EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
INFORMIX CORPORATION
IROQUOIS ACQUISITION CORPORATION
AND
ARDENT SOFTWARE, INC.
DATED AS OF NOVEMBER 30, 1999
TABLE OF CONTENTS
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ARTICLE I THE MERGER................................................... 1
1.1 The Merger.................................................. 1
1.2 Effective Time; Closing..................................... 2
1.3 Effect of the Merger........................................ 2
1.4 Certificate of Incorporation; Bylaws........................ 2
1.5 Directors and Officers...................................... 2
1.6 Effect on Capital Stock..................................... 2
1.7 Surrender of Certificates................................... 4
1.8 No Further Ownership Rights in Company Common Stock......... 5
1.9 Lost, Stolen or Destroyed Certificates...................... 5
1.10 Tax and Accounting Consequences............................. 5
1.11 Taking of Necessary Action; Further Action.................. 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY................... 6
2.1 Organization and Qualification; Subsidiaries................ 6
2.2 Certificate of Incorporation and Bylaws..................... 6
2.3 Capitalization.............................................. 7
2.4 Authority Relative to this Agreement........................ 8
2.5 No Conflict; Required Filings and Consents.................. 8
2.6 Compliance; Permits......................................... 9
2.7 SEC Filings; Financial Statements........................... 9
2.8 No Undisclosed Liabilities.................................. 10
2.9 Absence of Certain Changes or Events........................ 10
2.10 Absence of Litigation....................................... 11
2.11 Employee Matters and Benefit Plans.......................... 11
2.12 Registration Statement; Proxy Statement..................... 14
2.13 Restrictions on Business Activities......................... 14
2.14 Title to Property........................................... 15
2.15 Taxes....................................................... 15
2.16 Environmental Matters....................................... 16
2.17 Brokers..................................................... 17
2.18 Intellectual Property....................................... 17
2.19 Agreements, Contracts and Commitments....................... 20
2.20 Company Rights Plan......................................... 21
2.21 Insurance................................................... 22
2.22 Opinion of Financial Advisor................................ 22
2.23 Board Approval.............................................. 22
2.24 Vote Required............................................... 22
2.25 Pooling of Interests........................................ 22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.... 22
3.1 Organization and Qualification; Subsidiaries................ 22
3.2 Certificate of Incorporation and Bylaws..................... 23
3.3 Capitalization.............................................. 23
3.4 Authority Relative to this Agreement........................ 23
3.5 No Conflict; Required Filings and Consents.................. 24
3.6 SEC Filings; Financial Statements........................... 24
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TABLE OF CONTENTS
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3.7 Registration Statement; Proxy Statement..................... 25
3.8 Compliance; Permits......................................... 25
3.9 No Undisclosed Liabilities.................................. 25
3.10 Absence of Litigation....................................... 26
3.11 Brokers..................................................... 26
3.12 Opinion of Financial Advisor................................ 26
3.13 Board Approval.............................................. 26
3.14 Vote Required............................................... 26
3.15 Pooling of Interests........................................ 26
3.16 Interim Operations of Sub................................... 26
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME......................... 26
4.1 Conduct of Business by Company.............................. 26
4.2 Conduct of Business by Parent............................... 29
ARTICLE V ADDITIONAL AGREEMENTS........................................ 29
5.1 Proxy Statement/Prospectus; Registration Statement; Other
Filings; Board Recommendations............................ 29
5.2 Meeting of Company Stockholders............................. 30
5.3 Confidentiality; Access to Information...................... 31
5.4 No Solicitation............................................. 31
5.5 Public Disclosure........................................... 33
5.6 Reasonable Efforts; Notification............................ 33
5.7 Third Party Consents........................................ 34
5.8 Stock Options, Warrants and Employee Benefits............... 34
5.9 Form S-8.................................................... 35
5.10 Indemnification............................................. 35
5.11 Nasdaq Listing.............................................. 35
5.12 Company Affiliate Agreement................................. 35
5.13 Regulatory Filings; Reasonable Efforts...................... 36
5.14 No Rights Plan Amendment.................................... 36
5.15 Termination of 401(k) Plan.................................. 36
5.16 Termination of Severance Plans.............................. 36
5.17 Parent Stockholders' Meeting................................ 37
5.18 Directors................................................... 37
5.19 Benefit Arrangements........................................ 37
5.20 Restructuring............................................... 37
ARTICLE VI CONDITIONS TO THE MERGER.................................... 38
6.1 Conditions to Obligations of Each Party to Effect the
Merger.................................................... 38
6.2 Additional Conditions to Obligations of Company............. 38
6.3 Additional Conditions to the Obligations of Parent and
Merger Sub................................................ 39
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.......................... 40
7.1 Termination................................................. 40
7.2 Notice of Termination; Effect of Termination................ 42
7.3 Fees and Expenses........................................... 42
7.4 Amendment................................................... 43
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7.5 Extension; Waiver........................................... 43
ARTICLE VIII GENERAL PROVISIONS........................................ 43
8.1 Non-Survival of Representations and Warranties.............. 43
8.2 Notices..................................................... 43
8.3 Interpretation; Knowledge................................... 44
8.4 Counterparts................................................ 45
8.5 Entire Agreement; Third Party Beneficiaries................. 45
8.6 Severability................................................ 45
8.7 Other Remedies; Specific Performance........................ 45
8.8 Governing Law............................................... 45
8.9 Rules of Construction....................................... 45
8.10 Assignment.................................................. 46
8.11 WAIVER OF JURY TRIAL........................................ 46
INDEX OF EXHIBITS
Exhibit A Form of Company Voting Agreement
Exhibit B Form of Stock Option Agreement
Exhibit C Form of Company Affiliate Agreement
Exhibit D Schedule of Employees to Sign Noncompetition Agreements
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
November 30, 1999, among Informix Corporation, a Delaware corporation
("PARENT"), Iroquois Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of Parent ("MERGER SUB"), and Ardent Software, Inc., a
Delaware corporation ("COMPANY").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the Delaware General
Corporation Law ("DELAWARE LAW"), Parent and Company intend to enter into a
business combination transaction.
B. The Board of Directors of Company (i) has determined that the Merger (as
defined in Section 1.1) is consistent with and in furtherance of the long-term
business strategy of Company and fair to, and in the best interests of, Company
and its stockholders, (ii) has approved this Agreement, the Merger (as defined
in Section 1.1) and the other transactions contemplated by this Agreement and
(iii) has determined to recommend that the stockholders of Company adopt and
approve this Agreement and approve the Merger.
C. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company are entering into Voting Agreements in substantially the
form attached hereto as EXHIBIT A (the "COMPANY VOTING AGREEMENTS").
D. Concurrently with the execution of this Agreement, and as a condition and
inducement to Parent's willingness to enter into this Agreement, Company shall
execute and deliver a Stock Option Agreement in favor of Parent in substantially
the form attached hereto as EXHIBIT B (the "STOCK OPTION AGREEMENT"). The Board
of Directors of Company has approved the Stock Option Agreement.
E. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, certain
affiliates of Company (the "COMPANY AFFILIATES") are entering into Company
Affiliate Agreements in substantially the form attached hereto as EXHIBIT C (the
"COMPANY AFFILIATE AGREEMENTS").
F. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE").
G. It is also intended by the parties hereto that the Merger shall qualify
for accounting treatment as a pooling of interests.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 THE MERGER.
At the Effective Time (as defined in Section 1.2) and subject to and upon
the terms and conditions of this Agreement and the applicable provisions of
Delaware Law, Merger Sub shall be merged with and into Company (the "MERGER"),
the separate corporate existence of Merger Sub shall cease and Company shall
continue as the surviving corporation. Company as the surviving corporation
after the Merger is hereinafter sometimes referred to as the "SURVIVING
CORPORATION."
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1.2 EFFECTIVE TIME; CLOSING
Subject to the provisions of this Agreement, the parties hereto shall cause
the Merger to be consummated by filing a Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the relevant
provisions of Delaware Law (the 'CERTIFICATE OF MERGER") (the time of such
filing (or such later time as may be agreed in writing by Company and Parent and
specified in the Certificate of Merger) being the "EFFECTIVE TIME") as soon as
practicable on or after the Closing Date (as herein defined). Unless the context
otherwise requires, the term "AGREEMENT" as used herein refers collectively to
this Agreement and Plan of Reorganization and the Certificate of Merger. The
closing of the Merger (the "CLOSING") shall take place at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, at a time and date to be
specified by the parties, which shall be no later than the second business day
after the satisfaction or waiver of the conditions set forth in Article VI, or
at such other time, date and location as the parties hereto agree in writing
(the "CLOSING DATE").
1.3 EFFECT OF THE MERGER
At the Effective Time, the effect of the Merger shall be as provided in this
Agreement and the applicable provisions of the Delaware Law. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time all
the property, rights, privileges, powers and franchises of Company and Merger
Sub shall vest in the Surviving Corporation, and all debts, liabilities and
duties of Company and Merger Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
1.4 CERTIFICATE OF INCORPORATION; BYLAWS
(a) At the Effective Time, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation of the
Surviving Corporation; PROVIDED, HOWEVER, that at the Effective Time the
Certificate of Incorporation of the Surviving Corporation shall be amended
so that the name of the Surviving Corporation shall be "Ardent Software,
Inc."
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.
1.5 DIRECTORS AND OFFICERS
The initial directors of the Surviving Corporation shall be the directors of
Merger Sub immediately prior to the Effective Time, until their respective
successors are duly elected or appointed and qualified. The initial officers of
the Surviving Corporation shall be the officers of Merger Sub immediately prior
to the Effective Time.
1.6 EFFECT ON CAPITAL STOCK
Subject to the terms and conditions of this Agreement, at the Effective
Time, by virtue of the Merger and without any action on the part of Merger Sub,
Company or the holders of any of the following securities, the following shall
occur:
(a) CONVERSION OF COMPANY COMMON STOCK. Each share of Common Stock,
$0.01 par value per share, of Company, including, with respect to each such
share of Company Common Stock, the associated Rights (as defined in that
certain Amended and Restated Rights Agreement (the "Company Rights Plan")
dated as of July 20, 1999 and amended as of November 30, 1999, between
Company and State Street Bank and Trust Company as Rights Agent) (the
"COMPANY COMMON STOCK") issued and outstanding immediately prior to the
Effective Time, other than any shares of Company Common Stock to be canceled
pursuant to Section 1.6(b), will be canceled and extinguished and
automatically converted (subject to Sections 1.6(e) and (f)) into the right
to receive 3.5 shares of Common Stock of Parent (the "PARENT COMMON STOCK")
(the "EXCHANGE RATIO") upon surrender of
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the certificate representing such share of Company Common Stock in the
manner provided in Section 1.7 (or in the case of a lost, stolen or
destroyed certificate, upon delivery of an affidavit (and bond, if required)
in the manner provided in Section 1.9). If any shares of Company Common
Stock outstanding immediately prior to the Effective Time are unvested or
are subject to a repurchase option, risk of forfeiture or other condition
under any applicable restricted stock purchase agreement or other agreement
with Company, then the shares of Parent Common Stock issued in exchange for
such shares of Company Common Stock will also be unvested and subject to the
same repurchase option, risk of forfeiture or other condition, and the
certificates representing such shares of Parent Common Stock may accordingly
be marked with appropriate legends. Company shall take all action that may
be necessary to ensure that, from and after the Effective Time, Parent is
entitled to exercise any such repurchase option or other right set forth in
any such restricted stock purchase agreement or other agreement.
(b) CANCELLATION OF PARENT-OWNED STOCK. Each share of Company Common
Stock held by Company or owned by Merger Sub, Parent or any direct or
indirect wholly-owned subsidiary of Company or of Parent immediately prior
to the Effective Time shall be canceled and extinguished without any
conversion thereof.
(c) STOCK OPTIONS; WARRANTS; EMPLOYEE STOCK PURCHASE PLANS. At the
Effective Time, all options to purchase Company Common Stock then
outstanding under Company's 1986 Stock Option Plan (the "1986 Plan"), the
1999 Director Stock Option Plan (the "Director Plan") and the 1995
Non-Statutory Stock Option Plan (the "1995 Plan" and together with the 1986
Plan and the Director Plan, the "COMPANY OPTION PLANS") shall be assumed by
Parent in accordance with Section 5.8 hereof. Warrants to purchase Company
Common Stock shall be treated as set forth in Section 5.8. Purchase rights
outstanding under Company's Employee Stock Purchase Plan (the "ESPP") shall
be treated as set forth in Section 5.8.
(d) CAPITAL STOCK OF MERGER SUB. Each share of Common Stock, $0.001
par value per share, of Merger Sub (the "MERGER SUB COMMON STOCK") issued
and outstanding immediately prior to the Effective Time shall be converted
into one validly issued, fully paid and nonassessable share of Common Stock,
$0.001 par value per share, of the Surviving Corporation. Each certificate
evidencing ownership of shares of Merger Sub Common Stock shall evidence
ownership of such shares of capital stock of the Surviving Corporation.
(e) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
adjusted to reflect appropriately the effect of any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Parent Common Stock or Company Common Stock),
extraordinary cash dividends, reorganization, recapitalization,
reclassification, combination, exchange of shares or other like change with
respect to Parent Common Stock or Company Common Stock occurring on or after
the date hereof and prior to the Effective Time.
(f) FRACTIONAL SHARES. No fraction of a share of Parent Common Stock
will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Company Common Stock who would otherwise be entitled to a fraction
of a share of Parent Common Stock (after aggregating all fractional shares
of Parent Common Stock that otherwise would be received by such holder)
shall, upon surrender of such holder's Certificates(s) (as defined in
Section 1.7(c)) receive from Parent an amount of cash (rounded to the
nearest whole cent), without interest, equal to the product of (i) such
fraction, multiplied by (ii) the average closing price of one share of
Parent Common Stock for the five (5) most recent days that Parent Common
Stock has traded ending on the trading day immediately prior to the
Effective Time, as reported on the Nasdaq National Market System ("NASDAQ").
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1.7 SURRENDER OF CERTIFICATES
(a) EXCHANGE AGENT. Parent shall select a bank or trust company
reasonably acceptable to Company to act as the exchange agent (the "EXCHANGE
AGENT") in the Merger.
(b) PARENT TO PROVIDE COMMON STOCK. Promptly after the Effective Time,
Parent shall make available to the Exchange Agent, for exchange in
accordance with this Article I, the shares of Parent Common Stock issuable
pursuant to Section 1.6 in exchange for outstanding shares of Company Common
Stock, and cash in an amount sufficient for payment in lieu of fractional
shares pursuant to Section 1.6(f) and any dividends or distributions to
which holders of shares of Company Common Stock may be entitled pursuant to
Section 1.7(d).
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, Parent
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate or certificates (the "CERTIFICATES"), which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock whose shares were converted into the right to receive
shares of Parent Common Stock pursuant to Section 1.6, cash in lieu of any
fractional shares pursuant to Section 1.6(f) and any dividends or other
distributions pursuant to Section 1.7(d), (i) a letter of transmittal in
customary form (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and shall contain such other
provisions as Parent may reasonably specify) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for certificates
representing shares of Parent Common Stock, cash in lieu of any fractional
shares pursuant to Section 1.6(f) and any dividends or other distributions
pursuant to Section 1.7(d). Upon surrender of Certificates for cancellation
to the Exchange Agent or to such other agent or agents as may be appointed
by Parent, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, the holders of
such Certificates shall be entitled to receive in exchange therefor
certificates representing the number of whole shares of Parent Common Stock
into which their shares of Company Common Stock were converted at the
Effective Time, payment in lieu of fractional shares which such holders have
the right to receive pursuant to Section 1.6(f) and any dividends or
distributions payable pursuant to Section 1.7(d), and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding
Certificates will be deemed from and after the Effective Time, for all
corporate purposes, subject to Section 1.7(d) as to dividends and other
distributions, to evidence only the ownership of the number of full shares
of Parent Common Stock into which such shares of Company Common Stock shall
have been so converted and the right to receive an amount in cash in lieu of
the issuance of any fractional shares in accordance with Section 1.6(f) and
any dividends or distributions payable pursuant to Section 1.7(d).
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No dividends or
other distributions declared or made after the date of this Agreement with
respect to Parent Common Stock with a record date after the Effective Time
will be paid to the holders of any unsurrendered Certificates with respect
to the shares of Parent Common Stock represented thereby until the holders
of record of such Certificates shall surrender such Certificates. Subject to
applicable law, following surrender of any such Certificates, the Exchange
Agent shall deliver to the record holders thereof, without interest,
certificates representing whole shares of Parent Common Stock issued in
exchange therefor along with payment in lieu of fractional shares pursuant
to Section 1.6(f) hereof and the amount of any such dividends or other
distributions with a record date after the Effective Time payable with
respect to such whole shares of Parent Common Stock.
