EXHIBIT (D)1
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AGREEMENT AND PLAN OF MERGER
among
NOKIA CORPORATION
BLACKBIRD ACQUISITION, INC.
and
RAMP NETWORKS, INC.
----------------
Dated as of December 6, 2000
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions........................................................... 1
ARTICLE II
THE OFFER
SECTION 2.01 The Offer............................................................. 5
SECTION 2.02 Company Action........................................................ 6
ARTICLE III
THE MERGER
SECTION 3.01 The Merger........................................................... 7
SECTION 3.02 Effective Time; Closing.............................................. 8
SECTION 3.03 Effect of the Merger................................................. 8
SECTION 3.04 Certificate of Incorporation; By-laws................................ 8
SECTION 3.05 Directors and Officers............................................... 8
SECTION 3.06 Conversion of Securities............................................. 8
SECTION 3.07 Employee Stock Options; Employee Stock Purchase Plan................. 9
SECTION 3.08 Dissenting Shares.................................................... 9
SECTION 3.09 Surrender of Shares; Stock Transfer Books............................ 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01 Organization and Qualification; Subsidiaries......................... 11
SECTION 4.02 Certificate of Incorporation and By-laws............................. 11
SECTION 4.03 Capitalization....................................................... 11
SECTION 4.04 Authority Relative to this Agreement................................. 12
SECTION 4.05 No Conflict; Required Filings and Consents........................... 12
SECTION 4.06 Permits; Compliance.................................................. 13
SECTION 4.07 SEC Filings; Financial Statements.................................... 13
SECTION 4.08 Absence of Certain Changes or Events................................. 14
SECTION 4.09 Absence of Litigation................................................ 14
SECTION 4.10 Employee Benefit Plans............................................... 14
SECTION 4.11 Labor and Employment Matters......................................... 16
SECTION 4.12 Offer Documents; Schedule 14D-9; Proxy Statement..................... 17
SECTION 4.13 Property and Leases.................................................. 17
SECTION 4.14 Intellectual Property................................................ 18
SECTION 4.15 Taxes................................................................ 20
SECTION 4.16 Environmental Matters................................................ 21
SECTION 4.17 No Rights Agreements................................................. 21
SECTION 4.18 Material Contracts................................................... 21
SECTION 4.19 Insurance............................................................ 22
SECTION 4.20 Customers and Suppliers.............................................. 23
SECTION 4.21 Brokers.............................................................. 23
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
SECTION 5.01 Corporate Organization............................................... 23
SECTION 5.02 Authority Relative to This Agreement................................. 23
SECTION 5.03 No Conflict; Required Filings and Consents........................... 24
SECTION 5.04 Financing............................................................ 24
SECTION 5.05 Offer Documents; Proxy Statement..................................... 24
SECTION 5.06 Brokers.............................................................. 24
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01 Conduct of Business by the Company Pending the Merger................ 25
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Stockholders' Meeting................................................ 26
SECTION 7.02 Proxy Statement...................................................... 26
SECTION 7.03 Company Board Representation; Section 14(f).......................... 27
SECTION 7.04 Access to Information; Confidentiality............................... 27
SECTION 7.05 No Solicitation of Transactions...................................... 27
SECTION 7.06 Employee Benefits Matters............................................ 28
SECTION 7.07 Intentionally Omitted................................................ 29
SECTION 7.08 Directors' and Officers' Indemnification and Insurance............... 29
SECTION 7.09 Notification of Certain Matters...................................... 29
SECTION 7.10 Further Action; Reasonable Best Efforts.............................. 29
SECTION 7.11 Public Announcements................................................. 30
SECTION 7.12 Confidentiality Agreement............................................ 30
SECTION 7.13 Confirmation of No Withholding....................................... 30
SECTION 7.14 Obligations of Purchaser............................................. 30
SECTION 7.15 Voting of Shares..................................................... 30
SECTION 7.16 Extension of Offer................................................... 31
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Merger............................................. 31
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination.......................................................... 31
