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EXHIBIT 99.7
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 24, 1998 (the
"Agreement"), by and among ▇▇▇▇▇ plc, a United Kingdom public limited company
(the "Parent"), WDR Acquisition Corp., a Delaware corporation and an indirect
wholly-owned subsidiary of Parent (the "Purchaser"), WDR Sub Corp., a Delaware
corporation and a wholly-owned subsidiary of the Purchaser (the "Merger Sub"),
and Wonderware Corporation, a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of the Parent, the Purchaser, the
Merger Sub and the Company have each determined that it is in the best interests
of their respective stockholders for the Purchaser to acquire the Company on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that the Purchaser and
the Merger Sub shall make a cash tender offer to acquire all of the issued and
outstanding shares of common stock, par value $.001 per share, of the Company
(the "Company Common Stock"), together with the associated Rights (as
hereinafter defined) for $24.00 per share of Company Common Stock (all issued
and outstanding shares of Company Common Stock, together, except where the
context otherwise requires, with the associated Rights, being hereinafter
collectively referred to as the "Shares"), net to the seller in cash, in
accordance with the terms and subject to the conditions provided for herein and
in the offering documents relating to the Offer (as defined below); and
WHEREAS, the Board of Directors of the Company has unanimously (i)
determined that each of the Offer and the Merger (as defined below) is fair to
and in the best interests of the Company and its stockholders and (ii) resolved
to approve and adopt this Agreement and the transactions contemplated hereby and
to recommend acceptance of the Offer and approval and adoption by the
stockholders of the Company of this Agreement and the Merger on the terms and
conditions set forth herein of the Merger Sub with and into the Company
following the Offer.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, the Purchaser, the Merger Sub and the Company hereby agree as
follows:
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ARTICLE 1
THE OFFER
1.1 The Offer. (a) Provided that none of the conditions set forth in
Annex I to this Agreement shall have occurred, the Purchaser (or one or more
other direct or indirect wholly-owned subsidiaries of Parent) shall, not later
than one business day after execution of this Agreement, publicly announce the
transactions contemplated hereby, and not later than five business days after
execution of this Agreement, commence (within the meaning of Rule 14d-2 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), an offer
to purchase all Shares at a price of $24.00 per Share, net to the seller in cash
(the "Offer," which term shall include any amendments to such Offer not
prohibited by this Agreement) and, subject to a minimum of not less than a
majority of the outstanding Shares (on a fully-diluted basis) being validly
tendered and not withdrawn prior to the expiration of the Offer (the "Minimum
Condition") and the further conditions set forth in Annex I of this Agreement,
shall consummate the Offer. The Offer shall be made by means of an offer to
purchase containing the Minimum Condition and the further conditions set forth
in Annex I. The Purchaser hereby covenants and agrees that it shall hold the
Offer open for no less than 25 business days. Simultaneously with the
commencement of the Offer, the Purchaser shall file with the Securities and
Exchange Commission (the "Commission") a Tender Offer Statement on Schedule
14D-1 with respect to the Offer (the "Schedule 14D-1"). Notwithstanding the
foregoing, in the event any of the conditions set forth in Annex I to this
Agreement shall have occurred, the Purchaser may terminate the Offer. In the
event the Purchaser terminates the Offer, it may, subject to the prior written
approval of the Board of Directors of the Company, seek the approval of the
Company's stockholders for the Merger pursuant to the applicable provisions of
the General Corporation Law of the State of Delaware, as amended ("Delaware
Law"), as provided in Section 6.11. In such event, the Company shall take all
necessary action to call a special meeting of its stockholders to seek such
approval, and to prepare and file with the Commission a proxy statement relating
to such special meeting, all in accordance with Sections 6.1 and 6.2 hereof.
(b) The Purchaser expressly reserves the right to modify the terms and
conditions of the Offer from time to time, except that, without the prior
written approval of the Company, the Purchaser shall not amend the Offer (i) to
reduce the cash price per Share to be paid pursuant thereto, (ii) to reduce the
number of Shares to be purchased thereunder, (iii) to change the form of
consideration to be paid in the Offer, (iv) to increase the minimum number of
Shares which must be tendered as a condition to the Offer, (v) to waive the
Minimum Condition if such waiver would result in less than a majority of the
outstanding Shares being accepted for payment or paid for pursuant to the Offer,
(vi) to impose additional conditions to the Offer, (vii) to extend the period of
the Offer beyond 60 days, except that the Offer may be extended beyond 60 days
(subject to the Company's right of termination in Section 8.1 herein), without
the prior written approval of the Company, if all required waiting periods under
applicable law have not expired or (viii) otherwise to amend the terms of the
Offer (including the conditions set forth in Annex I) in a manner that is
materially adverse to stockholders of the Company.
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1.2 Company Action.
(a) The Company hereby consents to the Offer and represents that
its Board of Directors has unanimously (i) approved the Offer and the
Merger (as defined in Section 2.1), has determined that this Agreement
and the Offer are fair to and in the best interest of the Company and
its stockholders and has resolved to recommend acceptance of the Offer
to the Company's stockholders, and that the stockholders tender their
Shares in the Offer and, if applicable, vote to approve and adopt this
Agreement and the Merger, (ii) (x) taken all action necessary to render
Section 203 of the Delaware General Corporation Law, and (y) within 5
days of the date hereof, shall have taken all action necessary to render
the Company's Rights Agreement, dated as of February 15, 1996, between
the Company and The First National Bank of Boston, as rights agent, (the
"Rights Agreement"), inapplicable to the Offer, the Merger and this
Agreement or any of the transactions contemplated hereby or thereby. The
Company hereby consents to the inclusion in the Offer Documents (as
hereinafter defined) of the recommendation of the Board of Directors
described in the first sentence of this Section 1.2, except as such
consent may be withdrawn by the Board of Directors of the Company in the
exercise of its fiduciary duties as set forth in Section 6.6(b) hereof.
The Company represents that it has received the opinion of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ LLC ("H&Q") to the effect that the consideration offered pursuant
to the Offer and Merger is fair to stockholders of the Company from a
financial point of view; it being understood and acknowledged that such
opinion has been rendered to the Board of Directors of the Company and
may not be relied upon by Parent, Purchaser or Merger Sub or their
affiliates or their respective stockholders.
(b) Simultaneously with, or as promptly as possible after, the
commencement of the Offer, the Company shall file with the Commission
and mail to the holders of Shares a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"), which shall reflect
the recommendation of the Board of Directors; provided that prior to the
filing of such Schedule 14D-9, the Company shall have provided the
Purchaser's counsel with a reasonable opportunity to review and make
comments with respect to such Schedule 14D-9. Such recommendation shall
not be withdrawn or adversely modified except by resolution of the Board
of Directors adopted in the exercise of applicable fiduciary duties upon
the advice of counsel.
(c) The Company shall promptly furnish the Purchaser with mailing
labels containing the names and addresses of the record holders and, if
available, of non-objecting beneficial owners of Shares and lists of
securities positions of Shares held in stock depositories, each as of
the most recent practicable date, and shall from time to time furnish
the Purchaser with such additional information, including updated or
additional lists of stockholders, mailing labels and lists of securities
positions, and other assistance as the Purchaser may reasonably request
in order to be able to communicate the Offer to the stockholders of the
Company. Subject to the requirements of law, and except for such steps
as are necessary to disseminate the Offer and any other documents
necessary to consummate the Merger, Parent, the Purchaser and the Merger
Sub and each
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of their affiliates shall treat all information contained in such
labels, lists and additional information as "Evaluation Material" in
accordance with the letter agreement dated February 17, 1998 between
Parent and the Company (the "Confidentiality Agreement").
1.3 Directors. Promptly upon the payment by the Purchaser or any of
Parent's direct or indirect subsidiaries pursuant to the Offer for such number
of Shares which represent at least a majority of the outstanding Shares and from
time to time thereafter, the Company shall increase the size of its Board of
Directors to nine members, and the Purchaser shall be entitled to designate
members of the Company's Board of Directors such that the Purchaser, subject to
compliance with Section 14(f) of the Exchange Act, will have a number of
representatives on the Board of Directors, rounded up to the next whole number,
equal to the product obtained by multiplying nine by the percentage of Shares
beneficially owned by Parent and any of its subsidiaries. The Company shall,
upon request by the Purchaser, promptly increase the size of the Board of
Directors to the extent permitted by its Certificate of Incorporation and/or use
its best efforts to secure the resignations of such number of directors as is
necessary to enable the Purchaser's designees to be elected to the Board of
Directors and shall use its best efforts to cause the Purchaser's designees to
be so elected. At the request of the Purchaser, the Company shall take, at its
expense, all action necessary to effect any such election, including the mailing
to its stockholders of the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, in form and substance reasonably
satisfactory to the Purchaser and its counsel.
Notwithstanding the foregoing, (i) the affirmative vote of a majority of
the directors of the Company who are directors on the date hereof and who remain
directors shall be required to amend, modify or waive any provision of this
Agreement, or to approve any other action by the Company with respect to the
Offer or the other transactions contemplated hereby, which adversely affects the
interests of the stockholders of the Company with respect to such transactions
and (ii) none of the Purchaser, the Merger Sub or Parent shall, directly or
indirectly, cause the Company to breach its obligations hereunder.
ARTICLE 2
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.3), in
accordance with this Agreement and Delaware Law, the Merger Sub (or another
direct or indirect Delaware subsidiary of Parent) shall be merged with and into
the Company (the "Merger"), the separate existence of the Merger Sub (except as
may be continued by operation of law) shall cease, and the Company shall
continue as the surviving corporation under the corporate name it possesses
immediately prior to the Effective Time. The Company, in its capacity as the
corporation surviving the Merger, sometimes is referred to herein as the
"Surviving Corporation." Notwithstanding the foregoing, the Purchaser may revise
the structure of the Merger (including merging the Company into the Merger Sub
or merging the Company with or into another direct or indirect wholly-owned
subsidiary of Parent) provided that any such restructuring does not
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adversely affect the stockholders of the Company or does not cause the Company
to breach its representations and warranties hereunder.