(e) TRANSFERS OF OWNERSHIP. If certificates representing shares of
Parent Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will
be properly endorsed and otherwise in proper form for transfer and that the
persons requesting such
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exchange will have paid to Parent or any agent designated by it any transfer
or other taxes required by reason of the issuance of certificates
representing shares of Parent Common Stock in any name other than that of
the registered holder of the Certificates surrendered, or established to the
satisfaction of Parent or any agent designated by it that such tax has been
paid or is not payable.
(f) REQUIRED WITHHOLDING. Each of the Exchange Agent, Parent and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to
any holder or former holder of Company Common Stock such amounts as may be
required (as advised by tax counsel for Parent) to be deducted or withheld
therefrom under the Code or under any provision of state, local or foreign
tax law or under any other applicable legal requirement. To the extent such
amounts are so deducted or withheld, such amounts shall be treated for all
purposes under this Agreement as having been paid to the person to whom such
amounts would otherwise have been paid.
(g) NO LIABILITY. Notwithstanding anything to the contrary in this
Section 1.7, neither the Exchange Agent, Parent, the Surviving Corporation
nor any party hereto shall be liable to a holder of shares of Parent Common
Stock or Company Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
1.8 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK
All shares of Parent Common Stock issued in accordance with the terms hereof
(including any cash paid in respect thereof pursuant to Section 1.6(f) and
1.7(d)) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Company Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of shares
of Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged as
provided in this Article I.
1.9 LOST, STOLEN OR DESTROYED CERTIFICATES
In the event that any Certificates shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed Certificates, upon the making of an affidavit of that fact by the
holder thereof, certificates representing the shares of Parent Common Stock into
which the shares of Company Common Stock represented by such Certificates were
converted pursuant to Section 1.6, cash for fractional shares, if any, as may be
required pursuant to Section 1.6(f) and any dividends or distributions payable
pursuant to Section 1.7(d); PROVIDED, HOWEVER, that Parent may, in its
discretion and as a condition precedent to the issuance of such certificates
representing shares of Parent Common Stock, cash and other distributions,
require the owner of such lost, stolen or destroyed Certificates to deliver a
bond in such sum as it may reasonably direct as indemnity against any claim that
may be made against Parent, the Surviving Corporation or the Exchange Agent with
respect to the Certificates alleged to have been lost, stolen or destroyed.
1.10 TAX AND ACCOUNTING CONSEQUENCES
(a) It is intended by the parties hereto that the Merger shall
constitute a reorganization within the meaning of Section 368 of the Code.
The parties hereto adopt this Agreement as a "plan of reorganization" within
the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
Income Tax Regulations.
(b) It is intended by the parties hereto that the Merger shall be
treated as a pooling of interests for accounting purposes.
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1.11 TAKING OF NECESSARY ACTION; FURTHER ACTION
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, powers and franchises of Company and Merger Sub, the
officers and directors of Company and Merger Sub will take all such lawful and
necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
As of the date hereof and as of the Closing Date, Company represents and
warrants to Parent and Merger Sub, subject to such exceptions as are
specifically disclosed in writing in the disclosure letter supplied by Company
to Parent dated as of the date hereof and certified by a duly authorized officer
of Company and whether or not referenced in any specific section herein, which
disclosure shall provide an exception to or otherwise qualify the
representations or warranties of Company specifically referred to in such
disclosure (the "COMPANY SCHEDULE"), as follows:
2.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
(a) Each of Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted, except where the failure to do
so would not, individually, or in the aggregate, have a Material Adverse
Effect. Each of Company and its subsidiaries is in possession of all
franchises, grants, authorizations, licenses, permits, easements, consents,
certificates, approvals and orders ("APPROVALS") necessary to own, lease and
operate the properties it purports to own, operate or lease and to carry on
its business as it is now being conducted, except where the failure to have
such Approvals would not, individually or in the aggregate, have a Material
Adverse Effect on Company.
(b) Company has no subsidiaries except for the corporations identified
in Section 2.1(b) of the Company Schedule. Neither Company nor any of its
subsidiaries has agreed nor is obligated to make nor is bound by any
written, oral or other agreement, contract, subcontract, lease, binding
understanding, instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan, commitment or undertaking of any
nature, as of the date hereof or as may hereafter be in effect (a
"CONTRACT") under which it may become obligated to make, any future
investment in or capital contribution to any other entity. Neither Company
nor any of its subsidiaries directly or indirectly owns any equity or
similar interest in or any interest convertible, exchangeable or exercisable
for, any equity or similar interest in, any corporation, partnership, joint
venture or other business, association or entity.
(c) Company and each of its subsidiaries is qualified to do business as
a foreign corporation, and is in good standing, under the laws of all
jurisdictions where the nature of their business requires such qualification
and where the failure to so qualify would have a Material Adverse Effect (as
defined in Section 8.3) on Company.
2.2 CERTIFICATE OF INCORPORATION AND BYLAWS
Company has previously furnished to Parent a complete and correct copy of
its Certificate of Incorporation and Bylaws as amended to date (together, the
"COMPANY CHARTER DOCUMENTS"). Such Company Charter Documents and equivalent
organizational documents of each of its subsidiaries are in full force and
effect. Company is not in violation of any of the provisions of the Company
Charter Documents, and no subsidiary of Company is in violation of its
equivalent organizational documents.
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2.3 CAPITALIZATION
(a) The authorized capital stock of Company consists of 65,000,000
shares of Company Common Stock and 10,000,000 shares of Preferred Stock
("COMPANY PREFERRED STOCK"), each having a par value of $0.01 per share. At
the close of business on the date of this Agreement (i) 19,705,506 shares of
Company Common Stock (including treasury shares) were issued and
outstanding, all of which are validly issued, fully paid and nonassessable
(not including any shares issued on or after such date upon exercise of
options outstanding on the date hereof); (ii) no shares of Company Common
Stock were held by subsidiaries of Company; (iii) 407,071 shares of Company
Common Stock were available for future issuance pursuant to Company's ESPP;
(iv) 595,346 shares of Company Common Stock were reserved for issuance upon
the exercise of outstanding options to purchase Company Common Stock under
the 1986 Plan; (v) 98,438 shares of Company Common Stock were available for
future grant under the Directors Plan; (vi) 572,624 shares of Company Common
Stock were available for future grant under the 1995 Plan; (vii) 114,151
shares of Company Common Stock were reserved for issuance upon conversion of
warrants of Company (the "WARRANTS") and (viii) 3,921,396 shares of Company
Common Stock were reserved for future issuance pursuant to the Stock Option
Agreement. As of the date hereof, no shares of Company Preferred Stock were
issued or outstanding. Section 2.3(a) of the Company Schedule sets forth the
following information with respect to each Company Stock Option (as defined
in Section 5.8) outstanding as of the date of this Agreement: (i) the name
and address of the optionee; (ii) the particular plan pursuant to which such
Company Stock Option was granted; (iii) the number of shares of Company
Common Stock subject to such Company Stock Option; (iv) the exercise price
of such Company Stock Option; (v) the date on which such Company Stock
Option was granted; (vi) the applicable vesting schedule; (vii) the date on
which such Company Stock Option expires; and (viii) whether the
exercisability of such option will be accelerated in any way by the
transactions contemplated by this Agreement, and indicates the extent of
acceleration. Company has made available to Parent accurate and complete
copies of all stock option plans pursuant to which Company has granted such
Company Stock Options that are currently outstanding and the form of all
stock option agreements evidencing such Company Stock Options. All shares of
Company Common Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instrument pursuant to which they are
issuable, would be duly authorized, validly issued, fully paid and
nonassessable. Except as set forth in Section 2.3(a) of the Company
Schedule, there are no commitments or agreements of any character to which
Company is bound obligating Company to accelerate the vesting of any Company
Stock Option as a result of the Merger. All outstanding shares of Company
Common Stock, all outstanding Company Stock Options, and all outstanding
shares of capital stock of each subsidiary of Company have been issued and
granted in compliance with (i) all applicable securities laws and other
applicable Legal Requirements (as defined below) and (ii) all requirements
set forth in applicable Contracts. For the purposes of this Agreement,
"LEGAL REQUIREMENTS" means any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement
issues, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Entity (as defined
below) and (ii) all requirements set forth in applicable contracts,
agreements, and instruments.
(b) Except for securities Company owns free and clear of all liens,
pledges, hypothecations, charges, mortgages, security interests,
encumbrances, claims, infringements, interferences, options, right of first
refusals, preemptive rights, community property interests or restriction of
any nature (including any restriction on the voting of any security, any
restriction on the transfer of any security or other asset, any restriction
on the possession, exercise or transfer of any other attribute of ownership
of any asset) directly or indirectly through one or more subsidiaries, and
except for shares of capital stock or other similar ownership interests of
subsidiaries of Company that are owned by certain nominee equity holders as
required by the applicable law of the jurisdiction of organization of such
subsidiaries (which shares or other interests do not materially affect
Company's control of such
7
subsidiaries), as of the date of this Agreement, there are no equity
securities, partnership interests or similar ownership interests of any
class of equity security of any subsidiary of Company, or any security
exchangeable or convertible into or exercisable for such equity securities,
partnership interests or similar ownership interests, issued, reserved for
issuance or outstanding. Except as set forth in Section 2.3(b) of the
Company Schedule or as set forth in Section 2.3(a) hereof and except for the
Stock Option Agreement, there are no subscriptions, options, warrants,
equity securities, partnership interests or similar ownership interests,
calls, rights (including preemptive rights), commitments or agreements of
any character to which Company or any of its subsidiaries is a party or by
which it is bound obligating Company or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase,
redeem or otherwise acquire, or cause the repurchase, redemption or
acquisition of, any shares of capital stock, partnership interests or
similar ownership interests of Company or any of its subsidiaries or
obligating Company or any of its subsidiaries to grant, extend, accelerate
the vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement. As of the date of this
Agreement, except as contemplated by this Agreement and except for the
Company Rights Plan, there are no registration rights and there is, except
for the Company Voting Agreements, no voting trust, proxy, rights plan,
antitakeover plan or other agreement or understanding to which Company or
any of its subsidiaries is a party or by which they are bound with respect
to any equity security of any class of Company or with respect to any equity
security, partnership interest or similar ownership interest of any class of
any of its subsidiaries. Stockholders of Company will not be entitled to
dissenters' rights under applicable state law in connection with the Merger.
2.4 AUTHORITY RELATIVE TO THIS AGREEMENT
Company has all necessary corporate power and authority to execute and
deliver this Agreement and the Stock Option Agreement and to perform its
obligations hereunder and thereunder and, subject to obtaining the approval of
the stockholders of Company of the Merger, to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Stock Option Agreement by Company and the consummation by Company of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Company and no other
corporate proceedings on the part of Company are necessary to authorize this
Agreement, the Stock Option Agreement or to consummate the transactions so
contemplated (other than the approval and adoption of this Agreement and the
Merger by holders of a majority of the outstanding shares of Company Common
Stock in accordance with Delaware Law and the Company Charter Documents). This
Agreement and the Stock Option Agreement have been duly and validly executed and
delivered by Company and, assuming the due authorization, execution and delivery
by Parent and Merger Sub, constitute legal and binding obligations of Company,
enforceable against Company in accordance with their respective terms.
2.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS
(a) The execution and delivery of this Agreement and the Stock Option
Agreement by Company do not, and the performance of this Agreement and the
Stock Option Agreement by Company shall not, (i) conflict with or violate
the Company Charter Documents or the equivalent organizational documents of
any of Company's subsidiaries, (ii) subject to obtaining the approval of
Company's stockholders of this Agreement and the Merger and compliance with
the requirements set forth in Section 2.5(b) below, conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to Company
or any of its subsidiaries or by which its or any of their respective
properties is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or materially impair Company's or any of its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration
or cancellation of, or result in the creation of a lien or encumbrance on
any of the properties or assets of Company or any of its subsidiaries
pursuant to, any
8
material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
Company or any of its subsidiaries is a party or by which Company or any of
its subsidiaries or its or any of their respective properties are bound or
affected.
(b) The execution and delivery of this Agreement and the Stock Option
Agreement by Company do not, and the performance of this Agreement by
Company shall not, require any consent, approval, authorization or permit
of, or filing with or notification to, any court, administrative agency,
commission, governmental or regulatory authority, domestic or foreign (a
"GOVERNMENTAL ENTITY"), except (A) for applicable requirements, if any, of
the Securities Act of 1933, as amended (the "SECURITIES ACT"), the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), state
securities laws ("BLUE SKY LAWS"), the pre-merger notification requirements
(the "HSR APPROVAL") of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR ACT") and of foreign Governmental Entities and
the rules and regulations thereunder, the rules and regulations of Nasdaq,
and the filing and recordation of the Merger Documents as required by
Delaware Law and (B) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Company or, after the Effective Time, Parent, or
prevent consummation of the Merger or otherwise prevent the parties hereto
from performing their obligations under this Agreement.
2.6 COMPLIANCE; PERMITS
(a) Neither Company nor any of its subsidiaries is in conflict with, or
in default or violation of, (i) any law, rule, regulation, order, judgment
or decree applicable to Company or any of its subsidiaries or by which its
or any of their respective properties is bound or affected, or (ii) any
material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
Company or any of its subsidiaries is a party or by which Company or any of
its subsidiaries or its or any of their respective properties is bound or
affected, except for any conflicts, defaults or violations that
(individually or in the aggregate) would not cause Company to lose any
material benefit or incur any material liability. No investigation or review
by any governmental or regulatory body or authority is pending or, to the
knowledge of Company, threatened against Company or its subsidiaries, nor
has any governmental or regulatory body or authority indicated to Company an
intention to conduct the same, other than, in each such case, those the
outcome of which could not, individually or in the aggregate, reasonably be
expected to have the effect of prohibiting or materially impairing any
business practice of Company or any of its subsidiaries, any acquisition of
material property by Company or any of its subsidiaries or the conduct of
business by Company or any of its subsidiaries.
(b) Company and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities which are
material to operation of the business of Company and its subsidiaries taken
as a whole (collectively, the "COMPANY PERMITS"). Company and its
subsidiaries are in compliance in all material respects with the terms of
the Company Permits.
2.7 SEC FILINGS; FINANCIAL STATEMENTS
(a) Company has made available to Parent a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Company with the Securities and Exchange Commission ("SEC") since
September 30, 1997 (the "COMPANY SEC REPORTS"), which are all the forms,
reports and documents required to be filed by Company with the SEC since
September 30, 1997. The Company SEC Reports (A) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act, as the case
may be, and (B) did not at the time they were filed (and if amended or
superseded by a filing prior to the date of this Agreement then on the date
of such filing) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances
9
under which they were made, not misleading. None of Company's subsidiaries is
required to file any reports or other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto or, in the case of
unaudited statements, do not contain footnotes as permitted by Form 10-Q of
the Exchange Act) and each fairly presents in all material respects the
consolidated financial position of Company and its subsidiaries at the
respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal adjustments which were
not or are not expected to be material in amount.
(c) Company has previously furnished to Parent a complete and correct
copy of any amendments or modifications, which have not yet been filed with
the SEC but which are required to be filed, to agreements, documents or
other instruments which previously had been filed by Company with the SEC
pursuant to the Securities Act or the Exchange Act.
2.8 NO UNDISCLOSED LIABILITIES
Neither Company nor any of its subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise) of a nature required to be disclosed on a
balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP which are, individually or in the aggregate,
material to the business, results of operations or financial condition of
Company and its subsidiaries taken as a whole, except (i) liabilities provided
for in Company's balance sheet as of September 30, 1999 or (ii) liabilities
incurred since September 30, 1999 in the ordinary course of business, none of
which is material to the business, results of operations or financial condition
of Company and its subsidiaries, taken as a whole.
