote of the
-------------------------
holders of a majority of the outstanding shares of Company Class A Stock is the
only vote of the holders of any class or series of capital stock of the Company
necessary to approve the Merger.
SECTION 3.22. Accuracy of Information. Neither this Agreement nor
-----------------------
any other document provided by the Company or the Subsidiaries or any of their
respective employees or agents to Parent in connection with the transactions
contemplated herein contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained therein not
misleading.
SECTION 3.23. Transactions with Affiliates. (a) For purposes of this
----------------------------
Section 3.23, the term "Affiliated Person" means (i) any holder of 2% or more of
-----------------
the Company Class A Stock, (ii) any director, officer or senior executive of the
Company or any Subsidiary, (iii) any person, firm or corporation that directly
or indirectly controls, is controlled by, or is under common control with, any
of the Company or any Subsidiary or (iv) any member of the immediate family or
any of such persons.
(b) Except as set forth in Section 3.23(b) of the Company Disclosure
Schedule or in the Company SEC Reports, since September 30, 1993, the Company
and the Subsidiaries have not, in the ordinary course of business or otherwise,
(i) purchased, leased or otherwise acquired any material property or assets or
obtained any material services from, (ii) sold, leased or otherwise disposed of
any material property or assets or
<PAGE>
21
provided any material services to (except with respect to remuneration for
services rendered in the ordinary course of business as director, officer or
employee of the Company or any Subsidiary), (iii) entered into or modified in
any manner any contract with, or (iv) borrowed any money from, or made or
forgiven any loan or other advance (other than expenses or similar advances made
in the ordinary course of business) to, any Affiliated Person.
(c) Except as set forth in Section 3.23(c) of the Company Disclosure
Schedule or in the Company SEC Reports, (i) the contracts of the Company and the
Subsidiaries do not include any material obligation or commitment between the
Company or any Subsidiary and any Affiliated Person, (ii) the assets of the
Company or any Subsidiary do not include any receivable or other obligation or
commitment from an Affiliated Person to the Company or any Subsidiary and (iii)
the liabilities of the Company and the Subsidiaries do not include any payable
or other obligation or commitment from the Company or any Subsidiary to any
Affiliated Person.
(d) To the Knowledge of the Company and except as set forth in
Section 3.23(d) of the Company Disclosure Schedule or in the Company SEC
Reports, no Affiliated Person of any of the Company or any Subsidiary is a party
to any contract with any customer or supplier of the Company or any Subsidiary
that affects in any material manner the business, financial condition or results
of operation of the Company or any Subsidiary.
SECTION 3.24. Opinion of Financial Advisor. The Company has received
----------------------------
the opinion of Salomon Brothers Inc (the "Company Financial Advisor"), to the
-------------------------
effect that, as of the date hereof, the Merger Consideration is fair to the
Company stockholders from a financial point of view.
SECTION 3.25. Brokers. No broker, finder or investment banker (other
-------
than the Company Financial Advisor) is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger based upon arrangements
made by or on behalf of the Company. The Company has heretofore furnished to
Parent a complete and correct copy of all agreements between the Company and the
Company Financial Advisor pursuant to which such firm would be entitled to any
payment relating to the Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
----------------------------------------
AND MERGER SUB
--------------
Except as specifically disclosed in Parent SEC Reports (as hereinafter
defined) filed subsequent to December 31, 1996, Parent and Merger Sub hereby,
jointly and severally, represent and warrant to the Company that:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each of
--------------------------------------------
Parent and Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
the requisite power and authority and all necessary governmental approvals to
own, lease and operate its properties and to carry on its business as it is now
being conducted. Each of Parent and Merger Sub is duly qualified or licensed as
a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that, individually or in the aggregate, would not have a Parent
Material Adverse Effect. The term "Parent Material Adverse Effect" means any
------------------------------
circumstances, change in, or effect on, Parent, when taken as a consolidated
whole, which is, or could reasonably be expected to in the future be, materially
adverse to the operations, assets or liabilities, employee relationships,
customer or supplier relationships, earnings or results of operations, financial
projections or forecasts, or the business prospects and condition (financial or
otherwise), of Parent taken as a consolidated whole.
<PAGE>
22
SECTION 4.02. Certificate of Incorporation and By-laws. Parent has
----------------------------------------
heretofore furnished to the Company a complete and correct copy of the
Certificate of Incorporation and the By-laws, each as amended to date, of Parent
and Merger Sub. Such Certificates of Incorporation and By-laws are in full force
and effect. Neither Parent nor Merger Sub is in violation of any provision of
its respective Certificate of Incorporation or By-laws.
SECTION 4.03. Parent Common Stock to Be Issued in the Merger. The
----------------------------------------------
shares of Parent Common Stock to be issued pursuant to the Merger will be duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, Parent's Certificate of Incorporation or
By-laws or any agreement to which Parent is a party or by which Parent is bound
and will, when issued, be registered under the Securities Act and the Exchange
Act and registered or exempt from registration under applicable Blue Sky Laws.
SECTION 4.04. Authority Relative to This Agreement. Each of Parent
------------------------------------
and Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Merger. The execution and delivery of this Agreement by Parent and Merger
Sub and the consummation by Parent and Merger Sub of the Merger have been duly
and validly authorized by all necessary corporate action and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize this
Agreement or to consummate the Merger (other than, with respect to the Merger,
the filing and recordation of appropriate merger documents as required by
Delaware Law). This Agreement has been duly and validly executed and delivered
by Parent and Merger Sub and, assuming the due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
each of Parent and Merger Sub enforceable against each of Parent and Merger Sub
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
SECTION 4.05. No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance of this Agreement by Parent and Merger
Sub will not, (i) conflict with or violate the Certificate of Incorporation or
By-laws of Parent or Merger Sub, (ii) conflict with or violate any Law
applicable to Parent or Merger Sub or by which any property or asset of Parent
or Merger Sub is bound or affected, except for such conflicts or violations
which would not, individually or in the aggregate, have a Parent Material
Adverse Effect, (iii) prevent or materially delay the consummation of the Merger
or (iv) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or Merger Sub is a party or by
which Parent or Merger Sub or any property or asset of either of them is bound
or affected, except for any such breaches or defaults which, individually or in
the aggregate, would not have a Parent Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent and
Merger Sub do not, and the performance of this Agreement by Parent and Merger
Sub will not, require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
domestic, foreign or supranational, except (i) for applicable requirements, if
any, of the Exchange Act, the Securities Act, Blue Sky Laws, state takeover
laws, the HSR Act, and the filing and recordation of appropriate merger
documents as required by Delaware Law and the rules of the NYSE, and (ii) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, is not reasonably likely to prevent or
materially delay consummation of the Merger, and would not, individually or in
the aggregate, have a Parent Material Adverse Effect.
SECTION 4.06. SEC Filings; Financial Statements.
---------------------------------
<PAGE>
23
(a) Parent has filed all forms, reports and documents required to be
filed by it with the SEC since January 1, 1994 (collectively, the "Parent SEC
----------
Reports"). The Parent SEC Reports (i) were prepared in accordance with the
- -------
requirements of the Securities Act and the Exchange Act, as the case may be, and
the rules and regulations thereunder, (ii) did not at the time they were filed
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading and (iii) did not at the time they were filed omit any documents
required to be filed as exhibits thereto.
(b) Each of the consolidated financial statements (including, in
each case, any notes thereto) contained in the Parent SEC Reports was prepared
in accordance with United States generally accepted accounting principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presented the consolidated
financial position, results of operations and cash flows of Parent and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein in accordance with United States generally
accepted accounting principles (subject, in the case of unaudited statements, to
normal and recurring year-end adjustments that were not and are not expected,
individually or in the aggregate, to have a Parent Material Adverse Effect).
