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EXHIBIT 99(d)(1)
CONFIDENTIAL
AGREEMENT AND PLAN OF MERGER
among
TELELOGIC AB
RAINDROP ACQUISITION CORPORATION
and
CONTINUUS SOFTWARE CORPORATION
Dated as of October 25, 2000
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TABLE OF CONTENTS
Page
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ARTICLE 1 THE OFFER ............................................................................................. 2
1.1 The Offer.................................................................................... 2
1.2 Actions by Purchaser and Merger Sub.......................................................... 3
1.3 Actions by the Company....................................................................... 4
1.4 Directors.................................................................................... 6
ARTICLE 2 THE MERGER ............................................................................................ 7
2.1 The Merger................................................................................... 7
2.2 The Closing.................................................................................. 7
2.3 Effective Time............................................................................... 7
2.4 Effects of the Merger........................................................................ 7
ARTICLE 3 CERTIFICATE OF INCORPORATION AND BYLAWS OF THE SURVIVING CORPORATION................................... 8
3.1 Certificate of Incorporation................................................................. 8
3.2 Bylaws....................................................................................... 8
ARTICLE 4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION.................................................... 8
4.1 Directors.................................................................................... 8
4.2 Officers..................................................................................... 8
ARTICLE 5 EFFECT OF THE MERGER ON SECURITIES OF MERGER SUB AND THE COMPANY....................................... 8
5.1 Merger Sub Stock............................................................................. 8
5.2 Company Securities........................................................................... 8
5.3 Exchange of Certificates Representing Shares of Common Stock................................. 10
5.4 Merger Without Meeting of Stockholders....................................................... 12
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................................................... 13
6.1 Existence; Good Standing; Corporate Authority................................................ 13
6.2 Authorization, Validity and Effect of Agreements............................................. 13
6.3 Compliance with Laws......................................................................... 14
6.4 Capitalization............................................................................... 14
6.5 Subsidiaries................................................................................. 15
6.6 No Violation................................................................................. 15
6.7 Company Reports; Offer Documents............................................................. 16
6.8 Absence of Certain Changes................................................................... 17
6.9 Taxes........................................................................................ 18
6.10 Employee Benefit Plans....................................................................... 19
6.11 Brokers...................................................................................... 20
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6.12 Licenses and Permits......................................................................... 21
6.13 Environmental Compliance and Disclosure...................................................... 21
6.14 Title to Assets.............................................................................. 22
6.15 Labor and Employment Matters................................................................. 22
6.16 Intellectual Property........................................................................ 22
6.17 Material Agreements.......................................................................... 24
6.18 No Undisclosed Liabilities................................................................... 24
6.19 Litigation................................................................................... 24
6.20 Insurance.................................................................................... 25
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB............................................. 25
7.1 Existence; Good Standing; Corporate Authority................................................ 25
7.2 Authorization, Validity and Effect of Agreements............................................. 25
7.3 Offer Documents.............................................................................. 25
7.4 No Violation................................................................................. 26
7.5 Financing.................................................................................... 26
7.6 Purchaser-Owned Shares of Common Stock....................................................... 27
7.7 Interim Operations of Merger Sub............................................................. 27
ARTICLE 8 COVENANTS ............................................................................................. 27
8.1 Interim Operations........................................................................... 27
8.2 Company Stockholder Approval; Proxy Statement................................................ 29
8.3 Filings; Other Action........................................................................ 30
8.4 Publicity.................................................................................... 31
8.5 Further Action............................................................................... 31
8.6 Insurance; Indemnity......................................................................... 31
8.7 Restructuring of Merger...................................................................... 33
8.8 Employee Benefit Plans....................................................................... 33
8.9 Access to Information........................................................................ 34
8.10 No Solicitation.............................................................................. 34
ARTICLE 9 CONDITIONS ............................................................................................ 35
9.1 Conditions to Each Party's Obligation to Effect the Merger................................... 35
ARTICLE 10 TERMINATION; AMENDMENT; WAIVER........................................................................ 36
10.1 Termination.................................................................................. 36
10.2 Effect of Termination........................................................................ 38
10.3 Amendment.................................................................................... 39
10.4 Extension; Waiver............................................................................ 39
ARTICLE 11 GENERAL PROVISIONS.................................................................................... 40
11.1 Nonsurvival of Representations and Warranties................................................ 40
11.2 Notices...................................................................................... 40
11.3 Assignment; Binding Effect................................................................... 41
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11.4 Entire Agreement............................................................................. 41
11.5 Fees and Expenses............................................................................ 41
11.6 Governing Law................................................................................ 41
11.7 Headings..................................................................................... 41
11.8 Interpretation............................................................................... 41
11.9 Severability................................................................................. 42
11.10 Enforcement of Agreement..................................................................... 42
11.11 Counterparts................................................................................. 42
11.12 Obligation of Purchaser...................................................................... 42
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as
of October 25, 2000, is made and entered into among Telelogic AB, a company
organized under the laws of Sweden ("Purchaser"), Raindrop Acquisition
Corporation, a Delaware corporation and a wholly owned subsidiary of Purchaser
("Merger Sub"), and Continuus Software Corporation, a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the boards of directors of Purchaser, Merger Sub and
the Company each have determined that it would be advisable and is in the best
interests of their respective companies and stockholders for Purchaser to
acquire the Company on the terms and subject to the conditions set forth herein;
and
WHEREAS, to effectuate the acquisition, Purchaser and the
Company each desire that Purchaser cause Merger Sub to commence a cash tender
offer to purchase all, and in any event not less than a majority on a fully
diluted basis, of the outstanding shares of common stock, par value $0.001 per
share (the "Common Stock"), of the Company on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, concurrently with the execution hereof and in order
to induce Merger Sub and Purchaser to enter into this Agreement, Merger Sub and
Purchaser are entering into a Tender and Stockholder Support Agreement (the
"Tender Agreement") with ▇▇▇▇ ▇. ▇▇▇ (on behalf of himself and the Melita
Company, LLC), ▇▇▇▇▇ ▇. ▇▇▇▇ (on behalf of himself and Norwest Equity Partners
IV and Norwest Equity Partners V), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, A. ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (on behalf of himself and
Brentwood Associates VI, L.P.), ▇▇▇▇ Van Den ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇
(on behalf of himself and the ▇▇▇ ▇▇▇▇▇▇▇ Annuity Trust, the ▇▇▇ ▇▇▇▇▇▇▇ Family
Trust and the ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Annuity Trust) (each a "Significant
Stockholder") under which each Significant Stockholder is, among other things,
agreeing to tender all of such Significant Stockholder's shares of Common Stock
in the Offer upon the terms and conditions set forth therein; and
WHEREAS, the board of directors of the Company (the "Board of
Directors" or the "Board") has approved the tender offer and recommends (subject
to the limitations contained herein) that the Company's stockholders accept the
tender offer and tender their shares of Common Stock pursuant thereto; and
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in connection herewith;
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
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ARTICLE 1
THE OFFER
1.1 The Offer.
(a) Subject to the provisions of this Agreement and this Agreement not
having been terminated in accordance with Article 10 hereof, as promptly as
practicable but in any event within five business days after the date hereof,
Merger Sub shall commence, within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934 (the "Exchange Act") and the rules and regulations
promulgated thereunder, an offer to purchase (the "Offer") all of the
outstanding shares of Common Stock at a price of $3.46 per share of Common
Stock, net to the seller in cash, without interest (such price or any higher
price paid pursuant to the Offer, the "Offer Consideration"). Notwithstanding
the foregoing, if between the date of this Agreement and the closing of the
Offer the outstanding shares of Common Stock shall have been changed into a
different number of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares, the Offer Consideration shall be correspondingly adjusted on a
per-share basis to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares. The obligation of
Purchaser and Merger Sub to commence the Offer and accept for payment, and pay
for, any shares of Common Stock tendered pursuant to the Offer shall be subject
to the conditions set forth in Exhibit A hereto and to the terms and conditions
of this Agreement. Subject to the provisions of this Agreement, the Offer shall
expire 20 business days after the date of its commencement (the "Initial Offer
Expiration Date"), unless this Agreement is terminated in accordance with
Article 10, in which case the Offer (whether or not previously extended in
accordance with the terms hereof) shall expire on such date of termination.
(b) Purchaser and Merger Sub expressly reserve the right, in their sole
discretion, to modify the terms of the Offer and to waive any condition of the
Offer, except that, without the prior written consent of the Company, Merger Sub
shall not (and Purchaser shall cause Merger Sub not to) (i) waive the Minimum
Condition (as defined in Exhibit A), (ii) reduce the number of shares of Common
Stock subject to the Offer, (iii) reduce the price per share of Common Stock to
be paid pursuant to the Offer, (iv) except as set forth below, extend the Offer,
(v) change the form of consideration payable in the Offer, (vi) amend or modify
any term or condition of the Offer (including the conditions set forth on
Exhibit A) in any manner adverse to any holder of Common Stock or (vii) impose
additional conditions to the Offer other than such conditions required by
applicable law. So long as this Agreement is in effect and the conditions to the
Offer have not been satisfied or waived, Merger Sub may, without the consent of
the Company, extend the expiration date of the Offer for one or more periods of
up to ten additional Business Days each (but in no event shall Merger Sub be
permitted to extend the expiration date of the Offer beyond the fortieth
business day after the date of this Agreement). So long as this Agreement is in
effect and the conditions to the Offer have been satisfied or waived and such
conditions shall not apply to any extension pursuant to this sentence, Merger
Sub may, without the consent of the Company, extend the Offer in accordance with
Rule 14d-11 under the Exchange Act, if (i) the number of shares of Common Stock
that have been validly tendered and not withdrawn represent
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less than 90% of the issued and outstanding shares of the Common Stock and (ii)
Merger Sub shall accept and promptly pay for all shares of Common Stock validly
tendered and not withdrawn; provided, however, that no such extension shall (x)
extend the Offer beyond the sixtieth business day after the commencement of the
Offer or (y) exceed, in the aggregate, twenty business days. Notwithstanding the
foregoing, Merger Sub may, without the consent of the Company, extend the Offer
for any period required by any rule, regulation, interpretation or position of
the SEC or the staff thereof applicable to the Offer. It is agreed that the
conditions set forth in Exhibit A (other than the Minimum Condition and the
condition set forth in clause (ii) of the second paragraph of Exhibit A) are for
the sole benefit of Merger Sub and Purchaser and may be asserted by Merger Sub
or Purchaser, or may be waived in whole or in part by Merger Sub or Purchaser,
in their sole discretion. The failure by Merger Sub or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time until the consummation of the Offer. Subject to the terms and
conditions of the Offer and this Agreement, Merger Sub shall accept for payment
and pay for, in accordance with the terms of the Offer, all shares of Common
Stock validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after the expiration of the Offer (subject to the provisions of Rule
14d-11 under the Exchange Act, to the extent applicable).
(c) Purchaser shall provide or cause to be provided to Merger Sub on a
timely basis the funds necessary to purchase any shares of Common Stock that
Merger Sub becomes obligated to purchase pursuant to the Offer and shall be
liable on a direct and primary basis for the performance by Merger Sub or the
Surviving Corporation (as defined in Section 2.1), as the case may be, of its
obligations under this Agreement with respect to the payment of the Offer
Consideration, the Option Consideration (as defined in Section 5.2(d)) and the
Merger Consideration (as defined in Section 5.2(b)). Merger Sub may, at any
time, transfer or assign to one or more corporations directly or indirectly
wholly-owned by Purchaser the right to purchase all or any portion of the shares
tendered pursuant to the Offer, provided that any such transfer or assignment
shall not prejudice the rights of tendering stockholders to receive payment for
shares of Common Stock properly tendered and accepted for payment.
1.2 Actions by Purchaser and Merger Sub. As soon as reasonably
practicable following execution of this Agreement, but in no event later than
five business days from the date hereof, Purchaser and Merger Sub shall file
with the Securities and Exchange Commission (the "SEC") a Tender Offer Statement
on Schedule TO with respect to the Offer, which shall contain (including as an
exhibit) or incorporate by reference an offer to purchase and a related letter
of transmittal and any other ancillary documents pursuant to which the Offer
shall be made (such Tender Offer Statement on Schedule TO and the documents
therein pursuant to which the Offer will be made, together with any supplements
or amendments thereto, the "Offer Documents"). The Company and its counsel shall
be given a reasonable opportunity to review and comment upon the Offer Documents
prior to the filing thereof with the SEC. The Company shall promptly supply to
Purchaser in writing, for inclusion in the Offer Documents, all information
concerning the Company or any of its affiliates required by law, rule or
regulation to
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be included in the Offer Documents. The Offer Documents shall comply as to form
in all material respects with the requirements of the Exchange Act, and, on the
date filed with the SEC and on the date first published, sent or given to the
Company's stockholders, the Offer Documents shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that no representation is made by Purchaser or Merger Sub with respect to
information supplied in writing by the Company expressly for inclusion in the
Offer Documents. Each of Purchaser, Merger Sub and the Company agrees promptly
to correct any information provided by it for use in the Offer Documents if and
to the extent such information shall have become false or misleading in any
material respect, and each of Purchaser, Merger Sub and the Company further
agrees to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to holders of shares of Common
Stock, in each case as and to the extent required by applicable federal
securities laws. Purchaser and Merger Sub agree to provide the Company and its
counsel with any comments Purchaser, Merger Sub or their counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after
receipt of such comments.
