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EXHIBIT 1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of
October 31, 1998, by and among BMC Software, Inc., a Delaware corporation
("BMC"), Ranger Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of BMC ("Merger Sub"), and ▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc., a Delaware
corporation ("▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, the respective boards of directors of BMC and ▇▇▇▇▇ ▇▇▇▇ it
desirable and in the best interests of their respective corporations and their
respective stockholders that Merger Sub be merged with and into ▇▇▇▇▇, pursuant
to the provisions of Section 251 of the Delaware General Corporation Law
("DGCL"), in exchange for the consideration provided for in the Plan and
Agreement of Merger attached hereto as Exhibit A ("Plan of Merger"), and have
proposed, declared advisable, and approved such merger pursuant to this
Agreement and the Plan of Merger, which have been duly approved by resolutions
of the respective boards of directors of BMC and ▇▇▇▇▇;
WHEREAS, for federal income tax purposes, it is intended that the
merger qualify as a reorganization under the provisions of Section 368(a) of
the United States Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties hereto acknowledge the execution and delivery of
that certain Stock Option Agreement of even date herewith between ▇▇▇▇▇ (as
grantor) and BMC (as grantee) (the "Stock Option Agreement") concurrently with
the execution and delivery of this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, and in order to set forth the terms
and conditions of the Merger (as hereinafter defined), the mode of carrying the
same into effect, the manner and basis of converting the presently outstanding
shares of common stock, par value $.001 per share ("▇▇▇▇▇ Common Stock"), of
▇▇▇▇▇ into shares of common stock, par value $.01 per share ("BMC Common
Stock"), of BMC, and such other details and provisions as are deemed necessary
or proper, the parties hereto agree as follows:
ARTICLE I
MERGER
1.1. The Merger. Subject to and in accordance with the terms and
conditions of this Agreement and pursuant to the Plan of Merger, at the
Effective Time (as hereinafter defined) Merger
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Sub shall be merged with and into ▇▇▇▇▇ (the "Merger"), the separate existence
of Merger Sub shall cease, and ▇▇▇▇▇ (i) shall continue as the surviving
corporation (sometimes referred to herein as the "Surviving Corporation") under
the corporate name "▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc.", (ii) shall be governed by the laws
of the State of Delaware, (iii) shall maintain a registered office in the State
of Delaware at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and shall (iv)
succeed to and assume all of the rights, properties and obligations of Merger
Sub and ▇▇▇▇▇ in accordance with the DGCL. Subject to the terms and conditions
of this Agreement and the Plan of Merger, BMC agrees, at or prior to the
Closing (as hereinafter defined), to cause Merger Sub to execute and deliver
the Plan of Merger in form and substance substantially similar to the form
attached hereto as Exhibit A. Subject to the terms and conditions of this
Agreement and the Plan of Merger, ▇▇▇▇▇ agrees, at or prior to the Closing, to
execute and deliver the Plan of Merger in form and substance substantially
similar to the form attached hereto as Exhibit A.
1.2. Closing Date. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇ L.L.P., 2300 First City Tower, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, on a
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 V or at such other time and place and on such other date as BMC and
▇▇▇▇▇ shall agree; provided that the conditions set forth in Article V shall
have been satisfied or waived at or prior to such time. The date on which the
Closing occurs is herein referred to as the "Closing Date."
1.3. Effective Time. As soon as practicable on the Closing Date,
the parties hereto will cause the Merger to become effective by filing with the
Secretary of State of the State of Delaware, a certificate of merger in such
form as required by, and executed in accordance with, the relevant provisions
of the DGCL (the time of filing the certificate of merger with the Secretary of
State of the State of Delaware being the "Effective Time").
1.4. Material Adverse Effect. "Material Adverse Effect" or
"Material Adverse Change" means any effect, change, event, circumstance or
condition which when considered with all other effects, changes, events,
circumstances or conditions would reasonably be expected to materially
adversely affect the business, results of operations or financial condition of
BMC or ▇▇▇▇▇, in each case including its respective subsidiaries together with
it taken as a whole, as the case may be. In no event shall any of the
following constitute a Material Adverse Effect or a Material Adverse Change:
(i) a change in the trading prices of either of BMC's or ▇▇▇▇▇'▇ equity
securities between the date hereof and the Effective Time, in and of itself;
(ii) effects, changes, events, circumstances or conditions generally affecting
the industry in which either BMC or ▇▇▇▇▇ operate or arising from changes in
general business or economic conditions; (iii) effects, changes, events,
circumstances or conditions directly attributable to (a) out-of-pocket fees and
expenses (including without limitation legal, accounting, investigatory,
investment banking, and other fees and expenses) incurred in connection with
the transactions contemplated by this Agreement, or (b) the payment by BMC or
▇▇▇▇▇ of all amounts due to any officers or employees of ▇▇▇▇▇ under employment
contracts, non-competition agreements, employee benefit plans or severance
arrangements; (iv) any effects, changes, events, circumstances or conditions
resulting from any change in law or generally accepted accounting principles,
which affect generally entities such as BMC and ▇▇▇▇▇; (v) any effects,
changes, events, circumstances or conditions (including, without limitation,
non-governmental
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litigation, delays in customer orders, a reduction in sales, a disruption in
supplier, distributor or similar relationships or a loss of employees)
resulting from the announcement or pendency of any of the transactions
contemplated by this Agreement; and (vi) any effects, changes, events,
circumstances or conditions resulting from compliance by BMC or ▇▇▇▇▇ with the
terms of, or the taking of any action contemplated or permitted by, this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF ▇▇▇▇▇
▇▇▇▇▇ represents and warrants subject to the exceptions specifically
described in writing in the respective sections of the disclosure schedule
delivered by ▇▇▇▇▇ to BMC and dated the date hereof (the "▇▇▇▇▇ Disclosure
Schedule") as follows:
2.1. Organization and Standing. ▇▇▇▇▇ is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has full requisite corporate power and authority to carry on its
business as it is currently conducted, and to own and operate the properties
currently owned and operated by it, and is duly qualified or licensed to do
business and is in good standing as a foreign corporation authorized to do
business in all jurisdictions in which the character of the properties owned or
the nature of the business conducted by it would make such qualification or
licensing necessary, except where the failure to be so qualified or licensed
could not reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇.
2.2. Agreement Authorized and its Effect on Other Obligations.
Upon approval and adoption of this Agreement and approval of the Merger by the
stockholders of ▇▇▇▇▇, the consummation of the transactions contemplated hereby
will have been duly and validly authorized by all necessary corporate action on
the part of ▇▇▇▇▇, and this Agreement will be a valid and binding obligation of
▇▇▇▇▇ enforceable against ▇▇▇▇▇ in accordance with its terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
debtor relief or similar laws affecting the rights of creditors generally, and
(ii) general principles of equity. The Stock Option Agreement and the
consummation of the transactions contemplated thereby have been duly and
validly authorized by all necessary corporate action on the part of ▇▇▇▇▇, and
the Stock Option Agreement is a valid and binding obligation of ▇▇▇▇▇
enforceable against ▇▇▇▇▇ in accordance with its terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
debtor relief or similar laws affecting the rights of creditors generally, and
(ii) general principles of equity. The Stock Option Agreement and the
consummation of the transactions contemplated thereby do not conflict with or
cause a violation, breach or default of any term or provision of (i) the
certificate of incorporation or bylaws of ▇▇▇▇▇ or (ii) any indenture,
mortgage, deed of trust, lease, contract or other agreement to which ▇▇▇▇▇ or
any of its subsidiaries is a party or by which any of them or their properties
are bound, other than such violations, breaches or defaults as could not
reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇. At the
Effective Time, the consummation of the Merger will not conflict with or result
in a violation or breach of any term or provision of, nor constitute a default
under, (i) the certificate of incorporation or bylaws of ▇▇▇▇▇ or (ii) any
indenture, mortgage, deed of trust, lease, contract or other agreement to which
▇▇▇▇▇ or any of its subsidiaries
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is a party or by which any of them or their properties are bound, other than
such violations, breaches or defaults as could not reasonably be expected to
have a Material Adverse Effect on ▇▇▇▇▇. Section 2.2 of the ▇▇▇▇▇ Disclosure
Schedule lists all holders of any material indebtedness for borrowed money of
▇▇▇▇▇ as of the date of this Agreement, the lessors of any material property
leased by ▇▇▇▇▇ and the other parties to any Material Contract (as defined in
Section 2.9) to which ▇▇▇▇▇ is a party as of the date of this Agreement in each
case whose consent to the Merger is required.
2.3. Capitalization. The authorized capitalization of ▇▇▇▇▇
consists of 2,000,000 shares of preferred stock, par value $.001 per share, of
which as of the date hereof no shares were issued and outstanding and
45,000,000 shares of common stock, par value $.001 per share (the "▇▇▇▇▇ Common
Stock"), of which at September 30, 1998, 27,667,249 shares were issued and
outstanding, and an additional 8,453,000 shares were reserved for issuance in
conjunction with various employee benefit plans; at September 30, 1998,
3,065,930 shares of ▇▇▇▇▇ Common Stock were held in ▇▇▇▇▇'▇ treasury. All of
such outstanding shares are validly issued, fully paid and nonassessable, and
were not issued in violation of any preemptive rights of any stockholder.
Section 2.3 of the ▇▇▇▇▇ Disclosure Schedule sets forth a complete list as of
the date of this Agreement of all outstanding options, warrants or obligations
of any kind to issue any shares of capital stock of ▇▇▇▇▇, the owners thereof
and the amounts owned.
2.4. Subsidiaries. Section 2.4 of the ▇▇▇▇▇ Disclosure Schedule
lists the subsidiary corporations of ▇▇▇▇▇ existing at September 30, 1998, and
shows as to each of such subsidiary corporations the percentage of the total
outstanding stock thereof which is owned by ▇▇▇▇▇ at such date. All
outstanding shares of stock of the subsidiary corporations owned by ▇▇▇▇▇ are
validly issued, fully paid, and nonassessable, and ▇▇▇▇▇ has good and valid
title thereto free and clear of any mortgage, pledge, lien, charge, security
interest, option, right of first refusal, preferential purchase right, defect,
encumbrance or other right or interest of any other person (collectively, an
"Encumbrance"), except for shares of capital stock or other similar ownership
interests of certain subsidiaries of ▇▇▇▇▇ that are owned by certain nominee
equity holders as required by the applicable law of the jurisdiction of
organization of such subsidiaries. Each such subsidiary is a corporation duly
organized, validly existing, and in good standing (or equivalent concept with
respect to jurisdictions that do not recognize such concept) under the laws of
the jurisdiction under which it is incorporated and has full requisite
corporate power and authority to own its property and carry on its business as
presently conducted by it and is, or on the Effective Time will be, duly
qualified or licensed to do business and is, or on the Effective Time will be,
in good standing (or equivalent concept with respect to jurisdictions that do
not recognize such concept) as a foreign corporation authorized to do business
in all jurisdictions in which the character of the properties owned or the
nature of the business conducted makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed could not
reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇. As
hereinafter used in this Article II, the term "▇▇▇▇▇" also includes any and all
of its directly and indirectly held subsidiaries, except where the context
indicates to the contrary; provided, however, that for purposes of Sections
2.7.1 and 2.20, the term "▇▇▇▇▇" further includes any corporation, trade,
business or entity under common control with ▇▇▇▇▇ within the meaning of
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
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2.5. Reports and Financial Statements. ▇▇▇▇▇ has previously
furnished or made available (including through the SEC ▇▇▇▇▇ system) to BMC
true and complete copies of (a) all annual reports filed by ▇▇▇▇▇ with the
Securities and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), since
September 30, 1995, (b) ▇▇▇▇▇'▇ quarterly and other reports filed with the
Commission since September 30, 1995, (c) all definitive proxy solicitation
materials filed by ▇▇▇▇▇ with the Commission since September 30, 1995, and (d)
any registration statements of ▇▇▇▇▇ declared effective by the Commission since
September 30, 1995. The consolidated financial statements of ▇▇▇▇▇ and its
subsidiaries included in ▇▇▇▇▇'▇ most recent report on Form 10-K and most
recent report on Form 10-Q, and any other reports filed with the Commission by
▇▇▇▇▇ under the Exchange Act subsequent thereto (collectively, the "▇▇▇▇▇
Reports") were, or (if filed after the date hereof) will be, prepared in
accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved and fairly present, or will fairly
present, the consolidated financial position for ▇▇▇▇▇ and its subsidiaries as
of the dates thereof and the consolidated results of their operations and
changes in financial position for the periods then ended (except with respect
to interim period financial statements, for normal year-end adjustments which
are not material and for the absence of footnotes). The ▇▇▇▇▇ Reports did not
at the time each of the ▇▇▇▇▇ Reports was filed with the Commission (or, if
amended or superseded by a subsequent filing, then on the date of such filing),
and (if filed after the date hereof) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
whey they were made, not misleading. Since September 30, 1995, ▇▇▇▇▇ has filed
with the Commission all reports required to be filed by ▇▇▇▇▇ under the
Exchange Act and the rules and regulations of the Commission.
2.6. Liabilities. ▇▇▇▇▇ has no liabilities of the type required to
be disclosed in the consolidated financial statements of ▇▇▇▇▇ prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except for: (i) liabilities disclosed in the financial
statements (including any related notes) contained in the ▇▇▇▇▇ Reports and
(ii) liabilities incurred in the ordinary course of business consistent with
past practices.
2.7. Additional ▇▇▇▇▇ Information. Set forth in Section 2.7 of the
▇▇▇▇▇ Disclosure Schedule are true, complete and correct lists of the following
items, and ▇▇▇▇▇ agrees that upon the request of BMC, it will furnish to BMC
true, complete and correct copies of any documents referred to in such lists:
2.7.1. Employee Compensation Plans. All bonus, incentive
compensation, stock option, deferred compensation, profit-sharing,
retirement, pension, welfare, severance pay, supplemental income,
group insurance, death benefit, or other fringe benefit plans,
arrangements or trust agreements that are in effect as of the date of
this Agreement covering active, former or retired employees of ▇▇▇▇▇
(collectively, "▇▇▇▇▇ Plans"), together with copies of the most recent
Internal Revenue Service determination letters that have been
received, if any, with respect to such plans;
2.7.2. Certain Salaries. The names and salary rates as of
the date of this Agreement of all officers and employees of ▇▇▇▇▇ as
of the date of this Agreement whose regular annual
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base salary rate as of the date of this Agreement is $125,000 or more,
together with any bonuses paid or payable to such persons for the
fiscal year ended September 30, 1998, or since that date, and, to the
extent existing on the date of this Agreement, all arrangements with
respect to any bonuses to be paid to such employees from and after the
date of this Agreement;
2.7.3. Employee Agreements. Any collective bargaining
agreements of ▇▇▇▇▇ as of the date of this Agreement with any labor
union or other similar representative of employees, including
amendments, supplements, and understandings, and all employment and
consulting agreements of ▇▇▇▇▇ as of the date of this Agreement with
employees whose regular annual base salary exceeds $125,000 and with
consultants whose annual compensation from ▇▇▇▇▇ exceeds $125,000; and
2.7.4. Guaranties. All material third party indebtedness,
liabilities and commitments of others as to which ▇▇▇▇▇ is a
guarantor, endorser, co-maker, surety, or accommodation maker
(excluding liabilities as an endorser of checks and the like in the
ordinary course of business) and all letters of credit, whether
stand-by or documentary, issued by any third party.