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS
Since September 30, 1999, there has not been: (i) any Material Adverse
Effect on Company, (ii) any declaration, setting aside or payment of any
dividend on, or other distribution (whether in cash, stock or property) in
respect of, any of Company's or any of its subsidiaries' capital stock, or any
purchase, redemption or other acquisition by Company of any of Company's capital
stock or any other securities of Company or its subsidiaries or any options,
warrants, calls or rights to acquire any such shares or other securities except
for repurchases from employees following their termination pursuant to the terms
of their pre-existing stock option or purchase agreements, (iii) any split,
combination or reclassification of any of Company's or any of its subsidiaries'
capital stock, (iv) any granting by Company or any of its subsidiaries of any
increase in compensation or fringe benefits, except for normal increases of cash
compensation in the ordinary course of business consistent with past practice,
or any payment by Company or any of its subsidiaries of any bonus, except for
bonuses made in the ordinary course of business consistent with past practice or
any granting by Company or any of its subsidiaries of any increase in severance
or termination pay or any entry by Company or any of its subsidiaries into any
currently effective employment, severance, termination or indemnification
agreement or any agreement the benefits of which are contingent or the terms of
which are materially altered upon the occurrence of a transaction involving
Company of the nature contemplated hereby, (v) entry by Company or any of its
subsidiaries into any licensing or other agreement with regard to the
acquisition or disposition of any Intellectual Property (as defined in
Section 2.18) other than licenses in the ordinary course of business consistent
with past practice or any amendment or consent with respect to any licensing
agreement filed or required to be filed by Company with the SEC, (vi) any
material change by Company in its accounting methods, principles or practices,
except as required by concurrent changes in GAAP, or (vii) any revaluation by
Company of any of its assets, including, without limitation, writing down the
value of capitalized inventory or writing off notes or accounts receivable or
any sale of assets of Company other than in the ordinary course of business.
10
2.10 ABSENCE OF LITIGATION
There are no claims, actions, suits or proceedings pending or, to the
knowledge of Company, threatened (or, to the knowledge of Company, any
governmental or regulatory investigation pending or threatened) against Company
or any of its subsidiaries or any properties or rights of Company or any of its
subsidiaries, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign.
2.11 EMPLOYEE MATTERS AND BENEFIT PLANS
(a) DEFINITIONS. With the exception of the definition of "Affiliate"
set forth in Section 2.11(a)(i) below (which definition shall apply only to
this Section 2.11, for purposes of this Agreement, the following terms shall
have the meanings set forth below:
(i) "AFFILIATE" shall mean any other person or entity under common
control with Company within the meaning of Section 414(b), (c), (m) or
(o) of the Code and the regulations issued thereunder;
(ii) "CODE" shall mean the Internal Revenue Code of 1986, as amended;
(iii) "COMPANY EMPLOYEE PLAN" shall mean any plan, program, policy,
practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, deferred compensation,
performance awards, stock or stock-related awards, fringe benefits or
other employee benefits or remuneration of any kind, whether written or
unwritten or otherwise, funded or unfunded, including without limitation,
each "employee benefit plan," within the meaning of Section 3(3) of ERISA
which is or has been maintained, contributed to, or required to be
contributed to, by Company or any Affiliate for the benefit of any
Employee, or with respect to which Company or any Affiliate has or may
have any liability or obligation;
(iv) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;
(v) "DOL" shall mean the Department of Labor;
(vi) "EMPLOYEE" shall mean any current or former employee, consultant
or director of Company or any Affiliate;
(vii) "EMPLOYEE AGREEMENT" shall mean each management, employment,
severance, consulting, relocation, repatriation, expatriation or other
agreement, contract or understanding in effect between Company or any
Affiliate and any Employee;
(viii) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended;
(ix) "FMLA" shall mean the Family Medical Leave Act of 1993, as
amended;
(x) "INTERNATIONAL EMPLOYEE PLAN" shall mean each Company Employee
Plan that has been adopted or maintained by Company or any Affiliate,
whether informally or formally, or with respect to which Company or any
Affiliate will or may have any liability, for the benefit of Employees
who perform services outside the United States;
(xi) "IRS" shall mean the Internal Revenue Service;
(xii) "MULTIEMPLOYER PLAN" shall mean any "Pension Plan" (as defined
below) which is a "multiemployer plan," as defined in Section 3(37) of
ERISA;
(xiii) "PBGC" shall mean the Pension Benefit Guaranty Corporation; and
11
(xiv) "PENSION PLAN" shall mean each Company Employee Plan which is an
"employee pension benefit plan," within the meaning of Section 3(2) of
ERISA.
(b) SCHEDULE. Section 2.11(b) of the Company Schedule contains an
accurate and complete list of each Company Employee Plan, International
Employee Plan, and each Employee Agreement. Company does not have any plan
or commitment to establish any new Company Employee Plan, International
Employee Plan, or Employee Agreement, to modify any Company Employee Plan or
Employee Agreement (except to the extent required by law or to conform any
such Company Employee Plan or Employee Agreement to the requirements of any
applicable law, in each case as previously disclosed to Parent in writing,
or as required by this Agreement), or to adopt or enter into any Company
Employee Plan, International Employee Plan, or Employee Agreement.
(c) DOCUMENTS. Company has provided to Parent: (i) correct and
complete copies of all documents embodying each Company Employee Plan,
International Employee Plan, and each Employee Agreement including (without
limitation) all amendments thereto and all related trust documents;
(ii) the most recent annual actuarial valuations, if any, prepared for each
Company Employee Plan; (iii) the three (3) most recent annual reports (Form
Series 5500 and all schedules and financial statements attached thereto), if
any, required under ERISA or the Code in connection with each Company
Employee Plan; (iv) if the Company Employee Plan is funded, the most recent
annual and periodic accounting of Company Employee Plan assets; (v) the most
recent summary plan description together with the summary(ies) of material
modifications thereto, if any, required under ERISA with respect to each
Company Employee Plan; (vi) all IRS determination, opinion, notification and
advisory letters, and all applications and correspondence to or from the IRS
or the DOL with respect to any such application or letter; (vii) all
material written agreements and contracts relating to each Company Employee
Plan, including, but not limited to, administrative service agreements,
group annuity contracts and group insurance contracts; (viii) all
communications material to any Employee or Employees relating to any Company
Employee Plan and any proposed Company Employee Plans, in each case,
relating to any amendments, terminations, establishments, increases or
decreases in benefits, acceleration of payments or vesting schedules or
other events which would result in any material liability to Company;
(ix) all correspondence to or from any governmental agency relating to any
Company Employee Plan; (x) all COBRA forms and related notices (or such
forms and notices as required under comparable law); (xi) all policies
pertaining to fiduciary liability insurance covering the fiduciaries for
each Company Employee Plan; (xii) the three (3) most recent plan years
discrimination tests for each Company Employee Plan; and (xiii) all
registration statements, annual reports (Form 11-K and all attachments
thereto) and prospectuses prepared in connection with each Company Employee
Plan.
(d) EMPLOYEE PLAN COMPLIANCE. Except as set forth in Section 2.11(d)
of the Company Schedule, (i) Company has performed in all material respects
all obligations required to be performed by it under, is not in default or
violation of, and has no knowledge of any default or violation by any other
party to each Company Employee Plan, and each Company Employee Plan has been
established and maintained in all material respects in accordance with its
terms and in compliance with all applicable laws, statutes, orders, rules
and regulations, including but not limited to ERISA or the Code; (ii) each
Company Employee Plan intended to qualify under Section 401(a) of the Code
and each trust intended to qualify under Section 501(a) of the Code has
either received a favorable determination, opinion, notification or advisory
letter from the IRS with respect to each such Plan as to its qualified
status under the Code, including all amendments to the Code effected by the
Tax Reform Act of 1986 and subsequent legislation, or has remaining a period
of time under applicable Treasury regulations or IRS pronouncements in which
to apply for such a letter and make any amendments necessary to obtain a
favorable determination as to the qualified status of each such Company
Employee Plan; (iii) no "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 4975 or Section 408
12
of ERISA (or any administrative class exemption issued thereunder), has
occurred with respect to any Company Employee Plan; (iv) there are no
actions, suits or claims pending, or, to the knowledge of Company,
threatened or reasonably anticipated (other than routine claims for
benefits) against any Company Employee Plan or against the assets of any
Company Employee Plan; (v) each Company Employee Plan (other than any stock
option plan) can be amended, terminated or otherwise discontinued after the
Effective Time, without material liability to Parent, Company or any of its
Affiliates (other than ordinary administration expenses); (vi) there are no
audits, inquiries or proceedings pending or, to the knowledge of Company or
any Affiliates, threatened by the IRS or DOL with respect to any Company
Employee Plan; and (vii) neither Company nor any Affiliate is subject to any
penalty or tax with respect to any Company Employee Plan under
Section 502(i) of ERISA or Sections 4975 through 4980 of the Code.
(e) PENSION PLAN. Neither Company nor any Affiliate has ever
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Title IV of ERISA or Section 412 of the
Code.
(f) MULTIEMPLOYER AND MULTIPLE EMPLOYER PLANS. At no time has Company
or any Affiliate contributed to or been obligated to contribute to any
Multiemployer Plan. Neither Company, nor any Affiliate has at any time ever
maintained, established, sponsored, participated in, or contributed to any
multiple employer plan, as described in Section 413(c) of the Code.
(g) NO POST-EMPLOYMENT OBLIGATIONS. Except as set forth in
Section 2.11(g) of the Company Schedule, no Company Employee Plan provides,
or reflects or represents any liability to provide retiree health to any
person for any reason, except as may be required by COBRA or other
applicable statute, and Company has never represented, promised or
contracted (whether in oral or written form) to any Employee (either
individually or to Employees as a group) or any other person that such
Employee(s) or other person would be provided with retiree health, except to
the extent required by statute.
(h) HEALTH CARE COMPLIANCE. Neither Company nor any Affiliate has,
prior to the Effective Time and in any material respect, violated any of the
health care continuation requirements of COBRA, the requirements of FMLA,
the requirements of the Health Insurance Portability and Accountability Act
of 1996, the requirements of the Women's Health and Cancer Rights Act, the
requirements of the Newborns' and Mothers' Health Protection Act of 1996, or
any amendment to each such Act, or any similar provisions of state law
applicable to its Employees.
(i) EFFECT OF TRANSACTION.
(i) Except as set forth in Section 2.11(i) of the Company Schedule,
the execution of this Agreement and the consummation of the transactions
contemplated hereby will not (either alone or upon the occurrence of any
additional or subsequent events) constitute an event under any Company
Employee Plan, Employee Agreement, trust or loan that will or may 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 Employee.
(ii) Except as set forth in Section 2.11(i) of the Company Schedule,
no payment or benefit which will or may be made by Company or its
Affiliates with respect to any Employee will be characterized as a
"parachute payment," within the meaning of Section 280G(b)(2) of the
Code.
(j) EMPLOYMENT MATTERS. Company: (i) is in compliance in all respects
with all applicable foreign, federal, state and local laws, rules and
regulations respecting employment eligibility, employment, employment
practices, terms and conditions of employment and wages and hours, in each
case, with respect to Employees; (ii) has withheld and reported all amounts
required by law or by agreement to be withheld and reported with respect to
wages, salaries and other payments to
13
Employees; (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) is not
liable for any payment to any trust or other fund governed by or maintained
by or on behalf of any governmental authority, with respect to unemployment
compensation benefits, social security or other benefits or obligations for
Employees (other than routine payments to be made in the normal course of
business and consistent with past practice). There are no pending,
threatened or reasonably anticipated claims or actions against Company under
any worker's compensation policy or long-term disability policy.
(k) LABOR. No work stoppage or labor strike against Company is
pending, threatened or reasonably anticipated. Company does not know of any
activities or proceedings of any labor union to organize any Employees.
Except as set forth in Section 2.11(k) of the Company Schedule, there are no
actions, suits, claims, labor disputes or grievances pending, or, to the
knowledge of Company, threatened or reasonably anticipated relating to any
labor, safety or discrimination matters involving any Employee, including,
without limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in the
aggregate, result in any material liability to Company. Neither Company nor
any of its subsidiaries has engaged in any unfair labor practices within the
meaning of the National Labor Relations Act. Except as set forth in
Section 2.11(k) of the Company Schedule, Company is not presently, nor has
it been in the past, a party to, or bound by, any collective bargaining
agreement or union contract with respect to Employees and no collective
bargaining agreement is being negotiated by Company.
(l) INTERNATIONAL EMPLOYEE PLAN. Each International Employee Plan has
been established, maintained and administered in compliance with its terms
and conditions and with the requirements prescribed by any and all statutory
or regulatory laws that are applicable to such International Employee Plan.
Furthermore, no International Employee Plan has unfunded liabilities, that
as of the Effective Time, will not be offset by insurance or fully accrued.
Except as required by law, no condition exists that would prevent Company or
Parent from terminating or amending any International Employee Plan at any
time for any reason.
2.12 REGISTRATION STATEMENT; PROXY STATEMENT
None of the information supplied or to be supplied by Company for inclusion
or incorporation by reference in (i) the registration statement on Form S-4 to
be filed with the SEC by Parent in connection with the issuance of the Parent
Common Stock in or as a result of the Merger (the "S-4") will, at the time the
S-4 becomes effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; and (ii) the joint
proxy statement/prospectus to be filed with the SEC by Company and Parent
pursuant to Section 5.1(a) hereof (the "PROXY STATEMENT/PROSPECTUS") will, at
the dates mailed to the stockholders of Company and Parent, at the times of the
stockholders meetings of Company (the "COMPANY STOCKHOLDERS' MEETING") and of
Parent (the "PARENT STOCKHOLDERS' MEETING" and together with the Company
Stockholders' Meeting, the "STOCKHOLDERS MEETING") in connection with the
transactions contemplated hereby and as of the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The Proxy
Statement/Prospectus will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations promulgated by the
SEC thereunder. Notwithstanding the foregoing, Company makes no representation
or warranty with respect to any information supplied by Parent or Merger Sub
which is contained in any of the foregoing documents.
2.13 RESTRICTIONS ON BUSINESS ACTIVITIES
There is no agreement, commitment, judgment, injunction, order or decree
binding upon Company or its subsidiaries or to which Company or any of its
subsidiaries is a party which has or could reasonably be
14
expected to have the effect of prohibiting or materially impairing any business
practice of Company or any of its subsidiaries, any acquisition of property by
Company or any of its subsidiaries or the conduct of business by Company or any
of its subsidiaries as currently conducted.
2.14 TITLE TO PROPERTY
Neither Company nor any of its subsidiaries owns any material real property.
Company and each of its subsidiaries have good and defensible title to all of
their material properties and assets, free and clear of all liens, charges and
encumbrances except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract from the
value of or materially interfere with the present use of the property affected
thereby; and all leases pursuant to which Company or any of its subsidiaries
lease from others material real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not, under
any of such leases, any existing material default or event of default of Company
or any of its subsidiaries or, to Company's knowledge, any other party (or any
event which with notice or lapse of time, or both, would constitute a material
default and in respect of which Company or subsidiary has not taken adequate
steps to prevent such default from occurring). All the plants, structures and
equipment of Company and its subsidiaries, except such as may be under
construction, are in good operating condition and repair, in all material
respects.
2.15 TAXES
(a) DEFINITION OF TAXES. For the purposes of this Agreement, "TAX" or
"TAXES" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and
liabilities relating to taxes, including taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added,
ad valorem, transfer, franchise, withholding, payroll, recapture,
employment, excise and property taxes, together with all interest, penalties
and additions imposed with respect to such amounts and any obligations under
any agreements or arrangements with any other person with respect to such
amounts and including any liability for taxes of a predecessor or transferor
entity.
(b) TAX RETURNS AND AUDITS.
(i) Company and each of its subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, information
statements and reports ("RETURNS") relating to Taxes required to be filed
by Company and each of its subsidiaries with any Tax authority, except
such Returns which are not, individually or in the aggregate, material to
Company. Company and each of its subsidiaries have paid all Taxes
required to be paid, except such Taxes which are not, individually or in
the aggregate, material to Company.
(ii) Company and each of its subsidiaries as of the Effective Time
will have withheld with respect to all employees, independent contractors
or other persons all federal and state income Taxes, Taxes pursuant to
the Federal Insurance Contribution Act, Taxes pursuant to the Federal
Unemployment Tax Act and other Taxes required to be withheld, except such
Taxes which are not, individually or in the aggregate, material to
Company.
(iii) Neither Company nor any of its subsidiaries has been delinquent
in the payment of any material Tax nor is there any material Tax
deficiency outstanding, proposed or assessed against Company or any of
its subsidiaries, nor has Company or any of its subsidiaries executed any
unexpired waiver of any statute of limitations on or extending the period
for the assessment or collection of any Tax.
(iv) No audit or other examination of any Return of Company or any of
its subsidiaries by any Tax authority is presently in progress, nor has
Company or any of its subsidiaries been notified of any request for such
an audit or other examination.
15
(v) No adjustment relating to any Returns filed by Company or any of
its subsidiaries has been proposed, formally or informally, by any Tax
authority to Company or any of its subsidiaries or any representative
thereof.
(vi) Neither Company nor any of its subsidiaries has any liability
for any material unpaid Taxes which has not been accrued for or reserved
on Company balance sheet dated September 30, 1999 in accordance with
GAAP, whether asserted or unasserted, contingent or otherwise, other than
any liability for unpaid Taxes that may have accrued since October 1,
1999 in connection with the operation of the business of Company and its
subsidiaries in the ordinary course. There are no liens with respect to
Taxes on any of the assets of Company, other than liens which are not,
individually or in the aggregate, material or customary liens for current
Taxes not yet due and payable.