1.3 Actions by the Company.
(a) The Company hereby approves of and consents to the Offer and
represents and warrants that the Board of Directors at a meeting duly called and
held has duly adopted resolutions (i) approving this Agreement, the Offer and
the Merger (as defined in Section 2.1), determining that the Merger is advisable
and that the terms of the Offer and Merger are fair to, and in the best
interests of, the Company's stockholders and recommending that the Company's
stockholders accept the Offer and tender all of their shares of Common Stock to
Merger Sub and approve this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, (ii) taking all action necessary to render
Section 203 of the Delaware General Corporation Law, as amended (the "DGCL"),
inapplicable to the Offer, the Merger, this Agreement, the Tender Agreement and
any of the transactions contemplated hereby and thereby and (iii) electing, to
the extent permitted by law, not to be subject to any "moratorium," "control
share acquisition," "business combination," "fair price" or other form of
corporate anti-takeover laws and regulations of any jurisdiction that may
purport to be applicable to this Agreement or the Tender Agreement. The Company
further represents and warrants that the Board of Directors has received the
written opinion of U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. (the "Financial Advisor")
that the consideration to be received pursuant to the Offer and the Merger is
fair to the holders of Common Stock (other than Purchaser and its affiliates)
from a financial point of view (the "Fairness Opinion"). Subject to the last
sentence of this Section 1.3(a), the Company hereby consents to the inclusion in
the Offer Documents of the recommendation of the Board of Directors described in
the first sentence of this Section 1.3(a). The Company hereby represents and
warrants that it has been authorized by the Financial Advisor to permit the
inclusion of the Fairness Opinion and references thereto, subject to prior
review and consent by the Financial Advisor (such consent not to be unreasonably
withheld) in the Offer Documents, the Schedule 14D-9 (as defined in Section
1.3(b)) and the Proxy Statement (as defined in Section 8.2(b)). The
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Board of Directors shall not withdraw, modify or amend its recommendations
described above in a manner adverse to Purchaser (or announce publicly its
intention to do so), except that the Board shall be permitted to withdraw, amend
or modify its recommendation (or publicly announce its intention to do so) of
this Agreement or the Merger in a manner adverse to Purchaser or approve or
recommend or enter into an agreement with respect to a Superior Proposal (as
defined in Section 8.10) if the Company has complied with the terms of Section
8.10 and Section 10.1(e).
(b) The Company shall use its reasonable best efforts to file with the
SEC, concurrently with the filing of the Offer Documents with the SEC, and in
any event the Company shall file within five days thereafter, a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Offer (such Schedule 14D-9, as amended from time to time, the "Schedule 14D-9")
containing the recommendations described in the first sentence of Section 1.3(a)
(subject to the last sentence of Section 1.3(a)) and shall mail the Schedule
14D-9 to the stockholders of the Company. To the extent practicable, the Company
shall cooperate with Purchaser in mailing or otherwise disseminating the
Schedule 14D-9 with the appropriate Offer Documents to the Company's
stockholders. Purchaser and its counsel shall be given a reasonable opportunity
to review and comment upon the Schedule 14D-9 prior to the filing thereof with
the SEC. The Schedule 14D-9 shall comply as to form in all material respects
with the requirements of the Exchange Act and, on the date filed with the SEC
and on the date first published, sent or given to the Company's stockholders,
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that no representation is made by the Company with
respect to information supplied by Purchaser or Merger Sub for inclusion in the
Schedule 14D-9. Each of the Company, Purchaser and Merger Sub agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to the holders of shares of Common Stock, in each case as and to
the extent required by applicable federal securities laws. The Company agrees to
provide Purchaser and its counsel in writing with any comments the Company or
its counsel may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments.
(c) Each party hereto shall file all written communications, that are
made public or otherwise supplied to third parties, with the SEC on or prior to
the date the communication is first used. All such communications shall comply
as to form and content, including bearing the appropriate legends, in all
material respects with the applicable provisions of the federal securities laws.
Each party agrees that, prior to any such filing or use of written
communications, such party will provide the other party and its counsel the
opportunity to review and comment on such communications and filings.
(d) In connection with the Offer, the Company shall cause its transfer
agent to furnish promptly to Merger Sub mailing labels containing the names and
addresses of the record holders of Common Stock as of a recent date and of those
persons becoming record holders subsequent
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to such date, and to furnish copies of other information in the Company's
possession or control regarding the non-objecting beneficial owners of Common
Stock, and shall furnish to Merger Sub such information and assistance
(including updated lists of stockholders, security position listings and
computer files) as Merger Sub may reasonably request in communicating the Offer
to the Company's stockholders. Subject to the requirements of law, and except
for such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer and the Merger, Purchaser and Merger
Sub and each of their affiliates and associates shall hold in confidence the
information contained in any of such labels, lists and files, shall use such
information only in connection with the Offer and the Merger, and, if this
Agreement is terminated, shall promptly deliver to the Company all copies of
such information then in their possession or under their control.
(e) Subject to the terms and conditions of this Agreement, if there
shall occur a change in law or in a binding judicial interpretation of existing
law that would, in the absence of action by the Company or the Board, prevent
Merger Sub, were it to acquire a specified percentage of the shares of Common
Stock then outstanding, from adopting this Agreement by its affirmative vote as
the holder of a majority of shares of Common Stock and without the affirmative
vote of any other stockholder, the Company will use its best efforts to promptly
take or cause such action to be taken.
1.4 Directors.
(a) Upon the purchase of at least a majority of the issued and
outstanding shares of Common Stock on a fully diluted basis pursuant to the
Offer, Purchaser shall be entitled to designate such number of directors,
rounded up to the next whole number, as will give Purchaser representation on
the Board of Directors equal to the product of (i) the number of authorized
directors on the Board of Directors (giving effect to the directors elected
pursuant to this Section 1.4) and (ii) the percentage that the number of shares
of Common Stock purchased by Merger Sub or Purchaser or any affiliate thereof
bears to the aggregate number of shares of Common Stock outstanding (the
"Percentage"), and the Company shall, upon the election and request by
Purchaser, promptly increase the size of the Board of Directors and/or secure
the resignations of such number of directors as is necessary to enable
Purchaser's designees to be elected to the Board of Directors and shall cause
Purchaser's designees to be so elected. At the request of Purchaser, the Company
will cause such individuals designated by Purchaser to constitute the same
Percentage of (i) each committee of the Board, (ii) the board of directors of
each Subsidiary (as defined in Section 11.8) of the Company and (iii) the
committees of each such board of directors. The Company's obligations to seek to
appoint designees to the Board of Directors shall be subject to Section 14(f) of
the Exchange Act. The Company shall promptly take all appropriate action
necessary to effect any such election and shall, subject to the next succeeding
sentence, include in the Schedule 14D-9 the information required by Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. Purchaser will
supply to the Company in writing and be solely responsible for any information
with respect to itself and its nominees, directors and affiliates required by
Section 14(f) and Rule 14f-1. Notwithstanding the foregoing, the parties hereto
shall use their respective reasonable best efforts to ensure that at least three
of
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the members of the Board of Directors shall at all times prior to the Effective
Time be Continuing Directors (as defined in Section 1.4(b)).
(b) After the time that Purchaser's designees constitute at least a
majority of the Board of Directors and until the Effective Time (as defined in
Section 2.3), any (i) amendment or termination of this Agreement by or on behalf
of the Company, (ii) exercise or waiver of any of the Company's rights or
remedies hereunder, extension of time for the performance or waiver of any of
the obligations or other acts of Purchaser or Merger Sub hereunder, shall
require the approval of a majority of then-serving directors, if any, who are
not designees of Purchaser (the "Continuing Directors"), except to the extent
that applicable law requires that such action be acted upon by the full Board of
Directors, in which case such action will require the concurrence of both a
majority of the Board of Directors and a majority of the Continuing Directors.
ARTICLE 2
THE MERGER
2.1 The Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time, Merger Sub shall be merged with and into the Company in
accordance with this Agreement and the applicable provisions of the DGCL, and
the separate corporate existence of Merger Sub shall thereupon cease (the
"Merger"). The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation").
2.2 The Closing. Subject to the terms and conditions of this Agreement,
the closing of the Merger (the "Closing") shall take place at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at
10:00 a.m., local time, as soon as practicable following the satisfaction (or
waiver if permissible) of the conditions set forth in Article 9. The date on
which the Closing occurs is hereinafter referred to as the "Closing Date."
2.3 Effective Time. If all the conditions to the Merger set forth in
Article 9 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 10, the parties
hereto shall cause a certificate of merger meeting the requirements of Section
251 of the DGCL and any other appropriate documents to be properly executed and
filed in accordance with such Section 251 on the Closing Date (or on such other
date as Purchaser and the Company may agree). The Merger shall become effective
at the time of filing of the certificate of merger with the Secretary of State
of the State of Delaware in accordance with the DGCL or at such later time that
the parties hereto shall have agreed upon and designated in such filing as the
effective time of the Merger (the "Effective Time").
2.4 Effects of the Merger. The Merger shall have the effects set forth
in the applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all property of the
Company and Merger Sub shall vest in the Surviving Corporation, and all
liabilities and obligations of the Company and Merger Sub shall become
liabilities and obligations of the Surviving Corporation.
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ARTICLE 3
CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
3.1 Certificate of Incorporation. At the Effective Time, the
certificate of incorporation of the Company in effect immediately prior to the
Effective Time shall be amended to provide that Article I thereof shall read as
follows: "The name of this corporation is "Telelogic Configuration Management,
Inc."; and as so amended, such certificate of incorporation shall be the
certificate of incorporation of the Surviving Corporation, until duly amended in
accordance with applicable law and the terms thereof.
3.2 Bylaws. The bylaws of Merger Sub in effect immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation, until duly
amended in accordance with applicable law, the terms thereof and the Surviving
Corporation's certificate of incorporation; provided, however, that such bylaws
shall be amended to reflect that the name of the Surviving Corporation is
"Telelogic Configuration Management, Inc."
ARTICLE 4
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
4.1 Directors. The directors of Merger Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation as of the
Effective Time and until their successors are duly appointed or elected in
accordance with applicable law and the Surviving Corporation's certificate of
incorporation and bylaws.
4.2 Officers. The officers of Merger Sub immediately prior to the
Effective Time shall be the officers of the Surviving Corporation as of the
Effective Time and until their successors are duly appointed or elected in
accordance with applicable law and the Surviving Corporation's certificate of
incorporation and bylaws.
ARTICLE 5
EFFECT OF THE MERGER ON SECURITIES
OF MERGER SUB AND THE COMPANY
5.1 Merger Sub Stock. At the Effective Time, each share of common
stock, par value $0.01 per share, of Merger Sub outstanding immediately prior to
the Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of common stock, par value $0.001 per share,
of the Surviving Corporation.
5.2 Company Securities.
(a) Each share of Common Stock issued and outstanding immediately prior
to the Effective Time that is owned by the Company or any Subsidiary of the
Company or by Purchaser, Merger Sub or any other Subsidiary of Purchaser shall
automatically be canceled and
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retired and shall cease to exist, and no cash or other consideration shall be
delivered or deliverable in exchange therefor.
(b) Each share of Common Stock issued and outstanding immediately prior
to the Effective Time (other than shares of Common Stock to be canceled and
retired in accordance with Section 5.2(a) and any Dissenting Common Stock (as
defined in Section 5.2(c)) shall be converted into the right to receive the
Offer Consideration, payable in cash to the holder thereof, without any interest
thereon (the "Merger Consideration"), in accordance with Section 5.3.
Notwithstanding the foregoing, if between the date of this Agreement and the
Effective Time the outstanding shares of Common Stock shall have been changed
into a different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Merger Consideration shall be correspondingly adjusted
on a per-share basis to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares.
(c) Notwithstanding any provision of this Agreement to the contrary, if
required by the DGCL but only to the extent required thereby, shares of Common
Stock that are issued and outstanding immediately prior to the Effective Time
and that are held by holders of such shares of Common Stock who have properly
exercised appraisal rights with respect thereto in accordance with Section 262
of the DGCL (the "Dissenting Common Stock") will not be exchangeable for the
right to receive the Merger Consideration, and holders of such shares of
Dissenting Common Stock will be entitled to receive payment of the appraised
value of such shares of Common Stock in accordance with the provisions of such
Section 262 unless and until such holders fail to perfect or effectively
withdraw or lose their rights to appraisal and payment under the DGCL. If, after
the Effective Time, any such holder fails to perfect or effectively withdraws or
loses such right, such shares of Common Stock will thereupon be treated as if
they had been converted into and become exchangeable for, at the Effective Time,
the right to receive the Merger Consideration, without any interest thereon. The
Company will promptly give Purchaser notice of any demands received by the
Company for appraisals of shares of Common Stock. The Company shall not, except
with the prior written consent of Purchaser, make any payment with respect to
any demands for appraisal or settle any such demands.
(d) Subject to Section 5.3, at the Effective Time, each holder (other
than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ Van Den ▇▇▇▇, and
▇▇▇▇ ▇. ▇▇▇▇ (collectively the "Senior Executives"))of a then-outstanding option
to purchase shares of Common Stock under any plan, program or arrangement of the
Company (collectively, the "Stock Option Plans") (true and correct copies of
which have been provided to Purchaser by the Company), whether or not vested or
exercisable (individually, an "Option" and collectively, the "Options"), shall,
in respect of the cancellation thereof, receive for each share of Common Stock
subject to such Option an amount (subject to any applicable withholding tax) in
cash equal to the excess, if any, of (i) the Merger Consideration, over (ii) the
per share exercise price of such Option (such amount being hereinafter referred
to as the "Option Consideration"). Payment for Options shall be made by the
Company, subject to the terms and conditions of this Agreement and the
provisions of the applicable Stock Option Plan, as soon as practicable after
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consummation of the Merger. All amounts payable pursuant to this Section 5.2(d)
shall be subject to any required withholding of taxes and shall be paid without
interest.
(e) The Surviving Corporation's obligation to make the cash payment
described in Section 5.2(d) shall not require any action that violates any of
the Stock Option Plans. Except as otherwise may be agreed to by the parties, the
Company shall take all necessary action prior to the Effective Time to assure
that (x) the Options that are not vested and exercisable as of the date hereof
(other than options held by the Senior Executives and options granted under the
Company's 1997 Equity Incentive Plan that are held by persons who are not then
performing services as employees, directors or consultants of the Company)
become vested and exercisable immediately prior to the Effective Time, (y) the
Stock Option Plans shall terminate as of the Effective Time and the provisions
in any other plan, program or arrangement providing for the issuance or grant of
any other interest in respect of the capital stock of the Company or any
Subsidiary thereof shall be canceled as of the Effective Time and (z) at and
after the Effective Time no participant in the Stock Option Plans or other
plans, programs or arrangements shall have any right thereunder to acquire any
equity securities of the Company, the Surviving Corporation or any Subsidiary
thereof and that all such plans will be terminated.