SECTION 4.07. Absence of Certain Changes or Events. Since
------------------------------------
December 31, 1996, except as disclosed in any Parent SEC Report filed since
December 31, 1996, there has not been any event or events having, or reasonably
likely to have, individually or in the aggregate, a Parent Material Adverse
Effect.
SECTION 4.08. Brokers. No broker, finder or investment banker is
-------
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger based upon arrangements made by or on behalf of Parent or Merger
Sub.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
SECTION 5.01. Conduct of Business by the Company Pending the Merger.
-----------------------------------------------------
The Company covenants and agrees that, between the date of this Agreement and
the Effective Time, except as set forth in Section 5.01 of the Company
Disclosure Schedule or as otherwise expressly provided for in this Agreement,
unless Parent shall otherwise agree (which agreement shall not be unreasonably
withheld or delayed) in writing, the Company Businesses shall be conducted only
in, and the Company and the Subsidiaries shall not take any action except in,
the ordinary course of business and in a manner consistent in all material
respects with past practice; and the Company shall use its best efforts to
preserve intact its business organization, to keep available the services of the
current officers, employees and consultants of the Company and the Subsidiaries
and to preserve the current relationships of the Company and the Subsidiaries
with customers, distributors, suppliers, licensors, licensees, contractors and
other persons with which the Company or any Subsidiary has significant business
relations. By way of amplification and not limitation, except as contemplated
by this Agreement, or as set forth in Section 5.01 of the Company Disclosure
Schedule, neither the Company nor any of the Subsidiaries shall, between the
date of this Agreement and the Effective Time, directly or indirectly do, or
propose to do, any of the following without the prior written consent of Parent,
which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its Certificate of Incorporation or
By-laws or equivalent organizational documents;
<PAGE>
24
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize
the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any
shares of capital stock of any class of the Company or any Subsidiary, or
any options, warrants, convertible securities or other rights of any kind
to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the
Company or any Subsidiary or (ii) any assets of the Company or any
Subsidiary, except for sales in the ordinary course of business and in a
manner consistent in all material respects with past practice and other
asset sales for consideration or having a fair market value aggregating not
more than $1,000,000;
(c) other than regularly scheduled periodic cash dividends in
amounts not in excess of those previously declared, set aside, make or pay
any dividend or other distribution, payable in cash, stock, property or
otherwise, with respect to any of its capital stock, except that a United
States Subsidiary may, after consultation with Parent, declare and pay a
dividend to the Company;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) except as contemplated by the UNC Merger Agreement, (i) acquire
(including, without limitation, by merger, consolidation or acquisition of
stock or assets) any corporation, partnership, limited liability company,
other business organization or any division thereof, or any material amount
of assets; (ii) enter into any contract or agreement that, if entered into
prior to the date of this Agreement, would have been required to be
disclosed as a Material Contract, other than in the ordinary course of
business, consistent in all material respects with past practice; or
(iii) enter into or amend any Material Contract with respect to any matter
set forth in this subsection (e);
(f) (i) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or
make any loans or advances, except in the ordinary course of business and
consistent in all material respects with past practice and in an amount not
in excess of $250,000; (ii) authorize capital expenditures which are, in
the aggregate, in excess of $1,000,000 for the Company and the Subsidiaries
taken as a whole; or (iii) enter into or amend any contract, agreement,
commitment or arrangement with respect to any matter set forth in this
subsection (f);
(g) increase (except in the ordinary course of business and
consistent in all material respects with past practice) the compensation
payable or to become payable to its officers or employees generally or to
any employee with an annual salary in excess of $100,000, or grant any
bonus, severance or termination pay to, or enter into any employment or
severance agreement with any director, officer or other employee of the
Company or any Subsidiary, or establish, adopt, enter into or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee;
provided, however, that the Company and the executive officers identified
-------- -------
in Exhibit 5.01(g) hereto may enter into agreements in a form substantially
identical to, and in the amounts identified on, Exhibit 5.01(g) hereto;
(h) acquire, sell, lease or dispose of any Real Estate or other
material assets, other than sales or leases of fixed assets (other than
Real Estate) or sales of inventory, in each case, in the ordinary course of
business;
(i) accelerate the collection of accounts receivable, delay the
payment of accounts payable or take any action with respect to credit,
collection and fiscal policies and practices, other than in the
<PAGE>
25
ordinary course of business and in a manner consistent with past practice
with respect to accounting policies or practices;
(j) make any material Tax election or settle or compromise any
material federal, state, local or foreign income Tax liability;
(k) take any action that would or is reasonably likely to result in
any of the covenants and agreements set forth in this Article V or in
Article VI or any of the conditions set forth in Article VII not being
satisfied as of the Closing Date;
(l) take any action, other than reasonable and usual actions in the
ordinary course of business and consistent in all material respects with
past practice, with respect to accounting policies or procedures
(including, without limitation, procedures with respect to the payment of
accounts payable and collection of accounts receivable);
(m) knowingly take any action that could reasonably be expected to
prevent the Merger from constituting a transaction qualifying under Section
368(a) of the Code; or
(n) except for the payment of reasonable professional fees relating
to the Merger, the UNC Merger, or otherwise and reasonable fees to
financial advisors (which financial advisory fees have heretofore been
disclosed or are otherwise acceptable, to Parent), pay, discharge or
satisfy any claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise) in an amount in excess of $500,000 in
the aggregate, other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent in all material respects with
past practice, of liabilities reflected or reserved against in the Company
1996 Balance Sheet or subsequently incurred in the ordinary course of
business and consistent in all material respects with past practice.
<PAGE>
26
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
SECTION 6.01. Registration Statement; Proxy Statement.
---------------------------------------
(a) As promptly as practicable after the execution of this
Agreement, the Company and Parent shall prepare and file with the SEC
preliminary proxy materials relating to the meeting of the holders of shares of
Company Class A Stock to be held in connection with the Merger (together with
any amendments thereof or supplements thereto, the "Proxy Statement"). As
---------------
promptly as practicable after comments are received from the SEC on the
preliminary proxy materials and after the furnishing by the Company and Parent
of all information required to be contained therein, the Company and Parent
shall prepare and file with the SEC a registration statement on Form S-4
(together with all amendments thereto, the "Registration Statement"), in which
----------------------
the Proxy Statement shall be included as a prospectus in connection with the
registration under the Securities Act of the shares of Parent Common Stock to be
issued to the holders of shares of Company Common Stock pursuant to the Merger.
Parent shall use all reasonable efforts to cause the Registration Statement to
become effective as promptly as practicable, and shall take all action required
under any applicable federal or state securities laws in connection with the
issuance of shares of Parent Common Stock pursuant to the Merger. The Company
shall furnish all information concerning the Company as Parent may reasonably
request in connection with such actions and the preparation of the Registration
Statement. As promptly as practicable after the Registration Statement shall
have become effective, the Company shall mail the Proxy Statement to its
stockholders. The Proxy Statement shall include the unanimous recommendation of
the Board of Directors of the Company in favor of the Merger, unless otherwise
necessary due to the applicable fiduciary duties of the directors of the
Company, as determined by such directors in good faith after consultation with
independent legal counsel (who may be the Company's regularly engaged
independent legal counsel).