SECTION 9.02 Effect of Termination................................................ 32
SECTION 9.03 Fees and Expenses.................................................... 32
SECTION 9.04 Amendment............................................................ 33
SECTION 9.05 Waiver............................................................... 33
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Notices.............................................................. 33
SECTION 10.02 Severability......................................................... 34
SECTION 10.03 Entire Agreement; Assignment......................................... 34
SECTION 10.04 Parties in Interest.................................................. 34
SECTION 10.05 Specific Performance................................................. 35
SECTION 10.06 Governing Law........................................................ 35
SECTION 10.07 Waiver of Jury Trial................................................. 35
SECTION 10.08 Headings............................................................. 35
SECTION 10.09 Counterparts......................................................... 35
SECTION 10.10 Execution............................................................ 35
SECTION 10.11 Disclosure Schedule.................................................. 35
ANNEX A Conditions to the Offer
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AGREEMENT AND PLAN OF MERGER, dated as of December 6, 2000 (this
"Agreement"), among NOKIA CORPORATION, a company organized under the laws of
the Republic of Finland ("Parent"), BLACKBIRD ACQUISITION, INC., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Purchaser"), and RAMP
NETWORKS, INC., a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have
each determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company upon the terms and subject to
the conditions set forth herein;
WHEREAS, in furtherance of such acquisition, it is proposed that Purchaser
shall make a cash tender offer (the "Offer") to acquire all the shares of
common stock, par value $0.001 per share, of the Company ("Shares") that are
issued and outstanding for $5.80 per Share (such amount, or any greater amount
per Share paid pursuant to the Offer, being the "Per Share Amount"), net to
the seller in cash, upon the terms and subject to the conditions of this
Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (the "Board") has
unanimously approved the making of the Offer and resolved to recommend that
holders of Shares tender their Shares pursuant to the Offer;
WHEREAS, also in furtherance of such acquisition, the Boards of Directors
of Parent, Purchaser and the Company have each approved this Agreement and
declared its advisability and approved the merger (the "Merger") of Purchaser
with and into the Company in accordance with the General Corporation Law of
the State of Delaware ("Delaware Law"), following the consummation of the
Offer and upon the terms and subject to the conditions set forth herein;
WHEREAS, Parent, Purchaser and certain stockholders of the Company (the
"Stockholders") have entered into Stockholder's Agreements, dated as of the
date hereof (collectively, the "Stockholder Agreements"), providing that,
among other things, the Stockholders will (i) tender their Shares into the
Offer, (ii) vote their Shares in favor of the Merger, if applicable, and (iii)
grant an option to Purchaser to purchase their Shares at the Per Share Amount,
in each case subject to the conditions set forth therein; and
WHEREAS, as a condition and an inducement to Parent and Purchaser entering
into this Agreement, concurrently with the execution and delivery of this
Agreement, Parent and certain key employees of the Company (the "Employees")
are entering into Employment Agreements (collectively, the "Employment
Agreements").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
(a) For purposes of this Agreement:
"Acquisition Proposal" means (i) any proposal or offer from any person
relating to any direct or indirect acquisition of (A) all or a substantial
part of the assets of the Company or of any Subsidiary or (B) over 20% of any
class of equity securities of the Company or of any Subsidiary; (ii) any
tender offer or exchange offer, as defined pursuant to the Exchange Act, that,
if consummated, would result in any person beneficially owning 20% or more of
any class of equity securities of the Company or any Subsidiary; (iii) any
merger, consolidation, business combination, sale of all or a substantial part
of the assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any Subsidiary, other than the
Transactions or (iv) any other similar transaction the consummation of which
would reasonably be expected to impede, interfere with, prevent or materially
delay the Transaction.
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"affiliate" of a specified person means a person who, directly or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified person.
"beneficial owner", with respect to any Shares, has the meaning ascribed to
such term under Rule 13d-3(a) of the Exchange Act.
"business day" means any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized to close in The City of New York.
"Company Owned Intellectual Property" means Intellectual Property owned by
the Company or a Subsidiary that is material to the business, financial
condition, or results of operations of the Company and the Subsidiaries as
currently conducted or contemplated to be conducted.