2.2 Effect of the Merger. The Surviving Corporation shall possess all
the rights, privileges, immunities and franchises, both public and private, of
the Merger Sub and the Company (collectively, the "Constituent Corporations");
shall be vested with all property, whether real, personal, or mixed, and all
debts due on whatever account, including subscriptions to shares, and all other
choses in action, and all and every other interest belonging to or due to each
of the Constituent Corporations; and shall be responsible and liable for all the
obligations and liabilities of each of the Constituent Corporations, all with
the effect set forth in the Delaware Law.
2.3 Consummation of the Merger. As soon as is practicable after the
satisfaction or waiver, if possible, of the conditions set forth in Article 7,
and in no event later than five business days after such satisfaction or waiver,
the parties hereto will cause an Agreement or Certificate of Merger to be filed
with the Secretary of State of the State of Delaware, in such form as required
by, and executed in accordance with, the relevant provisions of applicable law
using the procedures permitted in Section 253 (if possible) or Section 251 of
the Delaware Law. The Merger shall be effective at the time of the filing of the
Agreement or Certificate of Merger with the Secretary of State of the State of
Delaware (the "Effective Time").
2.4 Certificate of Incorporation and By-Laws; Directors and Officers.
The Certificate of Incorporation and By-Laws of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation and By-Laws of the Surviving Corporation immediately after the
Effective Time and shall thereafter continue to be its Certificate of
Incorporation and By-Laws until amended as provided therein and under the
Delaware Law. The directors of the Merger Sub holding office immediately prior
to the Effective Time shall be the directors of the Surviving Corporation
immediately after the Effective Time.
2.5 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of the Merger Sub, the Company or the
holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time, other than Shares to be canceled pursuant to Section
2.5(b) hereof, shall automatically be canceled and extinguished and,
other than Shares with respect to which appraisal rights are properly
exercised ("Dissenting Shares"), be converted into and become a right to
receive in cash the highest price per share paid pursuant to the Offer
(the "Merger Consideration").
(b) Each Share issued and outstanding immediately prior to the
Effective Time and held in the treasury of the Company or owned by
Parent, the Purchaser or any subsidiary thereof shall automatically be
canceled and retired and no payment shall be made with respect thereto.
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(c) Each share of the Merger Sub's Common Stock, par value $.01
per share, issued and outstanding immediately prior to the Effective
Time shall automatically be converted into and become one validly
issued, fully paid and nonassessable share of Common Stock, par value
$.001 per share, of the Surviving Corporation.
(d) The holders of Dissenting Shares, if any, shall be entitled
to payment for such shares only to the extent permitted by and in
accordance with the provisions of Section 262 of the Delaware Law;
provided, however, that if, in accordance with such Section of the
Delaware Law, any holder of Dissenting Shares shall (i) subsequently
withdraw his demand for payment for such shares, or (ii) fail to
maintain a petition for appraisal as provided in such Section; or if
neither any holder of Dissenting Shares nor the Surviving Corporation
has filed suit as provided in Section 262 of the Delaware Law, such
holder or holders (as the case may be) shall forfeit such right to
payment of such Shares, and such Shares shall thereupon be deemed to
have been converted into and to have become exchangeable for, as of the
Effective Time, the right to receive the Merger Consideration.
2.6 Company Stock Options; Stock Purchase Plan. Each holder of then
outstanding options to purchase Shares ("Options") granted under any employee or
non-employee compensation plan or arrangement of the Company (the "Stock Plans")
shall be entitled, at the Effective Time, to exercise his or her Options, or to
surrender them for payment in accordance with the provisions of Section 6.3(a)
hereof. Any Options not so exercised or surrendered shall be terminated and
canceled at the Effective Time. The Company shall have the right to cause all
funds held in the Company's Employee Stock Purchase Plan to be used to purchase
shares of Company Common Stock so that such shares will be converted into the
right to receive cash in the Merger; provided that the Employee Stock Purchase
Plan is thereupon terminated.
2.7 Surrender of Shares; Stock Transfer Books.
(a) Prior to the Effective Time, the Purchaser shall designate a
bank or trust company reasonably satisfactory to the Company to act as
agent for the holders of Shares (the "Exchange Agent") to receive the
Merger Consideration, and at or immediately following the Effective
Time, Parent shall take all steps necessary to cause the Purchaser to
have sufficient funds to be able to provide the Exchange Agent with the
funds necessary to make the payments contemplated by this Article II.
(b) Promptly after the Effective Time, the Exchange Agent shall
mail to each person who was, at the Effective Time, a holder of record
of Shares entitled to receive the Merger Consideration pursuant to
Section 2.5(a) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the
certificates previously representing Shares to be exchanged pursuant to
the Merger (the "Certificates") shall pass, only upon proper delivery of
such Certificates to the Exchange Agent) and instructions for use
thereof in effecting the surrender of the Certificates. Upon surrender
to the Exchange Agent of the Certificates, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions
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thereto, and such other documents as may be requested, the Exchange
Agent shall promptly deliver to the persons entitled thereto the Merger
Consideration payable in respect of the Shares represented by the
Certificates, and the Certificates shall forthwith be canceled. Until so
surrendered and exchanged, each such Certificate (other than
Certificates representing Shares held in the treasury of the Company, by
the Purchaser or any subsidiary of the Purchaser and Dissenting Shares)
evidencing Shares shall, after the Effective Time, be deemed to evidence
only the right to receive the Merger Consideration.
(c) If delivery of the Merger Consideration in respect of
canceled Shares is to be made to a person other than the person in whose
name a surrendered Certificate or instrument is registered, it shall be
a condition to such delivery or payment that the Certificate or
instrument so surrendered shall be properly endorsed or shall be
otherwise in proper form for transfer and that the person requesting
such delivery or payment shall have paid any transfer and other taxes
required by reason of such delivery or payment in a name other than that
of the registered holder of the Certificate or instrument surrendered or
shall have established to the satisfaction of the Surviving Corporation
or the Exchange Agent that such tax either has been paid or is not
payable.
(d) 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 thereafter on the records of the Company. From and
after the Effective Time, holders of Certificates evidencing ownership
of Shares outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares except as otherwise
provided herein or by law. No interest shall be paid or accrue on any
portion of the Merger Consideration.
(e) Notwithstanding anything to the contrary in this Section 2.7,
none of the Exchange Agent, the Surviving Corporation or any party
hereto shall be liable to a holder of Shares for any amount properly
paid to a public official pursuant to any applicable property, escheat
or similar law.
2.8 Taking of Necessary Action; Further Action. Parent, the Purchaser,
the Merger Sub and the Company, respectively, shall use all reasonable efforts
to take all such action as may be necessary or appropriate in order to
effectuate the Offer and the Merger as promptly as possible and to carry out the
transactions provided for herein or contemplated hereby. If at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges,
immunities, powers and franchises of either of the Constituent Corporations, the
officers and directors of the Surviving Corporation are fully authorized in the
name of either of the Constituent Corporations or otherwise to take, and shall
take, all such action.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PARENT,
THE PURCHASER AND THE MERGER SUB
The Parent, the Purchaser and the Merger Sub hereby agree and represent
and warrant, on a joint and several basis, to the Company as follows:
3.1 Organization and Qualification. Each of the Parent, the Purchaser
and the Merger Sub has been duly incorporated and is validly existing as a
corporation and in good standing under the laws of the United Kingdom in the
case of Parent and the laws of Delaware in the case of the Purchaser and Merger
Sub and has the requisite corporate power to carry on its respective business as
now conducted. Each of the Parent, the Purchaser and the Merger Sub is duly
qualified as a foreign corporation in good standing in each jurisdiction in
which the character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on the business, operations
or financial condition of the Parent and its subsidiaries, taken as a whole. As
of the date of this Agreement, the Parent, the Purchaser and the Merger Sub have
no obligations or liabilities, and none of such parties are parties to any
litigation, which in any case if paid or adversely determined would have a
material effect on their ability to consummate the transactions contemplated by
this Agreement. The Purchaser is an indirect wholly-owned subsidiary of the
Parent and the Merger Sub is a wholly-owned subsidiary of the Purchaser. The
Certificate or Articles of Incorporation and By-Laws of the Purchaser and the
Merger Sub contain no provisions which would have a material adverse effect on
the ability of either of such entities to consummate the transactions
contemplated by this Agreement.
3.2 Authority Relative to this Agreement. Each of the Parent, the
Purchaser and the Merger Sub has the requisite corporate power and authority to
enter into this Agreement and to carry out its respective obligations hereunder.
The execution and delivery of this Agreement by the Parent, the Purchaser and
the Merger Sub and the consummation by the Parent, the Purchaser and the Merger
Sub of the transactions contemplated hereby have been duly authorized by the
respective Boards of Directors of the Parent, the Purchaser and the Merger Sub,
by an indirect wholly owned subsidiary of the Parent as the sole stockholder of
the Purchaser, and by the Purchaser as the sole stockholder of the Merger Sub,
and no other corporate proceedings on the part of the Parent or any of its
subsidiaries, the Purchaser or the Merger Sub are necessary to authorize this
Agreement and the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Parent, the Purchaser and the Merger Sub and
constitutes a valid and binding obligation of each such company, enforceable in
accordance with its terms. None of the Parent, the Purchaser or the Merger Sub
is subject to or obligated under any provision of (a) its Certificate or
Articles of Incorporation or By-Laws, or (b) any contract, indenture,
instrument, or other agreement, or (c) any license, franchise or permit, or (d)
any law, regulation, order, judgment or decree, which would be breached,
violated or defaulted or in respect of which a right of termination or
acceleration or any encumbrance on any of its assets could be created by its
execution, delivery and performance of this Agreement and the consummation by it
of the transactions contemplated hereby, other than any such breaches,
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violations, defaults, rights of termination or acceleration, or encumbrances,
which will not, individually or in the aggregate, have a material adverse effect
on the ability of the Parent, the Purchaser or the Merger Sub to consummate the
Offer or the Merger or any of the transactions contemplated hereby. Other than
in connection with or in compliance with the provisions of the Delaware Law, the
Exchange Act and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act"), no authorization, consent or approval of,
or filing with, any public body, court or authority is necessary on the part of
the Parent, the Purchaser or the Merger Sub for the consummation by the Parent,
the Purchaser and the Merger Sub of the transactions contemplated by this
Agreement other than filings with such foreign jurisdictions in which
subsidiaries of the Company are organized which may require filings to be made
in connection with the transfer of control of such subsidiaries, and Parent, the
Purchaser and the Merger Sub each agrees to make any and all such filings on or
prior to the Effective Time if any of such parties are required to make such
filings under applicable law.