(f) As of a date prior to the consummation of the Offer selected by the
Company (the "ESPP Date"), all offering and purchase periods under way under the
Company's Employee Stock Purchase Plan (the "ESPP") shall be terminated and no
new offering or purchasing periods shall be commenced. The rights of
participants in the ESPP with respect to any such offering or purchase periods
shall be determined by treating the ESPP Date as the Purchase Date (as defined
in the ESPP) of such offering and purchase periods but otherwise treating such
shortened offering and purchase periods as fully effective and completed
offering and purchase periods for all purposes under the ESPP, and such rights
shall be exercised in accordance with the terms of the ESPP effective as of the
ESPP Date. The Company shall take all actions as may be necessary in order to
freeze the rights of the participants in the ESPP, effective as of the date of
this Agreement, to existing participants and (to the extent permissible under
the ESPP) existing participation levels. The Company shall take all actions
necessary to terminate the rights of all participants under the ESPP effective
as of the ESPP Date.
5.3 Exchange of Certificates Representing Shares of Common Stock.
(a) Prior to the Effective Time, Purchaser shall appoint a commercial
bank or trust company, which shall be reasonably satisfactory to the Company, to
act as paying agent hereunder (the "Paying Agent") for payment of the Merger
Consideration upon surrender of a certificate or certificates (each, a
"Certificate") representing shares of Common Stock. Prior to or concurrently
with the Effective Time, Purchaser shall cause Merger Sub or the Surviving
Corporation, as the case may be, to provide the Paying Agent with cash in
amounts necessary to pay for all the shares of Common Stock pursuant to Section
5.2(b). Such amounts shall hereinafter be referred to as the "Exchange Fund."
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(b) Promptly after the Effective Time, Purchaser shall cause the Paying
Agent to mail to each holder of record of shares of Common Stock (i) a letter of
transmittal that shall specify that delivery shall be effected, and risk of loss
and title to Certificates shall pass, only upon delivery of the Certificates to
the Paying Agent, which letter shall be in such form and have such other
provisions as Purchaser may reasonably specify and (ii) instructions for
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate to the Paying Agent together with
such letter of transmittal, duly executed and completed in accordance with the
instructions thereto, and such other documents as may reasonably be required by
the Paying Agent, the holder of such Certificate shall promptly receive in
exchange therefor the amount of cash into which shares of Common Stock
theretofore represented by such Certificate shall have been converted pursuant
to Section 5.2, and the shares represented by the Certificate so surrendered
shall forthwith be canceled. No interest will be paid or will accrue on the cash
payable upon surrender of any Certificate. In the event of a transfer of
ownership of Common Stock that is not registered in the transfer records of the
Company, payment may be made with respect to such Common Stock to such a
transferee if the Certificate representing such shares of Common Stock is
presented to the Paying Agent, accompanied by all documents reasonably required
to evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid.
(c) As of the Effective Time, all shares of Common Stock (other than
shares of Common Stock to be canceled and retired in accordance with Section
5.2(a) and any shares of Dissenting Common Stock) issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each holder
of any such shares shall cease to have any rights with respect thereto or
arising therefrom (including, without limitation, the right to vote), except the
right to receive the Merger Consideration, without interest, upon surrender of
the Certificate representing such shares in accordance with Section 5.3(b), and
until so surrendered, the Certificate representing such shares shall represent
for all purposes only the right to receive the Merger Consideration, without
interest. The Merger Consideration paid upon the surrender for exchange of
Certificates in accordance with the terms of this Section 5.3 shall be deemed to
have been paid in full satisfaction of all rights pertaining to the shares of
Common Stock theretofore represented by such Certificates.
(d) At or after the Effective Time, there shall be no transfers on the
stock transfer books of the Company of the shares of Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged as provided in this Article 5.
(e) The Paying Agent shall invest the Exchange Fund, as directed by
Purchaser, in (i) direct obligations of the United States of America, (ii)
obligations for which the full faith and credit of the United States of America
is pledged to provide for the payment of principal and interest, (iii)
commercial paper rated the highest quality by either ▇▇▇▇▇'▇ Investors Services,
Inc. or Standard & Poor's Corporation or (iv) certificates of deposit, bank
repurchase agreements or bankers' acceptances of commercial banks with capital
exceeding $500 million. Any net
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earnings with respect to the Exchange Fund shall be the property of and paid
over to Purchaser as and when requested by Purchaser; provided, however, that
any such investment or any such payment of earnings may not delay the receipt by
holders of Certificates of any Merger Consideration.
(f) Any portion of the Exchange Fund (including the proceeds of any
interest and other income received by the Paying Agent in respect of all such
funds) that remains unclaimed by the former stockholders of the Company one year
after the Effective Time shall be delivered to the Surviving Corporation. Any
former stockholders of the Company who have not theretofore complied with this
Article 5 shall thereafter look only to the Surviving Corporation for payment of
any Merger Consideration that may be payable in respect of each share of Common
Stock such stockholder holds as determined pursuant to this Agreement, without
any interest thereon.
(g) None of Purchaser, the Company, the Surviving Corporation, the
Paying Agent or any other person shall be liable to any former holder of shares
of Common Stock for any amount properly delivered to a public official pursuant
to applicable abandoned property, escheat or similar laws.
(h) If any Certificate is lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by the Surviving Corporation, the posting
by such person of a bond in such reasonable amount as the Surviving Corporation
may direct as indemnity against any claim that may be made against it with
respect to such Certificate, the Paying Agent will issue in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration payable in
respect thereof pursuant to this Agreement.
(i) Except as otherwise provided herein or in the letter of transmittal
referred to in Section 5.3(b), Purchaser shall pay all charges and expenses (but
excluding income and withholding taxes), including those of the Paying Agent, in
connection with the exchange of the Merger Consideration for Certificates.
(j) Purchaser shall be entitled to deduct and withhold, or cause to be
deducted or withheld, from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Common Stock or Options such amounts as are
required to be deducted and withheld with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of applicable state, local or foreign tax law. To the extent that
amounts are so deducted and withheld, such deducted and withheld amounts shall
be treated for all purposes of this Agreement as having been paid to such
holders in respect of which such deduction and withholding was made.
5.4 Merger Without Meeting of Stockholders. Notwithstanding the
foregoing, if Merger Sub, together with any other direct or indirect subsidiary
of Purchaser, shall own at least 90 percent of the outstanding shares of Common
Stock upon consummation of the Offer, the
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parties hereto shall take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable, and in any event within five
business days, after the expiration of the Offer without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding sections of the
disclosure letter, dated the date hereof, delivered by the Company to Purchaser
(the "Disclosure Letter"), the Company hereby represents and warrants to
Purchaser and Merger Sub as follows:
6.1 Existence; Good Standing; Corporate Authority. Each of the Company
and its Subsidiaries is (a) duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and (b) is duly
licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of any other state of the United States or the laws of
any foreign jurisdiction, if applicable, in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except where the failure to be so qualified
or to be in good standing could not reasonably be expected to (i) materially
adversely affect the assets, liabilities, business, results of operations or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole, provided that the Company is not making any representation or warranty
herein with respect to any effect on its or any of its Subsidiaries' prospects,
or (ii) materially adversely affect or delay the ability of the Company on the
one hand, or Merger Sub and Purchaser on the other, to consummate the
transactions contemplated by this Agreement (either of the foregoing clauses (i)
or (ii) being a "Material Adverse Effect"). Each of the Company and its
Subsidiaries has all requisite corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted except where the
failure to have such power and authority could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. The Company
has heretofore made available to Purchaser true and correct copies of the
certificate of incorporation and bylaws or other governing instruments of the
Company and each of its Subsidiaries as currently in effect.
6.2 Authorization, Validity and Effect of Agreements. The Company has
the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby or executed in
connection herewith to which it is a party (the "Ancillary Documents") and
subject, if required with respect to the consummation of the Merger, to the
approval of holders of the Common Stock, to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Ancillary Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby have been duly and validly
authorized by the Board of Directors, and no other corporate proceedings on the
part of the Company are necessary to authorize this Agreement and the Ancillary
Documents or to consummate the transactions contemplated hereby and thereby
(other than the adoption of this Agreement by the holders of
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the Common Stock if required by applicable law). This Agreement has been, and
any Ancillary Document at the time of execution will have been, duly and validly
executed and delivered by the Company, and (assuming this Agreement and such
Ancillary Documents each constitute a valid and binding obligation of Purchaser
and Merger Sub) this Agreement constitutes, and each such Ancillary Document at
the time of execution will constitute, the valid and binding obligations of the
Company, enforceable in accordance with their respective terms. The Company has
taken all actions necessary to render the restrictions of Section 203 of the
DGCL to be inapplicable to the transactions contemplated by this Agreement and
the Tender Agreement, including without limitation the Offer and the Merger.
6.3 Compliance with Laws. Neither the Company nor any of its
Subsidiaries is or has been in violation of any foreign, federal, state or local
law, statute, ordinance, rule, regulation, order, judgment, ruling or decree of
any foreign, federal, state or local judicial, legislative, executive,
administrative or regulatory body or authority or any court, arbitration, board
or tribunal ("Governmental Entity") applicable to the Company or any of its
Subsidiaries or any of their respective properties or assets, except for
violations that could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
6.4 Capitalization. The authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock and 5,000,000 shares of preferred
stock. As of October 23, 2000, (a) 11,130,314 shares of Common Stock were issued
and outstanding, (b) no shares of preferred stock were issued and outstanding,
(c) 0 shares of Common Stock were held by the Company in its treasury and (d) no
shares of Common Stock were held by the Company's Subsidiaries. Section 6.4 of
the Disclosure Letter sets forth as of the date hereof the number of outstanding
warrants to purchase securities of the Company, Options and shares of restricted
Common Stock (collectively, the "Company Awards"), the dates on which the
Company Awards were granted, the number and class of securities of the Company
for or into which each Company Award is exercisable, convertible or
exchangeable, and the exercise price thereof. The Company has no outstanding
bonds, debentures, notes or other obligations entitling the holders thereof to
vote (or that are convertible into or exercisable for securities having the
right to vote) with the stockholders of the Company on any matter. Since October
23, 2000, the Company (i) has not issued any shares of Common Stock other than
upon the exercise of Options, (ii) has granted no Options to purchase shares of
Common Stock under the Stock Option Plans and (iii) has not split, combined,
converted or reclassified any of its shares of capital stock. All issued and
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights. Except as set forth in this
Section 6.4 or in Section 6.4 of the Disclosure Letter, there are no other
shares of capital stock or voting securities of the Company, and no existing
options, warrants, calls, subscriptions, convertible securities, or other
rights, agreements or commitments that obligate the Company or any of its
Subsidiaries to issue, transfer or sell any shares of capital stock of, or
equity interests in, the Company or any of its Subsidiaries. There are no
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company and there
are no performance awards outstanding under the Stock Option Plans or any other
outstanding stock-
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related awards. There are no voting trusts or other agreements or understandings
to which the Company or any of its Subsidiaries or, to the knowledge of the
Company, any of the Company's directors or executive officers is a party with
respect to the voting of capital stock of the Company or any of its
Subsidiaries.
6.5 Subsidiaries. (a) The Company owns directly, or indirectly through
a Subsidiary, all the outstanding shares of capital stock (or other ownership
interests having by their terms ordinary voting power to elect directors or
others performing similar functions with respect to such Subsidiary) of each of
the Company's Subsidiaries, and (b) each of the outstanding shares of capital
stock (or other ownership interests having by their terms ordinary voting power
to elect directors or others performing similar functions with respect to such
Subsidiary) of each of the Company's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and is owned directly or indirectly by the
Company free and clear of all liens, pledges, security interests, claims or
other encumbrances ("Encumbrances").
6.6 No Violation. Neither the execution and delivery by the Company of
this Agreement or any of the Ancillary Documents nor the consummation by the
Company of the transactions contemplated hereby or thereby will: (a) violate,
conflict with or result in a breach of any provisions of the certificate of
incorporation or bylaws of the Company; (b) violate, conflict with, result in a
breach of any provision of, constitute a default (or an event that, with notice
or lapse of time or both, would constitute a default) under, result in the
termination or in a right of termination of, accelerate the performance required
by or benefit obtainable under, result in the triggering of any payment,
redemption premium, penalty or other obligations pursuant to, result in the
creation of any Encumbrance upon any of the properties owned or used by the
Company or its Subsidiaries under, or result in there being declared void,
voidable, or without further binding effect, any of the terms, conditions or
provisions of any Material Agreement (as defined in Section 6.17); (c) require
any consent, approval or authorization of, license, permit or waiver by, or
declaration, filing or registration (collectively, "Consents") with, any
Governmental Entity, including any such Consent under the laws of any foreign
jurisdiction, other than (i) the filings provided for in Section 2.3 and the
filings required under the Exchange Act and the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations promulgated
thereunder, and (ii) the filing required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and any other applicable
law governing antitrust or competition matters, and any Consents required or
permitted to be obtained pursuant to the laws of any foreign jurisdiction
relating to antitrust matters or competition ("Foreign Antitrust Laws")
(collectively, "Other Antitrust Filings and Consents", together with the other
filings described in clauses (i) and (ii) above, "Regulatory Filings"), except
for those Consents the failure of which to obtain or make could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; (d) violate any laws applicable to the Company or any of its
Subsidiaries, except for violations that could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect; or (e)
subject the Company or (by reason of the Company's participation therein) the
Offer or the
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Merger to any "moratorium," "control share acquisition," "business combination,"
"fair price" or other form of corporate anti-takeover laws and regulations.