(vii) There is no contract, agreement, plan or arrangement to which
Company or any of its subsidiaries is a party as of the date of this
Agreement, including but not limited to the provisions of this Agreement,
covering any employee or former employee of Company or any of its
subsidiaries that, individually or collectively, could reasonably be
expected to give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G, 404 or 162(m) of the Code. There is
no contract, agreement, plan or arrangement to which Company or any of
its subsidiaries is a party or by which it is bound to compensate any
individual for excise taxes paid pursuant to Section 4999 of the Code.
(viii) Neither Company nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection
(f) asset (as defined in Section 341(f)(4) of the Code) owned by Company
or any of its subsidiaries.
(ix) Neither Company nor any of its subsidiaries (A) has ever been a
member of a consolidated group other than a consolidated group of which
Company is the parent corporation or (B) is party to or has any
obligation under any tax-sharing, tax indemnity or tax allocation
agreement or arrangement.
(x) None of Company's or its subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.
(xi) Neither Company nor any of its subsidiaries has distributed the
stock of any corporation in a transaction satisfying the requirements of
Section 355 of the Code since April 16, 1997. The stock of neither
Company nor any of its subsidiaries has been distributed in a transaction
satisfying the requirements of Section 355 of the Code since April 16,
1997.
(xii) Neither Company nor any of its subsidiaries owns any property,
the indirect transfer of which pursuant to this Agreement would give rise
to any documentary, stamp or other transfer Tax.
2.16 ENVIRONMENTAL MATTERS
(a) HAZARDOUS MATERIAL. Except as would not result in material
liability to Company or any of its subsidiaries, no underground storage
tanks and no amount of any substance that has been designated by any
Governmental Entity or by applicable federal, state or local law to be
radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including, without limitation, PCBs, asbestos, petroleum,
urea-formaldehyde and all substances listed as hazardous substances pursuant
to the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, or defined as a hazardous waste pursuant to the United
States Resource Conservation and Recovery Act of 1976, as amended, and the
regulations promulgated pursuant to said laws, but excluding office and
janitorial supplies, (a "HAZARDOUS MATERIAL") are present, as a result of
the actions of Company or any of its subsidiaries or any affiliate of
Company, or, to Company's
16
knowledge, as a result of any actions of any third party or otherwise, in,
on or under any property, including the land and the improvements, ground
water and surface water thereof, that Company or any of its subsidiaries has
at any time owned, operated, occupied or leased.
(b) HAZARDOUS MATERIALS ACTIVITIES. Except as would not result in a
material liability to Company (in any individual case or in the aggregate)
(i) neither Company nor any of its subsidiaries has transported, stored,
used, manufactured, disposed of, released or exposed its employees or others
to Hazardous Materials in violation of any law in effect on or before the
Closing Date, and (ii) neither Company nor any of its subsidiaries has
disposed of, transported, sold, used, released, exposed its employees or
others to or manufactured any product containing a Hazardous Material
(collectively "HAZARDOUS MATERIALS ACTIVITIES") in violation of any rule,
regulation, treaty or statute promulgated by any Governmental Entity in
effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity.
(c) PERMITS. Company and its subsidiaries currently hold all
environmental approvals, permits, licenses, clearances and consents (the
"COMPANY ENVIRONMENTAL PERMITS") necessary for the conduct of Company's and
its subsidiaries' Hazardous Material Activities and other businesses of
Company and its subsidiaries as such activities and businesses are currently
being conducted, except where the absence of such Company Environmental
Permits would not cause a Material Adverse Effect.
(d) ENVIRONMENTAL LIABILITIES. No action, proceeding, revocation
proceeding, amendment procedure, writ or injunction is pending, and to
Company's knowledge, no action, proceeding, revocation proceeding, amendment
procedure, writ or injunction has been threatened by any Governmental Entity
against Company or any of its subsidiaries in a writing delivered to Company
or any of its subsidiaries concerning any Company Environmental Permit,
Hazardous Material or any Hazardous Materials Activity of Company or any of
its subsidiaries. Company is not aware of any fact or circumstance which
could involve Company or any of its subsidiaries in any environmental
litigation or impose upon Company any material environmental liability.
2.17 BROKERS
Other than fees owed to Company's financial advisors, ▇.▇. ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ & Co., as set forth in Section 2.17 to the Company Schedule,
Company has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders fees or agent's commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
2.18 INTELLECTUAL PROPERTY
For the purposes of this Agreement, the following terms have the following
definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following and all
worldwide common law and statutory rights in, arising out of, or associated
therewith: (i) patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof ("PATENTS"); (ii) inventions (whether
patentable or not), invention disclosures, improvements, trade secrets,
proprietary information, know how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing;
(iii) copyrights, copyrights registrations and applications therefor, and
all other rights corresponding thereto throughout the world; (iv) domain
names, uniform resource locators ("URLS") and other names and locators
associated with the Internet ("DOMAIN NAMES"); (v) industrial designs and
any registrations and applications therefor; (vi) trade names, logos, common
law trademarks and service marks, trademark and service ▇▇▇▇ registrations
and applications therefor; (vii) all databases and data collections and all
rights therein; (viii) all moral and economic rights of authors and
inventors, however denominated, and (ix) any similar or equivalent rights to
any of the foregoing (as applicable).
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"COMPANY INTELLECTUAL PROPERTY" shall mean any Intellectual Property that is
owned by, or exclusively licensed to, Company and it subsidiaries.
"REGISTERED INTELLECTUAL PROPERTY" means all Intellectual Property that is
the subject of an application, certificate, filing, registration or other
document issued, filed with, or recorded by any private, state, government
or other legal authority.
"COMPANY REGISTERED INTELLECTUAL PROPERTY" means all of the Registered
Intellectual Property owned by, or filed in the name of, Company or any of
its subsidiaries.
(a) Section 2.18(a) of the Company Schedule is a complete and accurate
list of all Company Registered Intellectual Property and specifies, where
applicable, the jurisdictions in which each such item of Company Registered
Intellectual Property has been issued or registered and lists any
proceedings or actions before any court or tribunal (including the United
States Patent and Trademark Office (the "PTO") or equivalent authority
anywhere in the world) related to any of the Company Registered Intellectual
Property.
(b) Section 2.18(b) of the Company Schedule is a complete and accurate
list (by name and version number) of all products or service offerings of
Company or any of its subsidiaries ("COMPANY PRODUCTS") that have been
distributed or provided in the two (2) year period preceding the date hereof
or which Company or any of its subsidiaries currently intends to distribute
or provide in the future, including any products or service offerings under
development.
(c) No Company Intellectual Property or Company Product is subject to
any proceeding or outstanding decree, order, judgment, contract, license,
agreement, or stipulation restricting in any manner the use, transfer, or
licensing thereof by Company or any of its subsidiaries, or which may affect
the validity, use or enforceability of such Company Intellectual Property or
Company Product.
(d) Each material item of Company Registered Intellectual Property is
valid and subsisting, all necessary registration, maintenance and renewal
fees currently due in connection with such Company Registered Intellectual
Property have been made and all necessary documents, recordations and
certificates in connection with such Company Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or
other authorities in the United States or foreign jurisdictions, as the case
may be, for the purposes of maintaining such Company Registered Intellectual
Property.
(e) Section 2.18(e) of the Company Schedule is a complete and accurate
list of all material actions that are required to be taken by Company within
ninety (90) days of the date hereof with respect to any of the foregoing
Registered Intellectual Property.
(f) Company owns and has good and exclusive title to, each material item
of Company Intellectual Property owned by it free and clear of any lien or
encumbrance (excluding non-exclusive licenses and related restrictions
granted in the ordinary course). Without limiting the foregoing:
(i) Company is the exclusive owner of all trademarks and trade names used in
connection with the operation or conduct of the business of Company and its
subsidiaries, including the sale, distribution or provision of any Company
Products by Company or its subsidiaries; (ii) Company owns exclusively, and
has good title to, all copyrighted works that are Company Products or which
Company or any of its subsidiaries otherwise purports to own; and (iii) to
the extent that any Patents would be infringed by any Company Products,
Company is the exclusive owner of such Patents.
(g) To the extent that any material technology, software or Intellectual
Property has been developed or created independently or jointly by a third
party for Company or any of its subsidiaries or is incorporated into any of
the Company Products, Company has a written agreement with such third party
with respect thereto and Company thereby either (i) has obtained ownership
of, and is the exclusive owner of, or (ii) has obtained a perpetual,
non-terminable license (sufficient for the conduct
18
of its business as currently conducted and as proposed to be conducted) to
all such third party's Intellectual Property in such work, material or
invention by operation of law or by valid assignment, to the fullest extent
it is legally possible to do so.
(h) Neither Company nor any of its subsidiaries has transferred
ownership of, or granted any exclusive license with respect to, any
Intellectual Property that is material Company Intellectual Property, to any
third party, or knowingly permitted Company's rights in such material
Company Intellectual Property to lapse or enter the public domain.
(i) Section 2.18(i) of the Company Schedule lists all material
contracts, licenses and agreements to which Company or any of its
subsidiaries is a party: (i) with respect to Company Intellectual Property
licensed or transferred to any third party (other than end-user licenses in
the ordinary course); or (ii) pursuant to which a third party has licensed
or transferred any material Intellectual Property to Company.
(j) All material contracts, licenses and agreements relating to either
(i) Company Intellectual Property or (ii) Intellectual Property of a third
party licensed to Company or any of its subsidiaries, are in full force and
effect. The consummation of the transactions contemplated by this Agreement
will neither violate nor result in the breach, modification, cancellation,
termination or suspension of such contracts, licenses and agreements. Each
of Company and its subsidiaries is in material compliance with, and has not
materially breached any term of any such contracts, licenses and agreements
and, to the knowledge of Company, all other parties to such contracts,
licenses and agreements are in compliance with, and have not materially
breached any term of, such contracts, licenses and agreements. Following the
Closing Date, the Surviving Corporation will be permitted to exercise all of
Company's rights under such contracts, licenses and agreements to the same
extent Company and its subsidiaries would have been able to had the
transactions contemplated by this Agreement not occurred and without the
payment of any additional amounts or consideration other than ongoing fees,
royalties or payments which Company would otherwise be required to pay.
Neither this Agreement nor the transactions contemplated by this Agreement,
including the assignment to Parent or Merger Sub by operation of law or
otherwise of any contracts or agreements to which Company is a party, will
result in (i) either Parent's or the Merger Sub's granting to any third
party any right to or with respect to any material Intellectual Property
right owned by, or licensed to, either of them, (ii) either the Parent's or
the Merger Sub's being bound by, or subject to, any non-compete or other
material restriction on the operation or scope of their respective
businesses, or (iii) either the Parent's or the Merger Sub's being obligated
to pay any royalties or other material amounts to any third party in excess
of those payable by Company prior to the Closing.
(k) The operation of the business of Company and its subsidiaries as
such business currently is conducted, including (i) Company's and its
subsidiaries' design, development, manufacture, distribution, reproduction,
marketing or sale of the products or services of Company and its
subsidiaries (including Company Products) and (ii) Company's use of any
product, device or process, has not, does not and, to its knowledge, will
not infringe or misappropriate the Intellectual Property of any third party
or constitute unfair competition or trade practices under the laws of any
jurisdiction.
(l) Neither Company nor any of its subsidiaries has received notice from
any third party that the operation of the business of Company or any of its
subsidiaries or any act, product or service of Company or any of its
subsidiaries, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the
laws of any jurisdiction.
(m) To the knowledge of Company, no person has or is infringing or
misappropriating any Company Intellectual Property.
(n) Company and each of its subsidiaries has taken reasonable steps to
protect Company's and its subsidiaries' rights in Company's confidential
information and trade secrets that it wishes to protect
19
or any trade secrets or confidential information of third parties provided
to Company or any of its subsidiaries, and, without limiting the foregoing,
each of Company and its subsidiaries has and uses its best efforts to
enforce a policy requiring each employee and contractor to execute a
proprietary information/confidentiality agreement substantially in the form
provided to Parent and all current and former employees and contractors of
Company and any of its subsidiaries have executed such an agreement, except
where the failure to do so is not reasonably expected to be material to
Company.
(o) All of the Company Products (i) will record, store, process,
calculate and present calendar dates falling on and after (and if
applicable, spans of time including) January 1, 2000, and will calculate any
information dependent on or relating to such dates in the same manner, and
with the same functionality, data integrity and performance, as the products
record, store, process, calculate and present calendar dates on or before
December 31, 1999, or calculate any information dependent on or relating to
such dates (collectively, "YEAR 2000 COMPLIANT"), (ii) will lose no
functionality with respect to the introduction of records containing dates
falling on or after January 1, 2000, and (iii) will, to the knowledge of
Company, be interoperable with other products used and distributed by Parent
that may reasonably deliver records to Company's or any of its subsidiaries'
products or receive records from Company's or any of its subsidiaries'
products, or interact with Company's or any of its subsidiaries' products.
Except as would not result in a Material Adverse Effect, all of Company's or
its subsidiaries' Information Technology (as defined below) is Year 2000
Compliant, and will not cause an interruption in the ongoing operations of
Company's or any of its subsidiaries' business on or after January 1, 2000.
For purposes of the foregoing, the term "INFORMATION TECHNOLOGY" shall mean
and include all software, hardware, firmware, telecommunications systems,
network systems, embedded systems and other systems, components and/or
services (other than general utility services including gas, electric,
telephone and postal) that are owned or used by Company or any of its
subsidiaries in the conduct of their business, or purchased by Company or
any of its subsidiaries from third-party suppliers.
2.19 AGREEMENTS, CONTRACTS AND COMMITMENTS
Neither Company nor any of its subsidiaries is a party to or is bound by:
(a) any employment or consulting agreement, contract or commitment with
any officer, director, Company employee or member of Company's Board of
Directors, other than those that are terminable by Company or any of its
subsidiaries on no more than thirty (30) days' notice without liability or
financial obligation to Company;
(b) any agreement or plan, including, without limitation, any stock
option plan, stock appreciation right plan or stock purchase plan, any of
the benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which
will be calculated on the basis of any of the transactions contemplated by
this Agreement;
(c) any material agreement of indemnification or any guaranty other than
any agreement of indemnification entered into in connection with the sale or
license of software products in the ordinary course of business;
(d) any material agreement, contract or commitment containing any
covenant limiting in any respect the right of Company or any of its
subsidiaries to engage in any line of business or to compete with any person
or granting any exclusive distribution rights;
(e) any agreement, contract or commitment currently in force relating to
the disposition or acquisition by Company or any of its subsidiaries after
the date of this Agreement of a material amount of assets not in the
ordinary course of business or pursuant to which Company or any of its
subsidiaries has any material ownership interest in any corporation,
partnership, joint venture or other business enterprise other than Company's
subsidiaries;
20
(f) any dealer, distributor, joint marketing or development agreement
currently in force under which Company or any of its subsidiaries have
continuing material obligations to jointly market any product, technology or
service or any material agreement pursuant to which Company or any of its
subsidiaries have continuing material obligations to jointly develop any
intellectual property that will not be owned, in whole or in part, by
Company or any of its subsidiaries;
(g) any agreement, contract or commitment currently in force to provide
source code to any third party for any product or technology that is
material to Company and its subsidiaries taken as a whole;
(h) any agreement, contract or commitment currently in force to license
any third party to manufacture or reproduce any Company product, service or
technology or any agreement, contract or commitment currently in force to
sell or distribute any Company products, service or technology except
agreements with distributors or sales representative in the normal course of
business cancelable without penalty upon notice of ninety (90) days or less
and substantially in the form previously provided to Parent;
(i) any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the
borrowing of money or extension of credit;
(j) any material settlement agreement entered into within five
(5) years prior to the date of this Agreement; or
(k) any other agreement, contract or commitment that has a value of
$500,000 or more individually.
Neither Company nor any of its subsidiaries, nor to Company's knowledge any
other party to a Company Contract (as defined below), is in breach, violation or
default under, and neither Company nor any of its subsidiaries has received
written notice that it has breached, violated or defaulted under, any of the
material terms or conditions of any of the agreements, contracts or commitments
to which Company or any of its subsidiaries is a party or by which it is bound
that are required to be disclosed in the Company Schedule (any such agreement,
contract or commitment, a "COMPANY CONTRACT") in such a manner as would permit
any other party to cancel or terminate any such Company Contract, or would
permit any other party to seek material damages or other remedies (for any or
all of such breaches, violations or defaults, in the aggregate).