(b) The Registration Statement and the information supplied by
Parent for inclusion in the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective by the SEC; (ii) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the holders of shares of Company Class A Stock; (iii) the time of the
Stockholders' Meeting (as defined in Section 6.02); and (iv) the Effective Time,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. If at any time prior to the Effective Time any event or
circumstance relating to Parent or any of its subsidiaries, or their respective
officers or directors, is discovered by Parent which should be set forth in an
amendment or a supplement to the Registration Statement or Proxy Statement,
Parent shall promptly inform the Company, and the Company shall make appropriate
amendments or supplements to the Proxy Statement. The Proxy Statement shall
comply in all material respects as to form and substance with the requirements
of the Securities Act, the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to any information supplied by Parent or Merger Sub
which is contained in, or furnished in connection with the preparation of, any
of the foregoing documents.
(c) The Proxy Statement and the information supplied by the Company
for inclusion in the Registration Statement shall not, at (i) the time the
Registration Statement is declared effective by the SEC; (ii) the time the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
the holders of shares of Company Class A Stock; (iii) the time of the
Stockholders' Meeting; and (iv) the Effective Time, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading. If
at any time prior to the Effective Time any event or circumstance relating to
the Company or any of the Subsidiaries, or their respective officers or
directors, is discovered by the Company which should be set forth in an
amendment or a supplement to the Registration Statement or Proxy Statement, the
Company shall promptly inform Parent. The Registration Statement and the
<PAGE>
27
Proxy Statement shall comply in all material respects as to form and substance
with the requirements of the Securities Act, the Exchange Act and the rules and
regulations thereunder. Notwithstanding the foregoing, Parent and Merger Sub
make no representations or warranties with respect to any information supplied
by the Company which is contained in, or furnished in connection with the
preparation of, any of the foregoing documents.
SECTION 6.02. Stockholders' Meeting.
---------------------
(a) Subject to the provisions of Section 6.05 and Section 8.01(g),
the Company shall, consistent with applicable law, call and hold a meeting of
the holders of shares of Company Class A Stock (the "Stockholders' Meeting") as
---------------------
promptly as practicable for the purpose of voting upon the approval and adoption
of this Agreement and the Company shall use its reasonable best efforts to hold
the Stockholders' Meeting as soon as practicable after the date on which the
Registration Statement becomes effective. The Company shall solicit from the
holders of shares of Company Class A Stock proxies in favor of the approval and
adoption of the Merger, and shall take all other action necessary or advisable
to secure the vote or consent of such holders required by Delaware Law.
(b) Parent shall vote (or consent with respect to) any shares of
Company Class A Stock beneficially owned by it, or with respect to which it has
the power (by agreement, proxy or otherwise) or cause to be voted (or to provide
a consent), in favor of the approval and adoption of this Agreement at any
meeting of the stockholders of the Company at which this Agreement shall be
submitted for approval and adoption and at all adjournments or postponements
thereof (or, if applicable, by any action of the stockholders of the Company by
consent in lieu of a meeting).
SECTION 6.03. Appropriate Action; Consents; Filings.
-------------------------------------
(a) The Company and Parent shall use their reasonable efforts to
(i) take, or cause to be taken, all appropriate action and do, or cause to be
done, all things necessary, proper or advisable under applicable Law or
otherwise to consummate and make effective the Merger as promptly as
practicable, (ii) obtain expeditiously from any Governmental Authorities any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made by Parent or the Company or any of their
Subsidiaries in connection with the authorization, execution and delivery of
this Agreement and the consummation of the Merger, and (iii) as promptly as
practicable, make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (A)
the Securities Act and the Exchange Act, and any other applicable federal or
state securities Laws, (B) the HSR Act and any related governmental request
thereunder and (C) any other applicable Law; provided that Parent and the
--------
Company shall cooperate with each other in connection with the making of all
such filings, including providing copies of all such documents to the non-filing
party and its advisors prior to filing and, if requested, accepting all
reasonable additions, deletions or changes suggested by the other party in
connection therewith. From the date of this Agreement until the Effective Time,
each party shall promptly notify the other party in writing of any pending or,
to the knowledge of the first party, threatened action, proceeding or
investigation by any Governmental Authority or any other person (i) challenging
or seeking material damages in connection with the Merger or the conversion of
the Company Common into Parent Common Stock or cash pursuant to the Merger or
(ii) seeking to restrain or prohibit the consummation of the Merger or otherwise
limit the right of Parent or Parent's subsidiaries to own or operate all or any
portion of the businesses or assets of the Company or its Subsidiaries, which in
either case would have a Company Material Adverse Effect prior to or after the
Effective Time, or a Parent Material Adverse Effect after the Effective Time.
(b) The Company and Parent shall furnish to each other all
information required for any application or other filing to be made pursuant to
the rules and regulations of any applicable Law (including all information
required to be included in the Proxy Statement and the Registration Statement)
in connection with the transactions contemplated by this Agreement.
<PAGE>
28
(c) (i) Each of Parent and the Company shall give (or shall cause
its respective subsidiaries to give) any notices to third parties and use, and
cause its respective subsidiaries to use, their reasonable efforts to obtain any
third party consents, (A) necessary, proper or advisable to consummate the
transactions contemplated in this Agreement, (B) disclosed or required to be
disclosed in the Company Disclosure Schedule or (C) required to prevent a
Company Material Adverse Effect from occurring prior to or after the Effective
Time or a Parent Material Adverse Effect from occurring after the Effective
Time; provided, however, that the failure by the Company to obtain any one or
-------- -------
more of such third party consents (including those disclosed in Section 3.05(a)
and Section 3.05(b) of the Company Disclosure Schedule) shall not constitute a
condition precedent to Parent's obligation to consummate the Merger pursuant to
the terms of this Agreement or entitle Parent to delay the Effective Time.
(ii) In the event that Parent or the Company shall fail to obtain any
third party consent described in subsection (c)(i) above, it shall use its
reasonable efforts, and shall take any such actions reasonably requested by the
other party, to minimize any adverse effect upon the Company and Parent, their
respective subsidiaries, and their respective businesses resulting, or which
could reasonably be expected to result after the Effective Time, from the
failure to obtain such consent.
SECTION 6.04. Access to Information; Confidentiality.
--------------------------------------
(a) The parties shall comply with, and shall cause their respective
Representatives (as defined below) to comply with, to the extent permitted by
applicable Law, all of their respective obligations under the Confidentiality
Agreement dated March 4, 1997 (the "Confidentiality Agreement") between the
-------------------------
Company and Parent.
(b) Subject to the Confidentiality Agreement, from the date hereof
to the Effective Time, the Company will provide to Parent (and its officers,
directors, employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "Representatives") access to all information and
---------------
documents which Parent may reasonably request regarding the business, assets,
liabilities, employees and other aspects of the Company.
(c) From the date hereof to the Effective Time, the Company shall:
(i) provide to Parent and its Representatives access at reasonable times upon
prior notice to the officers, employees, agents, properties, offices and other
facilities of the Company and its Subsidiaries and to the books and records
thereof and (ii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of the
Company and its Subsidiaries as Parent or its Representatives may reasonably
request.