6.7 Company Reports; Offer Documents.
(a) The Company has previously made available to Purchaser true and
complete copies of (i) its Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, filed by the Company with the SEC, (ii) proxy statements
relating to all of the Company's meetings of stockholders held or scheduled to
be held since its initial public offering and (iii) each other registration
statement, proxy or information statement, Quarterly Report on Form 10-Q or
Current Report on Form 8-K filed by the Company with the SEC (such items
referenced in (i) through (iii), the "Company Reports"). The Company has
complied in all material respects with its SEC filing obligations under the
Exchange Act and the Securities Act. To the best of the Company's knowledge,
except as disclosed in a subsequent Company Report, there has not occurred any
event or circumstance that, but for the passage of time, would be required to be
disclosed in a Company Report. Except as set forth in or amended by a subsequent
Company Report, the financial statements and related schedules and notes thereto
of the Company contained in the Company Reports (or incorporated therein by
reference) were prepared in accordance with generally accepted accounting
principles (except in the case of interim unaudited financial statements)
applied on a consistent basis except as noted therein, and fairly present in all
material respects the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended, subject in the
case of interim unaudited financial statements to normal year-end audit
adjustments, and, except as set forth in or amended by a subsequent Company
Report, such financial statements complied as to form as of their respective
dates in all material respects with applicable rules and regulations of the SEC.
Each Company Report was prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as applicable, and did not, as of the date
of effectiveness in the case of a registration statement, the date of mailing in
the case of a proxy statement and the date of filing in the case of other
Company Reports, except as set forth in or amended by a subsequent Company
Report, 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 the light of the circumstances under which they were made, not
misleading.
(b) None of the Schedule 14D-9, any information statement filed by the
Company in connection with the Offer pursuant to Rule 14f-1 under the Exchange
Act (the "Information Statement"), any schedule required to be filed by the
Company with the SEC or any amendment or supplement thereto, at the respective
times such documents are filed with the SEC and first published, sent or given
to the Company's stockholders, will contain any untrue statement of a material
fact or will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading except that no
representation is made by the Company with respect to information supplied by
Purchaser or Merger Sub for inclusion in the Schedule 14D-9 or Information
Statement or any amendment or supplement to such information supplied by
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Purchaser or Merger Sub. None of the information supplied or to be supplied by
the Company for inclusion or incorporation by reference in the Offer Documents
will, at the date of filing with the SEC, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If, at any time prior
to the Effective Time, the Company shall obtain knowledge of any facts with
respect to itself, any of its officers or directors or any of its Subsidiaries
that would require the supplement or amendment to any of the foregoing documents
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or to comply with applicable laws, such
amendment or supplement shall be promptly filed with the SEC and, as required by
law, disseminated to the stockholders of the Company, and in the event Purchaser
shall advise the Company as to its obtaining knowledge of any facts that would
make it necessary to supplement or amend any of the foregoing documents, the
Company shall promptly amend or supplement such document, and such amendment or
supplement shall be promptly filed with the SEC, and as required by law
disseminated to the stockholders of the Company.
6.8 Absence of Certain Changes. During the period from June 30, 2000,
to and including the date of this Agreement, the Company and its Subsidiaries
have conducted their business in the ordinary course of such business consistent
with past practices, and there have not been (a) any events or states of fact
that could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; (b) any declaration, setting aside or payment of any
dividend or other distribution with respect to its capital stock; (c) any
repurchase, redemption or any other acquisition by the Company or its
Subsidiaries of any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company or its Subsidiaries; (d) any
material change in accounting principles, practices or methods; (e) any entry
into any employment agreement with, or any increase in the rate or terms
(including, without limitation, any acceleration of the right to receive
payment) of compensation payable or to become payable by the Company or any of
its Subsidiaries to, their respective directors, officers or employees, except
for regularly scheduled employee raises in the ordinary course of business
consistent with the Company's past practices or raises that, in the case of
executive officers, have been approved by the compensation committee of the
Board of Directors prior to the date hereof in the ordinary course of business
consistent with the committee's past practices; (f) any increase in the rate or
terms (including, without limitation, any acceleration of the right to receive
payment) of any bonus, insurance, pension or other employee benefit plan or
arrangement covering any such directors, officers or employees, except, in the
case of employees, increases occurring in the ordinary course of business
consistent with the Company's past practices; (g) any revaluation by the Company
or any of its Subsidiaries of any material amount of their assets, taken as a
whole, including, without limitation, write-downs of inventory or write-offs of
accounts receivable other than in the ordinary course of business consistent
with past practices; (h) any change in the business relationship with any
material customer, distributor or supplier of the Company or its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect; or (i) any
action of the type described in Sections 8.1(a) or 8.1(b) that had such action
been taken after the date of this Agreement would be in violation of any such
Section.
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6.9 Taxes. The Company and each of its Subsidiaries have timely filed
and will have timely filed on or prior to the Effective Time all Tax Returns (as
hereinafter defined) required to be filed by any of them. All such Tax Returns
are true, correct and complete in all material respects. All Taxes (as
hereinafter defined) of the Company and its Subsidiaries that are shown as due
on such Tax Returns, or are otherwise due and payable, or are claimed or
asserted by any taxing authority to be due, have been paid or will have been
paid on or before the Effective Time, or adequate reserves (in conformity with
generally accepted accounting principles applied on a consistent basis and
consistent with such entity's past custom and practice) have been established
therefor, except for those Taxes being contested in good faith and for which
adequate reserves have been established in the financial statements included in
the Company Reports in accordance with generally accepted accounting principles
applied on a consistent basis and consistent with such entity's past custom and
practice. No deficiencies for Taxes of the Company or any of its Subsidiaries
have been claimed, proposed or assessed by any taxing or other governmental
authority that are not being contested in good faith by the Company or a
Subsidiary and for which adequate reserves have not been established in the
financial statements included in the Company Reports in accordance with
generally accepted accounting principles applied on a consistent basis and
consistent with past practice. There are no pending or, to the Company's actual
knowledge, threatened audits, investigations or claims for or relating to any
liability in respect of Taxes of the Company or its Subsidiaries, and there are
no on-going negotiations with any taxing or other governmental authority with
respect to Taxes of the Company or its Subsidiaries. No extension of a statute
of limitations relating to Taxes is in effect with respect to the Company or any
of its Subsidiaries. The Company and each Subsidiary have withheld and paid over
to the relevant taxing authority all Taxes required to have been withheld and
paid in connection with payments to employees, independent contractors,
creditors, stockholders or other third parties. The Company and its Subsidiaries
are not parties to or bound by any tax sharing, tax indemnity or tax allocation
agreement or other similar arrangement with any other person or entity. There
are no liens for Taxes (other than for Taxes not yet delinquent) upon the assets
of the Company or any of its Subsidiaries. The Company and its Subsidiaries have
never been members of an affiliated group of corporations within the meaning of
Section 1504 of the Code, with the exception of the common group for which the
Company is the common parent, nor has the Company or any of its Subsidiaries, or
any predecessor of any of them, become liable (whether by contract, as
transferee or successor, by law or otherwise) for the Taxes of any other person
or entity under Treasury Regulation Section 1.1502-6 or any similar provision of
state, local or foreign law. The Company and its Subsidiaries have not been
"United States real property holding corporations" within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code. For purposes of this Agreement, (i) "Tax" (and,
with correlative meaning, "Taxes") means any federal, state, local or foreign
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, premium, withholding, alternative or added minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with any
interest or penalty or other additions to Tax, imposed by any Governmental
Entity and (ii) "Tax Return" means any return, report or similar statement
required to be filed with respect to any Tax (including any attached schedules),
including, without
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limitation, any information return, claim for refund, amended return or
declaration of estimated Tax.
6.10 Employee Benefit Plans.
(a) Copies of all material employee benefit plans (including without
limitation all "employee benefit plans" as defined in Section 3(3) of ERISA)
which cover or have covered employees, former employees or directors of the
Company, any of its Subsidiaries or any of its ERISA Affiliates (as hereinafter
defined) or any person treated by the Company or an ERISA Affiliate as an
independent contractor for tax purposes ("Independent Contractor") and all other
plans, policies, arrangements and agreements providing material compensation,
severance or other benefits to any current or former employee, director or
Independent Contractor of the Company or any of its Subsidiaries (the "Company
Benefit Plans") are listed on Schedule 6.10 attached hereto, and copies of all
such Company Benefit Plans and all Benefit Plan Related Documents (as
hereinafter defined) have previously been provided to Purchaser. To the extent
applicable, the Company Benefit Plans comply with the requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Code
and any other applicable law. The Company has received a favorable determination
letter from the Internal Revenue Service with respect to any Company Benefit
Plan that is intended to qualify under Section 401(a) of the Code and, to the
knowledge of the Company, there is no event that would cause such Company
Benefit Plan to fail to be qualified. None of any Company Benefit Plan, or any
officer, employee, former employee or director of the Company, any Subsidiary or
any ERISA Affiliate, or the Company or any of its Subsidiaries or ERISA
Affiliates has incurred any liability or penalty under Section 4975 of the Code
or Section 502(i) of ERISA or has engaged in any transaction that is reasonably
likely to result in any such liability or penalty.
(b) Neither the Company nor any ERISA Affiliate has ever (i)
maintained, contributed to, been required to contribute to or has any liability
(contingent or otherwise) with respect to any Company Benefit Plan which has
been subject to Section 412 of the Code or Section 302 or Title IV of ERISA,
(ii) contributed to, been required to contribute to, or has any liability
(contingent or otherwise) in connection with, any "multiemployer plan" as
defined in Section 4001(a)(3) or Section 3(37) of ERISA, (iii) except to the
extent reflected in the financial statements (and the notes thereto) attached to
the Company's Annual Report filed on Form 10-K for the fiscal year ended
December 31, 1999, provided heath care or any other non-pension benefits to any
employees after their employment is terminated (other than as required by Part 6
of Subtitle B of Title I of ERISA), or (iv) maintained any Company Benefit Plan
or other contract that individually or collectively provides for the payment by
the Company or any of its Subsidiaries of any amount that in connection with the
Offer or the Merger is or could be an "excess parachute payment" pursuant to
Section 280G of the Code or that is not or would not be deductible under Section
162(a)(1) of the Code or Section 404 of the Code.
(c) Neither the execution and delivery of this Agreement by the Company
nor the consummation of the transactions contemplated hereby or any related
transactions will result in the acceleration or creation of any rights of any
person to benefits under any Company Benefit
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Plan (including, without limitation, the acceleration of the vesting or
exercisability of any stock options, the acceleration of the vesting of any
restricted stock, the acceleration of the accrual or vesting of any benefits
under any pension plan or the acceleration or creation of any rights under any
severance, parachute or change in control agreement).
(d) There is no action, order, writ, injunction, judgment or decree
outstanding or claim (other than routine claims for benefits), suit, litigation,
proceeding, arbitral action, governmental audit or investigation relating to or
seeking benefits under any Company Benefit Plan that is pending or, to the
Company's knowledge, threatened or anticipated against the Company, any of its
Subsidiaries, any ERISA Affiliate or any Company Benefit Plan. Neither the
Company, any of its Subsidiaries nor any ERISA Affiliate has any announced plan
or legally binding commitment to create any additional employee benefit plans or
agreements of the Company or any ERISA Affiliate or to amend or modify any
existing Company Benefit Plan.
(e) To the Company's knowledge, no event has occurred in connection
with which the Company, any of its Subsidiaries, any ERISA Affiliate or any
Company Benefit Plan, directly or indirectly, could be subject to any liability
(i) under any statute, regulation or governmental order relating to any Company
Benefit Plan or (ii) pursuant to any obligation of the Company or any ERISA
Affiliate to indemnify any person against liability incurred under any such
statute, regulation or order as they relate to the Company Benefit Plans, other
than in any case such liability that could not reasonably be expected to have a
Material Adverse Effect.
(f) For purposes of this Agreement, "ERISA Affiliate" means any
business or entity that is a member of the same "controlled group of
corporations," under "common control" or an "affiliated service group" with an
entity within the meanings of Sections 414(b), (c) or (m) of the Code, or
required to be aggregated with the entity under Section 414(o) of the Code, or
is under "common control" with the entity, within the meaning of Section
4001(a)(14) of ERISA, or any regulations promulgated or proposed under any of
the foregoing Sections. For purposes of this Agreement, "Benefit Plan Related
Documents" means (i) each Company Benefit Plan (and, if applicable, related
trust agreements) which covers or has covered current or former employees,
directors or Independent Contractors of the Company or any ERISA Affiliate and
all amendments thereto, all material written interpretations or descriptions
thereof which have been distributed to employees of the Company or its ERISA
Affiliates and all annuity contracts or other funding instruments with respect
to a Company Benefit Plan, (ii) the most recent determination or opinion letter
issued by the Internal Revenue Service as to qualification under Section 401(a)
of the Code, or analogous ruling, if any, required under foreign law for each
applicable Company Benefit Plan, and (iii) for the three most recent plan years,
Annual Reports on Form 5500 Series (or analogous periodic report, if any,
required under foreign law) required to be filed with any governmental agency
for each applicable Company Benefit Plan.
6.11 Brokers. The Company has not entered into any contract,
arrangement or understanding with any person or firm that may result in the
obligation of Purchaser or Merger Sub or the Company to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of
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the transactions contemplated hereby, except that the Company has retained the
Financial Advisor, the arrangements with which have been disclosed in writing to
Purchaser prior to the date hereof.