2.8. Certain Agreements. The consummation of the transactions
contemplated by this Agreement will not cause or result in the acceleration or
vesting of any benefits, payments or rights covering active, former or retired
employees of ▇▇▇▇▇ under (i) any ▇▇▇▇▇ Plans or (ii) any other agreements to
which ▇▇▇▇▇ is a party.
2.9. No Undisclosed Contracts or Defaults. Except as may be
specified in the ▇▇▇▇▇ Reports, ▇▇▇▇▇ is not a party as of the date of this
Agreement, to, or bound as of the date of this Agreement by, any material
contract or arrangement of a nature required to be filed as an exhibit to an
annual report filed by ▇▇▇▇▇ under the Exchange Act which is to be performed
after the Effective Time (a "Material Contract"), nor is ▇▇▇▇▇ in default in
any material obligation or covenant on its part to be performed under any lease
or other contract that is material to the business of ▇▇▇▇▇ and its
subsidiaries taken as a whole.
2.10. Absence of Certain Changes and Events. Except as set forth in
the ▇▇▇▇▇ Reports, other than as a result of the transactions contemplated by
this Agreement, between June 30, 1998 and the date of this Agreement, there has
not been:
2.10.1. Financial Change. Any adverse change in the
financial condition, backlog, operations or business of ▇▇▇▇▇ which
could reasonably be expected to have a Material Adverse Effect on
▇▇▇▇▇;
2.10.2. Property Damage. Any damage, destruction, or loss to
the business or properties of ▇▇▇▇▇ (whether or not covered by
insurance) that could reasonably be expected to have a Material
Adverse Effect on ▇▇▇▇▇;
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2.10.3. Dividends. Any declaration, setting aside, or
payment of any dividend or other distribution in respect of the ▇▇▇▇▇
Common Stock, or any direct or indirect redemption, purchase or any
other acquisition by ▇▇▇▇▇ of any such stock, except pursuant to
▇▇▇▇▇'▇ publicly announced stock repurchase program;
2.10.4. Labor Disputes. Any labor dispute (other than
routine grievances); or
2.10.5. Employment Arrangements. Any increase in
compensation, bonus, deferred compensation, stock options or other
consideration of any employee or director other than in the ordinary
course of business consistent with past practice.
2.11. Taxes.
2.11.1. Tax Returns Filed; Taxes Paid. Except with respect
to failures which, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect on ▇▇▇▇▇, (i) all returns and
reports ("Tax Returns") of or with respect to any and all taxes,
charges, fees, levies, assessments, duties or other amounts payable to
any federal, state, local or foreign taxing authority or agency,
including, without limitation, (x) income, franchise, profits, gross
receipts, minimum, alternative minimum, estimated, ad valorem, value
added, sales, use, service, real or personal property, capital stock,
license, payroll, withholding, disability, employment, social
security, workers compensation, unemployment compensation, utility,
severance, excise, stamp, windfall profits, transfer and gains taxes,
(y) customs, duties, imposts, charges, levies or other similar
assessments of any kind, and (z) interest, penalties and additions to
tax imposed with respect thereto ("Tax" or "Taxes") which are required
to be filed on or before the Closing by or with respect to ▇▇▇▇▇ have
been or will be duly and timely filed, (ii) all Taxes which have
become or will become due with respect to the period covered by each
such Tax Return have been or will be timely paid in full, (iii) all
withholding Tax requirements imposed on or with respect to ▇▇▇▇▇ have
been or will be satisfied in full in all respects, and (iv) no
penalty, interest or other charge is or will become due with respect
to the late filing of any such Tax Return or late payment of any such
Tax.
2.11.2. Open Returns Disclosed. All federal and state income
and franchise Tax Returns of or with respect to ▇▇▇▇▇ with unexpired
or extended statutes of limitations which have been audited by the
applicable governmental authority are set forth in Section 2.11 of the
▇▇▇▇▇ Disclosure Schedule.
2.11.3. Extensions Disclosed. As of the date of this
Agreement, there is not in force any extension of time with respect to
the due date for the filing of any federal or state income or
franchise Tax Return of or with respect to ▇▇▇▇▇ or any waiver or
agreement for any extension of time for the assessment or payment of
any federal or state income or franchise Tax of or with respect to
▇▇▇▇▇.
2.11.4. Claims Disclosed. There is no claim against ▇▇▇▇▇
for any Taxes, and no assessment, deficiency or adjustment has been
asserted or proposed in writing with respect
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to any Tax Return of or with respect to ▇▇▇▇▇ other than those which
could not reasonably be expected to have a Material Adverse Effect on
▇▇▇▇▇.
2.11.5. Scheduled Tax Liabilities Sufficient. The total
amounts set up as liabilities for current and deferred Taxes in the
financial statements referred to in Section 2.5 of this Agreement are
sufficient to cover in all material respects the payment of all Taxes,
whether or not assessed or disputed, which are, or are hereafter found
to be, or to have been, due by or with respect to ▇▇▇▇▇ up to and
through the periods covered thereby.
2.11.6. Tax Allocation Agreements. There are no Tax
allocation or sharing agreements other than between or among ▇▇▇▇▇ and
its wholly owned subsidiaries.
2.11.7. No Tax Liens. Except for statutory liens for current
Taxes not yet due, no material liens for Taxes exist upon the assets
of ▇▇▇▇▇.
2.11.8. Change of Accounting Method. ▇▇▇▇▇ will not be
required to include any amount in income for any taxable period
beginning after September 30, 1997 as a result of a change in
accounting method for any taxable period or pursuant to any agreement
with any Tax authority with respect to any such taxable period.
2.11.9. Partnerships; Foreign Corporations. As of the date
of this Agreement, none of the property of ▇▇▇▇▇ is held in an
arrangement for which partnership Tax Returns are being filed, and as
of the date of this Agreement, ▇▇▇▇▇ does not own any interest in any
controlled foreign corporation (as defined in section 957 of the
Code), passive foreign investment company (as defined in section 1296
of the Code) or other entity the income of which is required to be
included in the income of ▇▇▇▇▇.
2.11.10. Safe Harbor Leases; Tax-Exempt Use Property. As of
the date of this Agreement, none of the property of ▇▇▇▇▇ is subject
to a safe-harbor lease (pursuant to section 168(f)(8) of the Internal
Revenue Code of 1954 as in effect after the Economic Recovery Tax Act
of 1981 and before the Tax Reform Act of 1986) or is "tax-exempt use
property" (within the meaning of section 168(h) of the Code) or
"tax-exempt bond financed property" (within the meaning of section
168(g)(5) of the Code).
2.11.11. Section 341(f) Election. ▇▇▇▇▇ has not made an
election under section 341(f) of the Code.
2.11.12. Actions Preventing Treatment as a Reorganization.
Neither ▇▇▇▇▇ nor, to the knowledge of ▇▇▇▇▇, any of its affiliates
has taken or agreed to take any action that would prevent the Merger
from constituting a reorganization qualifying under the provisions of
Section 368(a) of the Code.
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2.12. Intellectual Property. For purposes of this Section 2.12 and
Section 2.14, "Third Party Distributed Software" means the third party software
programs currently being distributed by ▇▇▇▇▇, whether as integrated or bundled
with any of ▇▇▇▇▇'▇ software products or as a separate stand-alone product, and
"Internally Developed Software" means all software programs developed for or on
behalf of ▇▇▇▇▇ and currently being distributed by ▇▇▇▇▇ and all software
products or programs under development by ▇▇▇▇▇ but not currently distributed,
other than Third Party Distributed Software. Third Party Distributed Software
and Internally Developed Software shall collectively be referred to as the
"Software Programs."
2.12.1. Ownership. ▇▇▇▇▇ exclusively owns all Internally
Developed Software, including without limitation those Software
Programs listed on Section 2.12.1 of the ▇▇▇▇▇ Disclosure Schedule,
free and clear of all mortgages, pledges, liens, security interests,
conditional sales agreements, encumbrances or charges of any kind
(other than object code end-user licenses in the ordinary course of
business and Marketing Agreements). ▇▇▇▇▇ exclusively owns all
material patents, trademarks, service marks, trade names and
copyrights (including registrations, licenses and applications
pertaining thereto) and all other material intellectual property
rights, trade secrets and other confidential or proprietary
information, processes and formulae embodied in the Internally
Developed Software (the "Intellectual Property"), free and clear of
all mortgages, pledges, liens, security interests, conditional sales
agreements, encumbrances or charges of any kind (other than object
code end-user licenses in the ordinary course of business and
Marketing Agreements). Section 2.12 of the ▇▇▇▇▇ Disclosure Schedule
contains a complete list of all registered trademarks and service
marks, all reserved trade names, all registered copyrights and all
filed patent applications and issued patents relating to the
Internally Developed Software.
2.12.2. Notices. In no instance has the eligibility of the
Internally Developed Software for protection under applicable
copyright law been forfeited to the public domain by omission of any
required notice or any other action.
2.12.3. Protection. The source code and related technical
system documentation for the Internally Developed Software are
protected by ▇▇▇▇▇ as trade secrets in accordance with trade secret
protections sufficient to maintain trade secret status under
applicable law. The source code and related technical system
documentation for the Internally Developed Software have been
disclosed by ▇▇▇▇▇ only to (i) employees and contractors who have had
a "need to know" the contents thereof in connection with the
performance of their duties to ▇▇▇▇▇ and who have executed
nondisclosure agreements substantially in the form provided by ▇▇▇▇▇
to BMC, and (ii) third parties under source code escrow agreements.
2.12.4. Personnel. All personnel who during the three years
prior to the date hereof have been employees, agents, consultants and
contractors of ▇▇▇▇▇ and who (on behalf of ▇▇▇▇▇) have contributed to
or participated in the conception and development of Internally
Developed Software and related technical documentation that is
material to the operation of ▇▇▇▇▇'▇ business have executed
nondisclosure agreements substantially in the form provided by ▇▇▇▇▇
to BMC and have executed appropriate instruments of assignment in
favor of
10
▇▇▇▇▇ as assignee that have conveyed to ▇▇▇▇▇, effective, and
exclusive ownership of all tangible and intangible property thereby
arising.
2.12.5. Third-Party Software. Section 2.12.5 of the ▇▇▇▇▇
Disclosure Schedule contains a complete list of material Third Party
Distributed Software. Section 2.12.5 of the ▇▇▇▇▇ Disclosure Schedule
lists all license agreements for the use of all such material Third
Party Software and, if any such software is not licensed, the basis of
the use of such software by ▇▇▇▇▇. ▇▇▇▇▇ has not taken any action
that could, or failed to take any action, the failure of which could,
reasonably be expected to (i) give rise to the termination by a
licensor of ▇▇▇▇▇'▇ license to distribute any material Third Party
Distributed Software or (ii) materially restrict ▇▇▇▇▇'▇ right of use
of any material Third Party Distributed Software under any license
agreement or other right of use, in each case subject to any right
▇▇▇▇▇ may have to receive notice of and/or cure or remedy such action
or failure to act.
2.12.6. No Infringement. The Internally Developed Software
and, to ▇▇▇▇▇'▇ knowledge as of the date of this Agreement, the Third
Party Distributed Software do not infringe and will not infringe any
copyright or trade secret of any person or entity, and, to ▇▇▇▇▇'▇
knowledge, no part of the Internally Developed Software nor the use
thereof for their intended purposes (and to ▇▇▇▇▇'▇ knowledge as of
the date of this Agreement, no part of the Third Party Distributed
Software nor the use thereof for their intended purposes) infringes or
will infringe any valid and subsisting patent or other exclusionary
right of any third party. As of the date of this Agreement, no
written claims have been asserted against ▇▇▇▇▇ by any person or
entity as to the use of any of the Intellectual Property.
2.12.7. Integrity. Except with respect to demonstration or
trial copies, no portion of the Internally Developed Software or, to
▇▇▇▇▇'▇ knowledge as of the date of this Agreement, the Third Party
Distributed Software contains any "back door," "time bomb," "Trojan
horse," "worm," "drop dead device," "virus" or other software routines
or hardware components designed to permit unauthorized access or to
disable or erase software, hardware, or data without the consent of
the user.
2.12.8. Year 2000. The Software Programs are Year 2000
Compliant. As used in this Section 2.12.8 and Section 3.15, "Year
2000 Compliant" means that (a) the performance of the software will
not be adversely affected by any date change involving dates in the
20th and 21st century and (b) use of the software will not end
abnormally or provide invalid or incorrect results as a result of date
data, specifically including date data which represents or references
different centuries or more than one century, provided that such date
data is in the correct format for such software as specified in the
applicable documentation for such software.
2.13. Intentionally omitted.
2.14. Software Contracts.
11
2.14.1. End-User Agreements. Section 2.14.1 of the ▇▇▇▇▇
Disclosure Schedule sets forth a complete example of each of ▇▇▇▇▇'▇
current standard end user license agreements with respect to the
Internally Developed Software (the "Standard Licenses"). Section
2.14.1 of the ▇▇▇▇▇ Disclosure Schedule accurately identifies each
license transaction (with customer name redacted if desired) which
generated $200,000 or more of revenues during the fiscal year ended
September 30, 1998.
2.14.2. Marketing Agreements. Section 2.14.2 of the ▇▇▇▇▇
Disclosure Schedule sets forth a complete list of all contracts,
agreements, licenses, or other commitments or arrangements in effect
with respect to the marketing, remarketing, distribution, licensing or
promotion of the Software Programs or any other Technical
Documentation or the Intellectual Property by any independent
salesperson, distributor, sublicensor or other remarketer or sales
organization (the "Marketing Agreements"), which generated 5% or more
of ▇▇▇▇▇'▇ revenues during the preceding four fiscal quarters.