(d) No investigation by Parent or Merger Sub, whether prior to the
execution of this Agreement or pursuant to this Section 6.04, shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
<PAGE>
29
SECTION 6.05. No Solicitation of Competing Transactions. (a) Neither
-----------------------------------------
the Company nor any Subsidiary shall, directly or indirectly, through any
officer, director, agent or otherwise, initiate, solicit or knowingly encourage
(including by way of furnishing non-public information or assistance), or take
any other action to facilitate knowingly, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Competing Transaction (as defined below), or enter into or maintain or continue
discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of the officers, directors or
employees of the Company or any Subsidiary or any investment banker, financial
advisor, attorney, accountant or other agent or representative of the Company or
any Subsidiary to take any such action, and the Company shall notify Parent
orally (within three business days) and in writing (as promptly as practicable)
of all of the relevant details relating to any inquiry or proposal which the
Company or any Subsidiary or any such officer, director, employee, investment
banker, financial advisor, attorney, accountant or other agent or representative
may receive relating to any of such matters and which the Company and any of its
officers or directors has knowledge of, and if such inquiry or proposal is in
writing, the Company shall deliver to Parent a copy of such inquiry or proposal;
provided, however, that nothing contained in this Section 6.05 shall prohibit
- -------- -------
the Company or its Board of Directors from (i) complying with Rule 14e-2
promulgated under the Exchange Act with regard to a tender or exchange offer,
(ii) referring any third party to this Section 6.05 or making a copy of this
Section 6.05 available to any third party, or (iii) failing to make or
withdrawing or modifying its recommendation referred to in Section 6.01(a)
following the making of a proposal that constitutes, or may reasonably be
expected to lead to, a Competing Transaction if the Board of Directors of the
Company, after consultation with independent legal counsel (who may be the
Company's regularly engaged independent legal counsel), determines in good faith
that such action is necessary for the directors of the Company to comply with
their fiduciary duties to the Company or its stockholders under applicable law,
or (iv) terminating this Agreement and the transactions contemplated hereby in
accordance with Section 8.01(g) hereof. The Company agrees not to release any
third party from, or waive any provision of, any confidentiality or standstill
agreement to which the Company is a party. For purposes of this Agreement,
"Competing Transaction" shall mean any of the following involving the Company or
---------------------
any Subsidiary: (i) any merger, consolidation, share exchange, recapitalization,
business combination, or other similar transaction; (ii) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition of 15% or more of the
assets of the Company and the Subsidiaries, taken as a whole, in a single
transaction or series of related transactions; (iii) any tender offer or
exchange offer for 15% or more of the shares of Company Class A Stock or Company
Class B Stock or the filing of a registration statement under the Securities Act
in connection therewith; (iv) any person having acquired beneficial ownership or
the right to acquire beneficial ownership of, or any "group" (as such term is
defined under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) having been formed which beneficially owns or has the
right to acquire beneficial ownership of, 15% or more of the shares of Company
Class A Stock or Company Class B Stock; or (v) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
(b) Provided that there has been no breach of Section 6.05(a) which
materially and adversely affects the rights of Parent contained herein or in the
Option and Voting Agreement, if the Board of Directors of the Company determines
that it has received a Superior Proposal (as defined below), the Board of
Directors may cause the Company to give to Parent a notice (a "Superior Proposal
-----------------
Notice") of its intent to accept such Superior Proposal and the giving of such
- ------
notice shall not be a breach of this Agreement. The Board of Directors of the
Company may withdraw such Superior Proposal Notice and, following such
withdrawal, may deliver to Parent another Superior Proposal Notice provided that
--------
such subsequent notice relates to a different proposal. A "Superior Proposal"
-----------------
shall mean any proposal made by a third party to acquire, directly or
indirectly, including pursuant to a merger, consolidation, share exchange,
recapitalization, business combination, liquidation, dissolution or other
similar transaction, for consideration consisting of cash and/or securities,
more than 50% of the aggregate voting power or capital stock of the Company then
outstanding or all or substantially all the assets of the Company and otherwise
on terms and conditions to closing which the Board of Directors of the Company
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation and independent counsel) to be more
<PAGE>
30
favorable to the Company's stockholders than the Merger and for which financing,
to the extent required, is then committed or which, in the good faith judgment
of the Board of Directors of the Company, is reasonably capable of being
obtained by such third party.
SECTION 6.06. Indemnification and Insurance.
-----------------------------
(a) Parent and the Surviving Corporation agree that, except as may
be limited by applicable Laws, for seven (7) years from and after the Effective
Time, the indemnification obligations set forth in the Company's Certificate of
Incorporation and the Company's By-Laws, in each case as of the date of this
Agreement, shall survive the Merger (and, prior to the Effective Time, Parent
shall cause the Certificate of Incorporation and By-laws of Merger Sub to
include such provisions) and shall not be amended, repealed or otherwise
modified after the Effective Time in any manner that would adversely affect the
rights thereunder of the individuals who on or at any time prior to the
Effective Time were entitled to indemnification thereunder with respect to
matters occurring prior to the Effective Time.
(b) The Surviving Corporation shall maintain in effect, for three
(3) years from and after the Effective Time, directors' and officers' liability
insurance policies covering the persons who are currently covered in their
capacities as such directors and officers by the Company's current directors'
and officers' policies and on terms not materially less favorable than the
existing insurance coverage with respect to matters occurring prior to the
Effective Time.
(c) Parent hereby agrees that, effective upon the consummation of
the Merger, it will guarantee the Surviving Corporation's obligations under
Section 6.06(a) and (b) of this Agreement and under Section 6.9(c) of the UNC
Merger Agreement.
(d) Parent hereby agrees that, effective upon the consummation of
the Merger and the UNC Merger, it will guarantee the obligations of the
surviving corporation of the UNC Merger under Sections 6.9(a) and (b) of the UNC
Merger Agreement.
(e) In addition to, and not in lieu of the foregoing, Parent shall
indemnify, defend and hold harmless all officers and directors of the Company
(the "Company Indemnified Parties") and all officers and directors of UNC (the
---------------------------
"UNC Indemnified Parties" and, together with the Company Indemnified Parties,
- ------------------------
the "Indemnified Parties") to the fullest extent permitted by Delaware Law and
-------------------
in the Certificate of Incorporation and By-laws of the Company and UNC, as
currently in effect, from and against all liabilities, costs, expenses and
claims (including without limitation reasonable legal fees and disbursements,
which shall be paid, reimbursed or advanced by Parent in a manner consistent
with applicable provisions of Parent's By-laws) related to the Merger and other
transactions contemplated hereby, which may be asserted against the Indemnified
Parties from and after the date of this Agreement, other than liabilities
resulting from a breach of the fiduciary duties of any of such Indemnified
Parties; provided, however, that (i) Parent's obligations to the Company
Indemnified Parties under this Section 6.06(e) shall not be effective until
consummation of the Merger and (ii) Parent's obligations to the UNC Indemnified
Parties shall not be effective until the consummation of both the UNC Merger and
the Merger.
<PAGE>
31
SECTION 6.07. Notification of Certain Matters. From and after the
-------------------------------
date of this Agreement until the Effective Time, each party hereto shall
promptly notify the other parties hereto of (a) the occurrence, or non-
occurrence, of any event the occurrence or non-occurrence of which would be
reasonably likely to cause any condition to the obligations of any party to
effect the Merger or the UNC Merger not to be satisfied, (b) the failure of the
Company or Parent, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it pursuant to this
Agreement which would be reasonably likely to result in any condition to the
obligations of any party to effect the Merger not to be satisfied, or (c) the
failure of UNC to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it pursuant to the UNC Merger Agreement (as
defined below) which would be reasonably likely to result in any condition to
the obligations of the Company to effect the transactions contemplated by the
UNC Merger Agreement not to be satisfied; provided, however, that the delivery
-------- -------
of any notice pursuant to this Section 6.07 shall not be deemed to be an
amendment of this Agreement or any Section in the Company Disclosure Schedule
and shall not cure any breach of any representation or warranty requiring
disclosure of such matter prior to the date of this Agreement. No delivery of
any notice pursuant to this Section 6.07 shall limit or affect the remedies
available hereunder to the party receiving such notice, including the rights of
Parent under Section 7.02(a) and those of the Company under Section 7.03(a), in
the event that a representation or warranty made by the Company or Parent herein
shall not be true and correct (giving effect to any standards of materiality set
forth in such Sections) as of the date hereof or as of the date when made (if a
different date) and as of the Effective Time.