"Company Licensed Intellectual Property" means each item of Intellectual
Property licensed to the Company or a Subsidiary pursuant to a license that is
material to the business of the Company or the Subsidiaries as currently
conducted or contemplated to be conducted.
"Company Software" means Software (A) material to the operation of the
business of the Company or a subsidiary of the Company, including all computer
software and databases operated by the Company or a subsidiary of the Company
on its web sites or used by the Company or a subsidiary of the Company in
connection with processing customer orders, storing customer information, or
storing or archiving data, and (B) owned, manufactured, distributed, sold,
licensed or marketed by the Company or any subsidiary of the Company.
"Company Systems" shall mean all computer, hardware, Software, systems, and
equipment (including embedded microcontrollers in non-computer equipment)
embedded within or required to operate the current products of the Company and
the Subsidiaries, and/or material to or necessary for the Company and the
Subsidiaries to carry on their businesses as currently conducted.
"control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly, or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise;
"Environmental Laws" means any United States federal, state, local or non-
United States laws relating to (i) releases or threatened releases of
Hazardous Substances or materials containing Hazardous Substances; (ii) the
manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Substances or materials containing Hazardous Substances; or (iii)
pollution or protection of the environment, health, safety or natural
resources.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Company or any Subsidiary and which, together
with the Company or any Subsidiary, is treated as a single employer within the
meaning of Section 414(b), (c), (m) or (o) of the Code.
"Fully Diluted Basis" means after taking into account all Shares issuable
upon the conversion of any Company convertible securities or upon the exercise
of any vested options, warrants or rights of the Company.
"Hazardous Substances" means (i) those substances defined in and regulated
under the following United States federal statutes and their state
counterparts, as each may be amended from time to time, and all regulations
thereunder: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Atomic Energy Act, the Federal Insecticide, Fungicide, and
Rodenticide Act and the Clean Air Act; (ii) petroleum and petroleum products,
including crude oil and any fractions thereof; (iii) natural
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gas, synthetic gas, and any mixtures thereof; (iv) polychlorinated biphenyls,
asbestos and radon; and (v) any other contaminant, substance, material or
waste regulated by any Governmental Authority pursuant to any Environmental
Law.
"Intellectual Property" means (i) United States, non-United States, and
international patents, patent applications and invention registrations of any
type, (ii) trademarks, service marks, domain names, trade dress, logos, trade
names, corporate names and other source identifiers, and registrations and
applications for registration thereof, (iii) copyrightable works, copyrights,
and registrations and applications for registration thereof, (iv) Software,
(v) confidential and proprietary information, including trade secrets and
know-how, and (vi) rights of privacy, publicity and endorsement, and all other
rights associated therewith in any jurisdiction.
"knowledge of the Company" means the knowledge of any director or executive
officer of the Company and such knowledge that would be imputed to such
persons upon reasonable investigation.
"Licenses" mean (A) licenses of Intellectual Property by the Company to
third parties, (B) licenses of Intellectual Property by third parties to the
Company, and (C) agreements between the Company and third parties relating to
the development or use of Intellectual Property, the development or
transmission of data, or the use, modification, framing, linking
advertisement, or other practices with respect to Internet web sites.
"Material Adverse Effect" means, when used in connection with the Company
or any Subsidiary, any event, circumstance, change or effect that, when taken
together with any other events, circumstances, changes and effects occurring
after the date hereof that do not individually have a Material Adverse Effect
or any other circumstances that would, but for the fact that they do not
individually have a Material Adverse Effect, constitute a breach of any
representation or warranty made by the Company in this Agreement, is or is
reasonably likely to be materially adverse to the business, financial
condition, results of operations or prospects of the Company and the
Subsidiaries taken as a whole, except that none of the following shall be
deemed in themselves to constitute a Material Adverse Effect: (i) any change
in the market price or trading volume of the Shares; (ii) any change in
general economic conditions; (iii) any adverse change affecting the Company's
industry generally; or (iv) any transaction costs, taxes or integration costs
or any cancellations of or delays in customer orders, any reduction in sales
or revenues or any disruptions in supplier or distributor relationships that
result directly from the announcement, pendency or consummation of the Merger.