2.15. Title to Properties. With minor exceptions which in the
aggregate are not material, and except for merchandise and other property and
assets sold, used or otherwise disposed of in the ordinary course of business
for fair value or no longer necessary for the operation of ▇▇▇▇▇'▇ business,
▇▇▇▇▇ has good and valid title to or valid leasehold interests in all its
properties, interests in properties and assets, real and personal, reflected in
the most recent balance sheet of ▇▇▇▇▇ included in the ▇▇▇▇▇ Reports, free and
clear of any Encumbrance of any nature whatsoever, except (i) liens and
Encumbrances reflected in the most recent balance sheet of ▇▇▇▇▇ included in
the ▇▇▇▇▇ Reports, (ii) liens for current taxes or other governmental charges
or levies not yet due and payable, (iii) Encumbrances that are created, arise
or exist under or in connection with any leases or other contracts or other
matters referred to in the ▇▇▇▇▇ Disclosure Schedule, (iv) Encumbrances that
relate to or are created, arise or exist in connection with, any legal
proceeding that is being contested in good faith, and (v) such imperfections of
title, easements and Encumbrances, if any, as do not and will not materially
detract from the value of the property subject thereto or affected thereby, or
otherwise materially impair business operations. All leases pursuant to which
▇▇▇▇▇ leases (whether as lessee or lessor) any substantial amount of real or
personal property are in good standing, valid and effective, except as validity
or effectiveness may be limited by (i) bankruptcy, insolvency, reorganization,
debtor relief or similar laws affecting the rights of creditors generally, and
(ii) general principles of equity; and there is not, under any such leases, any
existing or prospective default or event of default or event which with notice
or lapse of time, or both, would constitute a default by ▇▇▇▇▇ and in respect
to which ▇▇▇▇▇ has not taken reasonable steps to prevent a default from
occurring. The buildings and premises of ▇▇▇▇▇ that are used in its business
are in good and sufficient operating condition and repair for the continued
conduct of ▇▇▇▇▇'▇ business on a basis consistent with past practice, subject
to ordinary wear and tear. All major items of equipment of ▇▇▇▇▇ are in good
and sufficient operating condition and in a state of reasonable maintenance and
repair for the continued conduct of ▇▇▇▇▇'▇ business on a basis consistent with
past practice, ordinary wear and tear excepted, and are free from any known
defects except as may be repaired by routine maintenance and such minor defects
as do not substantially interfere with the continued use thereof in the conduct
of normal operations.
2.16. Intentionally omitted.
12
2.17. Environmental Compliance.
2.17.1. Environmental Conditions. There are no materials or
substances that are regulated by Applicable Environmental Laws (as
defined in Section 2.17.3) on any real property owned by ▇▇▇▇▇ as a
result of the actions of ▇▇▇▇▇ or, to its knowledge, of any third
party or otherwise, that could reasonably be expected to have a
Material Adverse Effect on ▇▇▇▇▇.
2.17.2. Permits, etc. ▇▇▇▇▇ has in full force and effect all
environmental permits, licenses, approvals and other authorizations
required under Applicable Environmental Laws to conduct its operations
and is operating in material compliance thereunder.
2.17.3. Compliance. ▇▇▇▇▇'▇ operations and use of its assets
do not violate any applicable federal, state or local law, statute,
ordinance, rule, regulation, order or notice requirement pertaining to
(a) the condition or protection of air, groundwater, surface water,
soil, or other environmental media, (b) the environment, including
natural resources or any activity which affects the environment, or
(c) the regulation of any pollutants, contaminants, waste, substances
(whether or not hazardous or toxic), including, without limitation,
the Comprehensive Environmental Response Compensation and Liability
Act (49 U.S.C. Section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 1609 et seq.), the
Clean Water Act (33 U.S.C. 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (17 U.S.C.
Section 2601 et seq.), the Safe Drinking Water Act (42 U.S.C. Section
201 and Section 300f et seq.), the Rivers and Harbors Act (33 U.S.C.
Section 401 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701
et seq.) and analogous state and local provisions, as any of the
foregoing may have been amended or supplemented from time to time
(collectively the "Applicable Environmental Laws"), except for
violations which, either singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇.
2.17.4. Environmental Claims. No written notice has been
served on ▇▇▇▇▇ from any entity, governmental agency or individual
regarding any existing, pending or threatened investigation or inquiry
related to alleged violations under any Applicable Environmental Laws,
or regarding any claims for remedial obligations or contribution under
any Applicable Environmental Laws, other than any of the foregoing
which, either singly or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on ▇▇▇▇▇ or which have been
cured or corrected in all material respects.
2.17.5. Renewals. ▇▇▇▇▇ does not know of any reason it would
not be able to renew any of the permits, licenses, or other
authorizations required pursuant to any Applicable Environmental Laws
to operate and use any of ▇▇▇▇▇'▇ assets for their current purposes
and uses.
2.17.6. Environmental Documents. There are no environmental
orders or decrees material to current operations conducted by ▇▇▇▇▇
and there have not been any environmental
13
audits, assessments, investigations or reviews conducted within the
last five years on any property owned or used by ▇▇▇▇▇.
2.18. Compliance with Other Laws. Except as set forth in the ▇▇▇▇▇
Reports, ▇▇▇▇▇ is not in violation of or in default with respect to the
Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) as amended
("OSHA"), or any other applicable law or any applicable rule, regulation, or
any writ or decree of any court or any governmental commission, board, bureau,
agency, or instrumentality, or delinquent with respect to any report required
to be filed with any governmental commission, board, bureau, agency or
instrumentality, except for violations or defaults which, either singly or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect on ▇▇▇▇▇.
2.19. Finder's Fee. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by ▇▇▇▇▇ and its
counsel directly with BMC and its counsel, without the intervention on behalf
of ▇▇▇▇▇ of any other person as the result of any act of ▇▇▇▇▇, and so far as
is known to ▇▇▇▇▇, without the intervention on behalf of ▇▇▇▇▇ of any other
person in such manner as to give rise to any valid claim against any of the
parties hereto for a brokerage commission, finder's fee or any similar
payments, other than financial advisory fees to be paid by ▇▇▇▇▇ to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. in connection with the transaction under financial arrangements
disclosed to BMC.
2.20. Compliance with ERISA. ▇▇▇▇▇ has made available to BMC a copy
of each ▇▇▇▇▇ Plan, any related summary plan description, trust agreement and
annuity or insurance contract, if any, and each plan's most recent annual
report filed with the Internal Revenue Service, if any, and: (i) each ▇▇▇▇▇
Plan has been maintained and administered in material compliance with its terms
and with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations, and is, to the extent required by applicable law
or contract, fully funded without having any deficit or unfunded actuarial
liability; (ii) all required contributions under any such plans have been made
and the applicable funds have been funded in accordance with the terms thereof
and no past service funding liabilities exist thereunder; (iii) each ▇▇▇▇▇ Plan
that is required or intended to be qualified under applicable law or registered
or approved by a governmental agency or authority has been so qualified,
registered or approved by the appropriate governmental agency or authority,
and, to the knowledge of ▇▇▇▇▇, nothing has occurred since the date of the last
qualification, registration or approval to materially and adversely affect, or
cause, the appropriate governmental agency or authority to revoke such
qualification, registration or approval; (iv) to the extent applicable, the
▇▇▇▇▇ Plans comply, in all material respects, with the requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the
Code, and any ▇▇▇▇▇ Plan intended to be qualified under Section 401(a) of the
Code has been determined by the Internal Revenue Service to be so qualified
and, to the knowledge of ▇▇▇▇▇, nothing has occurred to cause the loss of such
qualified status; (v) no ▇▇▇▇▇ Plan is covered by Title IV of ERISA or Section
412 of the Code; (vi) there are no pending or, to the knowledge of ▇▇▇▇▇,
anticipated material claims against or otherwise involving any of the ▇▇▇▇▇
Plans and no suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of ▇▇▇▇▇ Plan activities) has been brought
against or with respect to any ▇▇▇▇▇ Plan; (vii) all material contributions,
reserves or premium payments, required to be made as of the date hereof to the
▇▇▇▇▇ Plans have been made or provided for; (viii) ▇▇▇▇▇ has
14
not incurred any liability under subtitle C or D of Title IV of ERISA with
respect to any "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by ▇▇▇▇▇; (ix) ▇▇▇▇▇ has
not incurred any withdrawal liability under Subtitle E of Title IV of ERISA
with respect to any "multiemployer plan," within the meaning of Section
4001(a)(3) of ERISA; (x) ▇▇▇▇▇ has substantially performed all obligations,
whether arising by law or by contract, required to be performed by it in
connection with the ▇▇▇▇▇ Plans; (xi) to the knowledge of ▇▇▇▇▇, no act,
omission or transaction has occurred which would result in imposition on ▇▇▇▇▇
of (a) a civil penalty assessed pursuant to subsections (c), (i) or (l) of
Section 502 of ERISA, (b) breach of fiduciary duty liability damages under
Section 409 of ERISA or (c) a tax imposed pursuant to Chapter 43 of Subtitle D
of the Code; (xii) in connection with the consummation of the transactions
contemplated by this Agreement, no payments have or will be made hereunder,
under the ▇▇▇▇▇ Plans or otherwise by ▇▇▇▇▇ which, in the aggregate, would
result in imposition of the sanctions imposed under Sections 280G and 4999 of
the Code; and (xiii) ▇▇▇▇▇ has no obligations for retiree health and life
benefits under any ▇▇▇▇▇ Plan, except as set forth on Section 2.20 of the ▇▇▇▇▇
Disclosure Schedule, and there are no restrictions on the rights of ▇▇▇▇▇ to
amend or terminate any such ▇▇▇▇▇ Plan without incurring any liability
thereunder.
2.21. Investigations; Litigation. Except as required pursuant to
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder (collectively, "HSR") and any applicable
comparable foreign laws and regulations, (i) no investigation or review by any
governmental entity with respect to ▇▇▇▇▇ or any of the transactions
contemplated by this Agreement is pending or, to ▇▇▇▇▇'▇ knowledge is, as of
the date of this Agreement, threatened, nor, as of the date of this Agreement,
has any governmental entity indicated to ▇▇▇▇▇ an intention to conduct the
same, and (ii) except as set forth in the ▇▇▇▇▇ Reports, as of the date of this
Agreement, there is no action, suit or proceeding pending or, to ▇▇▇▇▇'▇
knowledge, threatened against or affecting ▇▇▇▇▇ at law or in equity, or before
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, which either individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
▇▇▇▇▇.
2.22. Product Warranty. There are no existing liabilities or, to
the knowledge of ▇▇▇▇▇, likely liabilities, arising from claims regarding the
performance or design of the products and services sold by ▇▇▇▇▇ either in the
past or at present for which adequate reserves have not been established on the
most recent balance sheet in the ▇▇▇▇▇ Reports that in the aggregate could
reasonably be expected to have a Material Adverse Effect on ▇▇▇▇▇.
2.23. Information for Proxy Statement. All information and data
(including financial statements) concerning ▇▇▇▇▇ which is or will be furnished
by ▇▇▇▇▇ and included in the registration statement and proxy statement
(collectively, the "Proxy Statement") issued in connection with the
transactions contemplated by this Agreement will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
in which they were made, not misleading.
15
2.24. Investment Company. ▇▇▇▇▇ is not an "investment company," or
an "affiliated person of" or "promoter" or "principal underwriter" of an
investment company, as those terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
2.25. Pooling. Neither ▇▇▇▇▇, nor to the knowledge of ▇▇▇▇▇, any of
its affiliates has taken or agreed to take any action that would prevent ▇▇▇▇▇
from being a "poolable entity" in accordance with generally accepted accounting
principles and the Regulations of the Securities and Exchange Commission.
2.26. Article IX of ▇▇▇▇▇'▇ Certificate of Incorporation and Section
203 of the Delaware General Corporation Law. As of the date hereof and at all
times on or prior to the Effective Time, neither the provisions of Section A of
Article IX of ▇▇▇▇▇'▇ Certificate of Incorporation nor Section 203 of the DGCL
are or will apply to this Agreement, the Stock Option Agreement, the Merger or
the transactions contemplated hereby and thereby, including the purchase of
shares of ▇▇▇▇▇ by BMC under the Stock Option Agreement, and the Board of
Directors of ▇▇▇▇▇, has unanimously approved such transactions.
2.27. Inapplicability of Certain Statutes. ▇▇▇▇▇ is not subject to
any state takeover law that might apply to the Merger or any of the other
transactions contemplated by this Agreement. ▇▇▇▇▇ is not subject to Section
2115 of the California Corporations Code.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BMC AND MERGER SUB
BMC and Merger Sub represent and warrant subject to the exceptions
specifically described in writing in the respective sections of the disclosure
schedule delivered by BMC to ▇▇▇▇▇ and dated the date hereof (the "BMC
Disclosure Schedule") as follows:
3.1. Organization and Standing. Each of BMC and Merger Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, has full requisite corporate power and authority
to carry on its business as it is currently conducted, and to own and operate
the properties currently owned and operated by it and is duly qualified or
licensed to do business and is in good standing as a foreign corporation
authorized to do business in all jurisdictions in which the character of the
properties owned or the nature of the business conducted by it would make such
qualification or licensing necessary, except where the failure to be so
qualified or licensed could not reasonably be expected to have a Material
Adverse Effect on BMC. As hereinafter used in this Article III, the term "BMC"
also includes any and all of its directly and indirectly held subsidiaries,
except where the context indicates to the contrary; provided, however, that for
purposes of Section 3.9, the term "BMC" further includes any corporation,
trade, business or entity under common control with BMC within the meaning of
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
3.2. Agreement Authorized and its Effect on Other Obligations. The
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary
16
corporate action on the part of BMC and Merger Sub, and this Agreement is a
valid and binding obligation of BMC and Merger Sub enforceable against BMC and
Merger Sub in accordance with its terms, except as enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, debtor relief or similar
laws affecting the rights of creditors generally, and (ii) general principles
of equity. At the Effective Time and except as specified in Section 3.2 of the
BMC Disclosure Schedule, the consummation of the Merger will not conflict with
or result in a violation or breach of any term or provision of, nor constitute
a default under (i) the certificate of incorporation or bylaws of BMC or Merger
Sub or (ii) any indenture, mortgage, deed of trust, lease, contract or other
agreement to which BMC or any of its subsidiaries is a party or by which any of
them or their properties are bound, other than such violations, breaches or
defaults as could not reasonably be expected to have a Material Adverse Effect
on BMC.
3.3. Capitalization. (a) The capitalization of BMC consists of
1,000,000 shares of preferred stock, par value $.01 per share, of which at
September 30, 1998 no shares were issued or outstanding; and 600,000,000 shares
of BMC Common Stock, par value $.01 per share, of which at September 30, 1998,
217,259,162 shares were issued and outstanding, an additional 36,756,693 shares
were reserved for issuance in connection with various BMC benefit plans and an
additional 5,966,100 shares were reserved for issuance upon exercise of
outstanding warrants; at September 30, 1998, 1,531,279 shares of BMC Common
Stock were held in BMC's treasury. Other than as set forth above, BMC has no
outstanding options, warrants or obligations of any kind to issue shares of its
capital stock.