SECTION 6.08. Stock Exchange Listing. Parent shall as promptly as
----------------------
reasonably practicable prepare and submit to the NYSE a listing application
covering the shares of Parent Common Stock to be issued in the Merger and shall
use its reasonable efforts to cause such shares to be approved for listing on
the NYSE prior to the Effective Time.
SECTION 6.09. Public Announcements. Parent and the Company shall
--------------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or any transaction contemplated
hereby. Parent and the Company shall not issue any such press release or make
any such public statement without the prior consent of the other (which consent
shall not be unreasonably withheld), except as may be required by Law or any
listing agreement with the NYSE, the NASD or any national securities exchange to
which Parent or the Company is a party. The parties have agreed on the text of
a joint press release by which Parent and the Company will announce the
execution of this Agreement.
SECTION 6.10. Plan of Reorganization. This Agreement is intended to
----------------------
constitute a "plan of reorganization" within the meaning of Section 1.368-2(g)
of the income tax regulations promulgated under the Code.
SECTION 6.11. Affiliates; Tax Treatment. Within thirty (30) days
-------------------------
from the date hereof, the Company shall obtain from any person who may be deemed
to be an affiliate, as of the date of this Agreement, of the Company under Rule
145 of the Securities Act, a written agreement substantially in the appropriate
form attached hereto as Exhibit 6.11. The Company shall use its reasonable best
efforts to cause the Merger to qualify, and shall not take any actions which
could prevent the Merger from qualifying, as a reorganization qualifying under
the provisions of Section 368(a) of the Code.
SECTION 6.12. Company Employee Stock Purchase Plan. The Company
------------------------------------
shall take all actions necessary pursuant to the terms of the ESPP in order to
shorten the offering period under such plan which includes the Effective Time
(the "Current Offering") such that a new purchase date shall occur prior to the
----------------
Effective Time and shares of Company Class B Stock shall be purchased by ESPP
participants prior to the Effective Time. The Current Offering shall expire
immediately following such new purchase date, and the ESPP shall terminate
immediately prior to the Effective Time. Subsequent to such new purchase date,
the Company shall take no action pursuant to the terms of the ESPP to commence
any new offering period.
<PAGE>
32
SECTION 6.13. Consulting Agreement. Parent and Eugene P. Conese, Sr.
--------------------
have entered into a Consulting Agreement as of the date hereof in the form of
Exhibit 6.13 hereto, which agreement shall become effective as of the Effective
Time.
SECTION 6.14. Supplemental Indenture. Immediately after the
----------------------
Effective time, the Surviving Corporation will assume the Company's obligations
under the Indenture, dated as of June 10, 1996, among the Company, the
Subsidiaries and American Stock Transfer and Trust Company ("American Stock
--------------
Transfer and Trust") and, prior to the Effective Time, the Company will deliver
- ------------------
such certificates, opinions, agreements and other instruments as Parent or
American Stock Transfer and Trust may request in connection with the assumption
of the Company's obligations under such Indenture.
SECTION 6.15. UNC Merger Agreement. Simultaneously with the
--------------------
execution and delivery of this Agreement, the Company and UNC Incorporated, a
Delaware corporation ("UNC"), have entered into an Amended and Restated Merger
---
Agreement, dated the date hereof (the "UNC Merger Agreement"), pursuant to which
--------------------
the Company intends, on the terms and conditions set forth therein, to acquire
UNC pursuant to a merger (the "UNC Merger"). Unless this Agreement shall have
----------
been terminated in accordance with its terms by Company or Parent, the Company
will not amend, modify, give any consent or grant any waiver under, nor will the
Company finally determine that all conditions to closing of the UNC Merger have
been satisfied without the prior written consent of Parent. The Company agrees
to provide to Parent, as promptly as practicable, copies of all notices given to
or by the Company pursuant to or in connection with the UNC Merger Agreement.
SECTION 6.16. Clean Air Act Permit. The Company covenants and agrees
--------------------
that, between the date of this Agreement and the Effective Time, the Company
shall use its reasonable best efforts to obtain an operating permit under Title
V of the Clean Air Act, as amended, with respect to operations at the Company's
Miami International Airport Facility and in connection therewith to ensure
continuation of present operating levels of such facility pending the issuance
of such permit. Provided that the Company is using its reasonable best efforts
to obtain such permit, Parent hereby acknowledges that the failure to obtain
such permit shall not, in and of itself, be a breach of such covenant; provided
--------
that Parent does not waive any breach that may result from the failure to have
such permit under any other provision of this Agreement and provided, further,
-------- -------
that, notwithstanding any disclosure of the failure to have such permit in this
Agreement, the Company Disclosure Schedule or otherwise, any adverse
consequences resulting or arising from the failure to have such permit may be
taken into account in determining whether a Company Material Adverse Effect has
occurred.
ARTICLE VII
CONDITIONS TO THE MERGER
------------------------
SECTION 7.01. Conditions to the Obligations of Each Party. The
-------------------------------------------
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction or, if permitted by applicable Law, waiver of the
following conditions:
(a) this Agreement and the transactions contemplated hereby shall have
been approved and adopted by the affirmative vote of the holders of a
majority of the outstanding shares of Company Class A Stock in accordance
with Delaware Law and the Company's Certificate of Incorporation;
(b) any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
<PAGE>
33
(c) no order, statute, rule, regulation, executive order, stay,
decree, judgment or injunction shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Authority or a court of
competent jurisdiction which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger;
(d) the Registration Statement shall have been declared effective, and
no stop order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending
before or threatened by the SEC;
(e) the shares of Parent Common Stock to be issued in the Merger shall
have been authorized for listing on the NYSE, subject to official notice of
issuance; and
(f) all other necessary and material governmental and regulatory
clearances, consents, or approvals shall have been received, other than the
consent to assignment of the Company's FAA Certificate which need not be
received prior to the Effective Time.
SECTION 7.02. Conditions to the Obligations of Parent and Merger Sub.
------------------------------------------------------
The obligations of Parent and Merger Sub to consummate the Merger are subject to
the satisfaction or, if permitted by applicable Law, waiver of the following
further conditions:
(a) (i) the Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to
the Effective Time; (ii) each of the representations and warranties of the
Company contained in this Agreement (disregarding for this purpose any
qualifications with respect to materiality or Company Material Adverse
Effect) shall be true and correct in all material respects, in each case as
of the date hereof and at and as of the Closing Date as if made at and as
of such time, it being understood and agreed by Parent and Merger Sub that
this Section 7.02(a) shall be deemed to have been satisfied unless any
failure of performance or failure to be so true and correct, individually
or in the aggregate, would have a Company Material Adverse Effect; and
(iii) Parent shall have received a certificate signed by an executive
officer of the Company to the foregoing effect;
(b) Parent shall have received "cold comfort" letters of Deloitte &
Touche LLP and dated the date on which the Registration Statement shall
become effective and the Effective Time, respectively, and addressed to
Parent, such "cold comfort" letters being in such form and substance as is
reasonably customary for letters delivered by independent public
accountants in connection with registration statements similar to the
Registration Statement;
(c) Parent shall have received the opinion of counsel to Parent, based
upon representation letters and stockholder certificates, dated on or about
the Closing Date, substantially in the forms of Exhibits 7.02(a), (b) and
(c) to this Agreement, and such other facts, representations and
assumptions concerning, among other things, the actions of the stockholders
of the Company as counsel may reasonably deem relevant, to the effect that
the Merger will be treated for federal income tax purposes as a
reorganization qualifying under the provisions of Section 368(a) of the
Code and that each of Parent, Merger Sub and the Company will be a party to
the reorganization within the meaning of Section 368(b) of the Code, dated
on the Closing Date;
(d) Parent shall have received from any person who may be deemed to
have become an affiliate of the Company, as reasonably determined by the
Company, pursuant to Rule 145 under the Securities Act, after the date of
this Agreement and on or prior to the Effective Time, a signed agreement
substantially in the form of Exhibit 6.11 hereto.