2.20 COMPANY RIGHTS PLAN
The Company Rights Plan has been amended to (i) render the Company Rights
Plan inapplicable to the Merger and the other transactions contemplated by this
Agreement, the Stock Option Agreement, the Company Affiliate Agreements and the
Company Voting Agreements, (ii) ensure that (x) neither Parent nor Merger Sub,
nor any of their affiliates shall be deemed to have become an Acquiring Person
(as defined in the Company Rights Plan) pursuant to the Company Rights Plan
solely by virtue of the execution of this Agreement, the Stock Option Agreement,
the Company Affiliate Agreements and the Company Voting Agreements of the
consummation of the transactions contemplated hereby or thereby and (y) a
Distribution Date, a Shares Acquisition Date (as such terms are defined in the
Company Rights Plan) or similar event does not occur by reason of the execution
of this Agreement, the Company Stock Option Agreement, the Company Affiliate
Agreements and the Company Voting Agreements, the consummation of the Merger, or
the consummation of the other transactions, contemplated hereby and thereby,
(iii) provide that the exercise of rights under the Company Rights Plan shall
expire immediately prior to the Effective Time and (iv) that such amendment may
not be further amended by Company without the prior consent of Parent in its
sole discretion.
21
2.21 INSURANCE
Company maintains insurance policies and fidelity bonds covering the assets,
business, equipment, properties, operations, employees, officers and directors
of Company and its subsidiaries (collectively, the "INSURANCE POLICIES") which
are of the type and in amounts customarily carried by persons conducting
businesses similar to those of Company and its subsidiaries. There is no
material claim by Company or any of its subsidiaries pending under any of the
material Insurance Policies as to which coverage has been questioned, denied or
disputed by the underwriters of such policies or bonds.
2.22 OPINION OF FINANCIAL ADVISOR
Company has been advised in writing by its financial advisor, ▇.▇. ▇▇▇▇▇
that in its opinion, as of the date of this Agreement, the Exchange Ratio is
fair to the stockholders of Company from a financial point of view.
2.23 BOARD APPROVAL
The Board of Directors of Company has, as of the date of this Agreement
unanimously (i) approved, subject to stockholder approval, this Agreement, the
Stock Option Agreement and the transactions contemplated hereby and thereby,
(ii) determined that the Merger is in the best interests of the stockholders of
Company and is on terms that are fair to such stockholders and
(iii) recommended that the stockholders of Company approve this Agreement and
the Merger.
2.24 VOTE REQUIRED
The affirmative vote of a majority of the votes that holders of the
outstanding shares of Company Common Stock are entitled to vote with respect to
the Merger is the only vote of the holders of any class or series of Company's
capital stock necessary to approve this Agreement and the transactions
contemplated hereby.
2.25 POOLING OF INTERESTS
To its knowledge, and based on consultation with its independent
accountants, neither Company nor any of its directors, officers or affiliates
has taken any action which would interfere with (i) Parent's ability to account
for the Merger as a pooling of interests or (ii) Parent's, Surviving
Corporation's or Company's ability to continue to account for as a pooling of
interests any past acquisition by Company currently accounted for as a pooling
of interests.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to
Company, subject to such exceptions as are specifically disclosed in writing in
the disclosure letter and referencing a specific representation supplied by
Parent to Company dated as of the date hereof and certified by a duly authorized
officer of Parent (the "PARENT SCHEDULE"), as follows:
3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES
Each of Parent and its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority to own, lease
and operate its assets and properties and to carry on its business as it is now
being conducted, except where the failure to do so would not, individually or in
the aggregate, have a Material Adverse Effect on Parent. Each of Parent and its
subsidiaries is in possession of all Approvals necessary to own, lease and
operate the properties it purports to own, operate or lease and to carry on its
business as it is now being conducted, except where the failure to have such
Approvals would not, individually or in the aggregate, have a Material Adverse
Effect on Parent. Each of Parent and its subsidiaries is duly qualified
22
or licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except for such failures to be so duly qualified or
licensed and in good standing that would not, either individually or in the
aggregate, have a Material Adverse Effect on Parent.
3.2 CERTIFICATE OF INCORPORATION AND BYLAWS
Parent has previously furnished to Company a complete and correct copy of
its Certificate of Incorporation and Bylaws as amended to date (together, the
"PARENT CHARTER DOCUMENTS"). Such Parent Charter Documents and equivalent
organizational documents of each of its subsidiaries are in full force and
effect. Parent is not in violation of any of the provisions of the Parent
Charter Documents, and no subsidiary of Parent is in violation of any of its
equivalent organizational documents.
3.3 CAPITALIZATION
The authorized capital stock of Parent consists of (i) 500,000,000 shares of
Parent Common Stock, par value $0.01 per share, and (ii) 5,000,000 shares of
Preferred Stock, par value $0.01 per share ("PARENT PREFERRED STOCK"), 440,000
of which have been designated as Series A-1 Preferred Stock and 80,000 of which
have been designated as Series B Preferred Stock. At the close of business on
October 31, 1999, (i) 201,346,149 shares of Parent Common Stock were issued and
outstanding, (ii) 253,365 shares of Parent Common Stock were held in treasury by
Parent or by subsidiaries of Parent, (iii) 1,463,379 shares of Parent Common
Stock were reserved for future issuance pursuant to Parent's employee stock
purchase plan, (iv) 7,237,949 shares of Parent Common Stock were reserved for
issuance upon the exercise of outstanding options ("PARENT OPTIONS") to purchase
Parent Common Stock. As of the date hereof, no shares of Series A-1 Preferred
Stock and 7,000 shares of Series B Preferred Stock were issued or outstanding. A
warrant to purchase an aggregate of 1,938,947 shares of Parent Common Stock,
associated with the exercise of Series B Preferred Stock, were outstanding as of
the date hereof. The authorized capital stock of Merger Sub consists of 1,000
shares of common stock, par value $0.001 per share, all of which, as of the date
hereof, are issued and outstanding. All of the outstanding shares of Parent's
and Merger Sub's respective capital stock have been duly authorized and validly
issued and are fully paid and nonassessable. All shares of Parent Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, shall, and the
shares of Parent Common Stock to be issued pursuant to the Merger will be, duly
authorized, validly issued, fully paid and nonassessable. All of the outstanding
shares of capital stock (other than directors' qualifying shares) of each of
Parent's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and all such shares (other than directors' qualifying shares) are
owned by Parent or another subsidiary free and clear of all security interests,
liens, claims, pledges, agreements, limitations in Parent's voting rights,
charges or other encumbrances of any nature whatsoever.
3.4 AUTHORITY RELATIVE TO THIS AGREEMENT
Each of Parent and Merger Sub has all necessary corporate power and
authority to execute and deliver this Agreement and the Stock Option Agreement,
and to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Stock Option Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the transactions contemplated hereby
and thereby have been duly and validly authorized by all necessary corporate
action on the part of Parent and Merger Sub, and no other corporate proceedings
on the part of Parent or Merger Sub are necessary to authorize this Agreement
and the Stock Option Agreement, or to consummate the transactions so
contemplated. This Agreement and the Stock Option Agreement have been duly and
validly executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery by Company, constitute legal and binding
obligations of Parent and Merger Sub, enforceable against Parent and Merger Sub
in accordance with their respective terms.
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3.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS
(a) The execution and delivery of this Agreement by Parent and Merger
Sub and the Stock Option Agreement by Parent do not, and the performance of
this Agreement by Parent and Merger Sub and the Stock Option Agreement by
Parent shall not, (i) conflict with or violate the Certificate of
Incorporation, Bylaws or equivalent organizational documents of Parent or
any of its subsidiaries, (ii) subject to compliance with the requirements
set forth in Section 3.5(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Parent or any of its
subsidiaries or by which it or their respective properties are bound or
affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default)
under, or impair Parent's or any such subsidiary's rights or alter the
rights or obligations of any third party under, or give to others any rights
of termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of
Parent or any of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise
or other instrument or obligation to which Parent or any of its subsidiaries
is a party or by which Parent or any of its subsidiaries or its or any of
their respective properties are bound or affected, except to the extent such
conflict, violation, breach, default, impairment or other effect could not
in the case of clauses (ii) or (iii) individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent.
(b) The execution and delivery of this Agreement by Parent and Merger
Sub and the Stock Option Agreement by Parent do not, and the performance of
this Agreement by Parent and Merger Sub shall not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, Blue Sky Laws, the pre-merger notification
requirements of the HSR Act and of foreign governmental entities and the
rules and regulations thereunder, the rules and regulations of Nasdaq, and
the filing and recordation of the Certificate of Merger as required by
Delaware Law and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
(x) would not prevent consummation of the Merger or otherwise prevent Parent
or Merger Sub from performing their respective obligations under this
Agreement or (y) could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent.
3.6 SEC FILINGS; FINANCIAL STATEMENTS
(a) Parent has made available to Company a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Parent with the SEC on or after September 30, 1997 (the "PARENT SEC
REPORTS"), which are all the forms, reports and documents required to be
filed by Parent with the SEC since September 30, 1997. The Parent SEC
Reports (A) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (B) did not at
the time they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of Parent's subsidiaries is required to file any reports or
other documents with the SEC.
(b) Each set of consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports was
prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in
the case of unaudited statements, do not contain footnotes as permitted by
Form 10-Q of the Exchange Act) and each fairly presents in all material
respects the consolidated financial position of Parent and its subsidiaries
at the respective dates thereof and the consolidated results of its
operations
24
and cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal adjustments which were
not or are not expected to be material in amount.
(c) Since the date of the balance sheet included in Parent's report on
Form 10-Q filed on November 15, 1999, and until the date hereof, there has
not occurred any Material Adverse Effect on Parent.
3.7 REGISTRATION STATEMENT; PROXY STATEMENT
None of the information supplied or to be supplied by Parent for inclusion
or incorporation by reference in (i) the S-4 will, at the time the S-4 becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading; and (ii) the Proxy
Statement/Prospectus will, at the dates mailed to the stockholders of Company
and Parent, at the times of the Stockholders' Meetings and as of the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The S-4 will comply as to form in all material respects with the
provisions of the Securities Act and the rules and regulations promulgated by
the SEC thereunder. Notwithstanding the foregoing, Parent makes no
representation or warranty with respect to any information supplied by Company
which is contained in any of the foregoing documents.
3.8 COMPLIANCE; PERMITS
(a) Neither Parent nor any of its subsidiaries is in conflict with, or
in default or violation of, (i) any law, rule, regulation, order, judgment
or decree applicable to Parent or any of its subsidiaries or by which its or
any of their respective properties is bound or affected, or (ii) any
material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Parent
or any of its subsidiaries is a party or by which Parent or any of its
subsidiaries or its or any of their respective properties is bound or
affected, except for any conflicts, defaults or violations that
(individually or in the aggregate) would not cause Parent to lose any
material benefit or incur any material liability. Except as disclosed in the
Parent SEC Reports, no investigation or review by any governmental or
regulatory body or authority is pending or, to the knowledge of Parent,
threatened against Parent or its subsidiaries, nor has any governmental or
regulatory body or authority indicated to Parent an intention to conduct the
same, other than, in each such case, those the outcome of which could not,
individually or in the aggregate, reasonably be expected to have the effect
of prohibiting or materially impairing any business practice of Parent or
any of its subsidiaries, any acquisition of material property by Parent or
any of its subsidiaries or the conduct of business by Parent or any of its
subsidiaries.
(b) Parent and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities which are
material to operation of the business of Parent and its subsidiaries taken
as a whole (collectively, the "PARENT PERMITS"). Parent and its subsidiaries
are in compliance in all material respects with the terms of the Parent
Permits.
3.9 NO UNDISCLOSED LIABILITIES
Neither Parent nor any of its subsidiaries has any liabilities (absolute,
accrued, contingent or otherwise) of a nature required to be disclosed on a
balance sheet or in the related notes to the consolidated financial statements
prepared in accordance with GAAP which are, individually or in the aggregate,
material to the business, results of operations or financial condition of Parent
and its subsidiaries taken as a whole, except (i) liabilities provided for in
Parent's balance sheet as of September 30, 1999 or (ii) liabilities incurred
since September 30, 1999 in the ordinary course of business, none of which is
material to the business, results of operations or financial condition of Parent
and its subsidiaries, taken as a whole.
25
3.10 ABSENCE OF LITIGATION
Except as disclosed in Parent SEC Reports, there are no claims, actions,
suits or proceedings pending or, to the knowledge of Parent, threatened (or, to
the knowledge of Parent, any governmental or regulatory investigation pending or
threatened) against Parent or any of its subsidiaries or any properties or
rights of Parent or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign.
3.11 BROKERS
Other than fees owed to Parent's financial advisor, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
Parent has not incurred, nor will it incur, directly or indirectly, any
liability for brokerage or finders fees or agent's commissions or any similar
charges in connection with this Agreement or any transaction contemplated
hereby.
3.12 OPINION OF FINANCIAL ADVISOR
Parent has been advised in writing by its financial advisor, ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., that in its opinion, as of the date of this Agreement, the Exchange
Ratio is fair, from a financial point of view, to Parent.
3.13 BOARD APPROVAL
The Board of Directors of Parent has, as of the date of this Agreement
unanimously (i) approved, subject to stockholder approval, this Agreement, the
Stock Option Agreement and the transactions contemplated hereby and thereby,
(ii) determined that the Merger is in the best interests of the stockholders of
Parent and is on terms that are fair to such stockholders and (iii) recommended
that the stockholders of Parent approve the issuance of Parent Common Stock in
connection with the Merger.
3.14 VOTE REQUIRED
The affirmative vote of a majority of the votes that holders of the
outstanding shares of Parent Common Stock are entitled to vote with respect to
the Merger is the only vote of the holders of any class or series of Parent's
capital stock necessary to approve the issuance of Parent Common Stock in
connection with the Merger.
3.15 POOLING OF INTERESTS
To its knowledge, and based on consultation with its independent
accountants, neither Parent nor any of its directors, officers or affiliates has
taken any action which would interfere with Parent's ability to account for the
Merger as a pooling of interests.
3.16 INTERIM OPERATIONS OF SUB
Merger Sub was formed solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 CONDUCT OF BUSINESS BY COMPANY
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, Company and each of its subsidiaries shall, except to the extent
that Parent shall otherwise consent in writing, carry on its business, in the
usual, regular and ordinary course, in substantially the same manner as
heretofore conducted and in compliance with all applicable laws and regulations,
pay its debts and taxes when due subject to good faith disputes over such debts
or taxes, pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
(i) preserve intact its present business
26
organization, (ii) keep available the services of its present officers and
employees and (iii) preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has significant
business dealings.