6.12 Licenses and Permits. The Company and its Subsidiaries have all
necessary licenses, permits, certificates, approvals and authorizations
(collectively, "Permits") required to lawfully conduct their respective
businesses as presently conducted, except for those Permits the lack of which
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and no Permit is subject to any outstanding order,
decree, judgment or stipulation that affects such Permit, where the effect of
the foregoing could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
6.13 Environmental Compliance and Disclosure. Except for any matters
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect, (a) the Company and each of its Subsidiaries has been
and are now in compliance with all Environmental Laws in effect on the date
hereof; (b) the Company and each of its Subsidiaries have obtained, and are in
full compliance with, all material Permits required by applicable laws for the
use, storage, treatment, transportation, release, emission and disposal of raw
materials, byproducts, wastes and other substances used or produced by or
otherwise relating to the operations of any of them; (c) to the Company's actual
knowledge, there is not now and has not been any Hazardous Substance used,
generated, treated, stored, transported, disposed of, released, handled or
otherwise existing on, under, about, or emanating from, or to, any property
owned, leased or operated by the Company or any of its Subsidiaries which could
impose liability or responsibility on the Company or any of its Subsidiaries;
(d) neither the Company nor any of its Subsidiaries has received any written
notice from any governmental agency or third party of alleged actual or
potential responsibility for, or any inquiry or investigation regarding, any
release or threatened release of Hazardous Substances or alleged violation of,
or non-compliance with, any Environmental Law, nor are the Company and its
Subsidiaries aware of any information which might form the basis of any such
notice; and (e) to the actual knowledge of the Company, there is no site to
which the Company or any of its Subsidiaries have transported or arranged for
the transport of Hazardous Substances that is the subject of any environmental
action. As used in this Agreement, the term "Environmental Laws" means foreign,
federal, state or local laws, statutes, ordinances, regulations, rules,
judgments, court orders, permits and licenses that are applicable to the Company
and in effect on the date of this Agreement and (i) regulate or relate to the
protection or clean up of the environment; the use, treatment, storage,
transportation, handling, disposal or release of Hazardous Substances, the
preservation or protection of waterways, groundwater, drinking water, air,
wildlife, plants or other natural resources; or the health and safety of persons
or property, including without limitation protection of the health and safety of
employees; or (ii) impose liability or responsibility with respect to any of the
foregoing. As used in this Agreement, the term "Hazardous Substances" means any
pollutant, chemical, substance and any toxic, infectious, carcinogenic,
reactive, corrosive, ignitable or flammable chemical, or chemical compound, or
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hazardous substance, material or waste, whether solid, liquid or gas, that is
subject to regulation, control or remediation under any Environmental Laws.
6.14 Title to Assets.
(a) Except as set forth in the Company's audited balance sheet
(including any related notes thereto) for the fiscal year ended December 31,
1999 included in the Company's Annual Report on Form 10-K for the fiscal year
then ended (the "1999 Balance Sheet") or in any subsequently filed Company
Report, the Company and each of its Subsidiaries have good and marketable title
to all of their real and personal properties and assets reflected on the 1999
Balance Sheet or acquired after December 31, 1999 (other than assets disposed of
since December 31, 1999), in each case free and clear of all title defects and
Encumbrances, except for (i) Encumbrances that secure indebtedness that is
properly reflected in the 1999 Balance Sheet or in any subsequently filed
Company Report; (ii) liens for Taxes accrued but not yet payable; (iii) liens
arising as a matter of law in the ordinary course of business with respect to
obligations incurred after December 31, 1999, provided that the obligations
secured by such liens are not delinquent; and (iv) such title defects or
Encumbrances, if any, as individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect. The Company and its Subsidiaries
either own, or have valid leasehold interests in, all properties and assets used
by them in the conduct of their business except where the absence of such
ownership or leasehold interest could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries owns any real property.
(b) Neither the Company nor any of its Subsidiaries has any legal
obligation, absolute or contingent, to any person to sell or otherwise dispose
(except in the ordinary course of business consistent with past practice) of any
of its assets with an individual value of $50,000 or an aggregate value in
excess of $500,000.
6.15 Labor and Employment Matters. Neither the Company nor any of its
Subsidiaries is a party to, or bound by, any collective bargaining agreement or
other Contract or understanding with a labor union or labor organization. Except
for such matters that could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, there is no (a) unfair labor
practice, labor dispute (other than routine individual grievances) or labor
arbitration proceeding pending or, to the actual knowledge of the Company,
threatened against the Company or its Subsidiaries relating to their business,
(b) to the actual knowledge of the Company, activity or proceeding by a labor
union or representative thereof to organize any employees of the Company or any
of its Subsidiaries or (c) lockout, strike, slowdown, work stoppage or, to the
actual knowledge of the Company, threat thereof by or with respect to such
employees.
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6.16 Intellectual Property.
(a) The Company Disclosure Letter sets forth (i) a true and complete
list and description of (i) all United States and foreign patents, patent
applications, trademarks, trademark registrations and applications, trade names,
service marks, copyright registrations and applications therefor owned by the
Company and its Subsidiaries (the "Intellectual Property Rights") and (ii) a
true and complete list of all licenses of United States and foreign patents,
patents applications, trademarks, trademark registrations and applications,
trade names, service marks, copyright registrations and applications therefor
and trade secrets that are currently licensed to the Company or any of its
Subsidiaries (the "Licensed Rights").
(b) Except to the extent that the inaccuracy of any of the following
(or the circumstances giving rise to such inaccuracy) could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect:
(i) (A) the Intellectual Property Rights are free and clear of
any Encumbrances, are not subject to any license (royalty bearing or
royalty free) other than product licenses to the Company's customers
and are not subject to any other arrangement requiring any payment to
any person or the obligation to grant rights to any person in exchange;
(B) the Licensed Rights are free and clear of any Encumbrances (other
than product licenses to the Company's customers), royalties or other
obligations; and (C) to the knowledge of the Company, the Intellectual
Property Rights and the Licensed Rights are all the material rights
necessary to the conduct of the business of each of the Company and its
Subsidiaries as presently conducted.
(ii) To the knowledge of the Company, the validity of the
Intellectual Property Rights and title thereto, and the validity of the
Licensed Rights, (A) are not the subject of any pending litigation; and
(B) are not the subject or subjects of any threatened or proposed
litigation and are not involved in any interference, reissue,
challenge, reexamination, invalidation, opposition proceeding or
cancellation.
(iii) To the knowledge of the Company, the business of the
Company and its Subsidiaries, as presently conducted, does not conflict
with and is not alleged to conflict with any patents, trademarks, trade
names, service marks, copyrights or other intellectual property rights
of others.
(iv) The consummation of the transactions contemplated hereby
will not result in the loss or impairment of any of the Intellectual
Property Rights or any of the Licensed Rights.
The Company does not know of any use by others (other than its
licensees) of any of the Intellectual Property Rights or the Licensed Rights
material to the business of the Company and its Subsidiaries as presently
conducted.
(c) Each of the Company and its Subsidiaries owns, or possesses valid
license rights to, all computer software programs that are material to the
conduct of the business of the
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Company and its Subsidiaries, except to the extent that the failure thereof
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. There are no infringement suits, actions or proceedings
pending or, to the actual knowledge of the Company, threatened against the
Company or any Subsidiary with respect to any software owned or licensed by the
Company or any Subsidiary.
6.17 Material Agreements. Except as listed in the Exhibit Index to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999
(the "1999 10-K") or any subsequently filed Company Report and except for
agreements made for the purpose of completing the transactions contemplated by
this Agreement, neither the Company nor any of its Subsidiaries is a party to,
or bound by, any Material Agreement of any kind to be performed in whole or in
part after the Effective Time. The term "Material Agreement" shall mean any
agreement to which the Company or any of its Subsidiaries is a party and (i) is
outside of the ordinary course of business of the Company or its Subsidiaries,
(ii) a customer of the Company or one of its Subsidiaries is a party and any of
(1) is reasonably likely to involve the receipt by the Company within the 24
months following the date of this Agreement of more than $500,000, (2) involves
the payment by the Company or any of its Subsidiaries, subsequent to the date of
this Agreement, of more than $500,000 or (3) is not terminable without material
penalty by the Company or the Subsidiary party thereto on fewer than 365 days'
notice or (iii) except for customer contracts, either (A) involves the payment
or receipt by the Company or any of its Subsidiaries, subsequent to the date of
this Agreement, of more than $250,000 or (B) is not terminable without material
penalty by the Company or the Subsidiary party thereto on fewer than 180 days'
notice. Except for any such breaches or defaults that could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
neither the Company nor any of its Subsidiaries is in breach or default under,
and, to the knowledge of the Company, there are no facts which with notice or
the passage of time would cause the Company to be in breach or default under, or
give rise to any right of termination, amendment, cancellation or acceleration
of other parties under, whether as a result of the consummation of the
transactions contemplated hereby or otherwise, any Material Agreement.
6.18 No Undisclosed Liabilities. Except as disclosed in the Company
Reports filed and publicly available prior to the date of this Agreement and
except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since June 30, 2000, the Company and its
Subsidiaries do not have any indebtedness, obligations or liabilities of any
kind (whether accrued, absolute, contingent or otherwise) (a) required by GAAP
to be reflected on a consolidated balance sheet of the Company and its
consolidated Subsidiaries or in the notes, exhibits or schedules thereto or (b)
which could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
6.19 Litigation. Except as described in the 1999 10-K, there is no
action, suit or proceeding, claim, arbitration or investigation pending or, to
the actual knowledge of the Company, threatened against the Company or any of
its Subsidiaries, that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. Except as disclosed in the 1999 10-K,
there is no judgment, order, injunction or decree of any
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Governmental Entity outstanding against the Company or any of its Subsidiaries
that could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
6.20 Insurance. The Company has previously made available to Purchaser
true and complete copies of its and its Subsidiaries' insurance policies.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND MERGER SUB
Except as set forth in the corresponding sections of the
disclosure letter, dated the date hereof, delivered by Purchaser and Merger Sub
to the Company (the "Purchaser Disclosure Letter"), Purchaser and Merger Sub
hereby represent and warrant, jointly and severally, to the Company as follows:
7.1 Existence; Good Standing; Corporate Authority. Each of Purchaser
and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite corporate power and authority to own, operate and lease its properties
and carry on its business as now conducted, except where the failure to have
such power and authority would not materially adversely affect the ability of
Purchaser or Merger Sub to consummate the transactions contemplated by this
Agreement.
7.2 Authorization, Validity and Effect of Agreements. Each of Purchaser
and Merger Sub has the requisite corporate power and authority to execute and
deliver this Agreement and the Ancillary Documents and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Ancillary Documents and the consummation by Purchaser and
Merger Sub of the transactions contemplated hereby and thereby have been duly
and validly authorized by the respective boards of directors of Purchaser and
Merger Sub and by Purchaser as the sole stockholder of Merger Sub and no other
corporate proceedings on the part of Purchaser or Merger Sub are necessary to
authorize this Agreement and the Ancillary Documents or to consummate the
transactions contemplated hereby and thereby. This Agreement has been, and any
Ancillary Documents at the time of execution will have been, duly and validly
executed and delivered by Purchaser and Merger Sub, and (assuming this Agreement
and such Ancillary Documents each constitutes a valid and binding obligation of
the Company) this Agreement constitutes, and such Ancillary Agreements at the
time of execution will constitute, the valid and binding obligations of each of
Purchaser and Merger Sub, enforceable in accordance with their respective terms.
7.3 Offer Documents. None of the Offer Documents, any schedule required
to be filed by Purchaser or Merger Sub with the SEC or any amendment or
supplement thereto will contain, at the respective times such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, any untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading, except that no representation is made by Purchaser or
Merger Sub with respect to information supplied by
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the Company in writing for inclusion in the Offer Documents, any schedule
required to be filed with the SEC or any amendment or supplement thereto. None
of the information supplied by Purchaser or Merger Sub for inclusion or
incorporation by reference in the Schedule 14D-9 will, at the date of filing
with the SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. If at any time prior to the Effective Time either
Purchaser or Merger Sub shall obtain knowledge of any facts with respect to
itself, any of its officers or directors or any of its Subsidiaries that would
require the supplement or amendment to any of the foregoing documents in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or to comply with applicable laws, such
amendment or supplement shall be promptly filed with the SEC and, as required by
law, disseminated to the stockholders of the Company, and in the event the
Company shall advise Purchaser or Merger Sub as to its obtaining knowledge of
any facts that would make it necessary to supplement or amend any of the
foregoing documents, Purchaser or Merger Sub shall promptly amend or supplement
such document, and such amendment or supplement shall be promptly filed with the
SEC, and as required by law disseminated to the stockholders of the Company.
7.4 No Violation. Neither the execution and delivery of this Agreement
or any of the Ancillary Documents by Purchaser and Merger Sub nor the
consummation by them of the transactions contemplated hereby or thereby will (a)
violate, conflict with or result in any breach of any provision of the
respective charter documents of Purchaser or Merger Sub; (b) violate, conflict
with, result in a breach of any provision of, constitute a default (or an event
that, with notice or lapse of time or both, would constitute a default) under,
result in the termination or in a right of termination of, accelerate the
performance required by or a benefit obtainable under, result in the triggering
of any payment or other obligations pursuant to, result in the creation of any
Encumbrance upon any of the properties of Purchaser or Merger Sub under, or
result in there being declared void, voidable or without further binding effect,
any contract to which Purchaser or Merger Sub is a party, or by which Purchaser
or Merger Sub or any of their respective properties is bound, except for any
such breach, default or right with respect to which requisite waivers or
consents have been, or prior to the Effective Time will be, obtained or any of
the foregoing matters that would not have a material adverse effect on the
ability of Purchaser or Merger Sub to consummate the transactions contemplated
hereby; (c) other than the Regulatory Filings, require any Consent of any
Governmental Entity, the lack of which would have a material adverse effect on
the ability of Purchaser or Merger Sub to consummate the transactions
contemplated hereby; or (d) violate any laws applicable to Purchaser or Merger
Sub or any of their respective assets, except for violations that would not have
a material adverse effect on the ability of Purchaser or Merger Sub to
consummate the transactions contemplated hereby.
7.5 Financing. Purchaser and Merger Sub collectively have cash on hand
or credit facilities with financially responsible third parties, or a
combination thereof, in an aggregate amount sufficient to enable Purchaser and
Merger Sub to timely perform their obligations hereunder, including to pay in
full (a) the aggregate Offer Consideration, the aggregate Merger
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Consideration and the aggregate Option Consideration and (b) all fees and
expenses payable by Purchaser and Merger Sub in connection with this Agreement
and the transactions contemplated hereby. The source of funds for the
transactions contemplated hereby will be derived from a sale of Purchaser's
common stock. At the consummation of the Offer and at the Effective Time,
Purchaser will have, and will cause Merger Sub to have, funds available to it
sufficient to consummate the Offer and the Merger on the terms contemplated
hereby.
7.6 Purchaser-Owned Shares of Common Stock. As of the date of this
Agreement, Purchaser, Merger Sub and their respective Subsidiaries own, in the
aggregate, no shares of Common Stock.