<PAGE>
34
SECTION 7.03. Conditions to the Obligations of the Company. The
--------------------------------------------
obligations of the Company to consummate the Merger are subject to the
satisfaction or, if permitted by applicable Law, waiver of the following further
conditions:
(a) (i) Parent and Merger Sub shall have performed in all material
respects all of their respective obligations hereunder required to be
performed by them at or prior to the Effective Time; (ii) each of the
representations and warranties of Parent contained in this Agreement
(disregarding for this purpose any qualifications with respect to
materiality or Parent Material Adverse Effect) shall be true and correct
in all material respects, in each case as of the date hereof and at and as
of the Closing Date as if made at and as of such time; it being understood
and agreed by the Company that this Section 7.03(a) shall be deemed to have
been satisfied unless any failure of performance or failure to be so true
and correct, individually or in the aggregate, would have a Parent Material
Adverse Effect; and (iii) the Company shall have received a certificate
signed by an executive officer of Parent to the foregoing effect; and
(b) Tax Opinion. The Company shall have received the opinion of
-----------
Greenberg, Traurig, counsel to the Company, based upon representation
letters and stockholder certificates substantially in the forms of Exhibits
7.02(a), (b) and (c) to this Agreement, dated on or about the Closing Date,
and such other facts, representations and assumptions concerning, among
other things, the actions of the stockholders of the Company as counsel may
reasonably deem relevant, to the effect that the Merger will be treated for
federal income tax purposes as a reorganization qualifying under the
provisions of Section 368(a) of the Code and that each of Parent, Merger
Sub and the Company will be a party to the reorganization within the
meaning of Section 368(b) of the Code, dated on the Closing Date.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
SECTION 8.01. Termination. This Agreement may be terminated and the
-----------
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite approval and adoption of this Agreement and the transactions
contemplated hereby by the stockholders of the Company:
(a) by written consent duly authorized by the Boards of Directors of
each of Parent and the Company;
(b) by either Parent or the Company if (i) the waiting period
applicable to the consummation of the Merger under the HSR Act shall not
have expired or been terminated prior to September 30, 1997, (ii) any court
of competent jurisdiction in the United States or other United States
Governmental Authority shall have issued an order (other than a temporary
restraining order), decree or ruling, or taken any other action,
restraining, enjoining or otherwise prohibiting the Merger (provided,
--------
however, that neither party may terminate this Agreement pursuant to this
-------
Section 8.01(b)(ii) prior to September 30, 1997 if the party subject to
such order, decree or ruling is using its reasonable best efforts to have
such order, decree or ruling removed, unless such order, decree or ruling
shall have become final and non-appealable), or (iii) the Effective Time
shall not have occurred on or before September 30, 1997; provided that the
--------
right to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose willful, deliberate or knowing failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such
date;
(c) by either Parent or the Company, if the Stockholders' Meeting
shall have been held and the holders of outstanding shares of Company Class
A Stock shall have failed to approve and adopt this
<PAGE>
35
Agreement at such meeting (including any adjournment or postponement
thereof); provided, however, that if the Company shall have delivered a
-------- -------
Superior Proposal Notice to Parent, the Company shall not have the right to
terminate this Agreement pursuant to this Section 8.01(c) until the Company
would otherwise be permitted to do so pursuant to Section 8.01(g);
(d) by the Company, upon a breach of any representation, warranty, or
agreement set forth in this Agreement such that the condition set forth in
Section 7.03(a) would not be satisfied (a "Terminating Parent Breach");
-------------------------
provided, however, that, if such Terminating Parent Breach is curable by
-------- -------
Parent through the exercise of its best efforts and Parent continues to
exercise such best efforts, the Company may not terminate this Agreement
under this Section 8.01(d) for a period of 30 days from the date on which
the Company delivers to Parent written notice setting forth in reasonable
detail the circumstances giving rise to such Terminating Parent Breach; or
(e) by Parent, upon a breach of any representation, warranty, or
agreement set forth in this Agreement such that the condition set forth in
Section 7.02(a) would not be satisfied (a "Terminating Company Breach");
--------------------------
provided, however, that, if such Terminating Company Breach is curable by
-------- -------
the Company through the exercise of its best efforts and the Company
continues to exercise such best efforts, Parent may not terminate this
Agreement under this Section 8.01(e) for a period of 30 days from the date
on which Parent delivers to the Company written notice setting forth in
reasonable detail the circumstances giving rise to such Terminating Company
Breach;
(f) by Parent, at any time after the Company shall have delivered a
Superior Proposal Notice to Parent; or
(g) by the Company if the Company shall have delivered to Parent a
Superior Notice Proposal in accordance with Section 6.05(b), (i) in the
event that any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated and at such time there shall
be no order, decree, ruling or stipulation entered into restraining,
enjoining or otherwise preventing the Merger or the purchase of Company
Common Stock pursuant to the Option and Voting Agreement, at any time after
the 15th business day following the date the Company shall have delivered
such Notice or (ii) in the event that any applicable waiting period under
the HSR Act relating to the Merger shall not have expired or been
terminated or there shall be in effect any order, decree, ruling or
stipulation entered into or approved by any Governmental Authority
restraining, enjoining or otherwise preventing the Merger or the purchase
of Company Common Stock pursuant to the Voting and Option Agreement, at any
time after the later of June 30, 1997 and the 45th day following the date
that the Company shall have delivered such Notice, provided that, in the
case of each of (i) and (ii), (A) the Superior Proposal referred to in such
notice shall not have been withdrawn or changed in such a way that it would
no longer be a "Superior Proposal" pursuant to the definition contained in
this Agreement and (B) the 15 business day period in (i) and the 45 day
period in (ii) shall each be extended by an amount of time equal to any
period in which a stockholder is in breach of such stockholder's
obligations to deliver shares of Company Common Stock pursuant to the
Option and Voting Agreement and provided, further, that, in the case of a
-------- -------
Superior Proposal Notice delivered when the circumstances described in
clause (ii) existed and subsequent to such delivery the applicable waiting
period under the HSR Act relating to the Merger shall have expired or been
terminated and at such time there shall be no order, decree, ruling or
stipulation entered into restraining, enjoining or otherwise preventing the
Merger or the purchase of Company Common Stock pursuant to the Option and
Voting Agreement, the Company may terminate this Agreement at any time
after the 15th business day following the date of such expiration of
termination.