(b) The capitalization of Merger Sub consists of 1,000 shares of
common stock, par value $.01 per share ("Merger Sub Common Stock"), of which as
of the date hereof, 100 were issued and outstanding and none were reserved for
issuance. As of the date hereof, all of the outstanding shares of Merger Sub
Common Stock are owned free and clear of any liens, claims or encumbrances by
BMC.
3.4. Reports and Financial Statements. BMC has previously
furnished or made available (including through the SEC ▇▇▇▇▇ system) to ▇▇▇▇▇
true and complete copies of (a) all annual reports filed by BMC with the
Commission pursuant to the Exchange Act, since September 30, 1995, (b) BMC's
quarterly and other reports filed with the Commission since September 30, 1995,
(c) all definitive proxy solicitation materials filed by BMC with the
Commission since September 30, 1995, and (d) any registration statements of BMC
declared effective by the Commission since September 30, 1995. The
consolidated financial statements of BMC and its subsidiaries included in BMC's
most recent report on Form 10-K and most recent report on Form 10-Q, and any
other reports filed with the Commission by BMC under the Exchange Act
subsequent thereto (the "BMC Reports") were, or (if filed after the date
hereof) will be, prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved and fairly
present, or will fairly present, the consolidated financial position for BMC
and its subsidiaries as of the dates thereof and the consolidated results of
their operations and changes in financial position for the periods then ended
(except with respect to interim period financial statements, for normal
year-end adjustments which are not material and for the absence of footnotes).
The BMC Reports did not at the time each of the BMC Reports was filed with the
Commission (or, if amended or superseded by a subsequent filing, then on the
date of such filing), and (if filed after the date hereof) will not
17
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Since September 30, 1995, BMC has filed with the Commission all reports
required to be filed by BMC under the Exchange Act and the rules and
regulations of the Commission.
3.5. Liabilities. BMC has no liabilities of the type required to
be disclosed in the consolidated financial statements of BMC prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except for: (i) liabilities disclosed in the financial
statements (including any related notes) contained in the BMC Reports and (ii)
liabilities incurred in the ordinary course of business consistent with past
practices.
3.6. No Undisclosed Defaults. Except as may be specified in the
BMC Reports, BMC is not in default in any material obligation or covenant on
its part to be performed under any lease or other contract that is material to
the business of BMC and its subsidiaries taken as a whole.
3.7. Absence of Certain Changes and Events in BMC. Except as set
forth in the BMC Reports, other than as a result of the transactions
contemplated by this Agreement, between June 30, 1998 and the date of this
Agreement, there has not been:
3.7.1. Financial Change. Any adverse change in the
financial condition, operations, or business of BMC which could
reasonably be expected to have a Material Adverse Effect on BMC;
3.7.2. Property Damage. Any damage, destruction, or loss to
the business or properties of BMC (whether or not covered by
insurance) that could reasonably be expected to have a Material
Adverse Effect on BMC;
3.7.3. Dividends. Any declaration, setting aside, or
payment of any dividend or other distribution in respect of BMC's
capital stock, or any direct or indirect redemption, purchase or any
other acquisition of such stock; or
3.7.4. Labor Disputes. Any labor dispute (other than
routine grievances).
3.8. Finder's Fee. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by BMC and its
counsel, directly with ▇▇▇▇▇ or its counsel, without the intervention on behalf
of BMC of any other person as the result of an act of BMC and, so far as known
to BMC, without the intervention on behalf of BMC of any other person in such
manner as to give rise to any valid claim against any of the parties hereto for
a brokerage commission, finder's fee, or any similar payments, other than
financial advisory fees to be paid by BMC to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in connection
with the merger contemplated by this Agreement.
3.9. Compliance With ERISA. BMC will make available to ▇▇▇▇▇ a
copy of all bonus, incentive compensation, stock option, deferred compensation,
profit-sharing, retirement, pension, welfare, severance pay, supplemental
income, group insurance, death benefit, or other fringe benefit
18
plans, arrangements or trust agreements covering active, former or retired
employees of BMC (collectively, the "BMC Plans"), any related summary plan
description, trust agreement and annuity or insurance contract, if any, and
each plan's most recent annual report filed with the Internal Revenue Service,
if any, the most recent reports with respect to such plans, trust agreements
and annuity or insurance contracts filed with any governmental agency, all
Internal Revenue Service determination letters that have been received with
respect to such plans and: (i) each BMC Plan has been maintained and
administered in material compliance with its terms and with the requirements
prescribed by any and all applicable statutes, orders, rules and regulations,
and is, to the extent required by applicable law or contract, fully funded
without having any deficit or unfunded actuarial liability; (ii) all required
contributions under any such plans have been made and the applicable funds have
been funded in accordance with the terms thereof and no past service funding
liabilities exist thereunder; (iii) each BMC Plan that is required or intended
to be qualified under applicable law or registered or approved by a
governmental agency or authority has been so qualified, registered or approved
by the appropriate governmental agency or authority, and nothing has occurred
since the date of the last qualification, registration or approval to adversely
affect, or cause, the appropriate governmental agency or authority to revoke
such qualification, registration or approval; (iv) to the extent applicable,
the BMC Plans comply, in all material respects, with the requirements of ERISA
and the Code, and any BMC Plan intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified
and nothing has occurred to cause the loss of such qualified status; (v) no BMC
Plan is covered by Title IV of ERISA or Section 412 of the Code; (vi) there are
no pending or anticipated material claims against or otherwise involving any of
the BMC Plans and no suit, action or other litigation (excluding claims for
benefits incurred in the ordinary course of BMC Plan activities) has been
brought against or with respect to any BMC Plan; (vii) all material
contributions, reserves or premium payments, required to be made as of the date
hereof to the BMC Plans have been made or provided for; (viii) BMC has not
incurred any liability under subtitle C or D of Title IV of ERISA with respect
to any "single-employer plan," within the meaning of Section 4001(a) of ERISA,
currently or formerly maintained by BMC; (ix) BMC has not incurred any
withdrawal liability under Subtitle E of Title IV of ERISA with respect to any
"multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA; (x)
BMC has substantially performed all obligations, whether arising by law or by
contract, required to be performed by it in connection with the BMC Plans; (xi)
no act, omission or transaction has occurred which would result in imposition
on BMC of (a) a civil penalty assessed pursuant to subsections (c), (i) or (l)
of Section 502 of ERISA, (b) breach of fiduciary duty liability damages under
Section 409 of ERISA or (c) a tax imposed pursuant to Chapter 43 of Subtitle D
of the Code; (xii) in connection with the consummation of the transactions
contemplated by this Agreement, no payments have or will be made hereunder,
under the BMC Plans or otherwise by BMC which, in the aggregate, would result
in imposition of the sanctions imposed under Sections 280G and 4999 of the
Code; and (xiii) BMC does not have any obligations for retiree health and life
benefits under any BMC Plan, except as set forth on Section 3.9 of the BMC
Disclosure Schedule, and there are no restrictions on the rights of BMC to
amend or terminate any such BMC Plan without incurring any liability
thereunder.
3.10. Investigations; Litigation. Except as required pursuant to
HSR and any applicable comparable foreign laws and regulations, (i) no
investigation or review by any governmental entity with respect to BMC in
connection with any of the transactions contemplated by this Agreement is
19
pending or, to BMC's knowledge is, as of the date of this Agreement,
threatened, nor, as of the date of this Agreement, has any governmental entity
indicated to BMC an intention to conduct the same and (ii) except as set forth
in the BMC Reports, as of the date of this Agreement, there is no action, suit
or proceeding pending or, to BMC's knowledge, threatened against or affecting
BMC or its subsidiaries at law or in equity, or before any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, which either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on BMC.
3.11. Information for Proxy Statement. All information and data
(including financial statements) concerning BMC which is or will be furnished
by BMC and included in the Proxy Statement to be issued in connection with the
transactions contemplated by this Agreement will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the circumstances
in which they were made, not misleading.
3.12. Actions Preventing Treatment as a Reorganization. Neither BMC
nor, to the knowledge of BMC, any of its affiliates has taken or agreed to take
any action that would prevent the Merger from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code. Merger Sub was
formed solely for the purpose of engaging in the transactions contemplated by
this Agreement, has engaged in no other business activities and has conducted
its operations only as contemplated by this Agreement.
3.13. Pooling. Neither BMC, nor to the knowledge of BMC, any of its
affiliates has taken or agreed to take any action that would prevent the Merger
from being treated as a "pooling of interests" in accordance with generally
accepted accounting principles and the Regulations of the Commission (a
"Pooling Transaction").
3.14. BMC Common Stock. The BMC Common Stock to be issued in
connection with the Merger has been duly authorized by all necessary corporate
action, and when issued in accordance with this Agreement, will be validly
issued, fully paid and nonassessable and not subject to preemptive rights.
3.15. Year 2000. All software programs currently being marketed by
BMC are Year 2000 Compliant.
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE TIME
4.1. Agreements of ▇▇▇▇▇. ▇▇▇▇▇ agrees that from the date hereof
to the Effective Time, except (i) to the extent BMC shall otherwise consent in
writing (which consent shall not be unreasonably withheld or delayed) or (ii)
as set forth or referred to in the section of the ▇▇▇▇▇ Disclosure Schedule
corresponding to the respective section of this Article IV, it will:
20
4.1.1. Maintenance of Present Business. Other than as
contemplated by this Agreement, operate its business only in the
usual, regular, and ordinary manner in an effort to maintain the
goodwill it now enjoys and, to the extent consistent with such
operation, use all reasonable efforts to preserve intact its present
business organization, keep available the services of its present
officers and employees, and preserve its relationships with customers,
suppliers, jobbers, distributors, and others having business dealings
with it, and in connection therewith it shall not substantially and
adversely deviate from its licensing and pricing practices;
4.1.2. No Delay. Not take any action or enter into any
transaction which would materially affect the ability of ▇▇▇▇▇ to, or
materially delay ▇▇▇▇▇'▇ ability to, complete the transactions
contemplated by this Agreement;
4.1.3. Maintenance of Books and Records. Maintain its books
of accounts and records in the usual, regular, and ordinary manner, in
accordance with generally accepted accounting principles applied on a
consistent basis;
4.1.4. Compliance with Law. Duly comply with all laws
applicable to it and to the conduct of its business, except where the
failure to comply with such laws would not have a Material Adverse
Effect on ▇▇▇▇▇;
4.1.5. Compliance with Agreement. At its expense, take all
commercially reasonable actions as may be necessary, advisable or
proper (i) to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated
by this Agreement, (ii) to insure that the representations and
warranties made by it herein are true and correct at the Effective
Time such that the condition contained in Section 5.2.1 would be
satisfied, (iii) to fully perform all covenants made by it herein and
(iv) to satisfy timely all other obligations imposed upon it by this
Agreement;
4.1.6. Inspection. Upon reasonable advance notice, permit
BMC and its officers and authorized representatives, during normal
business hours, to inspect its records and to consult with its
officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties
hereinabove made and the compliance with covenants contained in this
Agreement; provided, however, that ▇▇▇▇▇ shall not be required to
permit any inspection, or to disclose any information, that in the
reasonable judgment of ▇▇▇▇▇ would (i) result in the disclosure of any
trade secrets of third parties, (ii) violate any obligation of ▇▇▇▇▇
with respect to confidentiality, (iii) jeopardize protections afforded
▇▇▇▇▇ under the attorney-client privilege or the attorney work product
doctrine, or (iv) materially interfere with the conduct of ▇▇▇▇▇'▇
business; and
4.1.7. Maintenance of Intellectual Property. Not take any
action that would, or not fail to take any action the failure of which
would, materially and adversely affect its Intellectual Property.
21
4.2. Agreements of BMC and ▇▇▇▇▇. Each party agrees to take (or
not to take, as the case may be) the following actions after the date hereof:
4.2.1. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Each party shall promptly file
such materials as are required under HSR with respect to the
transactions contemplated hereby and shall cooperate with the other
party to the extent necessary to assist the other party in the
preparation of such filings. Each party shall promptly make and
effect all other registrations, filings and submissions required to be
made or effected by it pursuant to the Securities Act, the Exchange
Act and any other applicable legal requirements with respect to the
Merger. Without limiting the generality of the foregoing, each party
agrees to (i) promptly provide all information requested by any
governmental entity in connection with the Merger or any of the other
transactions contemplated by this Agreement; (ii) promptly take, and
cause its affiliates to take, all actions and steps necessary to
obtain any antitrust clearance or similar clearance required to be
obtained from the Federal Trade Commission, the Department of Justice,
any state attorney general, any foreign competition authority or any
other governmental entity in connection with the transactions
contemplated by this Agreement; (iii) give the other party prompt
notice of the commencement of any investigation, action or legal
proceeding by or before any governmental entity with respect to the
Merger or any of the other transactions contemplated by this
Agreement; (iv) keep the other party informed as to the status of any
such investigation, action or legal proceeding, and (v) promptly
inform the other party of any communication to or from the Federal
Trade Commission, the Department of Justice or any other governmental
entity regarding the Merger. Each party will consult and cooperate
with the other parties and will consider in good faith the views of
the other parties in connection with any analysis, appearance,
presentation, memorandum, brief, argument, opinion or proposal made or
submitted in connection with any investigation, action or legal
proceeding under or relating to HSR or any other federal or state or
foreign antitrust, competition or fair trade law. In addition, except
as may be prohibited by any governmental entity or by any law, rule or
regulation, in connection with any investigation, action or legal
proceeding under or relating to HSR or any other federal or state or
foreign antitrust, competition or fair trade law or any other similar
investigation, action or legal proceeding, each party hereto will
permit authorized representatives of the other party to be present at
each meeting or conference relating to any such investigation, action
or legal proceeding and to have access to and be consulted in
connection with any document, opinion or proposal made or submitted to
any governmental entity in connection with any such investigation,
action or legal proceeding;
4.2.2. Proxy Statement. Each party shall cooperate in the
preparation and prompt filing of the Proxy Statement with the
Commission with respect to the meeting of ▇▇▇▇▇'▇ stockholders called
for the purpose of, among other things, securing stockholder approval
of the Merger. Each party shall use all reasonable efforts to have
the Proxy Statement declared effective by the Commission as promptly
as practicable after it is filed with the Commission;
4.2.3. Notice of Material Development. Each party will
promptly notify the other party in writing of (i) any event occurring
subsequent to the date of this Agreement which
22
would render any representation or warranty of such party contained in
this Agreement untrue or inaccurate and which would reasonably be
expected to result in a Material Adverse Effect, (ii) any Material
Adverse Effect on such party and (iii) any material breach by such
party of any covenant or agreement contained in this Agreement;
4.2.4. Pooling. Each party shall use all reasonable efforts
to cause the Merger to be treated for financial accounting purposes as
a Pooling Transaction, and shall not take, and shall use all
reasonable efforts to prevent any affiliate of such party from taking,
any actions which could prevent the Merger from being treated for
financial accounting purposes as a Pooling Transaction; and
4.2.5. Tax Treatment. Neither party shall (before or after
the Effective Time) take any action or fail to take any action which
action or failure to act would prevent, or would reasonably be likely
to prevent, the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code. Each party shall use all
reasonable efforts to obtain the opinions of counsel referred to in
Sections 5.1.8 and 5.2.4, respectively.