3.3 Offer Documents. The Offer to Purchase and related Letter of
Transmittal and Schedule 14D-1 (and any amendments or supplements to the
foregoing) (which together constitute the "Offer Documents") shall in all
material respects conform with the requirements of the Exchange Act and the
rules and regulations thereunder (except that the foregoing representation shall
not apply with respect to the accuracy of information relating to the Company
which has been excerpted or derived from public sources or furnished in writing
by the Company specifically for inclusion in the Offer Documents). As of their
respective dates, and on the date they are first published, sent or given to
holders of Shares, the Offer Documents, taken as a whole, shall not contain any
misstatement of material fact or omit to state any material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances in which they were made, not misleading. Parent and the
Purchaser agree to correct the Schedule 14D-1 and the other Offer Documents if
and to the extent that any of them shall become false or misleading in any
material respect, and Parent and the Purchaser further agree to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be disseminated to
holders of Shares, in each case as and to the extent required by applicable law.
The information supplied by Parent for inclusion in the proxy statement to be
sent to the stockholders of the Company in connection with the meeting of the
Company's stockholders to consider the Merger, or the information statement to
be sent to such stockholders, as appropriate, shall not, on the date the proxy
statement or information statement is first mailed to stockholders, at the time
of such stockholders' meeting, if any, or at the Effective Time, contain any
statement which, at such time and in light of the circumstances under which it
shall be made, is false or misleading with respect to any material fact, or
shall omit to state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for such
stockholders' meeting which has become false or misleading. The Company and its
counsel shall be given reasonable opportunities to review and comment on the
Offer Documents.
3.4 Financing. Parent, the Purchaser and the Merger Sub have available
financing in an amount sufficient to consummate the Offer and the Merger.
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3.5 No Violation of the Margin Rules. None of the transactions
contemplated by this Agreement will violate or result in the violation of
Section 7 of the Exchange Act or any regulation promulgated pursuant thereto,
including, without limitation, Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent, the Purchaser
and the Merger Sub, except as set forth in the Disclosure Schedule which was
dated and delivered to the Parent, the Purchaser and the Merger Sub on or prior
to the date hereof, as follows:
4.1 Organization and Qualification. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of Delaware. The Company is duly qualified as a foreign corporation in good
standing in each jurisdiction in which the character of its properties owned or
leased or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified would not have a material adverse
effect on the financial condition, properties, business, or results of
operations of the Company or the Surviving Corporation and their respective
subsidiaries, taken as a whole (a "Company Material Adverse Effect"). The
Company has full corporate power and authority to own its properties and conduct
its business as presently owned and conducted. The copies of the Certificate of
Incorporation and By-Laws of the Company previously delivered to the Purchaser
are true, correct and complete as of the date hereof.
4.2 Subsidiaries. Each subsidiary of the Company, all of which are
listed in either Exhibit 22 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (the "Form 10-K Report") or the Disclosure
Schedule, has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation, is duly
qualified as a foreign corporation in good standing in each jurisdiction in
which the character of its properties owned or leased or the nature of its
activities make such qualification necessary, except where the failure to be so
qualified would not have a Company Material Adverse Effect, and has full power
and authority to own its properties and conduct its business as presently owned
and conducted. The Company owns, directly or indirectly, all of the outstanding
shares of capital stock of each such subsidiary free and clear of all liens,
claims. charges or encumbrances; there are no irrevocable proxies with respect
to such shares; and all such shares are validly issued, fully paid and
nonassessable. Except for the capital stock of such subsidiaries or otherwise as
disclosed in the Form 10-K Report, the Company does not own, directly or
indirectly, any investment in (a) any general partnership or joint venture or
(b) any equity or debt investment having either a fair market or face value or
cost in excess of $100,000. Except as disclosed in the Disclosure Schedule,
neither the Company nor any of its subsidiaries is obligated to make any
payments in the form of earn-outs, deferred purchase price or other
consideration in respect of the purchase price payable in connection with the
acquisition of any subsidiary or business.
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4.3 Capitalization. The authorized capital stock of the Company consists
of 50,000,000 Shares and 10,000,000 shares of preferred stock, $.001 par value
("Preferred Stock"), of which 500,000 shares have been designated Series A
Junior Participating Preferred Stock (the "Series A Preferred Stock"). As of the
date hereof, 14,314,078 Shares, and no shares of Preferred Stock, are issued and
outstanding. All issued and outstanding Shares are duly authorized and issued,
and are fully paid and nonassessable. As of the date hereof, (a) 2,231,757
shares of Common Stock are reserved for issuance pursuant to outstanding stock
options and (b) approximately 165,458 shares of Series A Preferred Stock are
reserved for issuance pursuant to preferred stock purchase rights (the "Rights")
issued under the Rights Agreement. Section 4.3 of the Disclosure Schedule sets
forth a complete and correct list of the Company's outstanding stock options,
including for each the name of the option holder, the date of grant, the
expiration date, the plan under which the option (or any portion thereof) was
granted. Except as otherwise described in the Disclosure Schedule, there are no
options, warrants, conversion privileges or other rights, agreements,
arrangements or commitments obligating the Company or any of its subsidiaries to
issue or sell any shares of, or make any payments based on the value or
appreciation of any, capital stock of the Company or any of its subsidiaries or
securities or obligations of any kind convertible into or exchangeable for any
shares of capital stock of the Company, any of its subsidiaries or any other
person. The holders of outstanding Shares are not entitled to any contractual or
statutory preemptive or other similar rights. Upon consummation of the Merger in
accordance with the terms of this Agreement, the Purchaser will own the entire
equity interest in the Company, and there will be no options, warrants,
conversion privileges or other rights, agreements, arrangements or commitments
obligating the Company or any of its subsidiaries to issue or sell any shares of
capital stock of the Company or of any of its subsidiaries.
4.4 Authority Relative to this Agreement. The Company has the requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and unanimously authorized by the Board of Directors of
the Company and, except for the approval of its stockholders (if required) as
set forth in Section 6.1, no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms. Neither the Company nor any of its
subsidiaries is subject to or obligated under any provision of (a) its
Certificate or Articles of Incorporation or By-Laws, (b) except as set forth in
the Disclosure Schedule, any contract, (c) any license, franchise or permit, or
(d) any law, regulation, order, judgment or decree, which would be breached or
violated or in respect of which a right of termination or acceleration or any
encumbrance on any of its or any of its subsidiaries' assets could be created by
the Company's execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby, other than
any such breaches, violations, rights or encumbrances which will not,
individually or in the aggregate, have a Company Material Adverse Effect. Other
than in connection with or in compliance with the provisions of the Delaware
Law, the Exchange Act and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, no
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authorization, consent or approval of, or filing with, any public body, court or
authority is necessary for the consummation by the Company of the transactions
contemplated by this Agreement other than filings with such foreign
jurisdictions in which subsidiaries of the Company are organized which may
require filings to be made in connection with the transfer of control of such
subsidiaries, and the Company agrees to make any and all such filings on or
prior to the Effective Time if the Company is required to make such filings
under applicable law.
4.5 Commission Filings. The Company has heretofore delivered to the
Purchaser copies of the Company's (a) Form 10-K Report, (b) Quarterly Reports on
Form 10-Q for the fiscal quarters ended March 31, 1997, June 30, 1997 and
September 30, 1997 (collectively, the "Form 10-Q Reports"), and (c) all proxy
statements relating to the Company's meetings of stockholders (whether annual or
special) during 1996 and 1997, in each case as filed with the Commission. The
Company has heretofore made available to the Purchaser all other reports,
registration statements and other documents filed by the Company with the
Commission under the Exchange Act and the Securities Act. All such documents
described in the first two sentences of this section are collectively referred
to herein as the "Commission Filings." Except as set forth on the Disclosure
Schedule, the Company has not filed any Form 8-K Reports with the Commission
since January 1, 1997. The Company has timely filed all reports, registration
statements and other documents required to be filed with the Commission under
the rules and regulations of the Commission, and all Commission Filings complied
with the requirements of the Securities Act or the Exchange Act, as the case may
be. As of their respective dates, the Commission Filings (including in all cases
any exhibits or schedules thereto or documents incorporated therein by
reference) did not contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
4.6 Financial Statements and Related Data. The (i) audited consolidated
financial statements and unaudited consolidated interim financial statements of
the Company included in the Form 10-K Report and the Form 10-Q Reports and (ii)
consolidated financial statements as of and for the fiscal year ended December
31, 1997 (the "1997 Financial Statements") have each been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto and
except, in the case of the unaudited statements, as may be permitted under Form
10-Q of the Exchange Act) and fairly present the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and changes in financial position for
the periods then ended, subject, in the case of the unaudited consolidated
interim financial statements, to normal year-end adjustments. Upon completion of
the audit of the 1997 Financial Statements, the Company will provide a copy
thereof to the Purchaser, which will be the same in all material respects
(including footnotes) as the 1997 Financial Statements previously provided to
the Purchaser, will be accompanied by an unqualified audit opinion by Deloitte &
Touche LLP, the Company's independent public accountants, and will contain notes
that do not include any information that is different from that provided to the
Purchaser under or pursuant to this Agreement or any document referenced herein
or in the Disclosure Schedule hereto to the extent that such differences, taken
as a whole,
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reflect changes which would have a Company Material Adverse Effect (the "Audited
1997 Financial Statements").
4.7 Absence of Certain Changes or Events. Except as contemplated by this
Agreement, or reflected in any financial statement or note thereto referred to
in Section 4.6 or reflected in the Disclosure Schedule, or reflected in any
Commission Filing filed prior to date hereof, since December 31, 1997, there has
not been (a) any change which would have a Company Material Adverse Effect; (b)
any damage, destruction or loss, whether covered by insurance or not, having a
Company Material Adverse Effect; (c) any entry by the Company or any subsidiary
into any commitment or transaction material to the Company and its subsidiaries
taken as a whole, which is not in the ordinary course of business; (d) any
change by the Company in accounting principles or methods except insofar as may
be required by a change in generally accepted accounting principles; (e) any
declaration, payment or setting aside for payment of any dividends or purchase
or redemption of any securities of the Company or (f) any entering into or
modification of any employment or severance contract with any executive officer
of the Company or any of its subsidiaries or any increase in compensation
payable by the Company or any of its subsidiaries to any of their executive
officers or any material increase under any bonus, pension or benefit plan.