In addition, except as permitted by the terms of this Agreement, and except
as provided in Section 4.1 of the Company Schedule, without the prior written
consent of Parent, during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement pursuant to
its terms or the Effective Time, Company shall not do any of the following and
shall not permit its subsidiaries to do any of the following:
(a) Other than pursuant to terms of agreements or policies in existence
as of the date of this Agreement as they apply to the transactions
contemplated by this Agreement, waive any stock repurchase rights,
accelerate, amend or change the period of exercisability of options or
restricted stock, or reprice options granted under any employee, consultant,
director or other stock plans or authorize cash payments in exchange for any
options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee
except pursuant to written agreements outstanding, or policies existing, on
the date hereof and as previously disclosed in writing or made available to
Parent, or adopt any new severance plan, or amend or modify or alter in any
manner any severance plan, agreement or arrangement existing on the date
hereof;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify any rights to the Company Intellectual Property, or enter
into grants to transfer or license to any person future patent rights, other
than in the ordinary course of business consistent with past practices,
provided that in no event shall Company license on an exclusive basis or
sell any Company Intellectual Property;
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock or split, combine or reclassify any capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for any capital stock;
(e) Except as set forth in Section 4.1(h) of the Company Schedule with
respect to mergers among Company and any of its direct or indirect
subsidiaries, acquire or purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of Company or its subsidiaries,
except repurchases of unvested shares at cost in connection with the
termination of the employment relationship with any employee pursuant to
stock option or purchase agreements in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber or
propose any of the foregoing with respect to, any shares of capital stock or
any securities convertible into shares of capital stock, or subscriptions,
rights, warrants or options to acquire any shares of capital stock or any
securities convertible into shares of capital stock, or enter into other
agreements or commitments of any character obligating it to issue any such
shares or convertible securities, other than (x) the issuance delivery
and/or sale of (i) shares of Company Common Stock pursuant to the exercise
of the Warrants or stock options outstanding as of the date of this
Agreement, and (ii) shares of Company Common Stock issuable to participants
in the ESPP consistent with the terms thereof and (y) the granting of stock
options to employees (excluding directors and executive officers), in the
ordinary course of business and consistent with past practices, in an amount
not to exceed options to purchase (and the issuance of Company Common Stock
upon exercise thereof) 600,000 shares in the aggregate;
(g) Cause, permit or propose any amendments to the Company Charter
Documents (or similar governing instruments of any of its subsidiaries);
27
(h) Except as set forth in Section 4.1(h) of the Company Schedule with
respect to mergers among Company and any of its direct or indirect
subsidiaries, acquire or agree to acquire by merging or consolidating with,
or by purchasing any equity interest in or a portion of the assets of, or by
any other manner, any business or any corporation, partnership, association
or other business organization or division thereof, or otherwise acquire or
agree to enter into any joint ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets except sales of inventory in the ordinary course of
business consistent with past practice, except for the sale, lease or
disposition (other than through licensing) of property or assets which are
not material, individually or in the aggregate, to the business of Company
and its subsidiaries;
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
options, warrants, calls or other rights to acquire any debt securities of
Company, enter into any "keep well" or other agreement to maintain any
financial statement condition or enter into any arrangement having the
economic effect of any of the foregoing other than in connection with the
financing of ordinary course trade payables consistent with past practice;
(k) Adopt or amend any employee benefit plan, policy or arrangement, any
employee stock purchase or employee stock option plan, or enter into any
employment contract or collective bargaining agreement (other than offer
letters and letter agreements entered into in the ordinary course of
business consistent with past practice with employees who are terminable "at
will"), pay any special bonus or special remuneration to any director or
employee, or increase the salaries or wage rates or fringe benefits
(including rights to severance or indemnification) of its directors,
officers, employees or consultants;
(l) (i) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), or litigation (whether or not commenced prior to the date of
this Agreement) other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, or liabilities recognized or
disclosed in the most recent consolidated financial statements (or the notes
thereto) of Company included in the Company SEC Reports or incurred since
the date of such financial statements, or (ii) waive the benefits of, agree
to modify in any manner, terminate, release any person from or knowingly
fail to enforce any confidentiality or similar agreement to which Company or
any of its subsidiaries is a party or of which Company or any of its
subsidiaries is a beneficiary;
(m) Make any individual or series of related payments outside of the
ordinary course of business in excess of $100,000;
(n) Except as set forth in Section 4.1(h) of the Company Schedule or
except in the ordinary course of business consistent with past practice,
modify, amend or terminate any material contract or agreement, to which
Company or any subsidiary thereof is a party or waive, delay the exercise
of, release or assign any material rights or claims thereunder;
(o) Enter into, renew or materially modify any contracts, agreements, or
obligations relating to the distribution, sale, license or marketing by
third parties of Company's products or products licensed by Company other
than new (or material modifications of existing) non-exclusive contracts,
agreements or obligations entered into in the usual, regular and ordinary
course, in substantially the same manner as heretofor conducted, and
renewals of existing nonexclusive contracts, agreements or obligations;
(p) Except as required by GAAP, revalue any of its assets or make any
change in accounting methods, principles or practices;
28
(q) Incur or enter into any agreement, contract or commitment requiring
Company or any of its subsidiaries to pay in excess of $250,000;
(r) Engage in any action that could reasonably be expected to (i) cause
the Merger to fail to qualify as a "reorganization" under Section 368(a) of
the Code or (ii) interfere with Parent's ability to account for the Merger
as a pooling of interests, whether or not (in each case) otherwise permitted
by the provisions of this Article IV;
(s) Settle any litigation;
(t) Make any tax election that, individually or in the aggregate, is
reasonably likely to adversely affect in any material respect the tax
liability or tax attributes of Company or any of its subsidiaries or settle
or compromise any material income tax liability;
(u) Agree in writing or otherwise to take any of the actions described
in Section 4.1(a) through (t) above.
4.2 CONDUCT OF BUSINESS BY PARENT
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement pursuant to its terms or the
Effective Time, except as permitted by the terms of this Agreement and the Stock
Option Agreement and except as provided in Section 4.2 of the Parent Schedule,
without the prior written consent of Company, Parent shall not
(a) Engage in any action that could reasonably be expected to (i) cause
the Merger to fail to qualify as a "reorganization" under Section 368(a) of
the Code or (ii) interfere with Parent's ability to account for the Merger
as a pooling of interests;
(b) Declare, set aside or pay any cash dividends on or make any other
cash distributions in respect of any capital stock; or
(c) Take any action that would reasonably be likely to materially delay
the Merger.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT; OTHER FILINGS;
BOARD RECOMMENDATIONS
(a) As promptly as practicable after the execution of this Agreement,
Company and Parent will prepare, and file with the SEC, the Proxy
Statement/Prospectus, and Parent will prepare and file with the SEC the S-4
in which the Proxy Statement/Prospectus will be included as a prospectus.
Each of Parent and Company shall provide promptly to the other such
information concerning its business and financial statements and affairs as,
in the reasonable judgment of the providing party or its counsel, may be
required or appropriate for inclusion in the Proxy Statement/Prospectus and
the S-4, or in any amendments or supplements thereto, and to cause its
counsel and auditors to cooperate with the other's counsel and auditors in
the preparation of the Proxy Statement/Prospectus and the S-4. Each of
Company and Parent will respond to any comments of the SEC, and will use its
respective commercially reasonable efforts to have the S-4 declared
effective under the Securities Act as promptly as practicable after such
filing, and Parent and Company will cause the Proxy Statement/ Prospectus to
be mailed to its respective stockholders at the earliest practicable time
after the S-4 is declared effective by the SEC. As promptly as practicable
after the date of this Agreement, each of Company and Parent will prepare
and file any other filings required to be filed by it under the Exchange
Act, the Securities Act or any other Federal, foreign or Blue Sky or related
laws relating to the Merger and the transactions contemplated by this
Agreement (the "OTHER FILINGS"). Each of Company and Parent will notify the
other promptly upon the receipt of any comments from the SEC
29
or its staff or any other government officials and of any request by the SEC
or its staff or any other government officials for amendments or supplements
to the S-4, the Proxy Statement/Prospectus or any Other Filing or for
additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the SEC or its staff or any other government officials, on the
other hand, with respect to the S-4, the Proxy Statement/ Prospectus, the
Merger or any Other Filing. Each of Company and Parent will cause all
documents that it is responsible for filing with the SEC or other regulatory
authorities under this Section 5.1(a) to comply in all material respects
with all applicable requirements of law and the rules and regulations
promulgated thereunder. Whenever any event occurs which is required to be
set forth in an amendment or supplement to the Proxy Statement/Prospectus,
the S-4 or any Other Filing, Company or Parent, as the case may be, will
promptly inform the other of such occurrence and cooperate in filing with
the SEC or its staff or any other government officials, and/or mailing to
stockholders of Company, such amendment or supplement.
(b) The Proxy Statement/Prospectus will include the unanimous
recommendations of (i) the Board of Directors of Parent in favor of the
issuance of the shares of Parent Common Stock in connection with the Merger
and (ii) subject to Section 5.2, the Board of Directors of Company in favor
of adoption and approval of this Agreement and approval of the Merger.
5.2 MEETING OF COMPANY STOCKHOLDERS
(a) Promptly after the date hereof, Company will take all action
necessary in accordance with Delaware Law and the Company Charter Documents
to convene the Company Stockholders' Meeting to be held as promptly as
practicable, and in any event (to the extent permissible under applicable
law) within 45 days after the declaration of effectiveness of the S-4, for
the purpose of voting upon this Agreement and the Merger. Subject to
Section 5.2(c), Company will use its commercially reasonable efforts to
solicit from its stockholders proxies in favor of the adoption and approval
of this Agreement and the approval of the Merger and will take all other
action necessary or advisable to secure the vote or consent of its
stockholders required by the rules of Nasdaq or Delaware Law to obtain such
approvals. Notwithstanding anything to the contrary contained in this
Agreement, Company may adjourn or postpone the Company Stockholders' Meeting
to the extent necessary to ensure that any necessary supplement or amendment
to the Prospectus/Proxy Statement is provided to Company's stockholders in
advance of a vote on the Merger and this Agreement or, if as of the time for
which the Company Stockholders' Meeting is originally scheduled (as set
forth in the Prospectus/Proxy Statement) there are insufficient shares of
Company Common Stock represented (either in person or by proxy) to
constitute a quorum necessary to conduct the business of the Company
Stockholders' Meeting. Company shall ensure that the Company Stockholders'
Meeting is called, noticed, convened and conducted, and that all proxies
solicited by Company in connection with the Company Stockholders' Meeting
are solicited, in compliance with Delaware Law, the Company Charter
Documents, the rules of Nasdaq and all other applicable legal requirements.
Company's obligation to call, give notice of, convene and conduct the
Company Stockholders' Meeting in accordance with this Section 5.2(a) shall
not be limited to or otherwise affected by the commencement, disclosure,
announcement or submission to Company of any Acquisition Proposal.
(b) Subject to Section 5.2(c): (i) the Board of Directors of Company
shall unanimously recommend that Company's stockholders vote in favor of and
adopt and approve this Agreement and the Merger at the Company Stockholders'
Meeting; (ii) the Prospectus/Proxy Statement shall include a statement to
the effect that the Board of Directors of Company has unanimously
recommended that Company's stockholders vote in favor of and adopt and
approve this Agreement and the Merger at the Company Stockholders' Meeting;
and (iii) neither the Board of Directors of Company nor any committee
thereof shall withdraw, amend or modify, or propose or resolve to withdraw,
amend or modify in a manner adverse to Parent, the unanimous recommendation
of the Board of Directors of Company that Company's stockholders vote in
favor of and adopt and approve this Agreement and
30
the Merger. For purposes of this Agreement, said recommendation of the Board
of Directors shall be deemed to have been modified in a manner adverse to
Parent if said recommendation shall no longer be unanimous.
(c) Nothing in this Agreement shall prevent the Board of Directors of
Company from withholding, withdrawing, amending or modifying its unanimous
recommendation in favor of the Merger if (i) a Superior Offer (as defined
below) is made to Company and is not withdrawn, (ii) neither Company nor any
of its representatives shall have violated any of the restrictions set forth
in Section 5.4, and (iii) the Board of Directors of Company concludes in
good faith, after consultation with its outside counsel, that, in light of
such Superior Offer, the withholding, withdrawal, amendment or modification
of such recommendation is required in order for the Board of Directors of
Company to comply with its fiduciary obligations to Company's stockholders
under applicable law. Nothing contained in this Section 5.2 shall limit
Company's obligation to convene and conduct the Company Stockholders'
Meeting (regardless of whether the unanimous recommendation of the Board of
Directors of Company shall have been withdrawn, amended or modified). For
purposes of this Agreement, "SUPERIOR OFFER" shall mean an unsolicited, bona
fide written offer made by a third party to consummate any of the following
transactions: (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
Company pursuant to which the stockholders of Company immediately preceding
such transaction hold less than 51% of the equity interest in the surviving
or resulting entity of such transaction; (ii) a sale or other disposition by
Company of assets (excluding inventory and used equipment sold in the
ordinary course of business) representing in excess of 51% of the fair
market value of Company's business immediately prior to such sale, or
(iii) the acquisition by any person or group (including by way of a tender
offer or an exchange offer or issuance by Company), directly or indirectly,
of beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 51% of the voting power of the then outstanding
shares of capital stock of Company, in each case on terms that the Board of
Directors of Company determines, in its reasonable judgment (based on
written advice of a financial advisor of nationally recognized reputation)
to be more favorable to Company stockholders from a financial point of view
than the terms of the Merger.
5.3 CONFIDENTIALITY; ACCESS TO INFORMATION
(a) The parties acknowledge that Company and Parent have previously
executed a Mutual Nondisclosure Agreement, dated as of September 29, 1999
(the "CONFIDENTIALITY AGREEMENT"), which Confidentiality Agreement will
continue in full force and effect in accordance with its terms.
(b) ACCESS TO INFORMATION. Each Party will afford the other Party its
accountants, counsel and other representatives reasonable access during
normal business hours, upon reasonable notice, to the properties, books,
records and personnel of such Party during the period prior to the Effective
Time to obtain all information concerning the business, including the status
of product development efforts, properties, results of operations and
personnel of such Party, as such requesting Party may reasonably request. No
information or knowledge obtained by any Party in any investigation pursuant
to this Section 5.3 will affect or be deemed to modify any representation or
warranty contained herein or the conditions to the obligations of the
parties to consummate the Merger.
5.4 NO SOLICITATION
(a) From and after the date of this Agreement until the Effective Time
or termination of this Agreement pursuant to Article VII, Company and its
subsidiaries will not, nor will they authorize or permit any of their
respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them
to, directly or indirectly (i) solicit, initiate, encourage or induce the
making, submission or announcement of any Acquisition Proposal (as defined
below), (ii) participate in any discussions or negotiations regarding, or
furnish to any person any non-public information with respect to, or take
any other action to facilitate any inquiries
31
or the making of any proposal that constitutes or may reasonably be expected
to lead to, any Acquisition Proposal, (iii) engage in discussions with any
person with respect to any Acquisition Proposal, (iv) subject to
Section 5.2(c), approve, endorse or recommend any Acquisition Proposal or
(v) enter into any letter of intent or similar document or any contract,
agreement or commitment contemplating or otherwise relating to any
Acquisition Transaction (as defined below); PROVIDED, HOWEVER, that this
Section 5.4(a) shall not prohibit Company from furnishing nonpublic
information regarding Company and its subsidiaries to, entering into a
confidentiality agreement with or entering into discussions with, any person
or group in response to a Superior Offer submitted by such person or group
(and not withdrawn) if (1) neither Company nor any representative of Company
and its subsidiaries shall have violated any of the restrictions set forth
in this Section 5.4, (2) the Board of Directors of Company concludes in good
faith, after consultation with its outside legal counsel, that such action
is required in order for the Board of Directors of Company to comply with
its fiduciary obligations to Company's stockholders under applicable law,
(3) (x) at least five days prior to furnishing any such nonpublic
information to, or entering into discussions or negotiations with, such
person or group, Company gives Parent written notice of the identity of such
person or group and of Company's intention to furnish nonpublic information
to, or enter into discussions or negotiations with, such person or group and
(y) Company receives from such person or group an executed confidentiality
agreement containing customary limitations on the use and disclosure of all
nonpublic written and oral information furnished to such person or group by
or on behalf of Company, and (4) contemporaneously with furnishing any such
nonpublic information to such person or group, Company furnishes such
nonpublic information to Parent (to the extent such nonpublic information
has not been previously furnished by Company to Parent). Company and its
subsidiaries will immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding
two sentences by any officer or director of Company or any of its
subsidiaries or any investment banker, attorney or other advisor or
representative of Company or any of its subsidiaries shall be deemed to be a
breach of this Section 5.4 by Company. In addition to the foregoing, Company
shall (i) provide Parent with at least forty-eight (48) hours prior notice
(or such lesser prior notice as provided to the members of Company's Board
of Directors but in no event less than eight hours) of any meeting of
Company's Board of Directors at which Company's Board of Directors is
reasonably expected to consider a Superior Offer and (ii) provide Parent
with at least five (5) business days prior written notice (or such lesser
prior notice as provided to the members of Company's Board of Directors but
in no event less than 24 hours) of a meeting of Company's Board of Directors
at which Company's Board of Directors is reasonably expected to recommend a
Superior Offer to its stockholders.
For purposes of this Agreement, "ACQUISITION PROPOSAL" shall mean any
offer or proposal (other than an offer or proposal by Parent) relating to
any Acquisition Transaction. For the purposes of this Agreement,
"ACQUISITION TRANSACTION" shall mean any transaction or series of related
transactions other than the transactions contemplated by this Agreement
involving: (A) any acquisition or purchase from Company by any person or
"group" (as defined under Section 13(d) of the Exchange Act and the rules
and regulations thereunder) of more than a 10% interest in the total
outstanding voting securities of Company or any of its subsidiaries or any
tender offer or exchange offer that if consummated would result in any
person or "group" (as defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) beneficially owning 10% or more of the
total outstanding voting securities of Company or any of its subsidiaries or
any merger, consolidation, business combination or similar transaction
involving Company pursuant to which the stockholders of Company immediately
preceding such transaction hold less than 90% of the equity interests in the
surviving or resulting entity of such transaction; (B) any sale, lease
(other than in the ordinary course of business), exchange, transfer, license
(other than in the ordinary course of business), acquisition or
32
disposition of more than 10% of the assets of Company; or (C) any
liquidation or dissolution of Company.
(b) In addition to the obligations of Company set forth in
paragraph (a) of this Section 5.4, Company as promptly as practicable shall
advise Parent orally and in writing of any request received by Company for
non-public information which Company reasonably believes would lead to an
Acquisition Proposal or of any Acquisition Proposal, or any inquiry received
by Company with respect to or which Company reasonably should believe would
lead to any Acquisition Proposal, the material terms and conditions of such
request, Acquisition Proposal or inquiry, and the identity of the person or
group making any such request, Acquisition Proposal or inquiry. Company will
keep Parent informed in all material respects of the status and details
(including material amendments or proposed amendments) of any such request,
Acquisition Proposal or inquiry.