4.3. Additional Agreements of ▇▇▇▇▇. ▇▇▇▇▇ agrees that from the
date hereof to the Effective Time, except (i) to the extent BMC shall otherwise
consent in writing (which consent shall not be unreasonably withheld or
delayed) or (ii) as set forth or referred to in the section of the ▇▇▇▇▇
Disclosure Schedule corresponding to the respective section of this Article IV,
it will:
4.3.1. Prohibition of Certain Employment Contracts. Not
enter into any contracts of employment which (i) cannot be terminated
on notice of 14 days or less without the payment of severance
compensation or (ii) provide for any increase in compensation,
including, without limitation, any modification of any stock option
agreements, outside the ordinary course of business consistent with
past practice, or severance payments or benefits covering a period
beyond the termination date (other than those which BMC has previously
approved) except as contemplated by this Agreement or as may be
required by law;
4.3.2. Prohibition of Certain Loans. Not incur any
indebtedness for borrowed money except for borrowings incurred in the
ordinary course of business consistent with past practices;
4.3.3. Prohibition of Certain Commitments. Not enter into
commitments of a capital expenditure nature which would exceed
$1,000,000, in the aggregate, except as may be necessary for the
maintenance of existing facilities and equipment in good operating
condition and repair in the ordinary course of business and except as
may be required by law;
4.3.4. Intentionally omitted;
4.3.5. Maintenance of Insurance. Maintain insurance (or
self insurance reserves) on its properties and with respect to the
conduct of its business of such kinds and in such substantially
similar amounts as presently carried by it, which insurance (or self
insurance reserves) may be added to from time to time in its
discretion; provided, that if during the
23
period from the date hereof to and including the Effective Time any of
its property or assets are damaged or destroyed by fire or other
casualty, the obligations of BMC and ▇▇▇▇▇ under this Agreement shall
not be affected thereby (subject, however, to the provision that the
coverage limits of such policies are adequate in amount to cover the
replacement value of such property or assets and loss of profits
during replacement, less commercially reasonable deductibles, if of
material significance to the assets or operations of ▇▇▇▇▇) but it
shall promptly notify BMC in writing thereof and proceed with the
repair or restoration of such property or assets in such manner and to
such extent as may be approved by BMC, and upon the Effective Time all
proceeds of insurance and claims of every kind arising as a result of
any such damage or destruction shall remain the property of ▇▇▇▇▇;
4.3.6. ▇▇▇▇▇ Acquisition Proposals.
4.3.6.1. No Solicitation. Not directly or
indirectly, or authorize or permit any of its respective
agents to: (i) solicit, initiate, facilitate or knowingly
encourage (including by way of furnishing information) any
inquiry or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any acquisition or
purchase by a third party (other than BMC or an affiliate of
BMC) of a substantial amount of assets of, or any equity
interest in, ▇▇▇▇▇ or any merger, consolidation, business
combination, sale of securities, recapitalization,
liquidation, dissolution or similar transaction involving
▇▇▇▇▇ (in each case, other than as permitted by Section 4.1.1,
Section 4.3.8 or any other provision of this Agreement)
(collectively, "▇▇▇▇▇ Transaction Proposals") or agree to or
endorse any ▇▇▇▇▇ Transaction Proposal or (ii) propose, enter
into or participate in any discussions or negotiations
regarding any ▇▇▇▇▇ Transaction Proposal, or furnish to
another person (other than BMC or a representative of BMC) any
information with respect to its business, properties or assets
for the purpose of facilitating any ▇▇▇▇▇ Transaction
Proposal, provided, however, that nothing contained in this
Section 4.3.6.1 or elsewhere in this Agreement shall prohibit
▇▇▇▇▇ from (A) furnishing information pursuant to an
appropriate confidentiality letter concerning ▇▇▇▇▇ and its
businesses, properties or assets to a third party who has made
a Superior ▇▇▇▇▇ Transaction Proposal (as defined below), (B)
engaging in discussions or negotiations with a third party who
has made a Superior ▇▇▇▇▇ Transaction Proposal or (C)
following receipt of a Superior ▇▇▇▇▇ Transaction Proposal,
taking and disclosing to its stockholders a position
(including a positive recommendation) with respect thereto or
changing, withdrawing or withholding the approval or
recommendation by ▇▇▇▇▇'▇ board of directors of this Agreement
or the Merger, but in each case referred to in the foregoing
clauses (A) through (C) only after the board of directors of
▇▇▇▇▇ concludes in good faith following advice of its outside
counsel, represented by a written opinion, that such action is
reasonably necessary in order for the board of directors of
▇▇▇▇▇ to comply with its fiduciary obligations to ▇▇▇▇▇'▇
stockholders under applicable law. If the board of directors
of ▇▇▇▇▇ receives a ▇▇▇▇▇ Transaction Proposal, then ▇▇▇▇▇
shall immediately inform BMC of the terms and conditions of
such proposal and the identity of the person making it and
shall keep BMC fully informed of the status and details of any
such ▇▇▇▇▇ Transaction Proposal and of all
24
steps it is taking in response to such ▇▇▇▇▇ Transaction
Proposal; provided that nothing contained in this Section
4.3.6.1 or elsewhere in this Agreement shall prohibit ▇▇▇▇▇ or
its board of directors from (i) making such disclosure to
▇▇▇▇▇'▇ stockholders or taking any action which, in the good
faith judgment of ▇▇▇▇▇'▇ board of directors based on a
written opinion of its outside counsel, may be required under
applicable law, including Rules 14d-9 and 14e-2 promulgated
under the Exchange Act, or (ii) filing with the Commission a
report on Form 8-K with respect to this Agreement and, only in
the event BMC shall have previously filed a copy of this
Agreement with the Commission, filing a copy of this Agreement
and any related agreements as an exhibit to such report. For
purposes of this Agreement, the term "Superior ▇▇▇▇▇
Transaction Proposal" shall mean a bona fide ▇▇▇▇▇ Transaction
Proposal that the board of directors of ▇▇▇▇▇ determines in
good faith after consultation with (and based in part on the
advice of) its independent financial advisors to be more
favorable to ▇▇▇▇▇ and ▇▇▇▇▇'▇ stockholders than the Merger,
is reasonably capable of being financed and is not subject to
any material contingencies relating to financing.
4.3.6.2. Acceptance of Superior ▇▇▇▇▇ Transaction
Proposals. If (i) this Agreement is terminated by BMC or
▇▇▇▇▇ pursuant to Section 6.1.5 hereof and there shall not
have occurred a Material Adverse Effect on BMC, or (ii) (A)
prior to the time of the meeting of ▇▇▇▇▇'▇ stockholders at
which a final vote is taken by such stockholders on a proposal
to approve and adopt this Agreement and to approve the Merger,
there is publicly announced by a third party (other than BMC
or an affiliate of BMC) a proposal for Another ▇▇▇▇▇
Transaction (as defined below); (B) the adoption and approval
of this Agreement and the approval of the Merger by the
holders of a majority of the shares of ▇▇▇▇▇ Common Stock
outstanding as of the record date for such meeting of
stockholders shall not have been obtained at such meeting; (C)
at or prior to the time of such meeting of ▇▇▇▇▇'▇
stockholders, there shall not have occurred a Material Adverse
Effect on BMC; and (D) ▇▇▇▇▇ enters into an acquisition
agreement which provides for Another ▇▇▇▇▇ Transaction or
Another ▇▇▇▇▇ Transaction is consummated (in each case with
any third party which after the date of this Agreement and
before termination of this Agreement has publicly announced a
proposal for Another ▇▇▇▇▇ Transaction), in either case within
twelve months after the date of termination of this Agreement,
then, in any such event unless this Agreement has been
terminated by ▇▇▇▇▇ pursuant to Section 6.1.4, Section 6.1.6,
Section 6.1.8 or Section 6.1.9, ▇▇▇▇▇ shall pay to BMC
simultaneously with termination by ▇▇▇▇▇ in the case of the
occurrence of any of the events specified in clause (i) above,
and immediately upon the first to occur of the entering into
an agreement providing for, or the consummation of, Another
▇▇▇▇▇ Transaction in the case of clause (ii) above (by wire
transfer of immediately available funds to an account
designated by BMC for such purpose), a fee (the "Break-Up
Fee") in an amount equal to $30.0 million. For purposes of
this Paragraph 4.3.6.2, the term "Another ▇▇▇▇▇ Transaction"
shall mean any transaction pursuant to which (1) any person,
entity or group (within the meaning of Section 13(d)(3) of the
Exchange Act) (other than BMC or any affiliate of BMC) (each,
a "Third Party") acquires 50% or
25
more of the outstanding ▇▇▇▇▇ Common Stock, (ii) a Third Party
acquires 25% or more of the total assets of ▇▇▇▇▇ taken as a
whole, (iii) a Third Party merges, consolidates or combines in
any other way with ▇▇▇▇▇ other than in a transaction in which
holders of ▇▇▇▇▇ Common Stock continue to own at least 75% of
the equity of the surviving corporation, or (iv) ▇▇▇▇▇
distributes or transfers to its stockholders, by dividend or
otherwise, assets constituting 25% or more of the market value
or earning power of ▇▇▇▇▇ on a consolidated basis (it being
understood that stock of subsidiaries constitute assets of
▇▇▇▇▇ for purposes of this Paragraph 4.3.6.2).
4.3.7. No Amendment to Certificate of Incorporation, etc.
Not amend its certificate of incorporation or bylaws or other
organizational documents or merge or consolidate with or into any
other corporation or change in any manner the rights of its capital
stock;
4.3.8. No Issuance, Sale, or Purchase of Securities. Not
issue or sell, or issue options or rights to subscribe to, or enter
into any contract or commitment to issue or sell (upon conversion or
otherwise), any shares of its capital stock or subdivide or in any way
reclassify any shares of its capital stock, or acquire, or agree to
acquire, any shares of its capital stock; provided, that nothing in
this Section 4.3.8 or elsewhere in this Agreement shall restrict or
prohibit (a) the issuance by ▇▇▇▇▇ of shares of ▇▇▇▇▇ Common Stock
upon exercise of options previously granted under existing benefit
plans or the issuance of ▇▇▇▇▇ Common Stock under the ▇▇▇▇▇ Employee
Stock Purchase Plan ("ESPP"), (b) the issuance of options to purchase
up to 100,000 shares of ▇▇▇▇▇ Common Stock per calendar quarter so
long as such options (i) are granted at fair market value on the date
of grant, and (ii) vest over four years in accordance with ▇▇▇▇▇'▇
normal vesting schedule, (c) the issuance of shares of ▇▇▇▇▇ Common
Stock upon the exercise of the options referred to in clause "(b)" of
this sentence, or (d) ▇▇▇▇▇ from formally issuing option agreements in
connection with option grants approved by ▇▇▇▇▇'▇ board of directors
or a committee thereof prior to the date of this Agreement;
4.3.9. Prohibition on Dividends. Not declare or pay any
dividend on shares of its capital stock or make any other distribution
of assets to the holders thereof;
4.3.10. Supplemental Financial Statements. Deliver to BMC,
within 90 days after the end of the fiscal year ended September 30,
1998 the audited consolidated financial statements of ▇▇▇▇▇ included
in its report on Form 10-K. Deliver to BMC, within 45 days after the
end of each fiscal quarter of ▇▇▇▇▇ beginning December 31, 1998 and
through the Effective Time, unaudited consolidated balance sheets and
related unaudited statements of income, retained earnings and cash
flows as of the end of each fiscal quarter of ▇▇▇▇▇, and as of the
corresponding fiscal quarter of the previous fiscal year;
4.3.11. Stockholders' Meeting. Call and hold a meeting of
stockholders as soon as practicable, but in any event no later than 60
days after the Commission has indicated that it has no further
comments on the Proxy Statement for the purpose of considering and
acting upon a proposal to approve this Agreement and the Merger;
provided, however, that if ▇▇▇▇▇ shall fail to hold a meeting of
stockholders by the 60-day deadline solely because of a delay
26
directly caused by BMC or because of an event outside of the control
of ▇▇▇▇▇, such 60-day deadline shall be extended by the number of days
by which BMC or the event outside of the control of ▇▇▇▇▇ shall have
been responsible for delaying the ▇▇▇▇▇ stockholders' meeting; and
4.3.12. Union Contracts and ▇▇▇▇▇ Plans. Not (i) enter into
or modify any collective bargaining agreement with any labor union or
other similar representative of employees, (ii) increase the
compensation or benefits of any employee of ▇▇▇▇▇ or any of its
subsidiaries other than in the ordinary course of business, (iii)
except as contemplated by this Agreement, amend or terminate any ▇▇▇▇▇
Plan, or (iv) enter into or adopt any new employee benefit plan,
policy or arrangement.