"person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),
trust, association or entity or government, political subdivision, agency or
instrumentality of a government.
"Software" means computer software, programs and databases in any form,
including Internet web sites, web content and links, all versions, updates,
corrections, enhancements, and modifications thereof, and all related
documentation.
"subsidiary" or "subsidiaries" of the Company, the Surviving Corporation,
Parent or any other person means an affiliate controlled by such person,
directly or indirectly, through one or more intermediaries.
"Superior Proposal" means any Acquisition Proposal on terms which the Board
determines, in its good faith judgment (after having received the advice of a
financial advisor of internationally recognized reputation), to be more
favorable to the Company's stockholders than the Offer and the Merger and for
which financing, to the extent required, is then committed or, in the good
faith judgment of the Board, reasonably likely to be obtained in a timely
manner.
"Taxes" shall mean any and all taxes, fees, levies, duties, tariffs,
imposts and other similar charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority or taxing authority,
including, without limitation: taxes or other charges on or with respect to
income, franchise, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net
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worth; taxes or other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value-added or gains taxes; license, registration and
documentation fees; and customers' duties, tariffs and similar charges.
(b) The following terms have the meaning set forth in the Sections set forth
below:
Location of
Defined Term Definition
------------ -------------
Action......................................................... (S)4.09
Affected Employees............................................. (S)7.06(a)
Agreement...................................................... Preamble
Blue Sky Laws.................................................. (S)4.05(b)
Board.......................................................... Recitals
Broadview...................................................... (S)2.02(a)
Certificate of Merger.......................................... (S)3.02
Certificates................................................... (S)3.09(b)
Code........................................................... (S)4.10(a)
Company........................................................ Preamble
Company Preferred Stock........................................ (S)4.03
Company Stock Options.......................................... (S)3.07(a)
Company Stock Option Plans..................................... (S)3.07(a)
Confidentiality Agreement...................................... (S)7.04(b)
Cut-Off Date................................................... (S)7.03(a)
Delaware Law................................................... Recitals
Disclosure Schedule............................................ (S)Article IV
Dissenting Shares.............................................. (S)3.08(a)
Effective Time................................................. (S)3.02
Environmental Permits.......................................... (S)4.16
ERISA.......................................................... (S)4.10(a)
ESPP........................................................... (S)3.07(c)
Exchange Act................................................... (S)2.01(a)
Exchange Ratio................................................. (S)3.07(a)
Existing D&O Policies.......................................... (S)4.19(d)
Expenses....................................................... (S)9.03(f)
Fairness Opinion............................................... (S)2.02(a)
Fee............................................................ (S)9.03(a)
GAAP........................................................... (S)4.07(b)
Governmental Authority......................................... (S)4.05(b)
HSR Act........................................................ (S)2.01(a)
IRS............................................................ (S)4.10(a)
Law............................................................ (S)4.05(a)
Liens.......................................................... (S)4.13(b)
Loan........................................................... (S)7.16
Material Contracts............................................. (S)4.18(a)
Merger......................................................... Recitals
Merger Consideration........................................... (S)2.01(a)
Minimum Condition.............................................. (S)2.01(a)
Multiemployer Plan............................................. (S)4.10(b)
Multiple Employer Plan......................................... (S)4.10(b)
Non-U.S. Benefit Plan.......................................... (S)4.10(h)
Offer.......................................................... Recitals
Offer Documents................................................ (S)2.01(b)
Offer to Purchase.............................................. (S)2.01(b)
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Location
of
Defined Term Definition
------------ ----------
Parent............................................................ Preamble
Parent ADSs....................................................... (S)3.07(a)
Parent Shares..................................................... (S)3.07(a)
Paying Agent...................................................... (S)3.09(a)
Permits........................................................... (S)4.06
Permitted Liens................................................... (S)4.13(b)