5.5 PUBLIC DISCLOSURE
Parent and Company will consult with each other, and to the extent
practicable, agree, before issuing any press release or otherwise making any
public statement with respect to the Merger, this Agreement or an
Acquisition Proposal and will not issue any such press release or make any
such public statement prior to such consultation, except as may be required
by law or any listing agreement with a national securities exchange. The
parties have agreed to the text of the joint press release announcing the
signing of this Agreement.
5.6 REASONABLE EFFORTS; NOTIFICATION
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including using reasonable efforts to
accomplish the following: (i) the taking of all reasonable acts necessary to
cause the conditions precedent set forth in Article VI to be satisfied,
(ii) the obtaining of all necessary actions or nonactions, waivers,
consents, approvals, orders and authorizations from Governmental Entities
and the making of all necessary registrations, declarations and filings
(including registrations, declarations and filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary
to avoid any suit, claim, action, investigation or proceeding by any
Governmental Entity, (iii) the obtaining of all consents, approvals or
waivers from third parties required as a result of the transactions
contemplated in this Agreement, (iv) the defending of any suits, claims,
actions, investigations or proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions
contemplated hereby, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated
or reversed and (v) the execution or delivery of any additional instruments
reasonably necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement. In connection with and
without limiting the foregoing, Company and its Board of Directors shall, if
any state takeover statute or similar statute or regulation is or becomes
applicable to the Merger, this Agreement or any of the transactions
contemplated by this Agreement, use all reasonable efforts to ensure that
the Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation
on the Merger, this Agreement and the transactions contemplated hereby.
Notwithstanding anything herein to the contrary, nothing in this Agreement
shall be deemed to require Parent or Company or any subsidiary or affiliate
thereof to agree to any divestiture by itself or any of its affiliates of
shares of capital stock or of any business, assets or property, or the
imposition of any material limitation on the ability of any of them to
conduct their business or to own or exercise control of such assets,
properties and stock.
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(b) Company shall give prompt notice to Parent upon becoming aware that
any representation or warranty made by it contained in this Agreement has
become untrue or inaccurate, or of any failure of Company to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement, in each case, such
that the conditions set forth in Section 6.3(a) or 6.3(b) would not be
satisfied; PROVIDED, HOWEVER, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
(c) Parent shall give prompt notice to Company (i) upon becoming aware
that any representation or warranty made by it or Merger Sub contained in
this Agreement has become untrue or inaccurate, or of any failure of Parent
or Merger Sub to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, in each case, such that the conditions set forth in
Section 6.2(a) or 6.2(b) would not be satisfied or (ii) in the event Parent
intends to undertake a transaction that would require the vote of Parent
stockholders; PROVIDED, HOWEVER, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
5.7 THIRD PARTY CONSENTS
As soon as practicable following the date hereof, Parent and Company will
each use its commercially reasonable efforts to obtain any consents, waivers and
approvals under any of its or its subsidiaries' respective agreements,
contracts, licenses or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby.
5.8 STOCK OPTIONS, WARRANTS AND EMPLOYEE BENEFITS
(a) STOCK OPTIONS. At the Effective Time, each outstanding option to
purchase shares of Company Common Stock (each, a "Company Stock Option")
under the Company Option Plans, whether or not vested, shall by virtue of
the Merger be assumed by Parent. Each Company Stock Option so assumed by
Parent under this Agreement will continue to have, and be subject to, the
same terms and conditions of such options immediately prior to the Effective
Time (including, without limitation, any repurchase rights or vesting
provisions and provisions regarding the acceleration of vesting on certain
transactions, other than the transactions contemplated by this Agreement),
except that (i) each Company Stock Option will be exercisable (or will
become exercisable in accordance with its terms) for that number of whole
shares of Parent Common Stock equal to the product of the number of shares
of Company Common Stock that were issuable upon exercise of such Company
Stock Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounded down to the nearest whole number of shares of Parent
Common Stock and (ii) the per share exercise price for the shares of Parent
Common Stock issuable upon exercise of such assumed Company Stock Option
will be equal to the quotient determined by dividing the exercise price per
share of Company Common Stock at which such Company Stock Option was
exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest tenth of a cent.
(b) WARRANTS. At the Effective Time, the Warrants will be assumed by
Parent. Each Warrant so assumed by Parent under this Agreement will continue
to have, and be subject to, the same terms and conditions set forth in the
applicable warrant agreement immediately prior to the Effective Time
(including, without limitation, any repurchase rights or vesting
provisions), except that (i) each Warrant will be exercisable (or will
become exercisable in accordance with its terms) for that number of whole
shares of Parent Common Stock equal to the product of the number of shares
of Company Common Stock that were issuable upon exercise of such Warrant
immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded to the nearest whole number of shares of Parent Common Stock and
(ii) the per share exercise price for the share of Parent Common Stock
issuable upon exercise of such assumed Warrant will be equal to the quotient
determined by dividing the
34
exercise price per share of Company Common Stock at which such Warrant was
exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded to the nearest whole cent. Company agrees to provide the holders of
Company Warrants with any and all notices required as a result of the Merger
and the transactions contemplated thereby.
(c) ESPP. Prior to the Effective Time, outstanding purchase rights
under Company's ESPP shall be exercised in accordance with the terms of the
ESPP. With respect to each share of Company Common Stock purchased pursuant
to the ESPP, such exercise shall by virtue of the Merger, and without any
action on the part of the holder thereof, be converted into the right to
receive a number of shares of Parent Common Stock equal to the Exchange
Ratio without issuance of certificates representing issued and outstanding
shares of Company Common Stock to ESPP participants. Company agrees that it
shall terminate the ESPP immediately following the aforesaid purchase of
shares of Company Common Stock thereunder.
5.9 FORM S-8
Parent agrees to file, if available for use by Parent, a registration
statement on Form S-8 for the shares of Parent Common Stock issuable with
respect to assumed Company Stock Options as soon as is reasonably practicable
after the Effective Time.
5.10 INDEMNIFICATION
From and after the Effective Time, Parent will cause the Surviving
Corporation to fulfill and honor in all respects the obligations of Company
pursuant to any indemnification agreements between Company and its directors and
officers in effect immediately prior to the Effective Time (the "INDEMNIFIED
PARTIES") and any indemnification provisions under the Company Charter Documents
as in effect on the date hereof. The Certificate of Incorporation and Bylaws of
the Surviving Corporation will contain provisions with respect to exculpation
and indemnification that are at least as favorable to the Indemnified Parties as
those contained in the Company Charter Documents as in effect on the date
hereof, which provisions will not be amended, repealed or otherwise modified for
a period of six (6) years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who, immediately prior to
the Effective Time, were directors, officers, employees or agents of Company,
unless such modification is required by law. For a period of six years after the
Effective Time, Parent will cause the Surviving Corporation to use its
commercially reasonable efforts to maintain in effect, if available, directors'
and officers' liability insurance covering those persons who are currently
covered by Company's directors' and officers' liability insurance policy on
terms substantially similar to those applicable to the current directors and
officers of Company.
5.11 NASDAQ LISTING
Parent agrees to cause the listing on Nasdaq the shares of Parent Common
Stock issuable, and those required to be reserved for issuance, in connection
with the Merger, subject to official notice of issuance.
5.12 COMPANY AFFILIATE AGREEMENT
Set forth in Section 5.12 the Company Schedule is a list of those persons
who may be deemed to be, in Company's reasonable judgment, affiliates of Company
within the meaning of Rule 145 promulgated under the Securities Act (each, a
"COMPANY AFFILIATE"). Company will provide Parent with such information and
documents as Parent reasonably requests for purposes of reviewing such list.
Each Company Affiliate Agreement will be in full force and effect as of the
Effective Time. Parent will be entitled to place appropriate legends on the
certificates evidencing any Parent Common Stock to be received by a Company
Affiliate pursuant to the terms of this Agreement, and to issue appropriate stop
transfer instructions to the transfer agent for the Parent Common Stock,
consistent with the terms of the Company Affiliate Agreement.
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5.13 REGULATORY FILINGS; REASONABLE EFFORTS
As soon as may be reasonably practicable, Company and Parent each shall file
with the United States Federal Trade Commission (the "FTC") and the Antitrust
Division of the United States Department of Justice ("DOJ") Notification and
Report Forms relating to the transactions contemplated herein as required by the
HSR Act, as well as comparable pre-merger notification forms required by the
merger notification or control laws and regulations of any applicable
jurisdiction, as agreed to by the parties. Company and Parent each shall
promptly (a) supply the other with any information which may be required in
order to effectuate such filings and (b) supply any additional information which
reasonably may be required by the FTC, the DOJ or the competition or merger
control authorities of any other jurisdiction and which the parties may
reasonably deem appropriate; PROVIDED, HOWEVER, that Parent shall not be
required to agree to any divestiture by Parent or Company or any of Parent's
subsidiaries or affiliates of shares of capital stock or of any business, assets
or property of Parent or its subsidiaries or affiliates or of Company, its
affiliates, or the imposition of any material limitation on the ability of any
of them to conduct their businesses or to own or exercise control of such
assets, properties and stock.
5.14 NO RIGHTS PLAN AMENDMENT
Except as expressly required by Section 6.3(g), prior to the Closing,
Company and its Board of Directors shall not amend or modify or take any other
action with regard to the Company Rights Plan in any manner or take another
action so as to (i) render the Company Rights Plan inapplicable to any
transaction(s) other than the Merger and other transactions contemplated by this
Agreement, the Stock Option Agreement, the Company Affiliate Agreements and the
Company Voting Agreements, or (ii) permit any person or group who would
otherwise be an Acquiring Person (as defined in the Company Rights Plan) not to
be an Acquiring Person, or (iii) provide that a Distribution Date or a Shares
Acquisition Date (as such terms are defined in the Company Rights Plan) or
similar event does not occur as promptly as practicable by reason of the
execution of any agreement or transaction other than this Agreement and the
Merger and the agreements and transactions contemplated hereby and thereby, or
(iv) except as specifically contemplated by this Agreement, otherwise affect the
rights of holders of Rights.
5.15 TERMINATION OF 401(K) PLAN
Company and its Affiliates, as applicable, each agrees to terminate its
401(k) plan immediately prior to Closing, unless Parent, in its sole and
absolute discretion, agrees to sponsor and maintain such plans by providing
Company with written notice of such election at least three (3) days before the
Effective Time. Unless Parent provides such notice to Company, Parent shall
receive from Company evidence that Company's and each Affiliate's (as
applicable) 401(k) plan has been terminated pursuant to resolutions of each such
entity's Board of Directors (the form and substance of which resolutions shall
be subject to review and approval of Parent), effective as of the day
immediately preceding the Closing Date.
5.16 SEVERANCE
(i) Parent shall provide each Company employee terminated by Parent or its
Affiliates at the Effective Time the same severance, transition and separation
benefits as such employee would have received from Company pursuant to policies
and practices in effect immediately prior to the Effective Time; (ii) Parent
shall provide each Company employee identified at Closing who is hired by Parent
to assist with the transition of Company after the Effective Time and who is
subsequently terminated by Parent or its Affiliates the same severance,
transition and separation benefits as such employee would have received from
Company pursuant to policies and practices in effect immediately prior to the
Effective Time; and (iii) Parent shall provide each Company employee who becomes
a full-time employee of Parent and who is subsequently terminated by Parent or
its Affiliates severance, transition and separation benefits under Parent's
policies and practices in effect at such time. Company's Policy Regarding
Termination of Executive Status and Related Matters shall apply to the
transactions contemplated by this Agreement but
36
shall not apply to subsequent changes of control (as defined therein) occuring
between Merger Sub or any affiliated entities subsequent to the Effective Time.
5.17 PARENT STOCKHOLDERS' MEETING
Promptly after the date hereof, Parent will take all action necessary in
accordance with Delaware Law and the Parent Charter Documents to convene the
Parent Stockholders' Meeting to be held as promptly as practicable, and in any
event (to the extent permissible under applicable law) within 45 days after the
declaration of effectiveness of the S-4, for the purpose of voting upon the
issuance of Parent Common Stock pursuant to the Merger and this Agreement.
Parent will use its commercially reasonable efforts to solicit from its
stockholders proxies in favor of the issuance of Parent Common Stock in
connection with the Merger and will take all other action necessary or advisable
to secure the vote or consent of its stockholders required by the rules of
Nasdaq or Delaware Law to obtain such approvals. Notwithstanding anything to the
contrary contained in this Agreement, Parent may adjourn or postpone the Parent
Stockholders' Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Prospectus/Proxy Statement is provided to
Parent's stockholders in advance of a vote on the issuance of such stock or, if
as of the time for which the Parent Stockholders' Meeting is originally
scheduled (as set forth in the Prospectus/Proxy Statement) there are
insufficient shares of Parent Common Stock represented (either in person or by
proxy) to constitute a quorum necessary to conduct the business of the Parent
Stockholders' Meeting. Parent shall ensure that the Parent Stockholders' Meeting
is called, noticed, convened and conducted, and that all proxies solicited by
Parent in connection with the Parent Stockholders' Meeting are solicited, in
compliance with Delaware Law, the Parent Charter Documents, the rules of Nasdaq
and all other applicable legal requirements.
5.18 DIRECTORS
Promptly following the Effective Time, Parent will cause ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to be designated as directors of Parent to serve in the
class of directors whose term expires in 2002. In the event either of
Messrs. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ is unable or unwilling to serve or complete his term,
▇▇. ▇▇▇▇▇▇▇ will designate ▇▇. ▇▇▇▇▇▇' successor and ▇▇. ▇▇▇▇▇▇ will designate
▇▇. ▇▇▇▇▇▇▇'▇ successor. If the individual that will make such designation is
unable to do so, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ will make such designation.
5.19 BENEFIT ARRANGEMENTS
Parent covenants and agrees that to the extent permitted by applicable law
and to the extent the existing benefit plans and arrangements provided by
Company to its employees are terminated on or after the Effective Time, such
employees shall be entitled to benefits which are available or subsequently
become available to Parent's employees, and on a basis which is on parity with
Parent's employees. For purposes of satisfying the terms and conditions of such
plans, Parent shall give full credit for eligibility, vesting or benefit accrual
to the extent possible for each participant's period of service at the Company
prior to the Effective Time.
5.20 RESTRUCTURING
In the event that all conditions to the closing are satisfied on or before
the date specified in Section 7.1(b) other than the condition specified in
Section 6.3(f), then the parties agree to use best efforts in good faith to
negotiate the restructure of this Agreement to allow the transaction
contemplated hereby to proceed; provided however that in such case neither party
shall be bound to any agreement or any such restructuring unless mutually
agreed.
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ARTICLE VI
CONDITIONS TO THE MERGER
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to this Agreement to effect the
Merger shall be subject to the satisfaction at or prior to the Closing Date of
the following conditions:
(a) COMPANY STOCKHOLDER APPROVAL. This Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of Company.
(b) PARENT STOCKHOLDER APPROVAL. This Agreement shall have been
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of Parent.
(c) REGISTRATION STATEMENT EFFECTIVE; PROXY STATEMENT. The SEC shall
have declared the S-4 effective. No stop order suspending the effectiveness
of the S-4 or any part thereof shall have been issued and no proceeding for
that purpose, and no similar proceeding in respect of the Proxy
Statement/Prospectus, shall have been initiated or threatened in writing by
the SEC.
(d) NO ORDER; HSR ACT. No Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of
making the Merger illegal or otherwise prohibiting consummation of the
Merger. All waiting periods, if any, under the HSR Act relating to the
transactions contemplated hereby will have expired or terminated early and
all material foreign antitrust approvals required to be obtained prior to
the Merger in connection with the transactions contemplated hereby shall
have been obtained.
(e) TAX OPINIONS. Parent and Company shall each have received written
opinions from their respective tax counsel (▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, Professional Corporation, and ▇▇▇▇▇▇ Hall & ▇▇▇▇▇▇▇, respectively),
in form and substance reasonably satisfactory to them, to the effect that
the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code and such opinions shall not have been withdrawn;
PROVIDED, HOWEVER, that if the counsel to either Parent or Company does not
render such opinion, this condition shall nonetheless be deemed to be
satisfied with respect to such party if counsel to the other party renders
such opinion to such party. The parties to this Agreement agree to make such
reasonable representations as requested by such counsel for the purpose of
rendering such opinions.