7.7 Interim Operations of Merger Sub. Merger Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.
ARTICLE 8
COVENANTS
8.1 Interim Operations.
(a) From and after the date of this Agreement to the Effective Time,
unless Purchaser has consented in writing thereto and except as set forth in the
Disclosure Letter, the Company shall, and shall cause each of its Subsidiaries
to, (i) conduct its operations according to its usual, regular and ordinary
course of business consistent with past practice; (ii) use commercially
reasonable efforts to preserve intact their business organizations, maintain in
effect all existing material qualifications, licenses, permits, approvals and
other authorizations referred to in Sections 6.1 and 6.12, keep available the
services of their officers and key employees and maintain satisfactory
relationships with those persons having business relationships with them; (iii)
promptly upon the discovery thereof notify Purchaser of the existence of any
breach of any representation or warranty contained herein (or, in the case of
any representation or warranty that makes no reference to Material Adverse
Effect, any breach of such representation or warranty in any material respect)
or the occurrence of any event that would cause any representation or warranty
contained herein no longer to be true and correct (or, in the case of any
representation or warranty that makes no reference to Material Adverse Effect,
to no longer be true and correct in any material respect); (iv) promptly deliver
to Purchaser true and correct copies of any report, statement or schedule filed
with the SEC subsequent to the date of this Agreement; and (v) maintain its
books of account and records in its usual, regular and ordinary manner,
consistent with its past practices.
(b) From and after the date of this Agreement to the Effective Time,
unless Purchaser has consented in writing thereto and except as set forth in the
Disclosure Letter, the Company shall not, and shall not permit any of its
Subsidiaries to, (i) amend its certificate of incorporation or bylaws or
comparable governing instruments; (ii) issue, sell, pledge or register for
issuance or sale any shares of capital stock or other ownership interest in the
Company (other than issuances
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of Common Stock in respect of any exercise of Options and warrants outstanding
on the date hereof or purchases of Common Stock pursuant to the ESPP) or any of
the Subsidiaries, or any securities convertible into or exchangeable for any
such shares or ownership interest, or any rights, warrants or options to acquire
or with respect to any such shares of capital stock, or ownership interest, or
convertible or exchangeable securities or accelerate any right to convert or
exchange or acquire any securities of the Company or any of its Subsidiaries for
any such shares or ownership interest; (iii) effect any stock split or
conversion of any of its capital stock or otherwise change its capitalization as
it exists on the date hereof, other than as set forth in this Agreement; (iv)
directly or indirectly redeem, purchase or otherwise acquire any shares of its
capital stock or capital stock of any of its Subsidiaries, other than as set
forth in this Agreement; (v) sell, lease or otherwise dispose of any of its
assets or properties (including capital stock of any of its Subsidiaries),
mortgage, pledge or impose a lien or other encumbrance on any of its material
assets or property (including capital stock of any of its Subsidiaries), except
in the ordinary course of business; (vi) acquire by merger, purchase or any
other manner, any business or entity or otherwise acquire any assets that are
material to the Company and its Subsidiaries taken as a whole, except for
purchases of inventory, supplies or capital expenditures in the ordinary course
of business consistent with past practice; (vii) incur or assume any long-term
or short-term debt, except for working capital purposes in the ordinary course
of business under the Company's existing credit facilities and capital
expenditures made in accordance with the Company's previously adopted capital
budget, copies of which have been provided to Purchaser; (viii) assume,
guarantee or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person except wholly
owned Subsidiaries of the Company; (ix) make or forgive any loans, advances or
capital contributions to, or investments in, any other person; (x) enter into
any new employment, severance, consulting or salary continuation agreements with
any newly hired employees other than in the ordinary course of business or enter
into any of the foregoing with any existing officers, directors or employees or
grant any increases in compensation or benefits to any officers, directors or
employees except for regularly scheduled employee raises in the ordinary course
of business consistent with the Company's past practices or raises that, in the
case of executive officers, have been approved by the compensation committee of
the Board of Directors prior to the date hereof and disclosed to Purchaser prior
to the date of this Agreement; (xi) adopt or amend in any material respect
(including any increase in the payment to or benefits under) or terminate any
employee benefit plan or arrangement; (xii) make any material changes in the
type or amount of their insurance coverage or permit any material insurance
policy naming the Company or any Subsidiary as a beneficiary or a loss payee to
be canceled or terminated; (xiii) except as may be required by law or generally
accepted accounting principles, change any material accounting principles or
practices used by the Company or its Subsidiaries; (xiv) take any action to
cause the Common Stock to cease to be traded on the Nasdaq National Market prior
to the completion of the Offer or the Merger; (xv) enter into a Material
Agreement, except as required or permitted by subsection (vii) or (xvi) of this
Section 8.1(b) or Section 8.10(b) and except for agreements relating to the
purchase or sale of the Company's products (including, without limitation,
supply, purchase and shipping contracts) to be performed within 90 days; (xvi)
enter into, terminate, fail to renew, or accelerate any license,
distributorship, dealer, sales representative, joint venture,
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credit or other agreement if such action could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; (xvii) fail to
operate, maintain, repair or otherwise preserve its material assets and
properties consistent with past practice; (xviii) fail to comply with all
applicable filing, payment and withholding obligations under all applicable
federal, state, local or foreign laws relating to Taxes except where such
failure to comply could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect; (xix) make any tax election or settle
or compromise any federal, state, local or foreign income tax liability; (xx)
pay, discharge, settle or satisfy any claims, liabilities or objections
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction of the foregoing in the ordinary course
of business consistent with past practice, or, if not in the ordinary course of
business, the payment, discharge or satisfaction of the foregoing that,
individually and in the aggregate, does not exceed $250,000; or (xxi) agree in
writing or otherwise to take any of the foregoing actions.
8.2 Company Stockholder Approval; Proxy Statement.
(a) If approval or action in respect of the Merger by the stockholders
of the Company is required by applicable law, the Company, through its Board of
Directors and in accordance with the DGCL and its certificate of incorporation
and bylaws then in effect, shall (i) call a meeting of its stockholders (the
"Stockholder Meeting") for the purpose of voting upon the Merger, (ii) hold the
Stockholder Meeting as soon as practicable following the purchase of shares of
Common Stock pursuant to the Offer and (iii) unless the Board of Directors
approves, recommends or enters into an agreement with respect to a Superior
Proposal in accordance with Section 8.10(b), recommend to its stockholders the
approval of this Agreement and the transactions contemplated hereby, including
the Merger, except to the extent that the Board of Directors determines in good
faith (after consultation with outside counsel) that to do so would create a
material risk of a breach by the Board of Directors of its fiduciary duties to
the Company's stockholders. The record date for the Stockholder Meeting shall be
a date subsequent to the date Purchaser or Merger Sub becomes a record holder of
Common Stock purchased pursuant to the Offer.
(b) If required by applicable law, the Company will, as soon as
practicable following the expiration of the Offer, prepare and file a
preliminary Proxy Statement (such proxy statement, and any amendments or
supplements thereto, the "Proxy Statement") or, if applicable, an Information
Statement with the SEC with respect to the Stockholder Meeting and will use
reasonable efforts to respond to any comments of the SEC or its staff and to
cause the Proxy Statement to be cleared by the SEC. Unless the Board of
Directors approves, recommends or enters into an agreement with respect to a
Superior Proposal in accordance with Section 8.10(b) and except to the extent
that the Board of Directors determines in good faith (after consultation with
outside counsel) that to do so would create a material risk of a breach by the
Board of Directors of its fiduciary duties to the Company's stockholders, the
Proxy Statement shall include the recommendation of the Board of Directors that
the stockholders of the Company vote in favor of approving the agreement of
merger (in accordance with Section 251 of the DGCL) contained in this Agreement
and the determination of the Board of Directors that this Agreement
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and the transactions contemplated hereby, including the Offer and the Merger,
are fair to, and in the best interests of, the stockholders of the Company. The
Company will notify Purchaser of the receipt of any comments from the SEC or its
staff and of any request by the SEC or its staff for amendments or supplements
to the Proxy Statement or for additional information and will supply Purchaser
with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement or the Merger. The Company shall give
Purchaser and its counsel the opportunity to review the Proxy Statement prior to
its being filed with the SEC and shall give Purchaser and its counsel the
opportunity to review all amendments and supplements to the Proxy Statement and
all responses to requests for additional information and replies to comments
prior to their being filed with, or sent to, the SEC. Each of the Company and
Purchaser agrees to use its best efforts, after consultation with the other
parties hereto, to respond promptly to all such comments of and requests by the
SEC. As promptly as practicable after the Proxy Statement has been cleared by
the SEC, the Company shall mail the Proxy Statement to the stockholders of the
Company. If at any time prior to the approval of this Agreement by the Company's
stockholders there shall occur any event that is required to be set forth in an
amendment or supplement to the Proxy Statement under applicable law, the Company
will prepare and mail to its stockholders such an amendment or supplement.
(c) The Company represents and warrants that any required Proxy
Statement will comply as to form in all material respects with the Exchange Act
and, at the respective times filed with the SEC and distributed to stockholders
of the Company, will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes no
representation or warranty as to any information included in the Proxy Statement
that was provided by Purchaser or Merger Sub. Purchaser represents and warrants
that none of the information supplied by Purchaser or Merger Sub for inclusion
in the Proxy Statement will, at the respective times filed with the SEC and
distributed to stockholders of the Company, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(d) Subject to clause (iii) of Section 8.2(a), the Company shall use
its reasonable efforts to obtain the necessary approvals by its stockholders of
the Merger, this Agreement and the transactions contemplated hereby.
(e) Purchaser agrees to cause all shares of Common Stock purchased by
Merger Sub pursuant to the Offer and all other shares of Common Stock owned by
Purchaser, Merger Sub or any other subsidiary or affiliate of Purchaser to be
voted in favor of the approval of the Merger.
8.3 Filings; Other Action. Subject to the terms and conditions herein
provided, the Company, Purchaser and Merger Sub shall: (a) as promptly as
practicable but in no event later than seven business days after the date
hereof, make their respective filings and thereafter make
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any other required submissions under the HSR Act with respect to the Offer and,
if applicable, the Merger, and request early termination of the waiting period
under the HSR Act; (b) cooperate and consult with one another in, (i)
determining which Regulatory Filings are required or, in the case of Other
Antitrust Filings and Consents, permitted to be made prior to the Effective Time
with, and which Consents are required or, in the case of Other Antitrust Filings
and Consents, permitted to be obtained prior to the Effective Time from
Governmental Entities or other third parties in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby, and determining which Consents are required to transfer to
the Surviving Corporation any Permits or registrations held on behalf of the
Company or any of its Subsidiaries by or in the name of distributors, brokers or
sales agents; (ii) promptly preparing all Regulatory Filings and all other
filings, submissions and presentations required or reasonably prudent to obtain
all Consents, including by providing to the other parties drafts of such
material reasonably in advance of the anticipated filing or submission dates;
(iii) promptly making all such Regulatory Filings and promptly seeking all such
Consents; (iv) defending against any lawsuit or proceeding, whether judicial or
administrative, challenging this Agreement or the consummation of any of the
transactions contemplated hereby; and (c) use their reasonable best efforts to
take, or cause to be taken, all other action and do, or cause to be done, all
other things necessary, proper or appropriate to consummate and make effective
the transactions contemplated by this Agreement (including without limitation
those actions described in the foregoing (ii) through (iv)). Each of Purchaser
and the Company shall use its reasonable best efforts to contest any proceeding
seeking a preliminary injunction or other legal impediment to, and to resolve
any objections as may be asserted by any Governmental Entity with respect to,
the Offer or the Merger under the HSR Act or Foreign Antitrust Laws. If, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purpose of this Agreement, the proper officers and directors of
Purchaser and the Surviving Corporation shall take all such necessary action.
8.4 Publicity. The initial press release relating to this Agreement
shall be a joint press release and thereafter the Company and Purchaser shall
consult with each other before issuing any press release or otherwise making
public statements with respect to the transactions contemplated hereby and in
making any filings with any Governmental Entity or with The Nasdaq Stock Market
with respect thereto.
8.5 Further Action. Each party hereto shall, subject to the fulfillment
at or before the Effective Time of each of the conditions of performance set
forth herein or the waiver thereof, perform such further acts and execute such
documents as may be reasonably required to effect the Merger, including the
execution of any deeds, bills of sale, assignments, assurances and all such
other acts and things necessary, desirable or proper to carry out the purposes
of this Agreement. In addition to the foregoing, the Company and its
Subsidiaries shall deliver to Purchaser a certificate in form and substance
reasonably satisfactory to Purchaser, duly executed and acknowledged, certifying
facts that would exempt the transactions contemplated hereby from withholding
pursuant to the provisions of the Foreign Investment in Real Property Tax Act.
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8.6 Insurance; Indemnity.
(a) For six years from the Effective Time, the Surviving Corporation
shall maintain in effect the Company's and its Subsidiaries' current directors'
and officers' liability insurance policies (the "Policies") covering those
persons who are currently covered by the Policies; provided, however, that in no
event shall the Surviving Corporation be required to expend in any one year an
amount in excess of 200% of the annual premiums currently paid by the Company
and its Subsidiaries for such insurance coverage, and, provided further, that if
the annual premiums of such insurance coverage exceed such amount, the Surviving
Corporation shall be obligated to obtain policies with the greatest coverage
available for a cost not exceeding such amount.
(b) The Surviving Corporation shall keep in effect in its bylaws
provisions for a period of not less than six years from the Effective Time (or,
in the case of matters occurring prior to the Effective Time that have not been
resolved prior to the sixth anniversary of the Effective Time, until such
matters are finally resolved) that provide for exculpation of director and
officer liability and indemnification (and advancement of expenses related
thereto) of the past and present officers and directors of the Company and its
Subsidiaries to the fullest extent permitted by the DGCL, which provisions shall
not be amended except as required by applicable law or except to make changes
permitted by law that would enhance the rights of past or present officers and
directors to indemnification or advancement of expenses.