SECTION 8.02. Effect of Termination. Except as provided in Section
---------------------
9.01, in the event of the termination of this Agreement pursuant to Section
8.01, this Agreement shall forthwith become void, there shall be
<PAGE>
36
no liability under this Agreement on the part of Parent, Merger Sub or the
Company or any of their respective officers or directors and all rights and
obligations of any party hereto shall cease; provided, however, that nothing
-------- -------
herein shall relieve any party from liability for, or be deemed to waive any
rights of specific performance of this Agreement available to a party by reason
of, any willful breach by the other party or parties of its or their willful
breach of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 8.03. Fees and Expenses. (a) In the event that:
-----------------
(i)(A) this Agreement is terminated pursuant to Section 8.01(b)(i) and
(B) the failure of the waiting period referred to in Section 8.01(b)(i) to
expire or terminate prior to September 30, 1997 shall not have been caused
principally by, nor shall it have resulted principally from, the Company's
breach of any obligation under this Agreement, or
(ii) any court of competent jurisdiction in the United States or other
United States Governmental Authority shall have issued an order (other than
a temporary restraining order which shall have been lifted on or before
September 30, 1997), decree or ruling, or taken any other action,
restraining, enjoining or otherwise prohibiting the Merger pursuant to
Section 7 of the Clayton Act of 1914, as amended, or the Federal Trade
Commission Act of 1914, as amended, and this Agreement shall have been
terminated pursuant to Section 8.01(b)(ii);
then, in either event, Parent shall pay the Company promptly a fee of $33.5
million (the "Parent Break-Up Fee"), which amount shall be payable in
-------------------
immediately available funds; provided, however, that if, within 12 months after
-------- -------
this Agreement shall have been terminated in the circumstances described in
Section 8.03(a)(i) or (ii), a transaction which results in a Change of Control
(as defined below) is consummated for aggregate consideration in excess of the
aggregate Merger Consideration, then the Company shall, promptly after the
consummation of such transaction, reimburse Parent in immediately available
funds for the full amount of the Parent Break-Up Fee paid by Parent to the
Company pursuant to this Section 8.03(a), exclusive of interest. For purposes
of this Agreement, the term "Change of Control", shall mean the occurrence of
any of the following events with respect to the Company: (i) there shall be
consummated (A) any merger, consolidation or combination (any, a "Combination")
-----------
involving the Company in which the Company is not the continuing or surviving
corporation, or pursuant to which shares of a majority of the Company's voting
stock would be converted in whole or in part into cash, other securities or
other property, other than a Combination involving the Company in which the
holders of a majority of the Company's voting stock immediately prior to the
Combination either have substantially the same proportionate ownership of voting
stock of the surviving corporation immediately after the Combination or a
sufficient percentage of the voting stock of the surviving corporation to enable
such holders to effectively cause a majority of the members of the surviving
corporation's board of directors to be persons acceptable to such holders, or
(B) any sale, lease, exchange or transfer (in one transaction or a series
related transaction) of all or substantially all of the assets of the Company,
(ii) any person, other than the Company or a Subsidiary or any employee benefit
plan sponsored by the Company or a Subsidiary or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions in their ownership of stock of the Company, shall become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company representing 50% or more of the combined voting power
of then outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of directors, as
a result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise.
(b) All expenses incurred by the parties hereto shall be borne solely
and entirely by the party which has incurred the same; provided, however, that
-------- -------
(a) Parent shall pay any New York State Real Estate Transfer Tax and New York
City Real Property Transfer Tax and any similar Taxes in any jurisdiction (and
any penalties and interest with respect to such Taxes), which becomes payable in
connection with the Merger, on behalf of the stockholders of the Company without
the offset, deduction, counterclaim or deferment of the price to be paid for
<PAGE>
37
shares of Company Common Stock pursuant to the Merger and (b) Parent and the
Company shall bear equally all expenses related to printing, filing and mailing
the Registration Statement and the Proxy Statement and all SEC and other
regulatory filing fees incurred in connection with the Registration Statement
and the Proxy Statement.
SECTION 8.04. Amendment. This Agreement may be amended by the
---------
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided that, after the
--------
approval and adoption of this Agreement by the stockholders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration to be received by the stockholders of the Company pursuant to the
Merger. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 8.05. Waiver. At any time prior to the Effective Time, any
------
party hereto may (a) extend the time for the performance of any obligation or
other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties of the other party contained herein or in any
document delivered by the other party pursuant hereto and (c) waive compliance
with any agreement or condition contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
------------------
SECTION 9.01. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. The representations, warranties and agreements in this Agreement
- ----------
and any certificate delivered pursuant hereto by any person shall terminate at
the Effective Time or upon the termination of this Agreement pursuant to Section
8.01, as the case may be, except that the agreements set forth in Articles I and
II and Sections 6.06 and 6.14 shall survive the Effective Time indefinitely, and
those set forth in Sections 6.09, 8.02, 8.03, 8.04, 8.05 and this Article IX
shall survive termination indefinitely.
SECTION 9.02. Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) or by a nationally recognized overnight courier service to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
9.02):
if to Parent or Merger Sub:
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431-0001
Facsimile: (203) 373-3008
Attention: Vice President and
Senior Counsel-Transactions
<PAGE>
38
with copies to:
General Electric Company
One Neumann Way
Mail Drop J104
Evendale, Ohio 45215-6301
Facsimile: (513) 243-5096
Attention: Vice President and General Counsel
and
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile: (212) 848-7666
Attention: Stephen R. Volk, Esq.
and John A. Marzulli, Jr., Esq.
if to the Company:
Greenwich Air Services, Inc.
4590 N.W. 36th Street
Miami, Florida 33152
Facsimile: (305) 526-7005
Attention: Eugene P. Conese, Sr., Chairman
and Chief Executive Officer
with a copy to:
Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel
153 East 53rd Street
New York, NY 10022
Facsimile: (212) 223-7161
Attention: Stephen A. Weiss, Esq.
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
-------------------
the term:
(a) "affiliate" of a specified person means a person who directly or
---------
indirectly through one or more intermediaries controls, is controlled by,
or is under common control with, such specified person;
(b) "beneficial owner" with respect to any shares means a person who
----------------
shall be deemed to be the beneficial owner of such shares (i) which such
person or any of its affiliates or associates (as such term is defined in
Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement
or understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
affiliates or associates or any person with whom such person or any of its
<PAGE>
39
affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any such
shares;
(c) "business day" means any day on which the principal offices of the
------------
SEC in Washington, D.C. are open to accept filings, or, in the case of
determining a date when any payment is due, any day on which banks are not
required or authorized to close in the City of New York, New York;
(d) "Company Aeroderivative Business" shall mean the overhaul,
-------------------------------
maintenance and repair of gas turbine engines used for industrial and
marine applications, and the management, sale, installation and maintenance
of power stations;
(e) "Company Businesses" shall mean, as of the date specified, the
------------------
collective reference to the Company Commercial Aircraft Business, the
Company Government Business and the Company Aeroderivative Business, as
presently conducted by the entities in the Company Group and their
respective business operations;
(f) "Company Commercial Aircraft Business" shall mean the overhaul,
------------------------------------
maintenance and repair of commercial gas turbine aircraft engines conducted
at the engine service centers of the Company Group located in Miami,
Florida, Dallas, Texas, Ft. Worth, Texas, McAllen, Texas, East Granby,
Connecticut and Prestwick, Scotland;
(g) "Company Government Business" shall mean the aircraft engine
---------------------------
maintenance and repair programs managed and operated by the Company Group
for domestic and foreign governments and military agencies;
(h) "Company Group" shall mean the Company, the Subsidiaries and any
-------------
partnerships in which the Company or any Subsidiary has an interest, when
taken as a whole;
(i) "control" (including the terms "controlled by" and "under common
------- ------------- ------------
control with") means the possession, directly or indirectly or as trustee
------------
or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(j) "Governmental Authority" means any United States (federal, state
----------------------
or local), foreign or supra-national Government, or governmental,
regulatory or administrative authority, agency or commission;
(k) "Knowledge" means the actual knowledge of any of Eugene P. Conese,
---------
Sr., Eugene P. Conese, Jr., Robert J. Vanaria and Michael A. Bucci,
together with the knowledge that (i) Eugene P. Conese, Sr. and Eugene P.