4.8 Litigation. Except as disclosed in the Form 10-K Report, the Form
10-Q Reports or the Disclosure Schedule, there are no claims, actions,
proceedings, or investigations pending or, to the best knowledge of the Company,
threatened against the Company or any of its subsidiaries or any of their
respective officers, directors, employees or agents (in their capacities as
such) before any court or governmental or regulatory authority or body, which if
adversely determined would have (to the extent not adequately reserved against
on the Company's December 31, 1997 balance sheet), individually or in the
aggregate, a Company Material Adverse Effect or would materially adversely
affect (i) the completion of the transactions contemplated by this Agreement or
(ii) the ability of the Purchaser or Parent through the acquisition of Shares to
own or operate the business of the Company.
4.9 Liabilities. Except as disclosed in the 1997 Financial Statements,
neither the Company nor any of its subsidiaries has any material obligation or
liability (whether accrued, absolute, contingent, unliquidated or otherwise,
whether or not known to the Company, whether due or to become due) other than
(a) liabilities incurred since December 31, 1997 in the ordinary course of
business consistent with past practice or (b) obligations and liabilities which
have been incurred in the ordinary course of business pursuant to contracts and
should not be reflected under generally accepted accounting principles on the
1997 Financial Statements, which in the aggregate are not material to the
Company and its subsidiaries, taken as a whole.
4.10 Environmental Matters. The Company and its subsidiaries have
obtained all material permits, licenses and other authorizations which are
required under applicable federal, state, local and foreign laws relating to
public health and safety, worker health and safety, pollution or protection of
the environment, including those relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants or hazardous or toxic materials or wastes, except where
its failure to obtain the
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same would not have a Company Material Adverse Effect. The Company and its
subsidiaries have complied and are in compliance with all terms and conditions
of any and all required permits, licenses, and authorizations, and with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
federal, state, local or foreign law or any regulation, code, plan, order,
decree or judgment relating to public health and safety, worker health and
safety, and pollution or protection of the environment, or any notice or demand
letter issued, entered, promulgated or approved thereunder, except where the
failure to comply would not have a Company Material Adverse Effect. To the best
knowledge of the Company, no facts, events or conditions relating to the
Company's or any of its subsidiaries' past or present operations, facilities or
properties interfere in any material respect with or prevent continued
compliance with, or give rise to any material present or potential legal, common
law or statutory liability under, any applicable law or regulation related to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or related to the emission, discharge, release or
threatened release into the environment, of any pollutant, contaminant, or
hazardous or toxic material or waste.
4.11 Employee Benefit Plans.
(a) Section 4.11(a) of the Disclosure Schedule hereto sets forth
a list of all "employee benefit plans," as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and all other material employee benefit or compensation
arrangements, including, without limitation, any such arrangements
providing severance pay, sick leave, vacation pay, salary continuation
for disability, retirement benefits, deferred compensation, bonus pay,
incentive pay, stock options (including those held by directors,
employees, and consultants), hospitalization insurance, medical
insurance, life insurance, scholarships or tuition reimbursements, that
are maintained by the Company, any subsidiary of the Company or any
Company ERISA Affiliate (as defined in this Section 4.11) or with
respect to which the Company, any subsidiary of the Company or any
Company ERISA Affiliate has or may have any liability, contingent or
otherwise (the "Company Employee Benefit Plans").
(b) None of the Company Employee Benefit Plans is a
"multiemployer plan," as defined in Section 4001(a)(3) of ERISA (a
"Multiemployer Plan"), and neither the Company nor any subsidiary of the
Company or Company ERISA Affiliate presently maintains or has maintained
such a plan.
(c) Except as provided in Part 6 of Title I of ERISA, neither the
Company nor any subsidiaries of the Company maintain or contribute to
any plan or arrangement which provides or has any liability to provide
life insurance or medical or other employee welfare benefits to any
employee or former employee upon his retirement or termination of
employment, and neither the Company nor any of its subsidiaries have
ever represented, promised or contracted (whether in oral or written
form) to any employee or former employee that such benefits would be
provided.
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(d) Except as provided for in the Options described in Section
4.3 of the Disclosure Schedule, the execution of, and performance of the
transactions contemplated in, this Agreement will not, either alone or
upon the occurrence of subsequent events, result in any payment (whether
of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation
to fund benefits with respect to any individual. The only severance
agreements or severance policies applicable to the Company or the
subsidiary of the Company in the event of a change of control of the
Company are the agreements and policies specifically referred to in
Section 4.11(d) of the Disclosure Schedule. Section 4.11(d) of the
Disclosure Schedule sets forth all payments or benefits which will or
may be made by the Company, Parent or any of their subsidiaries or
affiliates pursuant to contracts or arrangements in effect on the date
hereof with respect to any employee of the Company or any subsidiary of
the Company which may be characterized as a "parachute payment" within
the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986,
as amended.
(e) Each Company Employee Benefit Plan that is intended to
qualify under Section 401 of the Code, and each trust maintained
pursuant thereto, has been determined to be exempt from federal income
taxation under Section 501 of the Code by the IRS, and, to the Company's
knowledge, nothing has occurred with respect to the operation or
organization of any such Company Employee Benefit Plan that would cause
the loss of such qualification or exemption or the imposition of any
liability, penalty or tax under ERISA or the Code. No Company Employee
Benefit Plan is a "defined benefit plan" within the meaning of Section
3(35) of ERISA, and neither the Company nor any subsidiary of the
Company or any Company ERISA Affiliate maintains or has ever maintained
such a plan.
(f) (i) All contributions (including all employer contributions
and employee salary reduction contributions) required to have been made
under any of the Company Employee Benefit Plans to any funds or trusts
established thereunder or in connection therewith have been made by the
due date thereof, (ii) the Company and each of its subsidiaries have
complied in all material respects with any notice, reporting and
documentation requirements of ERISA and the Code, (iii) there are no
pending actions, claims or lawsuits which have been asserted, instituted
or, to the Company's knowledge, threatened, in connection with the
Company Employee Benefit Plans, and (iv) the Company Employee Benefit
Plans have been maintained, in all material respects, in accordance with
their terms and with all provisions of ERISA and the Code (including
rules and regulations thereunder) and other applicable federal and state
laws and regulations.
(g) Section 4.11(g) of the Disclosure Schedule sets forth a
complete list of all amounts outstanding relating to bonuses payable to
employees and any obligation to pay bonuses to employees relating to the
Company's performance, the employee's performance or the transactions
contemplated hereby.
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(h) All compensation attributable to outstanding Options
constitutes "qualified performance-based compensation" within the
meaning of Section 162(m) of the Code and the regulations promulgated
thereunder.
For purposes of this Agreement, "Company ERISA Affiliate" means any
business or entity which is a member of the same "controlled group of
corporations," under "common control" or a member of an "affiliated service
group" with the Company within the meanings of Sections 414(b), (c) or (m) of
the Code, or required to be aggregated with the Company under Section 414(o) of
the Code, or is under "common control" with the Company, within the meaning of
Section 4001(a)(14) of ERISA, or any regulations promulgated or proposed under
any of the foregoing Sections.
4.12 Labor Matters. (i) There are no controversies pending or, to the
knowledge of the Company, threatened, between the Company or any of its
subsidiaries and any group of their respective employees; (ii) neither the
Company nor, to the knowledge of the Company, any of its subsidiaries, is a
party to any collective bargaining agreement or other labor union contract
applicable to persons employed by the Company or its subsidiaries nor does the
Company know of any activities or proceedings of any labor union to organize any
such employees; (iii) neither the Company nor any of its subsidiaries has
breached or otherwise failed to comply with any provision of any such agreement
or contract and there are no grievances outstanding against any such parties
under any such agreement or contract; (iv) there are no unfair labor practice
complaints pending against the Company or any of its subsidiaries before the
National Labor Relations Board or any current union representation questions
involving employees of the Company or any of its subsidiaries; and (v) the
Company has no knowledge of any strikes, slowdowns, work stoppages, lockouts, or
threats thereof, by or with respect to any employees of the Company or any of
its subsidiaries. No consent of any union which is a party to any collective
bargaining agreement with the Company is required to consummate the transactions
contemplated by this Agreement.
4.13 Offer Documents. Neither the Schedule 14D-9 nor any of the
information supplied by the Company for inclusion in the Offer Documents shall,
at the respective times the Schedule 14D-9, the Offer Documents or any such
amendments or supplements are filed with the SEC or are first published, sent or
given to stockholders, as the case may be, 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 the light of the
circumstances under which they were made, not misleading. In the event that the
Purchaser has not designated a majority of the members of the Company's Board of
Directors pursuant to the terms of Section 1.3 hereof and a stockholder vote is
required, all information supplied by the Company for inclusion in any proxy
statement filed with the Commission and sent or given to stockholders pursuant
to Section 6.2 hereof shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading at the time of filing with the Commission,
mailing to stockholders or any meeting of stockholders. Notwithstanding the
foregoing, the Company makes no representation or warranty with respect to any
information which is supplied in writing by Parent, the Purchaser or the Merger
Sub specifically for inclusion
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and which is contained in any of the foregoing documents or which is excerpted
or derived from public sources.
4.14 Proprietary Rights.
(a) The Company and its subsidiaries possess or have adequate
rights to use all material trademarks, trade names, patents, service
marks, marks, brand names, computer programs, databases, industrial
designs and copyrights necessary for the operation of the businesses of
each of the Company and its subsidiaries (collectively, the "Proprietary
Rights"). All of the Proprietary Rights that are material to the conduct
of the Company's business taken as a whole are owned by the Company or
its subsidiaries free and clear of any and all encumbrances that would
have a material adverse effect on the value of, or ability of Purchaser
or Merger Sub to utilize, the item of the Proprietary Rights to which
such encumbrance relates, and neither the Company nor any such
subsidiary has forfeited or otherwise relinquished any Proprietary
Rights which forfeiture would have a Company Material Adverse Effect.