(f) NASDAQ LISTING. The shares of Parent Common Stock issuable to the
stockholders of Company pursuant to this Agreement and such other shares
required to be reserved for issuance in connection with the Merger shall
have been authorized for listing on Nasdaq upon official notice of issuance.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF COMPANY
The obligation of Company to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Company:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of Parent and Merger Sub contained in this Agreement (i) shall have been
true and correct as of the date of this Agreement and (ii) shall be true and
correct on and as of the Closing Date with the same force and effect as if
made on the Closing Date except (A) in each case, or in the aggregate, as
does not constitute a Material Adverse Effect on Parent and Merger Sub,
(B) for changes contemplated by this Agreement and (C) for those
representations and warranties which address matters only as of a particular
date
38
(which representations shall have been true and correct (subject to the
qualifications as set forth in the preceding clause A) as of such particular
date) (it being understood that, for purposes of determining the accuracy of
such representations and warranties, (i) all "Material Adverse Effect"
qualifications and other qualifications based on the word "material" or
similar phrases contained in such representations and warranties shall be
disregarded and (ii) any update of or modification to the Parent Schedule
made or purported to have been made after the date of this Agreement shall
be disregarded). Company shall have received a certificate with respect to
the foregoing signed on behalf of Parent by an authorized officer of Parent.
(b) AGREEMENTS AND COVENANTS. Parent and Merger Sub shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
them on or prior to the Closing Date, and Company shall have received a
certificate to such effect signed on behalf of Parent by an authorized
officer of Parent.
(c) MATERIAL ADVERSE EFFECT. No Material Adverse Effect with respect
to Parent and its subsidiaries shall have occurred since the date of this
Agreement.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB
The obligations of Parent and Merger Sub to consummate and effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of each of
the following conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) REPRESENTATIONS AND WARRANTIES. Each representation and warranty
of Company contained in this Agreement (i) shall have been true and correct
as of the date of this Agreement and (ii) shall be true and correct on and
as of the Closing Date with the same force and effect as if made on and as
of the Closing Date except (A) in each case, or in the aggregate, as does
not constitute a Material Adverse Effect on Company provided, however, such
Material Adverse Effect qualifier shall be inapplicable with respect to
representations and warranties contained in Section 2.3, (B) for changes
contemplated by this Agreement and (C) for those representations and
warranties which address matters only as of a particular date (which
representations shall have been true and correct (subject to the
qualifications as set forth in the preceding clause (A) as of such
particular date) (it being understood that, for purposes of determining the
accuracy of such representations and warranties, (i) all "Material Adverse
Effect" qualifications and other qualifications based on the word "material"
or similar phrases contained in such representations and warranties shall be
disregarded and (ii) any update of or modification to the Company Schedule
made or purported to have been made after the date of this Agreement shall
be disregarded). Parent shall have received a certificate with respect to
the foregoing signed on behalf of Company by an authorized officer of
Company.
(b) AGREEMENTS AND COVENANTS. Company shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of Company by the Chief Executive Officer and the Chief Financial
Officer of the Company.
(c) MATERIAL ADVERSE EFFECT. No Material Adverse Effect with respect
to Company and its subsidiaries shall have occurred since the date of this
Agreement.
(d) AFFILIATE AGREEMENTS. Each of the Company Affiliates shall have
entered into the Company Affiliate Agreement and each of such agreements
will be in full force and effect as of the Effective Time.
(e) CONSENTS. Company shall have obtained all consents, waivers and
approvals required in connection with the consummation of the transactions
contemplated hereby in connection with the agreements, contracts, licenses
or leases set forth on Section 6.3(e) of the Company Schedule.
39
(f) OPINIONS OF ACCOUNTANTS. Parent shall have received (i) from
Deloitte & Touche LLP, independent auditors for Company, a copy of a letter
addressed to Company dated as of the Closing Date in substance reasonably
satisfactory to Parent (which may contain customary qualifications and
assumptions) to the effect that Deloitte & Touche LLP concurs with Company
management's conclusion that no conditions exist related to Company that
would preclude Parent from accounting for the Merger as a
"pooling-of-interests" and (ii) from KPMG LLP, independent accountants for
Parent, a letter dated as of the Closing Date in substance reasonably
satisfactory to Parent (which may contain customary qualifications and
assumptions) to the effect that KPMG LLP concurs with Parent management's
conclusion that no conditions exist related to Parent that would preclude
Parent from accounting for the Merger as a "pooling-of-interests."
(g) COMPANY RIGHTS PLANS. All actions necessary to extinguish and
cancel all outstanding Rights under the Company Rights Plan at the Effective
Time and to render such rights inapplicable to the Merger shall have been
taken.
(h) NONCOMPETITION AGREEMENTS. Parent shall have received from each of
the persons identified on EXHIBIT D a noncompetition agreement in a form
provided by the Parent and approved by the Company.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 TERMINATION.
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after the requisite approval of the stockholders of Company:
(a) by mutual written consent duly authorized by the Boards of Directors
of Parent and Company;
(b) by either Company or Parent if the Merger shall not have been
consummated by June 30, 2000 for any reason; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Merger to occur on or before such
date and such action or failure to act constitutes a breach of this
Agreement;
(c) by either Company or Parent if a Governmental Entity shall have
issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise
prohibiting the Merger, which order, decree, ruling or other action is final
and nonappealable;
(d) by either Company or Parent if the required approval of the
stockholders of Company contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting
of Company stockholders duly convened therefor or at any adjournment
thereof; PROVIDED, HOWEVER, that the right to terminate this Agreement under
this Section 7.1(d) shall not be available to Company where the failure to
obtain Company stockholder approval shall have been caused by the action or
failure to act of Company and such action or failure to act constitutes a
breach by Company of this Agreement;
(e) by Company, upon a breach of any representation, warranty, covenant
or agreement on the part of Parent set forth in this Agreement, or if any
representation or warranty of Parent shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, PROVIDED, that if such
inaccuracy in Parent's representations and warranties or breach by Parent is
curable by Parent through the exercise of its commercially reasonable
efforts,
40
then Company may not terminate this Agreement under this Section 7.1(e) for
thirty (30) days after delivery of written notice from Company to Parent of
such breach, provided Parent continues to exercise commercially reasonable
efforts to cure such breach (it being understood that Company may not
terminate this Agreement pursuant to this paragraph (e) if it shall have
materially breached this Agreement or if such breach by Parent is cured
during such thirty (30)-day period);
(f) by Parent, upon a breach of any representation, warranty, covenant
or agreement on the part of Company set forth in this Agreement, or if any
representation or warranty of Company shall have become untrue, in either
case such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
would not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, PROVIDED, that if such
inaccuracy in Company's representations and warranties or breach by Company
is curable by Company through the exercise of its commercially reasonable
efforts, then Parent may not terminate this Agreement under this
Section 7.1(f) for thirty (30) days after delivery of written notice from
Parent to Company of such breach, provided Company continues to exercise
commercially reasonable efforts to cure such breach (it being understood
that Parent may not terminate this Agreement pursuant to this paragraph (f)
if it shall have materially breached this Agreement or if such breach by
Company is cured during such thirty (30)-day period);
(g) by Parent, upon a breach of the provisions of Section 5.4 of this
Agreement;
(h) by Parent if a Triggering Event (as defined below) shall have
occurred; or
(i) by either Company or Parent if the required approval by the
stockholders of Parent contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting
of Parent stockholders duly convened therefor or at any adjournment thereof;
PROVIDED, HOWEVER, that the right to terminate this Agreement under this
Section 7.1(i) shall not be available to Parent where the failure to obtain
Parent stockholder approval shall have been caused by the action or failure
to act of parent and such action or failure to act constitutes a breach by
Parent of this Agreement.
For the purposes of this Agreement, a "Triggering Event" shall be deemed to
have occurred if: (i) the Board of Directors of Company or any committee thereof
shall for any reason have withdrawn or shall have amended or modified in a
manner adverse to Parent its unanimous recommendation in favor of, the adoption
and approval of the Agreement or the approval of the Merger; (ii) Company shall
have failed to include in the Proxy Statement/Prospectus the unanimous
recommendation of the Board of Directors of Company in favor of the adoption and
approval of the Agreement and the approval of the Merger; (iii) Board of
Directors of Company fails to reaffirm its unanimous recommendation in favor of
the adoption and approval of the Agreement and the approval of the Merger within
five (5) business days after Parent requests in writing that such recommendation
be reaffirmed at any time following the announcement of an Acquisition Proposal;
(iv) the Board of Directors of Company or any committee thereof shall have
approved or recommended any Acquisition Proposal; (v) Company shall have entered
into any letter of intent or similar document or any agreement, contract or
commitment accepting any Acquisition Proposal; or (vi) a tender or exchange
offer relating to securities of Company shall have been commenced by a person
unaffiliated with Parent and Company shall not have sent to its securityholders
pursuant to Rule 14e-2 promulgated under the Securities Act, within ten
(10) business days after such tender or exchange offer is first published sent
or given, a statement disclosing that Company recommends rejection of such
tender or exchange offer.
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7.2 NOTICE OF TERMINATION; EFFECT OF TERMINATION
Any termination of this Agreement under Section 7.1 above will be effective
immediately upon (or, if the termination is pursuant to Section 7.1(e) or
Section 7.1(f) and the proviso therein is applicable, thirty (30) days after)
the delivery of written notice of the terminating party to the other parties
hereto. In the event of the termination of this Agreement as provided in
Section 7.1, this Agreement shall be of no further force or effect, except
(i) as set forth in this Section 7.2, Section 7.3 and Article 8 (General
Provisions), each of which shall survive the termination of this Agreement, and
(ii) nothing herein shall relieve any party from liability for any intentional
or willful breach of this Agreement. No termination of this Agreement shall
affect the obligations of the parties contained in the Confidentiality
Agreement, all of which obligations shall survive termination of this Agreement
in accordance with their terms.
7.3 FEES AND EXPENSES
(a) GENERAL. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses
whether or not the Merger is consummated; PROVIDED, HOWEVER, that Parent and
Company shall share equally all fees and expenses, other than attorneys' and
accountants fees and expenses, incurred in relation to the printing and
filing (with the SEC) of the Proxy Statement/ Prospectus (including any
preliminary materials related thereto) and the S-4 (including financial
statements and exhibits) and any amendments or supplements thereto.
(b) COMPANY PAYMENTS.
(i) Company shall pay to Parent in immediately available funds,
within one (1) business day after demand by Parent, an amount equal to
$25,500,000.00 (the "TERMINATION FEE") if this Agreement is terminated by
Parent pursuant to Section 7.1(g) or (h).
(ii) Company shall pay Parent in immediately available funds, within
one (1) business day after demand by Parent, an amount equal to the
Termination Fee, if this Agreement is terminated by Parent or Company, as
applicable, pursuant to Sections 7.1(b) or (d) and any of the following
shall occur:
a) if following the date hereof and prior to the termination of
this Agreement, a third party has announced an Acquisition Proposal
and within twelve (12) months following the termination of this
Agreement a Company Acquisition (as defined below) is consummated; or
b) if following the date hereof and prior to the termination of
this Agreement, a third party has announced an Acquisition Proposal
and within twelve (12) months following the termination of this
Agreement Company enters into an agreement or letter of intent
providing for a Company Acquisition.
Notwithstanding the foregoing, Parent shall not be entitled to
Termination Fee with respect to Section 7.1(b) if Parent's or Merger
Sub's action or failure to act has been the principal cause of or
resulted in the failure of the Merger to occur on or before June 30, 2000
and such action or failure to act constitutes a breach of this Agreement.
(iii) Company acknowledges that the agreements contained in this
Section 7.3(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Parent would not
enter into this Agreement; accordingly, if Company fails to pay in a
timely manner the amounts due pursuant to this Section 7.3(b) and, in
order to obtain such payment, Parent makes a claim that results in a
judgment against Company for the amounts set forth in this
Section 7.3(b), Company shall pay to Parent its reasonable costs and
expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amounts set
forth in this Section 7.3(b) at the prime rate of The Chase Manhattan
42
Bank in effect on the date such payment was required to be made. Payment
of the fees described in this Section 7.3(b) shall not be in lieu of
damages incurred in the event of breach of this Agreement. For the
purposes of this Agreement, "COMPANY ACQUISITION" shall mean any of the
following transactions (other than the transactions contemplated by this
Agreement): (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving Company pursuant to which the stockholders of Company
immediately preceding such transaction hold less than 50% of the
aggregate equity interests in the surviving or resulting entity of such
transaction, (ii) a sale or other disposition by Company of assets
representing in excess of 50% of the aggregate fair market value of
Company's business immediately prior to such sale or (iii) the
acquisition by any person or group (including by way of a tender offer or
an exchange offer or issuance by Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 50% of the voting power of the then outstanding
shares of capital stock of Company.
7.4 AMENDMENT
Subject to applicable law, this Agreement may be amended by the parties
hereto at any time by execution of an instrument in writing signed on behalf of
each of Parent and Company.
7.5 EXTENSION; WAIVER
At any time prior to the Effective Time, any party hereto may, to the extent
legally allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Delay in exercising any right under this Agreement shall
not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of Company, Parent and Merger Sub
contained in this Agreement shall terminate at the Effective Time, and only the
covenants that by their terms survive the Effective Time shall survive the
Effective Time.
8.2 NOTICES
All notices and other communications hereunder shall be in writing and shall
be deemed given if delivered personally or by commercial delivery service, or
sent via telecopy (receipt confirmed) to the parties at the following addresses
or telecopy numbers (or at such other address or telecopy numbers for a party as
shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Informix Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Company, to:
Ardent Software, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
8.3 INTERPRETATION; KNOWLEDGE
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise
indicated. When a reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement. Unless otherwise
indicated the words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement. When reference is made herein to "the
business of" an entity, such reference shall be deemed to include the
business of all direct and indirect subsidiaries of such entity. Reference
to the subsidiaries of an entity shall be deemed to include all direct and
indirect subsidiaries of such entity.
(b) For purposes of this Agreement, the term "KNOWLEDGE" means with
respect to a party hereto, with respect to any matter in question, that any
of the executive officers of such party has actual knowledge of such matter.
(c) For purposes of this Agreement, the term "MATERIAL ADVERSE EFFECT"
when used in connection with an entity means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with
other changes, events, violations, inaccuracies, circumstances or effects,
that is materially adverse to the business, assets (including intangible
assets), capitalization, financial condition or results of operations of
such entity and its subsidiaries taken as a whole; PROVIDED that the failure
of Parent or Company to achieve the current street expectations for any
fiscal quarter shall not by itself constitute a Material Adverse Effect.
(d) For purposes of this Agreement, the term "PERSON" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability
44
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization, entity or Governmental Entity.
8.4 COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other party, it being understood that all parties need not sign the same
counterpart.
8.5 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES
This Agreement and the documents and instruments and other agreements among
the parties hereto as contemplated by or referred to herein, including the
Company Schedule and the Parent Schedule (a) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof, it being understood that the
Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder,
except as specifically provided in Section 5.10.
8.6 SEVERABILITY
In the event that any provision of this Agreement, or the application
thereof, becomes or is declared by a court of competent jurisdiction to be
illegal, void or unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to other persons or
circumstances will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or unenforceable
provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of
such void or unenforceable provision.
8.7 OTHER REMEDIES; SPECIFIC PERFORMANCE
Except as otherwise provided herein, any and all remedies herein expressly
conferred upon a party will be deemed cumulative with and not exclusive of any
other remedy conferred hereby, or by law or equity upon such party, and the
exercise by a party of any one remedy will not preclude the exercise of any
other remedy. The parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
8.8 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof.
8.9 RULES OF CONSTRUCTION
The parties hereto agree that they have been represented by counsel during
the negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
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8.10 ASSIGNMENT
No party may assign either this Agreement or any of its rights, interests,
or obligations hereunder without the prior written approval of the other
parties. Subject to the preceding sentence, this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
8.11 WAIVER OF JURY TRIAL
EACH OF PARENT, COMPANY AND MERGER SUB HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF PARENT, COMPANY OR MERGER SUB IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.
*****
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
INFORMIX CORPORATION
By: /s/ ▇▇▇▇-▇▇▇▇ DEXMIER
--------------------------------------
Name: ▇▇▇▇-▇▇▇▇ Dexmier
--------------------------------------
Title: President and Chief Executive Officer
--------------------------------------
IROQUOIS ACQUISITION CORPORATION
By: /s/ ▇▇▇▇-▇▇▇▇ DEXMIER
--------------------------------------
Name: ▇▇▇▇-▇▇▇▇ Dexmier
--------------------------------------
Title: President
--------------------------------------
ARDENT SOFTWARE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Chairman, President and CEO
--------------------------------------
**** REORGANIZATION AGREEMENT ****
47