(c) Subject to Section 8.6(f), from and after the Effective Time,
Purchaser shall indemnify and hold harmless, to the fullest extent permitted
under applicable law, each person who is, or has been at any time prior to the
date hereof or who becomes prior to the Effective Time, an officer, director or
similar person of the Company or any Subsidiary, against all losses, claims,
damages, liabilities, costs or expenses (including attorneys' fees), judgments,
fines, penalties and amounts paid in settlement (collectively, "Losses") in
connection with any claims, actions, suits, proceedings, arbitrations,
investigations or audits (collectively, "Litigation") arising before or after
the Effective Time out of or pertaining to acts or omissions, or alleged acts or
omissions, by them in their capacities as such (including without limitation
acts or omissions with respect to the transactions contemplated by this
Agreement), which acts or omissions occurred no later than the Effective Time.
Without limiting the foregoing, Purchaser shall periodically advance expenses as
incurred with respect to the foregoing to the fullest extent permitted under
applicable law provided that the person to whom the expenses are advanced
provides an undertaking to repay such advance if it is ultimately determined
that such person is not entitled to indemnification. The rights of past and
present officers and directors to indemnification and advancement of expenses
set forth in this Section 8.6 shall be in addition to and not in lieu of any
rights that any such person is entitled to under any agreement between the
Company and such person in effect as of the date of this Agreement.
(d) If, after the Effective Time, Purchaser or the Surviving
Corporation or any of their respective successors or assigns (i) consolidates
with or merges into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or merger or (ii)
transfers all or substantially all of its properties or assets to any person,
then, in each such case, proper provisions shall be made so that successors and
assigns of Purchaser or the
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Surviving Corporation, as the case may be, shall assume such entity's
obligations set forth in this Section 8.6. The provisions of this Section 8.6
are intended for the benefit of and shall be enforceable by each person who is
now or has been at any time prior to the date of this Agreement, or who becomes
prior to the Effective Time, an officer, director or similar person of the
Company or any of its Subsidiaries.
(e) If any Litigation described in Section 8.6(c) (each, an "Action")
arises or occurs, the Surviving Corporation shall control the defense of such
Action with counsel selected by the Surviving Corporation, which counsel shall
be reasonably acceptable to the party seeking indemnification pursuant to
Section 8.6(c) (each, an "Indemnified Party"), provided that the Indemnified
Party shall be permitted to participate in the defense of such Action through
counsel selected by the Indemnified Party, at the Indemnified Party's expense,
except to the extent otherwise provided in the Surviving Corporation's bylaws,
any agreement between the Indemnified Party and the Company in effect as of the
date of this Agreement or any agreement between the Indemnified Party and the
Surviving Corporation entered into after the Effective Time. Notwithstanding the
foregoing, if there is any actual or potential conflict between the Surviving
Corporation and any Indemnified Party or there are additional defenses available
to any Indemnified Party, such Indemnified Party shall be permitted to
participate in the defense of such Action with counsel selected by the
Indemnified Party, at the Surviving Corporation's expense; provided, however,
that the Surviving Corporation shall not be obligated to pay the fees and
expenses of more than one counsel for any Indemnified Party in any single
Action. Except to the extent otherwise provided in the Surviving Corporation's
bylaws, any agreement between the Indemnified Party and the Company in effect as
of the date of this Agreement or any agreement between the Indemnified Party and
the Surviving Corporation entered into after the Effective Time, the Surviving
Corporation shall not be liable for any settlement effected without its written
consent, which consent shall not unreasonably be withheld.
(f) Purchaser shall have no obligations under Section 8.6(c), unless
and until the Surviving Corporation is unable to satisfy its indemnification
obligations under this Section 8.6.
8.7 Restructuring of Merger. Upon the mutual agreement of Purchaser and
the Company, the Merger shall be restructured in the form of a forward
subsidiary merger of the Company with and into Merger Sub, with Merger Sub being
the surviving corporation, or as a merger of the Company with and into
Purchaser, with Purchaser being the surviving corporation. In such event, this
Agreement shall be deemed appropriately modified to reflect such form of merger.
8.8 Employee Benefit Plans.
(a) From and after the Effective Time, the Surviving Corporation and
its respective Subsidiaries will assume and honor, in accordance with their
terms, all existing employment, indemnification, change in control and severance
agreements between the Company or any of its Subsidiaries and any current or
former officer, director, consultant or employee of the Company or any of its
Subsidiaries ("Covered Employees") to the extent in effect on, and disclosed to
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Purchaser prior to, the date hereof and all benefits or other amounts earned or
accrued to the extent vested or that become vested in the ordinary course or as
a result of the transactions contemplated by this Agreement through the
Effective Time under all employee benefit plans of the Company and any of its
Subsidiaries, in each case to the extent in effect on the date hereof.
(b) To the extent that Covered Employees are included in any benefit
plan of Purchaser or its subsidiaries, Purchaser agrees that the Covered
Employees shall receive credit under such plan for service prior to the
Effective Time with the Company and its Subsidiaries to the same extent such
service was counted under similar Company Benefit Plans for purposes of
eligibility, vesting, eligibility for retirement (but not for benefit accrual).
8.9 Access to Information. The Company shall, and shall cause each of
its Subsidiaries to, afford to Purchaser and to the officers, employees,
accountants, counsel, financial advisors and other representatives of Purchaser,
reasonable access during normal business hours during the period prior to the
Effective Time to all their respective properties, books, contracts,
commitments, personnel and records and, during such period, the Company shall,
and shall cause its respective Subsidiaries to, furnish promptly to Purchaser
(a) a copy of each report, schedule, registration statement and other document
filed by it during such period pursuant to the requirements of federal or state
securities laws and (b) all other information concerning its business,
properties and personnel as Purchaser may reasonably request.
8.10 No Solicitation.
(a) The Company shall not, and shall not authorize, permit or cause any
of its Subsidiaries or any of the officers and directors of it or its
Subsidiaries to, and shall not authorize, permit or direct its and its
Subsidiaries' employees, agents and representatives (including the Financial
Advisor or any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) to, directly or indirectly, (i) initiate, solicit, or
otherwise encourage any inquiries or the making of any proposal or offer with
respect to a merger, reorganization, share exchange, tender offer, consolidation
or similar transaction involving, or any purchase of, 10% or more of the assets
or any equity securities of the Company or any of its Subsidiaries (any such
proposal or offer being hereinafter referred to as, an "Acquisition Proposal")
or (ii) initiate or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person or
entity relating to an Acquisition Proposal, whether made before or after the
date of this Agreement, or otherwise facilitate any effort or attempt to make or
implement or consummate an Acquisition Proposal, except as permitted in Section
8.10(b).
(b) Notwithstanding clause (a) above, nothing contained in this
Agreement shall prevent the Company or its Board of Directors from (i) complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal or (ii): (x) providing information in response to a request therefor by
a person or entity who has made an unsolicited bona fide written Acquisition
Proposal if the Board of Directors receives from the person or entity so
requesting such information an executed confidentiality agreement on terms
substantially
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equivalent to those contained in the letter agreement dated August 23, 2000
between Purchaser and the Company (the "Confidentiality Agreement"); (y)
engaging in any negotiations or discussions with any person or entity who has
made an unsolicited bona fide written Acquisition Proposal; or (z) recommending
such an Acquisition Proposal to the stockholders of the Company, if, and only to
the extent that, (i) in each such case referred to in clause (x), (y) or (z)
above, the Board of Directors of the Company determines in good faith after
consultation with outside legal counsel and the Financial Advisor that such
action is necessary in order for its members to comply with their fiduciary
duties under applicable law and (ii) in each case referred to in clause (x), (y)
or (z) above, the Board of Directors of the Company determines in good faith
(after consultation with outside legal counsel) that, if accepted, such
Acquisition Proposal is reasonably likely to be consummated, taking into account
all legal, financial and regulatory aspects of the proposal and the person or
entity making the proposal, and would provide for a higher per share value to
the stockholders of the Company, and is fully financed (or, based on a good
faith determination of the Board of Directors of the Company, is readily
financeable) (any such Acquisition Proposal meeting the foregoing conditions
being referred to herein as a "Superior Proposal"). The Company shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to an Acquisition Proposal. The Company agrees that it will take the necessary
steps to promptly inform its officers, directors and representatives of the
obligations undertaken in this paragraph and in the Confidentiality Agreement.
The Company also shall promptly request each person or entity that has
heretofore executed a confidentiality agreement in connection with its
consideration of an Acquisition Proposal to return all confidential information
heretofore furnished to such person or entity by or don behalf of it or any of
its Subsidiaries.
(c) The Company shall notify Purchaser immediately if any Acquisition
Proposal or inquiries regarding a potential Acquisition Proposal are received
by, any information with respect to an Acquisition Proposal or a potential
Acquisition Proposal is requested from, or any discussions or negotiations with
respect to an Acquisition Proposal or a potential Acquisition Proposal are
sought to be initiated or continued with, it or any of its representatives
indicating, in connection with such notice, the name of the person or entity
involved and the material terms and conditions of any such Acquisition Proposal,
and thereafter shall keep Purchaser informed, on a current basis, of the status
and terms of any such inquiries or Acquisition Proposals and the status of any
such negotiations or discussions.
ARTICLE 9
CONDITIONS
9.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of the
following conditions:
(a) Merger Sub shall have accepted for payment and paid for all shares
of Common Stock validly tendered in the Offer and not withdrawn; provided,
however, that neither Purchaser nor Merger Sub may invoke this condition if
Merger Sub (or its assignee) shall have failed in
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violation of the terms of this Agreement or the Offer to purchase shares so
tendered and not withdrawn.
(b) This Agreement shall have been adopted by the affirmative vote of
the holders of the requisite number of shares of capital stock of the Company if
such vote is required pursuant to Company's certificate of incorporation, the
DGCL or other applicable law; provided, however, that neither Purchaser nor
Merger Sub may invoke this condition if either of them or any of their
respective affiliates shall have failed to vote the shares of Common Stock held
by it in favor of this Agreement and the Company may not invoke this condition
if the Company shall have failed to fulfill its obligations under Section 8.2.
(c) No temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing, restraining or restricting the consummation
of the Merger shall be in effect; provided, however, that the party invoking
this condition shall use its best efforts to have any such order, injunction or
restraint vacated.
(d) All necessary waiting periods under the HSR Act that are applicable
to the Merger shall have expired or been earlier terminated, and all other
necessary approvals from any other Governmental Entity that are applicable to
the Merger shall have been obtained.
ARTICLE 10
TERMINATION; AMENDMENT; WAIVER
10.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time notwithstanding approval
thereof by the stockholders of the Company, but prior to the Effective Time:
(a) by mutual written consent of the Company and Purchaser; or
(b) by the Company, if (i) Purchaser or Merger Sub shall have failed to
commence the Offer within seven business days after the date of this Agreement,
(ii) Purchaser or Merger Sub (or Merger Sub's assignee) shall have failed to
comply with its payment obligations under this Agreement with respect to any
shares of Common Stock accepted for payment pursuant to the Offer, or (iii) any
change to the Offer is made in contravention of the provisions of Article 1; or
(c) by Purchaser or the Company:
(i) if the Effective Time shall not have occurred on or before
the date which is six months from the date of this Agreement (provided
that the right to terminate this Agreement pursuant to this clause (i)
shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in
the failure of the Effective Time to occur on or before such date;
provided, further that this right to
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terminate shall not be available to the Company after the consummation
of the Offer unless approved by a majority of the Continuing
Directors);
(ii) if, upon a vote at the Stockholder Meeting, or any
adjournment thereof, the adoption of this Agreement by the stockholders
of the Company required by the DGCL shall not have been obtained
(provided that the right to terminate this Agreement pursuant to this
clause (ii) shall not be available to Purchaser if Purchaser, Merger
Sub or any of their affiliates shall have failed to vote the shares of
Common Stock held by them in favor of adoption of this Agreement, and
shall not be available to the Company, if the Company shall have failed
to fulfill its obligations under Section 8.2);
(iii) if there shall be any statute, law, rule or regulation
that makes consummation of the Offer or the Merger illegal or
prohibited or if any court of competent jurisdiction or other
Governmental Entity shall have issued an order, judgment, decree or
ruling, or taken any other action restraining, enjoining or otherwise
prohibiting the Offer or the Merger and such order, judgment, decree,
ruling or other action shall have become final and non-appealable; or
(iv) if the Offer terminates or expires on account of the
failure of any condition specified in Exhibit A without Merger Sub
having purchased any shares of Common Stock thereunder (provided that
the right to terminate this Agreement pursuant to this clause (iv)
shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in
the failure of any such condition); or
(d) by Purchaser, prior to the consummation of the Offer, if (i) the
Board of Directors of the Company withdraws, amends or modifies, its approval of
this Agreement and the transactions contemplated hereby, or its recommendation
that the holders of the shares of Common Stock accept the Offer and tender all
of their shares of Common Stock to Merger Sub and approve this Agreement and the
transactions contemplated hereby (or, in each case, publicly announces its
intention to do so) in a manner adverse to Purchaser or Merger Sub or (ii) the
Company approves, recommends or enters into an agreement with respect to, or
consummates, an Acquisition Proposal; or
(e) by the Company, if (x) a third party shall have disclosed,
announced, submitted or made a Superior Proposal, and (y) the Board of Directors
has determined in good faith after consultation with outside counsel that
termination of this Agreement by the Company is necessary in order for the Board
of Directors to comply with its fiduciary duties; provided, however, that the
right to terminate this Agreement pursuant to this Section 10.1(e) shall not be
available unless (i) the Company has complied with all provisions of Section
8.10, including the notice provisions therein, (ii) the Company has delivered to
Purchaser a written notice of the Company's intent to enter into an agreement to
effect a Superior Proposal, (iii) three business days have elapsed following
delivery to Purchaser of such written notice by the Company, (iv) during such
three business day period the Company has reasonably cooperated with Purchaser,
including informing Purchaser of the terms and conditions of the Acquisition
Proposal and
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identifying the person making the Acquisition Proposal, with the intent of
enabling Purchaser to agree to a modification of the terms and conditions of
this Agreement so the transactions contemplated hereby may be effected, (v) at
the end of such three business day period the Board of Directors continues
reasonably to believe that the Acquisition Proposal constitutes a Superior
Proposal; provided, further, however, that no termination shall be effective
pursuant to this Section 10.1(e) unless a Break-Up Fee is paid in full by the
Company in accordance with Section 10.2; and, provided, further, however, that
the Company may not terminate this Agreement pursuant to this Section 10.1(e)
until one business day after the Initial Offer Expiration Date; or
(f) by Purchaser, if before the consummation of the Offer the Company
shall breach any of its representations, warranties or obligations hereunder and
such breach shall not have been cured or waived within 10 business days after
written notice of the breach (notwithstanding anything in this Agreement to the
contrary, with the consent of the Company, Purchaser shall be permitted to
extend the Offer for the time period necessary to allow the Company such 10
business day period to cure the breach), but only if such breach, individually
or together with all other such breaches, would constitute failure of a
condition contained in Exhibit A as of the date of such termination; or
(g) by the Company, if before the consummation of the Offer Purchaser
or Merger Sub shall materially breach any of its representations, warranties or
obligations hereunder and such breach shall not have been cured or waived within
10 business days after written notice of the breach, but only if such breach,
individually or together with all other such breaches, is reasonably likely to
materially and adversely affect Purchaser's or Merger Sub's ability to
consummate the Offer or the Merger; or
(h) by Purchaser, prior to the consummation of the Offer, if the Tender
Agreement shall not be in full force and effect or any Significant Stockholders
shall have breached in any material respect any representation, warranty or
covenant contained in the Tender Agreement; provided, however, that the party
seeking termination pursuant to clause (f), (g) or (h) hereof is not in material
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement.