The use of the Proprietary Rights by the Company or its subsidiaries
does not conflict with, infringe upon, violate or interfere with or
constitute an appropriation of any right, title, interest or goodwill,
including, without limitation, any intellectual property right,
trademark, trade name, patent, service ▇▇▇▇, brand ▇▇▇▇, brand name,
computer program, database, industrial design, copyright or any pending
application therefor of any other person, except where such conflict,
infringement, violation, interference or appropriation would not result
in a Company Material Adverse Effect. The Company has received no
written notice that the use of any Proprietary Rights or trade dress by
the Company or its subsidiaries conflicts with, infringes upon, violates
or interferes with any rights of any other person. There are no pending
claims that any of the Proprietary Rights is invalid or conflicts with
the asserted rights of any other person or has not been used or enforced
or has been failed to be used or enforced in a manner that would result
in the abandonment, cancellation or unenforceability of any of the
Proprietary Rights that is material to the conduct of the Company's
business. Neither the Company nor any of its subsidiaries is in default
under the terms of any third party license or other right to use any of
the Proprietary Rights which default is likely to have a Company
Material Adverse Effect.
(b) It is the Company's policy to have each employee, consultant
or contractor of the Company execute a proprietary information and
confidentiality agreement substantially in the form of the Company's
standard forms of such agreement, and substantially all of the Company's
employees, consultants and contractors have executed such an agreement.
All computer software included in the Company's products (i) has been
either created by employees of the Company within the scope of their
employment or otherwise on a work-for-hire basis or by consultants or
contractors who have created such software themselves and have assigned
all right, title and interest they have in such software to the Company
or (ii) is licensed to the Company pursuant to valid and binding
agreements.
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4.15 Taxes. Each of the Company and its subsidiaries has filed all
federal and state tax returns and reports, and all material local and foreign
tax returns and reports, that it was required to file. All such tax returns and
reports were correct and complete in all material respects. All taxes owed by
any of the Company and its subsidiaries have been paid. Each of the Company and
its subsidiaries has withheld and paid all taxes required to have been withheld
and paid in connection with amounts paid to any employee, independent
contractor, creditor, stockholder, or other third party. Neither the Internal
Revenue Service (the "IRS") nor any other taxing authority or agency is now
asserting or, to the best of the Company's knowledge, threatening to assert
against the Company or any of its subsidiaries any deficiency or claim for
material additional taxes or interest thereon or penalties in connection
therewith. Neither the Company nor any of its subsidiaries has granted any
waiver of any statute of limitations with respect to, or any extension of a
period for the assessment of, any federal, state, local or foreign income tax.
The accruals and reserves for taxes reflected in the balance sheet of the
Company as of December 31, 1997 are adequate to cover all taxes accruable
through such date (including interest and penalties, if any, thereon) in
accordance with generally accepted accounting principles. Neither the Company
nor any of its subsidiaries has made an election under Section 341(f) of the
Code. The Company is not, and has not been during the period specified in
Section 897(c)(1)(A)(ii) of the Code, a United States real property holding
corporation within the meaning of Section 897(c) of the Code.
4.16 Brokers, Advisors. No broker, finder or investment banker (other
than H&Q) is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by and on behalf of the Company. The Company has heretofore
furnished to the Purchaser and the Merger Sub a complete and correct copy of all
agreements between the Company and H&Q pursuant to which such firm would be
entitled to any payment relating to the transactions contemplated hereunder.
4.17 Product Liabilities. Except as set forth in the Disclosure
Schedule, there are no product warranty, product liability or similar claims
pending, or to the best knowledge of the Company overtly threatened, against the
Company or any of its subsidiaries.
4.18 Related Party Transactions. Except as set forth in the Disclosure
Schedule, or the SEC Reports for the year ended December 31, 1996 and for the
nine months ended September 30, 1997, no current or former stockholder,
director, officer or key employee of the Company or any of its subsidiaries nor
any "Associate" (as defined in Rule 405 promulgated under the Securities Act) of
any such person, is presently or has been, directly or indirectly through his
affiliation with any other person or entity, a party to any transaction with the
Company or any of its subsidiaries providing for the furnishing of services
(except as an employee) by or to, or rental of real or personal property from or
to, or otherwise requiring cash payments by or to any such person. In addition,
except as set forth in the Disclosure Schedule or the SEC Reports, during such
periods there was no relationship or transaction involving the Company or any of
its subsidiaries which is described in Item 404 of Regulation S-K promulgated
under the Securities Act.
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4.19 Rights Agreement. No later than 5 days from the date hereof, the
Company shall have amended the Rights Agreement so that the Rights Agreement
will not be applicable to this Agreement, the Offer, the announcement of the
Offer, the purchase of Shares by Parent, the Purchaser or the Merger Sub
pursuant to the Offer or the Merger, or any other action contemplated hereby.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE MERGER
5.1 Conduct of Business by the Company Pending the Merger. The Company
covenants and agrees that, prior to the Effective Time, unless the Purchaser
shall otherwise agree in writing or as otherwise expressly contemplated or
permitted by this Agreement:
(a) The business of the Company and its subsidiaries shall be
conducted only in, and the Company and its subsidiaries shall maintain
their facilities in, the ordinary course of business and consistent with
past practice.
(b) The Company shall not directly or indirectly do or permit to
occur any of the following: (i) issue, sell, pledge, dispose of or
encumber (or permit any of its subsidiaries to issue, sell, pledge,
dispose of or encumber) any shares of, or any options, warrants,
conversion privileges or rights of any kind to acquire any shares of,
any capital stock of the Company or any of its subsidiaries (other than
shares issuable upon exercise of the outstanding (as of the date hereof)
Options or any rights to purchase shares of Company Common Stock
pursuant to the Employee Stock Purchase Plan, in each case in accordance
with their respective terms in effect on the date hereof); (ii) amend or
propose to amend the Certificate or Articles of Incorporation or By-Laws
of it or any of its subsidiaries; (iii) split, combine or reclassify any
outstanding Shares, or declare, set aside or pay any dividend or other
distribution payable in cash, stock, property or otherwise with respect
to the Shares; (iv) redeem, purchase or acquire or offer to acquire (or
permit any of its subsidiaries to redeem, purchase or acquire or offer
to acquire) any Shares or other securities of the Company or any of its
subsidiaries other than as contemplated by Section 2.5 hereof and other
than for the repurchase by the Company, pursuant to existing agreements,
of any outstanding Shares upon termination of an employment, director or
consulting relationship with the Company; or (v) enter into or modify
any agreement, commitment or arrangement with respect to any of the
foregoing.
(c) Neither the Company nor any of its subsidiaries shall (i)
sell, pledge, lease, dispose of or encumber any material assets other
than in the ordinary course of business consistent with past practice;
(ii) acquire (by merger, consolidation, acquisition of stock or assets
or otherwise) any corporation, partnership or other business
organization or enterprise or material assets thereof; (iii) incur any
indebtedness for borrowed money or issue any debt securities for
borrowings except in the ordinary course of business and consistent with
past practice; (iv) guarantee, endorse or otherwise became liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other
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person (other than a subsidiary of the Company or the Company) except in
the ordinary course of business consistent with past practice and in
amounts immaterial to the Company; or (v) enter into or modify any
contract, agreement, commitment or arrangement with respect to any of
the foregoing.
(d) Neither the Company nor any of its subsidiaries shall (i)
enter into or modify any employment, severance or similar agreements or
arrangements with, or grant any bonuses, salary increases, severance or
termination pay to, any officers or directors; or (ii) in the case of
employees who are not officers or directors, take any action other than
in the ordinary course of business consistent with past practice (none
of which actions shall be unreasonable or unusual) with respect to the
grant of any bonuses, salary increases, severance or termination pay or
with respect to any increase of benefits in effect on the date of this
Agreement.
(e) Except as may be required by applicable law, neither the
Company nor any of its subsidiaries shall adopt or amend any bonus,
profit sharing, compensation, stock option, pension, retirement,
deferred compensation, employment or other employee benefit plan,
agreement, trust fund or arrangement for the benefit or welfare of any
employee.
(f) Except to the extent required by fiduciary obligations under
applicable law as advised by counsel, the Company will not (i) call any
meeting (other than any meeting contemplated by Section 6.1) of its
stockholders or (ii) waive or modify any provision of, or terminate any,
confidentiality or standstill agreement entered into by the Company with
any person.
(g) The Company shall use its best efforts to cause its current
insurance (or reinsurance) policies not to be canceled or terminated or
any of the coverage thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies providing
coverage equal to or greater than the coverage under the canceled,
terminated or lapsed policies for substantially similar premiums are in
full force and effect.
(h) The Company (i) shall use its reasonable efforts, and cause
each of its subsidiaries to use reasonable efforts, to preserve intact
their respective business organizations and goodwill, keep available the
services of its officers and employees as a group and maintain
satisfactory relationships with suppliers, distributors, customers and
others having business relationships with it or its subsidiaries; (ii)
shall confer on a regular and frequent basis with representatives of the
Purchaser and the Merger Sub to report operational matters and the
general status of ongoing operations; (iii) shall not take any action,
and shall not permit any of its
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subsidiaries to take any action, which would render, or which reasonably
may be expected to render, any representation or warranty made by it in
this Agreement untrue at any time prior to the Effective Time; and (iv)
shall notify the Purchaser and the Merger Sub of any emergency or other
change in the normal course of its or any of its subsidiaries' business
or in the operation of its or any of its subsidiaries' properties and of
any governmental or third party complaints, investigations or hearings
(or communications indicating that the same may be contemplated) if such
emergency, change, complaint, investigation or hearing would have a
Company Material Adverse Effect, or would materially adversely affect
any party's ability to consummate the transactions contemplated by this
Agreement.
(i) Neither the Company nor any of its subsidiaries shall adopt a
plan of liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, or reorganization.
(j) Neither the Company nor any of its subsidiaries shall make
any material tax election or settle or compromise any material federal,
state, local, or foreign tax liability, except in the ordinary course of
business and consistent with past practice.