4.4. Additional Agreements of BMC. BMC agrees that from the date
hereof to the Effective Time, it will:
4.4.1. Maintenance of Present Business. Other than as
contemplated by this Agreement, operate its business in the usual,
regular, and ordinary manner;
4.4.2. No Delay. Not take any action or enter into any
transaction which would materially affect the ability of BMC to, or
materially delay BMC's ability to, complete the transactions
contemplated by this Agreement;
4.4.3. No Amendment to Certificate of Incorporation, etc.
Except as otherwise provided herein, not amend its certificate of
incorporation or bylaws or other organizational documents or merge
into any other corporation or change in any manner the rights of its
Common Stock;
4.4.4. Inspection. Upon reasonable advance notice, permit
▇▇▇▇▇ and its officers and authorized representatives, during normal
business hours, to inspect its records and to consult with its
officers, employees, attorneys and agents for the purpose of
determining the accuracy of the representations and warranties
hereinabove made and the compliance with covenants contained in this
Agreement; provided, however, that BMC shall not be required to permit
any inspection, or to disclose any information, that in the reasonable
judgment of BMC would (i) result in the disclosure of any trade
secrets of third parties, (ii) violate any obligation of BMC with
respect to confidentiality, (iii) jeopardize protections afforded BMC
under the attorney-client privilege or the attorney work product
doctrine, or (iv) materially interfere with the conduct of BMC's
business;
4.4.5. No Issuance, Sale, or Purchase of Securities. Not
issue or sell, or issue options (other than (i) options previously
authorized by the compensation committee of BMC's board of directors,
(ii) options granted to new personnel upon commencement of employment
or (iii) options granted in the ordinary course of business as to
three percent (3%) of the outstanding BMC Common Stock) or rights to
subscribe to, or enter into any contract or commitment to issue or
sell (upon conversion or otherwise), any shares of its capital stock
or subdivide or in any way reclassify any shares of its capital stock,
or acquire,
27
or agree to acquire, any shares of its capital stock; provided, that
nothing in this Section 4.4.5 shall restrict or prohibit the issuance
by BMC of shares of BMC Common Stock upon exercise of options
previously granted under existing employee benefit plans, the issuance
of shares of BMC Common Stock upon exercise of outstanding warrants,
or the issuance of up to 2,000,000 shares of BMC Common Stock in the
acquisition of other businesses in "non-dilutive" (for financial
reporting purposes) transactions if such acquired businesses would not
individually or collectively constitute a "significant subsidiary" of
BMC;
4.4.6. Prohibition on Dividends. Not declare or pay any
dividend on shares of its capital stock or make any other distribution
of assets to the holders thereof;
4.4.7. Issuance of BMC Common Stock. Take all action
reasonably necessary to register the "issuance" of BMC Common Stock to
the stockholders of ▇▇▇▇▇ in connection with the Merger under the
Securities Act of 1933, as amended (the "Securities Act"). BMC also
shall take any action reasonably required to be taken under state blue
sky or securities laws and under other applicable laws, rules and
regulations in connection with the issuance of the BMC Common Stock
pursuant to the Merger and pursuant to all assumed ▇▇▇▇▇ Options;
4.4.8. Listing of BMC Stock. Take such steps as are
required to accomplish, as of the Effective Time, the Notification of
Additional Listing of the shares of BMC Common Stock to be issued
pursuant to this Agreement and pursuant to all assumed ▇▇▇▇▇ Options
on the Nasdaq National Market; and
4.4.9. Compliance with Agreement. At its expense, take all
commercially reasonable actions as may be necessary, advisable or
proper (i) to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated
by this Agreement, (ii) to insure that the representations and
warranties made by it herein are true and correct at the Effective
Time such that the condition contained in Section 5.1.1 would be
satisfied, (iii) to fully perform all covenants made by it herein and
(iv) to satisfy timely all other obligations imposed upon it by this
Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. Conditions Precedent to Obligations of ▇▇▇▇▇. The obligations
of ▇▇▇▇▇ to consummate and effect the Merger shall be subject to the
satisfaction of the following conditions, or to the waiver thereof by ▇▇▇▇▇ in
the manner contemplated by Section 6.4 before the Effective Time:
5.1.1. Representations and Warranties of BMC True at
Effective Time. The representations and warranties of BMC herein
contained shall be, in all respects, true as of and at the Effective
Time with the same effect as though made at such date, except as
affected by transactions permitted or contemplated by this Agreement
and except for those
28
representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such
particular date), provided that any inaccuracies in such
representations and warranties will be disregarded if the
circumstances giving rise to all such inaccuracies (considered
collectively) do not constitute, and are not reasonably expected to
result in, a Material Adverse Effect on BMC (it being understood that
any materiality qualifications contained in such representations and
warranties shall be disregarded for this purpose); BMC shall have
performed and complied, in all material respects, with all covenants
required by this Agreement to be performed or complied with by BMC
before the Effective Time; and BMC shall have delivered to ▇▇▇▇▇ a
certificate, dated the Effective Time and signed on behalf of BMC by
its chairman of the board and by its chief financial or accounting
officer to both such effects.
5.1.2. No Material Litigation. No suit, action or other
legal proceeding shall have been commenced by any United States
federal or state, or any European country, governmental entity with
respect to the Merger and shall be pending, before any court or
governmental agency of competent jurisdiction which would reasonably
be expected to have a Material Adverse Effect on BMC.
5.1.3. Stockholder Approval. At the meeting of stockholders
of ▇▇▇▇▇ to be held before the Effective Time, the holders of a
majority of the shares of ▇▇▇▇▇ Common Stock outstanding as of the
record date for such meeting of stockholders shall have approved the
Merger and this Agreement.
5.1.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, etc. All waiting periods required
by HSR and any applicable comparable European and Japanese laws and
regulations shall have expired with respect to the transactions
contemplated by this Agreement, or early termination with respect
thereto shall have been obtained without the imposition of any
governmental request or order requiring the sale or disposition or
holding separate (through a trust or otherwise) of particular assets
or businesses of BMC, its affiliates or any component of ▇▇▇▇▇ or
other actions as a precondition to the expiration of any waiting
period or the receipt of any necessary governmental approval or
consent.
5.1.5. Registration of BMC Common Stock. At or prior to the
Effective Time the Proxy Statement shall have become effective under
the Securities Act.
5.1.6. Stock Options. BMC shall have made effective
provision for the assumption or substitution at the Effective Time of
all stock options outstanding under plans maintained by or agreements
entered into by ▇▇▇▇▇.
5.1.7. Ancillary Matters. ▇▇▇▇▇ shall have received a
favorable opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. for inclusion in the Proxy
Statement as to the fairness, from a financial point of view, to the
▇▇▇▇▇ stockholders of the Merger Consideration, which opinion shall
not have been withdrawn at the Effective Time.
29
5.1.8. Tax Opinion. ▇▇▇▇▇▇ Godward LLP shall have delivered
to ▇▇▇▇▇ its written opinion (which may be based upon such
representations, warranties and certificates it deems reasonable and
appropriate under the circumstances) as of the date that the Proxy
Statement is first mailed to ▇▇▇▇▇ stockholders substantially to the
effect that (x) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code, (y) BMC, Merger Sub and ▇▇▇▇▇
will each be a party to that reorganization within the meaning of
Section 368(b) of the Code, and (z) no gain or loss for U.S. federal
income tax purposes will be recognized by the holders of ▇▇▇▇▇ Common
Stock upon receipt of shares of BMC Common Stock in the merger, except
with respect to any cash received in lieu of a fractional share
interest in BMC Common Stock, and such opinion shall not have been
withdrawn or modified in any material respect; provided, however, that
if ▇▇▇▇▇▇ Godward LLP does not render such opinion or withdraws or
modifies such opinion, this condition shall nonetheless be deemed to
be satisfied if counsel to BMC renders such opinion to ▇▇▇▇▇.
5.2. Conditions Precedent to Obligations of BMC. The obligations
of BMC to consummate and effect the Merger shall be subject to the satisfaction
of the following conditions, or to the waiver thereof by BMC in the manner
contemplated by Section 6.4 before the Effective Time:
5.2.1. Representations and Warranties of ▇▇▇▇▇ True at
Effective Time. The representations and warranties of ▇▇▇▇▇ herein
contained shall be, in all respects, true as of and at the Effective
Time with the same effect as though made at such date, except as
affected by transactions permitted or contemplated by this Agreement
and except for those representations and warranties that address
matters only as of a particular date (which shall remain true and
correct as of such particular date), provided that any inaccuracies in
such representations and warranties will be disregarded if the
circumstances giving rise to all such inaccuracies (considered
collectively) do not constitute, and are not reasonably expected to
result in, a Material Adverse Effect on ▇▇▇▇▇ (it being understood
that any materiality qualifications contained in such representations
and warranties shall be disregarded for this purpose); ▇▇▇▇▇ shall
have performed and complied, in all material respects, with all
covenants required by this Agreement to be performed or complied with
by ▇▇▇▇▇ before the Effective Time; and ▇▇▇▇▇ shall have delivered to
BMC a certificate, dated the Effective Time and signed on behalf of
▇▇▇▇▇ by its chief executive officer and by its chief financial or
accounting officer to both such effects.
5.2.2. No Material Litigation. No suit, action or other
legal proceeding shall have been commenced by any United States
federal or state, or any European country, governmental entity with
respect to the Merger and shall be pending before any court or
governmental agency of competent jurisdiction which would reasonably
be expected to have a Material Adverse Effect on ▇▇▇▇▇.
5.2.3. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, etc. All waiting periods required
by HSR and any applicable comparable European and Japanese laws and
regulations shall have expired with respect to the transactions
contemplated by this Agreement, or early termination with respect
thereto shall have been obtained without the imposition of any
governmental request or order
30
requiring the sale or disposition or holding separate (through a trust
or otherwise) of particular assets or business of BMC, its affiliates
or any component of ▇▇▇▇▇ or other actions as a precondition to the
expiration of any waiting period or the receipt of any necessary
governmental approval or consent.
5.2.4. Tax Opinion. ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. shall have
delivered to BMC its written opinion (which may be based upon such
representations, warranties and certificates it deems reasonable and
appropriate under the circumstances) as of the date that the Proxy
Statement is first mailed to ▇▇▇▇▇ stockholders substantially to the
effect that (x) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code, (y) BMC, Merger Sub and ▇▇▇▇▇
will each be a party to that reorganization within the meaning of
Section 368(b) of the Code, and (z) BMC, Merger Sub and ▇▇▇▇▇ will not
recognize any gain or loss for U.S. federal income tax purposes as a
result of the Merger, and such opinion shall not have been withdrawn
or modified in any material respect; provided, however, that if ▇▇▇▇▇▇
& ▇▇▇▇▇▇ L.L.P. does not render such opinion or withdraws or modifies
such opinion, this condition shall nonetheless be deemed to be
satisfied if counsel to ▇▇▇▇▇ renders such opinion to BMC.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1. Termination. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated and the Merger
abandoned at any time (whether before or after the approval and adoption
thereof by the stockholders of ▇▇▇▇▇) before the Effective Time:
6.1.1. By Mutual Consent. By mutual written consent of BMC
and ▇▇▇▇▇.
6.1.2. By BMC Because of Conditions Precedent. By BMC, if
(i) there has been a breach by ▇▇▇▇▇ of its representations,
warranties, covenants, or agreements set forth in this Agreement if,
as a result of such breach, the conditions set forth in Section 5.2.1
would not be satisfied, and (ii) ▇▇▇▇▇ fails to cure such breach
within 30 business days after written notice thereof from BMC (except
that no cure period shall be provided for any breach by ▇▇▇▇▇ which by
its nature cannot be cured).
6.1.3. By BMC Because of Material Adverse Change. By BMC,
if there has been since September 30, 1998, a Material Adverse Change
with respect to ▇▇▇▇▇ which condition or event shall not have been
ameliorated such that it no longer constitutes a Material Adverse
Change within ten (10) business days following receipt by ▇▇▇▇▇ of
notice from BMC (except that no cure period shall be provided for any
Material Adverse Change which by its nature cannot be cured).
6.1.4. By ▇▇▇▇▇ Because of Conditions Precedent. By ▇▇▇▇▇,
if (i) there has been a breach by BMC of any of its representations,
warranties, covenants or agreements set forth in this Agreement if, as
a result of such breach, the conditions set forth in Section 5.1.1
31
would not be satisfied, and (ii) BMC fails to cure such breach within
30 business days after written notice thereof from ▇▇▇▇▇ (except that
no cure period shall be provided for any breach by BMC which by its
nature cannot be cured).
6.1.5. By ▇▇▇▇▇ or BMC Due to a Superior ▇▇▇▇▇ Transaction
Proposal. By ▇▇▇▇▇ or BMC if, before the Effective Time, ▇▇▇▇▇'▇
board of directors shall have withdrawn, withheld or modified in a
manner adverse to BMC its approval of this Agreement or the Merger
solely to the extent permitted by the terms, conditions and procedures
set forth in Section 4.3.6.1.
6.1.6. By ▇▇▇▇▇ Because of Material Adverse Change. By
▇▇▇▇▇, if there has been since September 30, 1998, a Material Adverse
Change with respect to BMC which condition or event shall not have
been ameliorated such that it no longer constitutes a Material Adverse
Change within ten (10) business days following receipt by BMC of
notice from ▇▇▇▇▇ (except that no cure period shall be provided for
any Material Adverse Change which by its nature cannot be cured).
6.1.7. By BMC or ▇▇▇▇▇ Because of Statute or Order. By BMC
or ▇▇▇▇▇ if (i) a statute, rule, regulation or executive order shall
have been enacted, entered or promulgated after the date of this
Agreement (and shall remain in effect) prohibiting the consummation of
the Merger substantially on the terms contemplated hereby or (ii) an
order, decree, ruling or injunction shall have been entered by a court
of competent jurisdiction after the date of this Agreement (and shall
not have been vacated, withdrawn or overturned) permanently
restraining, enjoining or otherwise prohibiting the consummation of
the Merger substantially on the terms contemplated hereby and such
order, decree, ruling or injunction shall have become final and non-
appealable; provided, that the party seeking to terminate this
Agreement pursuant to this Section 6.1.7 shall have used its
reasonable best efforts to remove such order, decree, ruling or
injunction.
6.1.8. By BMC or ▇▇▇▇▇ if Merger not Effective by June 30,
1999. By either BMC or ▇▇▇▇▇, if all conditions to consummation of
the Merger shall not have been satisfied or waived on or before June
30, 1999, other than as a result of a breach of this Agreement by the
terminating party.
6.1.9. By BMC or ▇▇▇▇▇ if Merger Cannot be Accounted for as
a Pooling. By BMC or ▇▇▇▇▇ if the Merger cannot for financial
reporting purposes be accounted for as a "pooling of interests";
provided, however, this provision shall not be available to a party
which has taken or has permitted any of its affiliates to take any
action or which has failed to take or has permitted any of its
affiliates to fail to take any action, that either alone or in
combination with actions previously taken, disqualifies the Merger
from such accounting treatment.
6.1.10. By BMC or ▇▇▇▇▇ if Merger Not Approved by ▇▇▇▇▇
Stockholders. By either BMC or ▇▇▇▇▇ if (i) a meeting of the
stockholders of ▇▇▇▇▇ (including any adjournments thereof) shall have
been held and completed and ▇▇▇▇▇'▇ stockholders shall have taken a
final vote on a proposal to approve and adopt this Agreement and to
approve the Merger, and
32
(ii) the adoption and approval of this Agreement and the approval of
the Merger by the holders of a majority of the shares of ▇▇▇▇▇ Common
Stock outstanding as of the record date for such meeting of
stockholders shall not have been obtained.