10.2 Effect of Termination.
(a) If this Agreement is terminated and the Merger is abandoned
pursuant to Section 10.1, this Agreement, except for the provisions of Sections
1.3(c), 8.4, and Article 11, shall terminate, without any liability (except as
set forth below) on the part of any party or its affiliates, directors, officers
or stockholders. Nothing herein shall relieve any party from liability for any
intentional breach of this Agreement.
(b) The Company shall pay Purchaser a Break-Up Fee in the event that
this Agreement is terminated by Purchaser pursuant to Section 10.1(d) or by the
Company pursuant to Section 10.1(e).
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(c) If all of the following events have occurred:
(i) an Acquisition Proposal is commenced, publicly disclosed,
publicly proposed or otherwise communicated to the Company at any time
on or after the date of this Agreement and prior to the consummation of
the Offer and either Purchaser or the Company terminates this Agreement
pursuant to Section 10.1(c)(i) or Section 10.1(c)(iv) or Purchaser
terminates this Agreement pursuant to Section 10.1(f); and
(ii) thereafter, within 12 months of the date of termination
of this Agreement, the Company enters into a definitive agreement with
respect to, or consummates, any Acquisition Proposal described in
clause (i) above (or any other Acquisition Proposal whether or not
described in clause (i) above if such Acquisition Proposal is made by
any Person (or Affiliate thereof) who made any Acquisition Proposal
described in clause (i) above),
then, the Company shall pay to Purchaser an amount equal to the Break-Up Fee
concurrently with the execution of the relevant definitive agreement.
(d) If this Agreement is terminated by Purchaser pursuant to Section
10.1(f), the Company shall reimburse Purchaser up to a maximum of $1,000,000 for
all expenses incurred by Purchaser in connection with the negotiation,
execution, delivery and performance of this Agreement by Purchaser and Merger
Sub.
(e) If this Agreement is terminated by the Company pursuant to Section
10.1(g), Purchaser shall reimburse the Company up to a maximum of $1,000,000 for
all expenses incurred by the Company in connection with the negotiation,
execution, delivery and performance of this Agreement by the Company.
(f) The "Break-Up Fee" shall be $1,700,000, provided that, such amount
will be reduced by any amounts paid by the Company to Purchaser pursuant to
Section 10.2(d) above. In the event that the Break-Up Fee shall be payable under
this Agreement, the Company shall pay the Break-Up Fee to Purchaser by wire
transfer of immediately available funds to an account designated by Purchaser,
within five business days following the termination of this Agreement.
10.3 Amendment. To the extent permitted by applicable law, this
Agreement may be amended by action taken by or on behalf of the Boards of
Directors of the Company and Purchaser at any time before or after adoption of
this Agreement by the stockholders of the Company but, after any such
stockholder approval, no amendment shall be made that decreases the Merger
Consideration or that adversely affects the rights of the Company's stockholders
hereunder without the approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of all of the
parties.
10.4 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the boards of directors of
the Company (subject to Section 1.4)
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and Purchaser, may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein by any other
applicable party or in any document, certificate or writing delivered pursuant
hereto by any other applicable party or (c) waive compliance with any of the
agreements or conditions contained herein, except after adoption of this
Agreement by the stockholders of the Company, for any waiver that has the effect
of decreasing the Merger Consideration or that adversely affects the rights of
the Company's stockholders hereunder without approval of such stockholders. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE 11
GENERAL PROVISIONS
11.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time.
11.2 Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission (with a
confirmatory copy sent by overnight courier), by courier service (with proof of
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
If to Purchaser or Merger Sub: If to the Company:
Telelogic AB Continuus Software Corporation
Kungsgatan 6 ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Sweden United States of America
Facsimile: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇
With a copy to: With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Godward LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. Attention: D. ▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
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11.3 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties; provided, however, that either Purchaser
or Merger Sub (or both) may assign its rights hereunder (including, without
limitation, the right to make the Offer or to purchase shares of Common Stock in
the Offer) to a wholly owned Subsidiary of Purchaser or Merger Sub but nothing
shall relieve the assignor from its obligations hereunder. Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, except for
the provisions of Sections 8.6 and 8.8, nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
11.4 Entire Agreement. This Agreement, the Disclosure Letter, the
Purchaser Disclosure Letter, the Exhibit hereto, the Ancillary Documents and any
other documents delivered by the parties in connection herewith constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings among the parties with respect
thereto.
11.5 Fees and Expenses. Whether or not the Offer or Merger is
consummated, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
11.6 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to its rules
of conflict of laws. Each of the Company, Purchaser and Merger Sub hereby
irrevocably and unconditionally consents to submit to the jurisdiction of the
federal and state courts located in New York, New York for any litigation
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except in
such courts), waives any objection to the laying of venue of any such litigation
in such courts and agrees not to plead or claim in any such court that such
litigation brought therein has been brought in an inconvenient forum.
11.7 Headings. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and shall be given no substantive
or interpretive effect whatsoever.
11.8 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa. Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." As used in this Agreement, (a) the words "Subsidiary," "affiliate"
and "associate" shall have the
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meanings ascribed thereto in Rule 12b-2 under the Exchange Act, (b) "business
day" means any day other than Saturday, Sunday or any other day on which banks
in the City of New York are required or permitted to close and (c) "knowledge"
means the actual knowledge after reasonable inquiry of any executive officer of
the Company or Purchaser, as the case may be.
11.9 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
11.10 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any federal or state
court located in New York, New York, this being in addition to any other remedy
to which they are entitled at law or in equity. The prevailing party in any
judicial action shall be entitled to receive from the other party reimbursement
for the prevailing party's reasonable attorneys' fees and disbursements, and
court costs.
11.11 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.
11.12 Obligation of Purchaser. Whenever this Agreement requires Merger
Sub to take any action, such requirement shall be deemed to include an
undertaking on the part of Purchaser to cause Merger Sub to take such action.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement and caused
the same to be duly delivered on their behalf on the day and year first written
above.
PURCHASER:
TELELOGIC AB
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President and Chief Executive Officer
MERGER SUB:
RAINDROP ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President and Chief Executive Officer
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COMPANY:
CONTINUUS SOFTWARE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇
President, Chief Executive Officer
and Chairman
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EXHIBIT A
CONDITIONS OF THE OFFER
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings assigned to them in the Agreement and Plan of Merger, dated as
of October 24, 2000 (the "Merger Agreement"), among Purchaser, Merger Sub and
the Company.
Notwithstanding any other term of the Merger Agreement, Merger Sub
shall not be required to accept for payment or pay for, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) of the
Exchange Act, any shares of Common Stock not theretofore accepted for payment or
paid for and may terminate or amend the Offer as to such shares of Common Stock
unless (i) there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer that number of shares of Common Stock which would
represent at least a majority of the sum of (A) the outstanding shares of Common
Stock and (B) the shares of Common Stock issuable upon the conversion or
exercise of convertible securities and stock options that (x) will become
exercisable in accordance with their terms (without regard to any acceleration
provisions) prior to the six month anniversary of the Merger Agreement and (y)
have a conversion or exercise price equal to or less than the Offer
Consideration (collectively, the "Minimum Condition") and (ii) any waiting
period under the HSR Act and any non-United States laws regulating competition,
antitrust, investment or exchange controls applicable to the purchase of shares
of Common Stock pursuant to the Offer shall have expired or been terminated.
Furthermore, notwithstanding any other term of the Offer or the Merger
Agreement, Merger Sub shall not be required to accept for payment or, subject as
aforesaid, to pay for any shares of Common Stock not theretofore accepted for
payment or paid for, and may terminate or amend the Offer if at any time on or
after the date of the Merger Agreement and prior to the expiration of the Offer
any of the following conditions exist or shall occur and remain in effect:
(a) any United States or state Governmental Entity shall have
enacted, issued, promulgated, enforced, instituted or entered any
statute, rule, regulation, executive order, decree, injunction, action,
application or claim or other order that is in effect or pending (a
"Claim"), (i) challenging or prohibiting the acquisition by Purchaser
or Merger Sub of the shares of Common Stock pursuant to the Merger
Agreement, including the Offer or the Merger, (ii) restraining or
prohibiting the making or consummation of the Merger Agreement,
including the Offer or the Merger or the performance of any of the
other transactions contemplated by the Merger Agreement, (iii) seeking
to obtain from Purchaser or Merger Sub any damages that arise out of
the transactions contemplated by this Agreement and could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect if such damages were assessed against the Company, (iv)
restraining or prohibiting, or limiting in any material respect, the
ownership or operation by Purchaser or Merger Sub of any material
portion of the business or assets of the Company and its Subsidiaries
taken as a whole, (v) seeking to compel Purchaser or Merger Sub to
dispose of or forfeit material incidents of control of all or any
material portion of the business or assets of the Company or any of its
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Subsidiaries, (vi) imposing limitations on the ability of Purchaser,
Merger Sub or any other Subsidiary of Purchaser effectively to exercise
full rights of ownership of the shares of Common Stock, including,
without limitation, the right to vote any shares of Common Stock
acquired or owned by Purchaser or Merger Sub on all matters properly
presented to the Company's stockholders, or (vii) seeking to require
divestiture by Merger Sub or Purchaser of any shares of Common Stock;
or
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, promulgated, entered, enforced or deemed
applicable to the Offer, the Merger or the Merger Agreement, or any
other action shall have been taken by any government, Governmental
Entity or court, domestic or foreign, other than the routine
application to the Offer or the Merger of waiting periods under the HSR
Act or any non-United States laws regulating competition, antitrust,
investment or exchange controls, that has, or has a substantial
likelihood of resulting in, any of the consequences referred to in
paragraph (a) above; or
(c)(i) the representations and warranties made by the Company
in Articles 1 and 6 of the Merger Agreement shall not be true and
correct as of the date of consummation of the Offer as though made on
and as of that date (other than representations and warranties made as
of a specified date, in which case such representations and warranties
shall be true and correct in all material respects on and as of such
specified date) except for any breach or breaches that, individually or
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect or (ii) the Company shall have breached or failed to
comply with any of its obligations, covenants or agreements under the
Merger Agreement (other than those obligations, covenants or agreements
under Section 5.2(e), with respect to which the Company shall have
performed in all respects) and, with respect to any such breach or
failure that can be remedied, the breach or failure is not remedied
within 10 business days after Purchaser has furnished the Company with
written notice of such breach or failure, unless all such breaches or
failures, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; or
(d) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on the New York
Stock Exchange, any other national securities exchange or the Nasdaq
National Market (other than a shortening of trading hours or any
trading halt resulting from a specified increase or decrease in a
market index that does not continue for more than one business day),
(ii) the declaration of a banking moratorium or any mandatory
suspension of payments in respect of banks in the United States, (iii)
the commencement of or escalation of a war, armed hostilities or other
international or national calamity directly involving the United States
and resulting in a declaration of a national emergency or war by the
United States, (iv) any limitation (whether or not mandatory) by any
United States governmental authority on the extension of credit by
banks or other financial institutions, (v) a change in general
financial bank or capital market conditions which materially and
adversely affects the ability of financial institutions in the United
States to extend credit or syndicate loans, and, in the case of (iv)
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and (v), makes impracticable (in the reasonable judgment of Purchaser)
Purchaser's ability to proceed with the Offer; or
(e) the Company's Board of Directors shall have withdrawn or
modified in a manner adverse to Purchaser or Merger Sub (including by
amendment of the Schedule 14D-9) its approval of the Merger Agreement
and the transactions contemplated thereby, or its recommendation that
the holders of the shares of Common Stock accept the Offer and tender
all of their shares of Common Stock to Merger Sub and approve the
Merger Agreement and the transactions contemplated thereby, including
the Offer and the Merger, or shall have approved or recommended any
Acquisition Proposal or Superior Proposal; or
(f) the Merger Agreement shall have been terminated in
accordance with its terms; or
(g) there shall have occurred any events or states of fact
that have had, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
The foregoing conditions (other than the Minimum Condition and
the condition set forth in clause (ii) of the second paragraph of this Exhibit
A) are for the sole benefit of Purchaser and Merger Sub and may be asserted by
Purchaser and Merger Sub regardless of the circumstances (including any action
or inaction by Purchaser) giving rise to any such condition and, except for the
Minimum Condition and the condition set forth in clause (ii) of the second
paragraph of this Exhibit A, may be waived by Purchaser or Merger Sub, in whole
or in part, at any time and from time to time, in the sole discretion of
Purchaser. The failure by Purchaser or Merger Sub at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right, the waiver
of such right with respect to any particular facts or circumstances shall not be
deemed a waiver with respect to any other facts or circumstances, and each such
right will be deemed an ongoing right which may be asserted at any time and from
time to time until the consummation of the Offer.
Should the Offer be terminated pursuant to the foregoing
provisions, all tendered shares of Common Stock not theretofore accepted for
payment shall forthwith be returned by the Paying Agent to the tendering
stockholders.
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