(k) Except as contemplated by Section 6.3, the Company shall not
modify or accelerate the exercisability of any stock options, rights or
warrants presently outstanding, and shall not amend, change or waive (or
exempt any person from the effect of) the Rights Agreement, except in
the exercise of its fiduciary duties by the Board of Directors as set
forth in Section 6.6(b) of this Agreement or as contemplated by Section
4.19 hereof.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Action of Stockholders. The Company shall take all action necessary
in accordance with the Delaware Law and its Certificate of Incorporation and
By-Laws to convene a meeting of its stockholders promptly following consummation
of the Offer to consider and vote upon the Merger, if a stockholder vote is
required. If a stockholders' meeting is convened, the Board of Directors shall
recommend that the stockholders of the Company vote to approve the Merger. Such
recommendation shall not be withdrawn or adversely modified except by resolution
of the Board of Directors adopted in the exercise of applicable fiduciary duties
upon the advice of counsel. In the event that proxies are to be solicited from
the Company's stockholders, the Company shall, if and to the extent requested by
the Purchaser, use its best efforts to solicit from stockholders of the Company
proxies in favor of such approval and shall take all other reasonable action
necessary or, in the opinion of the Purchaser, helpful to secure a vote or
consent of stockholders in favor of the Merger, except where the Board of
Directors of the Company determines not to undertake such actions and efforts in
the exercise of its fiduciary duties as set forth in Section 6.6(b) hereof. At
any such meeting, the Purchaser shall vote or cause to be voted all of the
Shares then owned by the Purchaser or any subsidiary of the Purchaser in favor
of the Merger and the Company shall vote all Shares in favor of the Merger for
which proxies in the form distributed by the Company shall have been given and
with respect to which no contrary direction shall have been made.
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6.2 Proxy Statement. If a stockholder vote is required, the Company and
the Purchaser shall cooperate with each other and use all reasonable efforts to
prepare, and the Company and the Purchaser shall file with the Commission as
soon as reasonably practicable following consummation of the Offer and use their
best efforts to have cleared by the Commission, a proxy statement or information
statement, as appropriate, with respect to the approval of the Merger by the
Company's stockholders. The information provided and to be provided by the
Purchaser, the Merger Sub and the Company, respectively, for use in the proxy
statement or information statement shall be true and correct in all material
respects and shall not omit to state any material fact required to be stated
therein or necessary in order to make such information not misleading.
6.3 Employee Benefits and Stock Options.
(a) Acceleration and Cancellation. The Parent, the Purchaser, the
Merger Sub and the Company hereby acknowledge and agree that the
Surviving Corporation shall not assume or continue any outstanding stock
options under the Stock Plans, or any other stock options, or substitute
any additional options for such outstanding options. On or before the
Effective Time, the Company shall, consistently with the terms of the
Company's benefit plans and other agreements and arrangements evidencing
the issuance of options, or to the extent permissible under applicable
law, accelerate the unvested portion of all outstanding stock options,
warrants or other rights to acquire Shares issued under employee benefit
or nonemployee compensation plans or arrangements, conditioned upon the
successful completion of the Merger. In lieu of exercising such stock
options or warrants, each holder thereof shall, upon surrender for
cancellation of the same to the Company on or before the Effective Time,
be entitled to receive from the Company, subject to applicable
withholding requirements, an amount in cash equal to the excess of (a)
the product of the number of Shares covered by such stock options,
warrants or other rights to acquire Shares multiplied by the Merger
Consideration, over (b) the product of the number of Shares covered by
such stock options, warrants or other rights to acquire Shares
multiplied by the per-Share exercise, purchase or conversion price
payable upon exercise, purchase or conversion of the same. Any
outstanding stock options that shall not have been exercised or
surrendered for payment in accordance with the preceding sentence shall
terminate at the Effective Time, in accordance with the terms of the
Stock Plans. The Company shall use its best efforts to obtain consent to
the foregoing treatment by the holders of all outstanding options listed
on Section 6.3(a) of the Disclosure Schedule.
(b) Stock Purchase Plan. The Company shall take such actions, on
or before the Effective Time, as are necessary to terminate the
Company's Employee Stock Purchase Plan. After such termination, employee
participants in such Employee Stock Purchase Plan shall not be permitted
to continue to have the Company withhold any monies for investment in
such Plan and each such employee shall be permitted to elect to receive
invested cash or purchase Shares in accordance with the terms of such
plan.
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(c) Employment Agreements and Severance Agreements. Parent shall
cause the Company to honor without modification (except to the extent
the same may be modified by mutual agreement between the parties and
approved by the Purchaser) all employment agreements and severance
agreements in effect prior to the date hereof between the Company and
any employee of the Company, all of which, the Company hereby represents
and warrants, have been disclosed in writing to Parent prior to the date
hereof.
6.4 Expenses. If (a) this Agreement is terminated by the Company
pursuant to Section 8.1(e)(iii) or Section 6.6(b), or (b) this Agreement is
terminated by the Purchaser pursuant to Section 8.1(c) or (c) this Agreement is
terminated pursuant to its terms for any reason other than a material breach of
this Agreement by the Parent or the Merger Sub, and in case of this clause (c)
within six months thereafter (x) a definitive agreement is entered into between
the Company and any person other than the Purchaser or any affiliate of the
Purchaser for the acquisition of all or substantially all the assets or a
majority of the capital stock of the Company, or for a merger, consolidation or
other reorganization of the Company at a price equivalent to a price per Share
in excess of $24.00 or (y) any person or "group" (as that term is used in
Section 13(d)(3) of the Exchange Act) other than the Purchaser or any affiliate
of the Purchaser shall have acquired by way of a public tender offer beneficial
ownership of 50% or more of the outstanding Shares at a price per Share in
excess of $24.00, the Company shall pay to Parent upon demand (by wire transfer
of immediately available federal funds to an account designated by Parent for
such purpose) the amount of $12.6 million to compensate Parent, the Purchaser
and the Merger Sub for taking actions to consummate this Agreement, to reimburse
them for the time and expense relating thereto and for other direct and indirect
costs (including lost opportunity costs) in connection with the transactions
contemplated herein. The Company acknowledges that the provisions set forth in
this section are an integral part of this Agreement that have been negotiated in
order to induce Parent, the Purchaser and the Merger Sub to enter into this
Agreement; accordingly, if the Company fails to promptly pay the amounts
referred to above, the Company shall in addition pay Parent all costs and
expenses (including attorneys' fees and expenses) incurred in collecting such
fees together with interest on the amount of such fees from the date such
payment was required to be made until such time as payment is received by Parent
at the rate of the lesser of (i) 10% per annum or (ii) the maximum rate
permitted by law. Payment of such amount by the Company along with any interest,
costs and expenses as may be required under this Section 6.4 shall constitute a
full and complete discharge of all obligations or liabilities of the Company
under this Paragraph; provided, however, that under no circumstances will the
Company be liable for more than one fee payable pursuant to this Section 6.4.
In the event of any breach of the representations and warranties
contained in this Agreement by either party hereto (for purposes of this
Section, the parties to this Agreement shall mean Parent, the Purchaser and the
Merger Sub, on the one hand, and the Company, on the other hand), if the
nonbreaching party incurs damages caused by the breaching party, the breaching
party's aggregate liability for all such damages caused by all such breaches
shall not exceed $12.6 million.
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6.5 Additional Agreements. Subject to the terms and conditions provided
herein, each of the parties 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 to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement, including using best efforts to
obtain all necessary waivers, consents and approvals and to effect all necessary
registrations and filings, including but not limited to filings under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and submissions of information requested by governmental
authorities.
6.6 No Solicitation.
(a) Except as provided in Section 6.6(b) below, the Company
agrees that from the date hereof until the Effective Time or the
termination of this Agreement, the Company will not, directly or
indirectly, through any officer, director, affiliate or agent of the
Company, or otherwise, solicit, initiate, or encourage any proposals or
offers from any person other than Parent or its affiliates (a "third
party") relating to any possible acquisition of the Company or any of
its subsidiaries (whether by way of merger, purchase of capital stock,
purchase of assets or otherwise) or engage in any sale of any equity
interest in or substantial assets of the Company or any of its
subsidiaries (other than pursuant to the exercise of options outstanding
on the date hereof) to a third party (an "Alternative Acquisition"); nor
will the Company participate in any negotiations regarding, or furnish
to any person any information with respect to, or otherwise cooperate
with, facilitate or encourage any effort or attempt by any person to do
or seek, any Alternative Acquisition.
(b) Notwithstanding the foregoing, in the event that (i) the
Company shall receive a written proposal from a third party relating to
an Alternative Acquisition (which proposal may or may not be subject to
confirmatory due diligence), (ii) the Company shall have notified Parent
in writing of its receipt of such proposal and (iii) the Board of
Directors, upon the advice of independent counsel, reasonably believes
that the failure to do so would constitute a breach of its fiduciary
duties (it being understood for this purpose that the failure to respond
to an Acquisition Alternative which in the judgment of the Company's
Board of Directors and its financial advisor is superior, from a
financial point of view, to the Company's stockholders may be deemed to
be a breach of such duty), then thereafter the Company shall be entitled
to negotiate and provide information to such third party.
Notwithstanding the immediately preceding sentence, this Section 6.6
will not be violated and, without more, the Company shall be permitted
to negotiate and provide information to any third party that provides a
written proposal for an Alternative Acquisition if such written proposal
indicates that the proposed Alternative Acquisition (i) is fully
financed, (ii) provides for a purchase price which will be paid entirely
in cash, for all outstanding Shares and at a price per Share greater
than the price per Share set forth in Section 1.1 hereof and (iii) sets
forth material terms which taken as a whole are no less favorable to the
Company than the terms set forth in this Agreement, and the Company
shall have first notified the Parent in writing of its receipt of such
proposal and the terms thereof. In addition, in the event that any such
proposal, including the financing thereof, has been determined by the
Board of Directors of the Company based upon the
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written opinion of its outside financial advisors to be on terms
financially superior to the Company's stockholders as compared with the
Offer and the Merger (a "Bona Fide Offer"), the Company may terminate
this Agreement and accept such Bona Fide Offer upon the payment to
Parent of the fee provided in Section 6.4.