6.2. Termination by Board of Directors. An election of BMC to
terminate this Agreement and abandon the Merger as provided in Section 6.1
shall be exercised on behalf of BMC by its board of directors. An election of
▇▇▇▇▇ to terminate this Agreement and abandon the Merger as provided in Section
6.1 shall be exercised on behalf of ▇▇▇▇▇ by its board of directors.
6.3. Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to and in accordance with the provisions
of Section 6.1 hereof, this Agreement shall become void and have no effect,
without any liability on the part of any party hereto (or its stockholders or
controlling persons or directors or officers), except (i) the provisions of
Section 4.3.6.2 shall survive such termination and abandonment and (ii) neither
party shall be released or relieved from any liability arising from any willful
breach by such party of any of its representations, warranties, covenants or
agreements as set forth in this Agreement.
6.4. Waiver of Conditions. Subject to the requirements of any
applicable law, any of the terms or conditions of this Agreement may be waived
at any time by the party which is entitled to the benefit thereof, by action
taken by its board of directors.
6.5. Expense on Termination. If the Merger is abandoned pursuant
to and in accordance with the provisions of Section 6.1 hereof, all expenses
will be paid by the party incurring them.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1. Assumption of Options. Promptly after the Effective Time, BMC
will notify in writing each holder of a ▇▇▇▇▇ Option of the assumption of the
▇▇▇▇▇ Option and that such option will become an option to purchase BMC Common
Stock in accordance with Section 1.10 of the Plan of Merger. Promptly after
the Effective Time, BMC shall cause all shares of BMC Common Stock issuable
upon exercise of the assumed ▇▇▇▇▇ Options to be registered under an effective
Form S-8 Registration Statement (or other comparable form) filed with the
Commission.
7.2. Indemnification of Directors and Officers. (a) From and after
the Effective Time, BMC shall (and BMC shall cause the Surviving Corporation
to) indemnify and hold harmless each present and former director and officer of
▇▇▇▇▇, determined as of the Effective Time, against any claims, losses,
liabilities, damages, judgments, fines, fees, costs or expenses, including,
without limitation, attorneys' fees and disbursements, incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining to
matters existing or occurring at or prior to the Effective Time (including,
without limitation, the Merger, the preparation, filing and mailing of the
Proxy Statement and the other transactions and actions contemplated by this
Agreement), whether asserted or claimed prior to, at or after the Effective
Time, and BMC shall (and BMC shall cause the Surviving Corporation to)
33
fulfill and honor in all respects the obligations of ▇▇▇▇▇ pursuant to all
indemnification agreements existing on the date hereof and the certificate of
incorporation and bylaws of ▇▇▇▇▇ in effect on the date hereof (and BMC shall
also advance expenses as incurred to the fullest extent permitted under
applicable law provided the person to whom expenses are advanced provides an
undertaking to repay such advances if it is ultimately determined that such
person is not entitled to indemnification).
(b) For a period of six (6) years after the Effective Time, BMC
shall maintain (to the extent available in the market) in effect a directors'
and officers' liability insurance policy covering those persons who are
currently covered by ▇▇▇▇▇'▇ directors' and officers' liability insurance
policy (a copy of which has been heretofore delivered to BMC) with coverage in
amount and scope at least as favorable as ▇▇▇▇▇'▇ existing coverage (which
coverage may be an endorsement extending the period in which claims may be made
under such existing policy); provided that (i) in no event shall BMC be
required to expend per year for such coverage more than an aggregate of 200% of
the current annual premium expended by ▇▇▇▇▇ to provide such coverage; (ii) if
the annual premiums of such insurance coverage exceed such amount, BMC shall be
obligated to obtain a policy with the greatest coverage available for a cost
not exceeding such amount; and (iii) if a policy of the type described in this
Section 7.2(b) is not available in the market, BMC shall obtain a policy that
is as close as possible to being as favorable as ▇▇▇▇▇'▇ existing coverage.
(c) The provisions of this Section 7.2 are intended to be for the
benefit of, and shall be enforceable by, each person who is entitled to
indemnification under this Section 7.2 and his or her heirs and
representatives, and nothing herein shall affect any indemnification rights
that any such indemnified party and his or her heirs and representatives may
have under the bylaws of ▇▇▇▇▇ or any of its subsidiaries, any contract or
applicable law. BMC and the Surviving Corporation jointly and severally agree
to pay all expenses, including attorneys' fees, that may be incurred by any
person entitled to indemnification under this Section 7.2 who is the prevailing
party in an action seeking to reinforce the indemnity and other obligations
provided for in this Section 7.2.
7.3. Affiliate Agreements.
7.3.1. ▇▇▇▇▇ Affiliates. To insure that the Merger will be
treated as a "pooling of interests" and to insure compliance with Rule
145 of the rules and regulations promulgated by the Commission and the
Securities Act, each of ▇▇▇▇▇'▇ directors, executive officers and
beneficial owners of 10% or more of ▇▇▇▇▇'▇ Common Stock identified as
possible "affiliates" (as such term is used in Rule 145 under the
Securities Act) has concurrently signed and delivered to BMC the ▇▇▇▇▇
affiliate agreements in the form attached as Exhibit C.
7.3.2. BMC Affiliates. To insure that the Merger will be
treated as a "pooling of interests," each of BMC's directors,
executive officers and beneficial owners of 10% or more of BMC's
Common Stock identified as possible "affiliates" (as such term is used
in Rule 145 under the Securities Act) has concurrently signed and
delivered to BMC the BMC affiliate agreements in the form attached as
Exhibit D.
34
7.4. Employee Benefit Plans of ▇▇▇▇▇. BMC shall take all actions
necessary or appropriate to permit the employees of ▇▇▇▇▇ and its subsidiaries
("▇▇▇▇▇ Employees") to continue to participate from and after the Closing Date
in the ▇▇▇▇▇ Plans maintained by ▇▇▇▇▇ and its subsidiaries immediately prior
to the Closing Date. Notwithstanding the foregoing, BMC may permit or cause
any such ▇▇▇▇▇ Plan to be terminated or discontinued on or after the Closing
Date, provided that BMC shall take all actions necessary or appropriate to
permit the ▇▇▇▇▇ Employees participating in such ▇▇▇▇▇ Plan to immediately
thereafter participate in the comparable BMC Plan maintained by BMC or any of
its subsidiaries for their similarly situated employees. If the ▇▇▇▇▇ Plan
that is terminated or discontinued by BMC is a group health plan, then BMC
shall permit each ▇▇▇▇▇ Employee participating in such group health plan to be
covered under a BMC Plan that (i) provides medical and dental benefits to each
such ▇▇▇▇▇ Employee effective immediately upon the cessation of coverage of
such individuals under such group health plan, (ii) credits such ▇▇▇▇▇
Employee, for the year during which such coverage under such BMC Plan begins,
with any deductibles and copayments already incurred during such year under
such group health plan, and (iii) waives any preexisting condition restrictions
to the extent necessary to provide immediate coverage and to the extent such
restrictions were not applicable under such group health plan. BMC and the BMC
Plans shall recognize each ▇▇▇▇▇ Employee's years of service and level of
seniority with ▇▇▇▇▇ and its subsidiaries for purposes of terms of employment
and eligibility, vesting and benefit determination under the BMC Plans (other
than benefit accruals under any defined benefit pension plan).
7.5. ▇▇▇▇▇ ESPP. As of the Effective Time, the ESPP shall be
terminated. The rights of participants in the ESPP with respect to any
offering period underway under the ESPP immediately prior to the Effective Time
shall be determined by treating the last business day prior to the Effective
Time as the last day of such offering period and by making such other pro-rata
adjustments as may be necessary to reflect the reduced offering period but
otherwise treating such offering period as a fully effective and completed
offering period for all purposes of such Plan. Prior to the Effective Time,
▇▇▇▇▇ may take all actions (including, if appropriate, amending the terms of
the ESPP) that are necessary to give effect to the transactions contemplated by
this Section 7.5.
ARTICLE VIII
MISCELLANEOUS
8.1. Entirety. This Agreement, the attachments and Schedules
thereto, the Plan of Merger, those certain confidentiality letter agreements
dated September 18, 1998, that certain confidentiality letter agreement dated
October 14, 1998 and the Stock Option Agreement embody the entire agreement
among the parties with respect to the subject matter hereof, and all prior
agreements among the parties with respect thereto are hereby superseded in
their entirety.
8.2. Counterparts. Any number of counterparts of this Agreement
may be executed and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
instrument.
35
8.3. Notices and Waivers. Any notice or waiver to be given to any
party hereto shall be in writing and shall be delivered by overnight courier,
sent by facsimile transmission or first class registered or certified mail,
postage prepaid.
IF TO BMC
Addressed to: With a copy to:
BMC Software, Inc. ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ 1001 ▇▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO ▇▇▇▇▇
Addressed to: With a copy to:
▇▇▇▇▇ & Babbage, Inc. ▇▇▇▇▇▇ Godward LLP
3131 Zanker Road ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, shall be deemed to be received on the fifth
business day after so mailed, and any communication so addressed and if
delivered by overnight courier or facsimile to such address shall be deemed to
be received (i) in the case of delivery by overnight courier, on the second
business day after such communication is delivered to the overnight courier
service, and (ii) in the case of delivery by facsimile, upon delivery during
normal business hours on any business day.
8.4. Termination of Representations, Warranties, etc. The
respective representations, warranties, covenants and agreements contained in
this Agreement shall expire with, and be terminated and extinguished by, the
Merger at the time of the consummation thereof on the Effective Time; provided,
however, that this Section 8.4 shall not limit or otherwise effect any covenant
or agreement of the parties hereto which by its terms contemplates performance
after the Effective Time or after termination of this Agreement.
8.5. Table of Contents and Captions. The table of contents and
captions contained in this Agreement are solely for convenient reference and
shall not be deemed to affect the meaning or interpretation of any article,
section, or paragraph hereof.
8.6. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of and be enforceable by the successors and
assigns of the parties hereto.
36
8.7. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
8.8. Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
without regard to applicable principles of conflicts of law.
8.9. Public Announcements. The parties agree that before the
Effective Time they shall consult with each other before the making of any
public announcement regarding the existence of this Agreement, the contents
hereof or the transactions contemplated hereby, and to obtain the prior
approval of the other party as to the content of such announcement, which
approval shall not be unreasonably withheld. However, the foregoing shall not
apply to any announcement or written statement which, upon the written advice
of counsel, is required by law, rule or regulation to be made, except that the
party required to make such announcement shall, whenever practicable, consult
with and solicit prior approval from such other party concerning the timing and
content of such legally required announcement or statement before it is made.
8.10. Definitions. The following terms are defined in the indicated
place:
Section or
Term Paragraph
---- ---------
Agreement Premises
▇▇▇▇▇ Common Stock Premises
▇▇▇▇▇ Employees 7.4
▇▇▇▇▇ Options 1.10 of the Plan of Merger
▇▇▇▇▇ Option Plans 1.10 of the Plan of Merger
▇▇▇▇▇ Plans 2.7.1
▇▇▇▇▇ Reports 2.5
▇▇▇▇▇ Transaction Proposals 4.3.6.1
Another ▇▇▇▇▇ Transaction 4.3.6.2
Applicable Environmental Laws 2.17.3
Break-Up Fee 4.3.6.2
Code Premises
Commission 2.5
DGCL Premises
Effective Time 1.3
Encumbrance 2.4
ERISA 2.20
Exchange Act 2.5
HSR 2.21
Intellectual Property 2.12
Investment Company Act 2.24
37
Section or
Term Paragraph
---- ---------
BMC Common Stock Premises
BMC Plans 3.9
BMC Reports 3.4
BMC Shares 1.9.2 of the Plan of Merger
Material Adverse Effect 1.4
Merger Consideration 1.9.2 of the Plan of Merger
Merging Corporations Premises
OSHA 2.18
Proxy Statement 2.23
Securities Act 4.4.4
Superior ▇▇▇▇▇ Transaction 4.3.6.1
Proposal
38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Reorganization to be duly executed as of the date first above written.
BMC SOFTWARE, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
--------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Title: Chairman, President and
Chief Executive Officer
RANGER ACQUISITION CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
--------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Title: President
▇▇▇▇▇ & BABBAGE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
39
EXHIBIT A
PLAN AND AGREEMENT OF MERGER
Merging Merger Sub into ▇▇▇▇▇
THIS PLAN AND AGREEMENT OF MERGER, dated as of October 31, 1998 (this
"Plan of Merger"), is by and between Ranger Acquisition Corp., a Delaware
corporation ("Merger Sub") and a wholly owned subsidiary of BMC, Inc., a
Delaware corporation ("BMC"), and ▇▇▇▇▇, Inc., a Delaware corporation
("▇▇▇▇▇"). Merger Sub and ▇▇▇▇▇ are hereinafter sometimes referred to as the
"Merging Corporations."
PRELIMINARY STATEMENT
This Plan of Merger is being entered into pursuant to an Agreement and
Plan of Reorganization dated as of October 31, 1998 (the "Agreement") among
BMC, Merger Sub and ▇▇▇▇▇.
The authorized capital stock of Merger Sub consists of 1,000 shares of
common stock, par value $.01 per share ("Merger Sub Common Stock"), of which
100 shares are outstanding, all of which are owned by BMC. The authorized
capital stock of ▇▇▇▇▇ consists of 2,000,000 shares of preferred stock, par
value $.001 per share, of which no shares are issued and outstanding and
45,000,000 shares of common stock, par value $.001 per share ("▇▇▇▇▇ Common
Stock"), of which 27,667,249 shares are issued and outstanding and an
additional 8,453,000 shares are reserved for issuance in conjunction with
various employee benefit plans, and 3,065,930 shares are held in ▇▇▇▇▇'▇
treasury.
The Boards of Directors of each of the Merging Corporations,
respectively, have approved the Agreement and this Plan of Merger.
Accordingly, in consideration of the premises, and the mutual
covenants and agreements herein contained, the parties hereto hereby agree,
subject to the terms and conditions hereinafter set forth, as follows:
40
ARTICLE I
THE MERGER
1.1. Surviving Corporation. Subject to the adoption and approval
of this Plan of Merger by the requisite vote of the stockholders of each of the
Merging Corporations and to the other conditions hereinafter set forth, Merger
Sub and ▇▇▇▇▇ shall be, upon the Effective Time (as defined in Section 1.3
hereof), merged into a single surviving corporation, which shall be ▇▇▇▇▇ (the
"Surviving Corporation"), one of the Merging Corporations, which shall continue
its corporate existence and remain a Delaware corporation governed by and
subject to the laws of that state.
1.2. Stockholder Approval. This Agreement shall be submitted for
adoption and approval by the stockholders of each of the Merging Corporations
in accordance with their respective certificates of incorporation and the
applicable laws of the State of Delaware.