Conese, Jr. would have had after making due inquiry of the officers of the
Company and the Subsidiaries who have responsibility for the subject matter
in question and who report directly to them, including Mordechai Volevesky,
Gerald Waltman, R. Frank Leftwich, Richard Cardin, Graham Bell and John
Korsborough and, (ii) Robert J. Vanaria would have had after making due
inquiry of Orlando Machado, Guillermo Novarro and Ed Broadmeadow;
(l) "person" means an individual, corporation, limited liability
------
company, partnership, limited partnership, syndicate, person (including,
without limitation, a "person" as defined in Section 13(d)(3) of the
Exchange Act), trust, association or entity or government, political
subdivision, agency or instrumentality of a government;
<PAGE>
40
(m) "Real Estate" means, with respect to the Company or any
-----------
Subsidiary, as applicable, all of the fee or leasehold ownership right,
title and interest of such person, in and to all real estate and
improvements owned or leased by any such person and which is used by any
such person in connection with the operation of its business; and
(n) "subsidiary" or "subsidiaries" of any person means any
---------- ------------
corporation, partnership, joint venture or other legal entity of which such
person (either above or through or together with any other subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity
interests, the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 9.04. Accounting Terms. All accounting terms used herein
----------------
which are not expressly defined in this Agreement shall have the respective
meanings given to them in accordance with United States generally accepted
accounting principles.
SECTION 9.05. Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Merger is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
Merger be consummated as originally contemplated to the fullest extent possible.
SECTION 9.06. Entire Agreement; Assignment. This Agreement
----------------------------
(including the Exhibits and the Company Disclosure Schedule, which are hereby
incorporated herein and made a part hereof for all purposes as if fully set
forth herein) and the Confidentiality Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof. This Agreement shall
not be assigned by operation of law or otherwise, except that Parent and Merger
Sub may assign all or any of their rights and obligations hereunder to any
affiliate of Parent provided that no such assignment shall change the amount or
--------
nature of the Merger Consideration or relieve the assigning party of its
obligations hereunder if such assignee does not perform such obligations.
SECTION 9.07. Parties in Interest. This Agreement shall be binding
-------------------
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.06 (which is intended to be for the
benefit of the persons covered thereby and may be enforced by such persons).
SECTION 9.08. Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 9.09. Governing Law. This Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that state. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined exclusively in the Court of Chancery for the State of Delaware in and
for the County of New Castle.
<PAGE>
41
SECTION 9.10. Headings. The descriptive headings contained in this
--------
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.11. Counterparts. This Agreement may be executed and
------------
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
<PAGE>
42
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
GENERAL ELECTRIC COMPANY
By:
--------------------------------
Name: William J.Vareschi
Title: Vice President
GB MERGER CORP.
By:
--------------------------------
Name: William J. Vareschi
Title: Chief Executive Officer
and President
GREENWICH AIR SERVICES, INC.
By:
--------------------------------
Name: Eugene P. Conese
Title: Chief Executive Officer
<PAGE>
Exhibit 3
[LETTERHEAD OF UNC APPEARS HERE]
NEWS RELEASE
Contact: Bob Pevenstein
(410) 266-7333
GE TO ACQUIRE GREENWICH AIR SERVICES AND UNC INCORPORATED
FAIRFIELD, CONN. -- March 10, 1997 -- General Electric Company and
Greenwich Air Services, Inc. have signed a definitive agreement whereby GE will
acquire Greenwich Air.
Under the terms of the agreement, GE also obtains the rights to complete
Greenwich's acquisition of UNC Incorporated, also an aircraft engine services
company, which announced in February plans to merge with Greenwich.
The transactions have been approved by the boards of GE, Greenwich, and
UNC. The GE/Greenwich transaction is subject to approval by Greenwich's
shareholders. The Greenwich/UNC transaction is subject to approval by the
shareholders of UNC. Both transactions are subject to regulatory review.
Eugene P. Coneso, Sr., chairman and chief executive officer of Greenwich
and its controlling share owner, has agreed to sell his shares of Greenwich to
GE and has agreed to vote in favor of the transaction.
The GE/Greenwich agreement calls for GE to acquire Greenwich through a
combination of GE stock and cash valued at $530 million or $31 per share of
Greenwich stock. The acquisition of UNC by Greenwich will involve a cash
transaction valued at an additional $345 million or $15 per share of UNC stock.
As part of the transaction, GE will assume the debt of both acquired companies.
"The acquisition of Greenwich/UNC will enable GE Engine Services to
provide even greater customer value by broadening our capabilities and
products," said Bill Vareschi, president and chief executive officer of GE
Engine Services. "This acquisition is an excellent complementary match between
Greenwich's and UNC's capabilities and GE's current services and products. It
will bring GE a broader range of customers and will give GE a presence in the
growing business jet aviation services sector."
Eugene P. Coneso, Sr., chairman and chief executive officer of Greenwich
said: "The merger of Greenwich Air into GE will result in the most efficient
aircraft engine services company in the world and should be of great benefit to
Greenwich's customers. The merger will also present a great opportunity for all
of Greenwich's employees for greater advancement and financial security. At
the same time it will afford Greenwich's shareholders substantial value and the
opportunity to receive GE stock on a tax-free basis, with the attendant ability
to participate in the future value of GE stock, including the results of this
merger. As announced in our February 14, 1997 press release with regard
<PAGE>
to the UNC merger, the combined annual revenues of Greenwich Air and UNC would
be nearly $1.8 billion."
Dan A. Colussy, chairman, chief executive officer, and president of UNC,
said: "The acquisition of UNC by GE provides an excellent opportunity for UNC
shareholders, customers, and employees. This link into the global, high
technology capabilities of GE Engine Services will enhance service to our
corporate, regional airline, and military customers, permitting a broader range
of services with improved efficiencies."
GE Engine Services, a wholly owned subsidiary of General Electric
Company based in Evendale, Ohio is a provider of overhaul and repair of aircraft
engines, components, and accessories, with facilities in the United States,
Wales, Brazil, and Singapore. With approximately 6,200 employees worldwide, GE
Engine Services in 1996 had revenues of approximately $2.3 billion.
Greenwich, based in Miami, Florida, is a diversified, independent jet
engine maintenance and overhaul company with nine locations, principally in the
United States and Scotland. Greenwich services primarily large commercial
aircraft engines, as well as marine and industrial aeroderivative engines
produced by the world's leading manufacturers. Greenwich has approximately 3,000
employees. In 1996, Greenwich purchased portions of Aviall, Inc., a jet engine
overhaul operation.
UNC, based in Annapolis, Maryland, is a diversified, independent
supplier of jet engine maintenance and overhaul with a major focus on smaller
jet engines for corporate and military aircraft. UNC's Garrett Aviation Services
division, acquired in 1996, provides engine, airframe, and avionics services for
business jets and turboprop aircraft. UNC operates primarily at 20 U.S.
locations and on 100 military bases in the U.S. and abroad. UNC employs
approximately 7,000 people.
The Greenwich/UNC Merger Agreement provides that, if the GE/Greenwich
merger is not consummated, the Greenwich/UNC Merger announced on February 14,
1997, will proceed on the same terms and conditions as previously announced.
For further information, contact:
GE: Bruce Bunch (203) 373-2039 (Office); (203) 263-5595 (Home)
Greenwich: Sara Wilkins (305) 870-7910 (Office)