(c) Notwithstanding the provisions of the sixth paragraph of the
Confidentiality Agreement (the "standstill provisions"), (i) following
any notification to Parent of a written proposal that permits the
Company to negotiate with and furnish information to any third party in
accordance with Section 6.6(b) hereof, and until any Alternative
Transaction resulting from such proposal shall have either been
consummated or the Company shall have received written notification that
any such third party shall no longer seek to engage in an Alternative
Transaction with or involving the Company, the Parent shall be entitled
to propose or present to the Company any offer in response to such third
party's offer, and (ii) if, from the date hereof until the Effective
Time or the termination of this Agreement, any third party shall
announce its intention to commence, or shall commence, any tender offer
to acquire Shares, Parent and the Purchaser shall be entitled to make
any public announcement or proposal, or to take any other action it or
they may deem appropriate, in response to such announcement or tender
offer.
6.7 Notification of Certain Matters. Each party shall give prompt notice
to the others of (a) the occurrence or failure to occur of any event, which
occurrence or failure would be likely to cause any representation or warranty on
its part contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time, and (b) any
material failure of such party, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
6.8 Access to Information. From the date hereof to the Effective Time,
the Company shall, and shall cause its subsidiaries, officers, directors,
employees and agents (including lenders, attorneys and accountants) to afford
the Parent and the Purchaser complete access at all reasonable times to its
officers, employees, agents, properties, books and records, and shall furnish
Parent and the Purchaser all financial, operating, personnel, compensation, tax
and other data and information as the Purchaser, through its officers, employees
or agents, may reasonably request. All of such information shall be treated as
"Evaluation Material" pursuant to the terms of the Confidentiality Agreement.
6.9 Stockholder Claims. The Company shall not settle or compromise any
claim brought by any present, former or purported holder of any securities of
the Company in connection with the Merger prior to the Effective Time without
the prior written consent of the Purchaser.
6.10 Indemnification.
(a) The By-Laws of the Company as the Surviving Corporation shall
contain the provisions with respect to indemnification set forth in
Article XI of the By-Laws
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of the Company. Such provisions in the By-Laws of the Company and the
Surviving Corporation shall not be amended, repealed or otherwise
modified for a period of six years from the date Parent, the Purchaser
or the Merger Sub acquires a majority of the Shares in any manner that
would adversely affect the rights thereunder of individuals who at or
prior to the Effective Time were directors, officers, employees or
agents of the Company, unless such modification is required by law.
(b) Purchaser shall cause the Surviving Corporation to use its
reasonable best efforts to maintain in effect for six years from the
Effective Time, if available, the coverage provided by the current
directors' and officers' liability insurance policies maintained by the
Company (provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions
which are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that nothing
contained herein shall require the Surviving Corporation to incur any
annual premium in excess of 120% of the last annual aggregate premium
paid prior to the date of this Agreement for all current directors' and
officers' liability insurance policies maintained by the Company which
the Company represents and warrants to be $300,000 (the "Current
Premium"). If such premiums for such insurance would at any time exceed
120% of the Current Premium, then the Surviving Corporation shall cause
to be maintained policies of insurance which, in the Surviving
Corporation's good faith determination, provide the maximum coverage
available at an annual premium equal to 120% of the Current Premium.
(c) In the event the Company as the Surviving Corporation or any
of its successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers all or
substantially all of its properties and assets to any person, then and
in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Corporation, or at Parent's
option, Parent, shall assume the obligations set forth in this Section
6.10. Parent further agrees to assume the obligations set forth in this
Section 6.10 and the obligations of the Surviving Corporation under the
indemnification obligations of the Company referenced in paragraph (a)
of this Section 6.10 during any period of time in which the net worth of
the Surviving Corporation, without giving effect to any accounting or
other changes in the Company's net worth resulting solely from the
Merger, shall be less than 80% of the net worth of the Company
immediately prior to the Merger by reason of dividends or distributions
by the Company to the Parent or any of its affiliates.
(d) This Section 6.10 shall survive the Effective Time, is
intended to benefit the Company, the Surviving Corporation and each of
the persons referred to in paragraph (a) of this Section and shall be
binding on all successors and assigns of the Surviving Corporation.
6.11 Conversion to Merger. In the event any of the conditions set forth
in Annex I shall occur, the Parent, the Purchaser and the Merger Sub shall have
the right to terminate the
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Offer. In the event the Offer is terminated, the Parent, the Purchaser and the
Merger Sub shall have the right, but not the obligation, to notify the Company
that it or they desire, subject to the prior written approval of the Board of
Directors of the Company, to seek the approval of the Company's stockholders for
the Merger pursuant to Delaware Law. Unless the Board of Directors shall
determine, upon the advice of counsel, that such actions would have a material
adverse economic effect on the Company's stockholders, or that cooperation by
the Company would constitute a breach of fiduciary duty by the Company's Board
of Directors, the Company shall take all necessary actions, pursuant to Sections
6.1 and 6.2 hereto and otherwise, to obtain stockholder approval and to
accomplish the Merger in accordance with this Agreement, except in the exercise
of its fiduciary duties by the Board of Directors of the Company as set forth in
Section 6.6(b) hereof.
6.12 Consents. The Company shall use its reasonable best efforts to
obtain, without the payment of any fee or compensation without the written
approval of the Parent or the Purchaser, consents to the Offer, the Merger, and
the transactions contemplated by this Agreement from the other parties to the
agreements listed on Section 6.12 of the Disclosure Schedule.
ARTICLE 7
CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) The Merger shall have been approved and adopted by the vote
of the stockholders of the Company to the extent required by Delaware
Law;
(b) All waiting, review and investigation periods (and any
extension thereof) applicable to the consummation of the Merger under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or been terminated;
(c) There shall have been no law, statute, rule or order,
domestic or foreign, enacted or promulgated which would make
consummation of the Merger illegal; and
(d) No injunction or other order entered by a United States
(state or federal) court of competent jurisdiction shall have been
issued and remain in effect which would prohibit consummation of the
Merger.
7.2 Additional Conditions to Obligations of Parent, the Purchaser and
the Merger Sub. The obligations of Parent, the Purchaser and the Merger Sub to
effect the Merger after termination of the Offer in accordance with Section 6.11
are also subject to the following conditions:
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(a) The representations and warranties of the Company contained
in this Agreement shall have been true and correct in all material
respects when made.
(b) There shall not have occurred, after the date hereof, any
event, condition or state of facts, which has resulted, or is reasonably
likely to result, in (i) a Company Material Adverse Effect or (ii) a
material adverse effect on the ability of Parent, the Purchaser or the
Merger Sub to consummate the Merger.
(c) The Company's stockholders shall have approved and adopted
the Merger and this Agreement in accordance with Delaware Law.
(d) All rights to acquire shares of the Company Common Stock as
described in Section 4.3 hereof shall have been exercised, canceled or
terminated prior to or concurrently with the Effective Time.
(e) There shall not be pending or threatened any action,
proceeding or investigation by any court or governmental or regulatory
authority or body (i) challenging or seeking damages in connection with
the Merger, (ii) seeking to require the divestiture by Parent, the
Purchaser or the Company or any of their respective affiliates of shares
of Company Common Stock or any business, asset or property of Parent or
the Company or any of their respective affiliates, or (iii) seeking to
restrain or prohibit the consummation of the Merger or otherwise limit
the right of Parent, or its subsidiaries to transact business with the
Company or otherwise own or operate in the current manner all or any
portion of the businesses or assets of the Company or its subsidiaries,
which, in either case, is reasonably likely to have a Company Material
Adverse Effect prior to or after the Effective Time, or to subject the
Company, Parent, Purchaser, Merger Sub or any of their respective
subsidiaries or any of their respective officers or directors to
substantial penalties or criminal liability.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the consummation of the Offer (or, if the Offer is terminated and thereafter
Parent and the Purchaser shall seek stockholder approval of the Merger in
accordance with Section 6.11 hereof (a "Subsequent Merger"), the Effective
Time):
(a) By mutual consent of the Boards of Directors of Parent and
the Company;
(b) By either the Purchaser or the Company if the Offer shall not
have been consummated on or before May 31, 1998, or a Subsequent Merger
shall not have occurred by September 30, 1998; provided, however, that a
party shall not be entitled to
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terminate this Agreement pursuant to this Section 8.1(b) if it is in
material breach of its obligations under this Agreement;
(c) By the Purchaser if the Board of Directors of the Company
shall have withdrawn or adversely modified either of its recommendations
referred to in Sections 1.2 and 6.1; provided, that a finding by the
Board that an Alternative Acquisition may be superior from a financial
point of view for purposes of Section 6.6(b) shall not be deemed a
withdrawal or adverse modification of its recommendation referred to in
this Section 8.1(c) unless such finding shall be stated publicly or
otherwise disseminated;
(d) By the Purchaser prior to the purchase of Shares pursuant to
the Offer in the event any of the conditions to the Offer set forth in
Annex I shall have occurred; or
(e) By the Company if any of (i) the Offer shall not have been
commenced substantially in accordance with Section 1.1; or (ii) the
Offer shall have expired or been terminated without any Shares having
been purchased thereunder; or (iii) if a tender offer for Shares is
commenced by a person or entity, or the Company receives an offer for an
Alternative Acquisition, any of which the Board of Directors determines,
in the exercise of its fiduciary duties and subject to compliance with
Section 6.6(b), makes necessary or advisable the termination of this
Agreement; provided that the provisions of Sections 6.4 and 6.6(c) shall
survive termination of the Agreement pursuant to this clause (e)(iii).
8.2 Amendment. This Agreement may not be amended except by an instrument
in writing approved by the parties to this Agreement and signed on behalf of
each of the parties hereto; provided, however, that after approval of the Merger
by the stockholders of the Company (if such approval is required), no amendment
may be made which changes the amount into which each Share will be converted or
effects any change which would materially and adversely affect the stockholders
of the Company without the further approval of the stockholders of the Company.
8.3 Waiver. Subject to applicable law and the provisions of this
Agreement, at any time prior to the Effective Time, any party hereto may (a)
extend the time for the performance of any of the obligations or other acts of
any other party hereto, or (b) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations, in each case only
to the extent such obligations, agreements and conditions are intended for its
benefit. For the purposes of this Section 8, Parent, the Purchaser and the
Merger Sub shall be considered to be a single party.