1.3. Effective Time. The merger of Merger Sub with and into ▇▇▇▇▇
(the "Merger") shall become effective upon the filing of a Certificate of
Merger with the Secretary of State of the State of Delaware in accordance with
Section 251 of the Delaware General Corporation Law. The time at which the
Merger shall become effective is referred to in this Agreement as the
"Effective Time."
1.4. Name and Continued Corporate Existence of Surviving
Corporation. At the Effective Time, the identity, existence, purposes, powers,
objects, franchises, rights, and immunities of ▇▇▇▇▇ shall continue unaffected
and unimpaired by the Merger, and the corporate identity, existence, purposes,
powers, objects, franchises, rights, and immunities of Merger Sub shall be
wholly merged into ▇▇▇▇▇ and ▇▇▇▇▇ shall be fully vested therewith.
Accordingly, at the Effective Time, the separate existence of Merger Sub shall
cease.
1.5. Governing Law and Certificate of Incorporation of Surviving
Corporation. The laws of the State of Delaware shall continue to govern the
Surviving Corporation. At the Effective Time, the Certificate of Incorporation
of Merger Sub shall be the certificate of incorporation of the Surviving
Corporation until further amended in the manner provided by law, provided 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 "▇▇▇▇▇ & Babbage, Inc.".
1.6. Bylaws of Surviving Corporation. Effective as of the
Effective Time, the bylaws of Merger Sub shall be the bylaws of the Surviving
Corporation until altered, amended, or repealed, or until new bylaws shall be
adopted in accordance with the provisions of law, the certificate of
incorporation and the bylaws.
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1.7. Directors of Surviving Corporation
1.7.1. Directors of Surviving Corporation. The names and
addresses of the persons who, upon the Effective Time, shall
constitute the board of directors of the Surviving Corporation, and
who shall hold office until the first annual meeting of stockholders
of the Surviving Corporation next following the Effective Time, are as
follows:
NAME ADDRESS
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.7.2. Vacancies. At or after the Effective Time, if a
vacancy shall exist for any reason in the board of directors of the
Surviving Corporation, such vacancy shall be filled in the manner
provided in the certificate of incorporation and/or bylaws of the
Surviving Corporation.
1.8. Capital Stock of Surviving Corporation. The authorized number
of shares of capital stock of the Surviving Corporation, and the par value,
designations, preferences, rights, and limitations thereof, and the express
terms thereof, shall be as set forth in the certificate of incorporation.
1.9. Conversion of Securities upon Merger
1.9.1. General. The manner and basis of converting the
issued and outstanding shares of the capital stock of ▇▇▇▇▇ into
shares of the capital stock of BMC shall be as hereinafter set forth
in this Section 1.9.
1.9.2. Conversion of ▇▇▇▇▇ Common Stock. At the Effective
Time, each share of ▇▇▇▇▇ Common Stock issued and outstanding
immediately prior to the Effective Time, without any action on the
part of the holders thereof, shall automatically become and be
converted into a fraction of a fully paid and nonassessable share of
issued and outstanding BMC Common Stock equal to 0.675 (the "Exchange
Ratio"). The shares of BMC Common Stock to be issued in connection
with the Merger (the "BMC Shares") are hereinafter referred to
collectively as the "Merger Consideration."
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1.9.3. Exchange of ▇▇▇▇▇ Common Stock Certificates. Prior
to the Effective Time, BMC (after consultation with and approval of
▇▇▇▇▇) shall select a reputable bank or trust company to act as the
exchange agent under the Agreement and this Plan of Merger. As of the
Effective Time, BMC shall deposit with the exchange agent, for the
benefit of holders of shares of ▇▇▇▇▇ Common Stock, for exchange in
accordance with the Agreement and this Plan of Merger, certificates
representing shares of BMC Common Stock issuable pursuant to the
Agreement and this Plan of Merger and cash sufficient to make payments
in lieu of fractional share interests. Promptly after the Effective
Time, BMC shall cause the exchange agent to mail to each person who
was, immediately prior to the Effective Time, a holder of record of
▇▇▇▇▇ Common Stock a form of letter of transmittal (mutually agreed to
by BMC and ▇▇▇▇▇) and instructions for use in effecting the surrender
of stock certificates that, prior to the Effective Time, represented
shares of ▇▇▇▇▇ Common Stock, in exchange for certificates
representing shares of BMC Common Stock and a cash payment in lieu of
fractional share interests. Commencing at the Effective Time, each
holder of an outstanding certificate or certificates theretofore
representing shares of ▇▇▇▇▇ Common Stock may surrender the same to
the exchange agent, and such holder shall be entitled upon such
surrender to receive in exchange therefor a certificate or
certificates representing the number of whole BMC Shares into which
the shares of ▇▇▇▇▇ Common Stock theretofore represented by the
certificate or certificates so surrendered shall have been converted
as aforesaid, cash in lieu of fractional share interests and any
unpaid dividends payable in accordance with the Agreement or this Plan
of Merger. However, before surrender, each outstanding certificate
representing issued and outstanding ▇▇▇▇▇ Common Stock shall after the
Effective Time be deemed, for all purposes, only to evidence ownership
of the number of whole BMC Shares into which such shares have been so
converted. In the event of a transfer of ownership of ▇▇▇▇▇ Common
Stock which is not registered in the transfer records of ▇▇▇▇▇, a
certificate representing the appropriate number of shares of BMC
Common Stock may be issued to a person other than the person in whose
name the certificate so surrendered is registered, if, upon
presentation to the exchange agent, such certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person
requesting such issuance shall pay any transfer or other taxes
required by reason of the issuance of shares of BMC Common Stock to a
person other than the registered holder of such certificate or
establish to the reasonable satisfaction of BMC that such tax has been
paid or is not applicable. Unless and until such outstanding
certificates formerly representing ▇▇▇▇▇ Common Stock are so
surrendered, no dividend payable to holders of record of BMC Common
Stock as of any date after the Effective Time shall be paid to the
holders of such outstanding certificates in respect thereof. Upon
surrender of such outstanding certificates, however, there shall be
paid to the holders of BMC Shares represented thereby the amount of
dividends, if any, which theretofore (but after the Effective Time)
became payable with respect to such BMC Shares. No interest shall be
payable with respect to the payment of such dividends on surrender of
outstanding certificates. The holder of fractional share interests,
as such, shall not be entitled to any dividends in respect thereof or
to any distribution in respect thereof in the event of liquidation or
to any voting or other privileges in respect thereof of a stockholder
of BMC.
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If any stock certificate that, prior to the Effective Time,
represented shares of ▇▇▇▇▇ Common Stock shall have been lost, stolen
or destroyed, then, upon the making of an affidavit of that fact by
the person claiming such stock certificate to be lost, stolen or
destroyed (and, if required by BMC, the posting by such person of a
bond in such reasonable amount as BMC may direct as indemnity against
any claim that may be made against it with respect to such stock
certificate), BMC shall cause the exchange agent to issue in exchange
for such lost, stolen or destroyed stock certificate a certificate
representing the appropriate number of shares of BMC Common Stock,
cash in lieu of any fractional share interests and any unpaid
dividends, issuable or payable in accordance with the Agreement and
this Plan of Merger.
1.9.4. BMC Fractional Shares. No certificates for
fractional share interests of BMC Common Stock will be issued, but, in
lieu thereof, BMC will settle all such fractional share interests in
cash on the basis of the closing price for BMC Common Stock on the
Nasdaq National Market (as reported in The Wall Street Journal) on the
last trading day before the Effective Time.
1.9.5. ▇▇▇▇▇'▇ Transfer Books Closed. Upon the Effective
Time, the stock transfer books of ▇▇▇▇▇ shall be deemed closed, and no
transfer of any certificates theretofore representing the shares of
▇▇▇▇▇ shall thereafter be made or consummated.
1.9.6. Conversion of Merger Sub Common Stock. At the
Effective Time, each share of Merger Sub Common Stock then issued and
outstanding, without any action on the part of the holder thereof,
shall automatically become and be converted into one share of ▇▇▇▇▇
Common Stock.
1.10. Treatment of Stock Options. At the Effective Time, each
option to purchase ▇▇▇▇▇ Common Stock outstanding immediately prior to the
Effective Time (collectively, the "▇▇▇▇▇ Options") (which includes all
outstanding options granted under ▇▇▇▇▇'▇ stock option plans other than the
ESPP (the "▇▇▇▇▇ Option Plans")) will and without any further action on the
part of any holder thereof (herein, an "optionholder"), be assumed by BMC and
become an option to purchase that number of shares of BMC Common Stock
determined by multiplying the number of shares of ▇▇▇▇▇ Common Stock subject to
such ▇▇▇▇▇ Option immediately prior to the Effective Time by the Exchange
Ratio, at an exercise price per share of BMC Common Stock equal to the exercise
price per share of such ▇▇▇▇▇ Option divided by the Exchange Ratio. If the
foregoing calculation results in an assumed ▇▇▇▇▇ Option being exercisable for
a fraction of a share of BMC Common Stock, then the number of shares of BMC
Common Stock subject to such option will be rounded down to the nearest whole
number of shares, and the total exercise price for the option will be reduced
by the exercise price of the fractional share. The term, exerciseability,
vesting schedule, and all other terms and conditions of the ▇▇▇▇▇ Options will
otherwise be unchanged by the provisions of this Section 1.10 and shall operate
in accordance with their terms. All shares of BMC Common Stock issued upon
exercise of the assumed ▇▇▇▇▇ Options shall be registered under an effective
Form S-8 Registration Statement (or other comparable form) filed with the
Securities and Exchange
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Commission (the "Commission") in accordance with Section 7.1 of the Agreement.
Except as provided in the Agreement or this Plan of Merger or as otherwise
agreed to by the parties, each of the ▇▇▇▇▇ Option Plans providing for the
issuance or grant of ▇▇▇▇▇ Options shall be assumed as of the Effective Time by
BMC with such amendments thereto as may be required to reflect the Merger.
1.11. Assets and Liabilities
1.11.1. Assets and Liabilities of Merging Corporations Become
Those of Surviving Corporation. At the Effective Time, all rights,
privileges, powers, immunities, and franchises of each of the Merging
Corporations, both of a public and private nature, and all property,
real, personal, and mixed, and all debts due on whatever account, as
well as stock subscriptions and all other choses or things in action,
and all and every other interest of or belonging to or due to either
of the Merging Corporations, shall be taken by and shall be vested in
the Surviving Corporation without further act or deed, and all such
rights, privileges, powers, immunities, and franchises, property,
debts, choses or things in action, and all and every other interest of
each of the Merging Corporations shall be thereafter as effectually
the property of the Surviving Corporation as they were of the
respective Merging Corporations, and the title to any real or other
property, or any interest therein, whether vested by deed or
otherwise, in either of the Merging Corporations, shall not revert or
be in any way impaired by reason of the merger, provided, however,
that all rights of creditors and all liens upon any properties of each
of the Merging Corporations shall be preserved unimpaired, and all
debts, liabilities, restrictions, obligations, and duties of the
respective Merging Corporations, including without limitation all
obligations, liabilities and duties as lessee under any existing
lease, shall thenceforth attach to the Surviving Corporation and may
be enforced against and by it to the same extent as if such debts,
liabilities, duties, restrictions and obligations had been incurred or
contracted by it. Any action or proceeding pending by or against
either of the Merging Corporations may be prosecuted to judgment as if
the merger had not taken place, or the Surviving Corporation may be
substituted in place of either of the Merging Corporations.
1.11.2. Conveyances to Surviving Corporation. The Merging
Corporations hereby agree, respectively, that from time to time, as
and when requested by the Surviving Corporation, or by its successors
and assigns, they will execute and deliver or cause to be executed and
delivered, all such deeds, conveyances, assignments, permits, licenses
and other instruments, and will take or cause to be taken such further
or other action as the Surviving Corporation, its successors or
assigns, may deem necessary or desirable to vest or perfect in or
confirm to the Surviving Corporation, its successors and assigns,
title to and possession of all the property, rights, privileges,
powers, immunities, franchises, and interests referred to in this
Paragraph 1.11.2 and otherwise carry out the intent and purposes of
this Agreement.
1.11.3. Accounting Treatment. The assets and liabilities of
the Merging Corporations shall be taken up on the books of the
Surviving Corporation in accordance with generally
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accepted accounting principles, and the capital surplus and retained
earnings accounts of the Surviving Corporation shall be determined, in
accordance with generally accepted accounting principles, by the board
of directors of the Surviving Corporation. Nothing herein shall
prevent the board of directors of the Surviving Corporation from
making any future changes in its accounts in accordance with law.
1.11.4. Unclaimed Merger Consideration; No Escheat. Subject
to any contrary provision of governing law, all consideration
deposited with the exchange agent or held by BMC for the payment of
the consideration into which the outstanding shares of ▇▇▇▇▇ Common
Stock shall have been converted, and remaining unclaimed for one year
after the Effective Time, shall be paid or delivered to BMC; and the
holder of any unexchanged certificate or certificates which before the
Effective Time represented shares of ▇▇▇▇▇ Common Stock shall
thereafter look only to BMC for exchange or payment thereof upon
surrender of such certificate or certificates to BMC.
1.12. Taking of Necessary Action; Further Action. Merger Sub and
▇▇▇▇▇ shall take all such reasonable and lawful action as may be necessary or
appropriate in order to effectuate the Merger as promptly as possible. If, at
any time after the Effective Time, any such 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 ▇▇▇▇▇ or Merger Sub, such
corporations shall direct their respective officers and directors to take all
such lawful and necessary action.
ARTICLE II
MISCELLANEOUS
2.1. Counterparts. This Plan of Merger 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 each of the other parties.
2.2. Governing Law. This Plan of Merger shall be governed by and
construed in accordance with the laws of the State of Delaware.
2.3. Waiver and Amendment. Any provision of this Plan of Merger
may be waived at any time by the party that is, or whose stockholders are,
entitled to the benefits thereof. This Plan of Merger may not be amended or
supplemented at any time, except by an instrument in writing signed on behalf
of each party hereto. The waiver by any party hereto of any condition or of a
breach of another provision of this Plan of Merger shall not operate or be
construed as a waiver of any other condition or subsequent breach. The waiver
by any party hereto of any of the conditions precedent to its obligations under
this Plan of Merger shall not preclude it from seeking redress for breach of
this Plan of Merger other than with respect to the condition so waived.
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IN WITNESS WHEREOF, the parties hereto have caused this Plan of Merger
to be duly executed as of the date first above written.
RANGER ACQUISITION CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
----------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Title: President
▇▇▇▇▇ & BABBAGE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
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