8.4 Effect of Termination. In the event of termination of this Agreement
as provided in Section 8.1, (a) this Agreement shall become void and there shall
be no liability or further obligation on the part of the Parent, the Purchaser,
the Merger Sub or the Company or their respective stockholders, officers or
directors, except as set forth in Section 6.4, in the last sentence of Section
1.2(c) hereof, and in Section 8.1(e) hereof, and (b) the Purchaser and the
Merger Sub shall terminate the Offer, if still pending, without purchasing any
Shares thereunder.
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ARTICLE 9
GENERAL PROVISIONS
9.l Public Statements. Except as required by applicable law, neither
Parent, the Purchaser or the Merger Sub, on the one hand, nor the Company, on
the other hand, shall make any public announcement or statement with respect to
the Offer, the Merger, this Agreement or the transactions contemplated hereby,
without the approval of the Company or the Purchaser, respectively. The parties
hereto agree to consult with each other prior to issuing each public
announcement or statement with respect to the Offer, the Merger, this Agreement
or the transactions contemplated hereby.
9.2 Notices. All notices and other communications hereunder shall be in
writing and sent by hand delivery, facsimile transmission (with confirmation of
receipt), or nationally recognized overnight courier service (with proof of
delivery), to the parties at the addresses set forth below (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent, the Purchaser or the Merger Sub:
▇▇▇▇▇ plc
▇▇▇▇▇ ▇▇▇▇▇
▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attention: Company Secretary
Telephone: ▇▇-▇▇▇▇-▇▇▇-▇▇▇
Facsimile: 44-1753-622-030
with copies to:
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) if to the Company:
Wonderware Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Wonderware Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Godward LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: D. ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.3 Interpretation. When a reference is made in this Agreement to
subsidiaries of the Purchaser or the Company, the word "subsidiaries" means any
"majority-owned subsidiary" (as defined in Rule 12b-2 under the Exchange Act) of
the Purchaser or the Company, as the case may be; provided, however, that the
Company shall in no event and at no time be considered a subsidiary of the
Purchaser for purposes of this Agreement. As used herein, the term "person"
means an individual, a partnership, a corporation, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization or other
entity. The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
References to Sections and Articles refer to sections and articles of this
Agreement unless otherwise stated.
9.4 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or enforceable, 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 and the parties shall negotiate
in good faith to modify the Agreement to preserve each party's anticipated
benefits under the Agreement.
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9.5 Miscellaneous. This Agreement (together with all other documents and
instruments referred to herein, including the Confidentiality Agreement except
as expressly provided in Section 6.6(c) hereof): (a) constitutes the entire
agreement and supersedes all other prior agreements and undertakings, both
written and oral, among the parties with respect to the subject matter hereof;
(b) is not intended to confer upon any other person any rights or remedies
hereunder; (c) shall not be assigned by operation of law or otherwise, except
that the Purchaser and the Merger Sub may assign all or any portion of their
rights under this Agreement to any direct or indirect wholly-owned subsidiary of
Parent, but no such assignment shall relieve the Purchaser and the Merger Sub of
their obligations hereunder, and except that this Agreement may be assigned by
operation of law to any corporation with or into which the Purchaser may be
merged; and (d) shall be governed in all respects, including validity,
interpretation and effect, by the internal laws of the State of Delaware,
without giving effect to the principles of conflict of laws thereof. This
Agreement may be executed in two or more counterparts which together shall
constitute a single agreement.
9.6 Survival of Representations and Warranties. The representations and
warranties of the parties set forth herein shall be deemed to be continuing as
if made as of the date of any determination hereunder; provided, however, that
such representations and warranties shall terminate as of the time Parent, the
Purchaser or the Merger Sub acquires more than a majority of the then
outstanding Shares, or upon the termination of this Agreement pursuant to
Section 8.1.
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IN WITNESS WHEREOF, Parent, the Purchaser, the Merger Sub and the
Company have caused this Agreement and Plan of Merger to be executed as of the
date first written above by their respective officers thereunder duly
authorized.
▇▇▇▇▇ PLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Director
WDR ACQUISITION CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
President
WDR SUB CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
President
WONDERWARE CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board,
President and Chief Executive Officer
34
ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Agreement and Plan of Merger
(the "Agreement") or the Offer, neither the Purchaser nor the Merger Sub shall
be required to commence or continue the Offer or accept for payment, purchase or
pay for any Shares tendered, or may postpone the acceptance, purchase or payment
for Shares, or may amend (to the extent permitted by the Agreement) or terminate
the Offer (1) if the Minimum Condition is not satisfied as of the expiration of
the Offer; (2) any applicable waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act in
respect of the Offer shall not have expired or been terminated prior to the
expiration of the Offer (provided, however, that the Purchaser and the Merger
Sub shall extend the expiration date of the Offer from time to time until May
31, 1998, if, when and as necessary to satisfy any request by the Federal Trade
Commission or the United States Department of Justice for additional information
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act) or (3) if, at any time on or after February __,
1998 and prior to the time of payment for any such Shares (whether or not any
Shares have theretofore been accepted for payment or paid for pursuant to the
Offer), any of the following events shall have occurred (each of paragraphs (a)
through (h) providing a separate and independent condition to the obligations of
the Purchaser and the Merger Sub pursuant to the Offer):
(a) the Company or any subsidiary of the Company shall have
authorized, recommended or proposed, or shall have announced an
intention to authorize, recommend or propose, or shall have entered into
an agreement or agreement in principle with respect to, any merger,
consolidation or business combination (other than the Merger), any
acquisition or disposition of a material amount of assets or securities
or any material change in its capitalization, or the Company's board of
directors shall have withdrawn or adversely modified (including by
amendment to the Schedule 14D-9) its favorable recommendations with
respect to the Offer and the Merger, or any corporation, entity, "group"
or "person" (as defined in the Exchange Act) other than Parent, the
Purchaser or the Merger Sub, shall have acquired beneficial ownership of
more than 50% of the outstanding Shares;
(b) the Company or any of its subsidiaries shall have authorized,
recommended or proposed, or shall have announced an intention to
authorize, recommend or propose, or shall have entered into an agreement
or agreement in principle with respect to, any release or relinquishment
of any material contract rights not in the ordinary course of business,
which release or relinquishment would have a Company Material Adverse
Effect.
(c) there shall be instituted or pending any action, litigation,
proceeding, investigation or other application (hereinafter, an
"Action") before any court of competent jurisdiction or other
governmental entity by any governmental entity that is reasonably likely
to: (i) result in a restriction or prohibition on the consummation of
the transactions contemplated by the Offer or the Merger; (ii) prohibit,
or impose any material limitations on Purchaser's or Merger Sub's
ownership or operation of all or a material portion of their
35
or the Company's business or assets, or to compel Purchaser or Merger
Sub to dispose of or hold separate all or a material portion of
Purchaser's or Merger Sub's or the Company's business or assets; (iii)
make the acceptance for payment of, purchase of, or payment for, some or
all of the Shares illegal or rendering Purchaser or Merger Sub unable
to, or restricting or prohibiting, the ability of Purchaser or Merger
Sub to accept for payment, purchase or pay for some or all of the
Shares; or (iv) impose material limitations on the ability of Purchaser
or Merger Sub effectively to acquire or hold or to exercise full rights
of ownership of the Shares including, without limitation, the right to
vote the Shares purchased by them on an equal basis with all other
Shares on all matters properly presented to the stockholders of the
Company;
(d) any statute, rule, regulation, order or injunction shall be
enacted, promulgated, entered, enforced or deemed to or become
applicable to the Offer or the Merger that results in any of the
consequences referred to in clauses (i) through (iv) of paragraph (c)
above;
(e) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national
securities exchange or in the over the counter market in the United
States or on the London Stock Exchange, (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in
the United States or the United Kingdom, (iii) the commencement of war,
armed hostilities or other military action, or other international or
national calamity, having a Company Material Adverse Effect, (iv) any
limitation by any governmental authority on, or any other event which
might materially adversely affect, the extension of credit by banks or
other lending institutions in the United States or the United Kingdom,
(v) from the date of this Agreement through the close of business on the
business day immediately prior to the date of termination or scheduled
expiration of the Offer, a decline of at least 25% in the Standard &
Poor's 500 Index, or (vi) in the case of any of the foregoing existing
at the time of the commencement of the Offer, a material acceleration or
worsening thereof;
(f) except as set forth in the SEC Reports or the Disclosure
Schedule, any change shall have occurred which individually or in the
aggregate had, is continuing to have, or is reasonably likely to have a
Company Material Adverse Effect;
(g) the representations and warranties of the Company in the
Agreement shall not have been true and correct in all material respects
when made, or the Company shall not have performed in all material
respects each material covenant and complied with each material
agreement to be performed and complied with by it under the Agreement;
provided that if the breach of any such covenant or agreement is cured
within 5 calendar days after notice by the Purchaser of its intent to
terminate the Offer or if the breach shall not have a Company Material
Adverse Effect or a material adverse effect on the ability of Parent or
the Purchaser to consummate the Offer, the Merger, or the transactions
contemplated by this Agreement, the Purchaser shall not terminate the
Offer;
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(h) the Company and the Purchaser shall have reached an agreement
or understanding regarding termination of the Offer or the Agreement
shall have been terminated in accordance with its terms; or
(i) all governmental consents required to be obtained in
connection with the purchase of Shares pursuant to the Offer shall not
have been obtained prior to expiration of the Offer or any governmental
agency shall have announced an intention to seek to prohibit or
interfere with the purchase of Shares pursuant to the Offer;
which, in the good faith judgment of the Purchaser, in any such case, and
regardless of the circumstances giving rise to any such condition, make it
inadvisable to proceed with acceptance for payment or purchase of or payment for
the Shares.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be asserted by the Purchaser and Parent regardless of the
circumstances giving rise to such conditions, or may be waived by the Purchaser
or the Merger Sub in whole at any time or in part from time to time in their
sole discretion. The failure by the Purchaser or the Parent at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right and may be asserted
at any time and from time to time.