Per Share Amount.................................................. Recitals
Plans............................................................. (S)4.10(a)
Proprietary Names................................................. (S)4.14(a)
Proxy Statement................................................... (S)7.02
Purchaser......................................................... Preamble
Replacement Option................................................ (S)3.07(a)
Schedule 14D-9.................................................... (S)2.02(b)
Schedule TO....................................................... (S)2.01(b)
SEC............................................................... (S)2.01(a)
SEC Reports....................................................... (S)4.07(a)
September Balance Sheet........................................... (S)4.07(c)
Securities Act.................................................... (S)4.07(a)
Shares............................................................ Recitals
Stockholder Agreements............................................ Recitals
Stockholders...................................................... Recitals
Stockholders' Meeting............................................. (S)7.01(a)
Subsidiary........................................................ (S)4.01(a)
Surviving Corporation............................................. (S)3.03
Tail Period....................................................... (S)7.08(b)
Transactions...................................................... (S)2.02(a)
ARTICLE II
THE OFFER
SECTION 2.01 The Offer. (a) Provided that this Agreement shall not have
been terminated in accordance with Section 9.01 hereof and none of the events
set forth in clause (a) through (i) of Annex A hereto shall have occurred or
be continuing, Purchaser shall commence (within the meaning of Rule 14d-2(a)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) the
Offer as promptly as reasonably practicable after the date hereof, but in no
event later than 10 business days after the initial public announcement of
Purchaser's intention to commence the Offer. The obligation of Purchaser to
accept for payment Shares tendered pursuant to the Offer shall be subject to
the condition (the "Minimum Condition") that at least the number of Shares
that shall constitute fifty-one percent (51%) of the then outstanding Shares
on a Fully Diluted Basis shall have been validly tendered and not withdrawn
prior to the expiration of the Offer and also shall be subject to the
satisfaction of each of the other conditions set forth in Annex A hereto.
Purchaser expressly reserves the right to waive any such condition, to
increase the price per Share payable in the Offer, and to make any other
changes in the terms and conditions of the Offer; provided, however, that
without the Company's prior written consent, Purchaser shall not waive the
Minimum Condition and no change may be made (i) which decreases the price per
Share payable in the Offer, or (ii) which reduces the maximum number of Shares
to be purchased in the Offer, or (iii) which changes the form of consideration
payable in the Offer, or (iv) which imposes conditions to the Offer in
addition to those set forth in Annex A hereto, or (v) which, except as
provided by Law or in the following sentence, extends the Offer.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (i) extend the Offer beyond the scheduled expiration date, which
shall be 20 business days following the commencement of the Offer, if, at the
scheduled expiration of the Offer, any of the conditions to Purchaser's
obligation to accept
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Shares for payment, shall not be satisfied or waived, (ii) extend the Offer
for any period required by any rule, regulation or interpretation of the
Securities and Exchange Commission (the "SEC"), or the staff thereof,
applicable to the Offer, or (iii) extend (or re-extend) the Offer for an
aggregate period of not more than 10 business days beyond the latest
applicable date that would otherwise be permitted under clause (i) or (ii) of
this sentence, if, as of such date, all of the conditions to Purchaser's
obligations to accept for payment Shares are satisfied or waived, but there
shall not have been validly tendered and not withdrawn pursuant to the Offer
that number of Shares necessary to permit the Merger to be effected without a
meeting of the Company's stockholders in accordance with Delaware Law . In
addition, if, on the then applicable expiration date of the Offer, the sole
condition remaining unsatisfied is the failure of the waiting period under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act") or under any applicable material non-United States statutes or
regulations to have expired or been terminated, then Purchaser shall extend
the Offer from time to time until the earlier to occur of (i) February 15,
2001 and (ii) the fifth business day after the expiration or termination of
the applicable waiting period under the HSR Act or any applicable material
non-United States statutes or regulation. Parent and Purchaser further agree
that in the event of the failure of one or more of the conditions to the Offer
to be either satisfied or waived on any date on which the Offer would have
otherwise expired, Purchaser shall, if such condition or conditions could
reasonably be satisfied by February 15, 2001 and for so long as such condition
or conditions continue to reasonably be expected to be satisfied by February
15, 2001, extend the Offer until such condition or conditions shall have been
satisfied or waived; provided, however, that Purchaser shall not be required
to extend the Offer pursuant to this sentence beyond February 15, 2001. The
Per Share Amount shall, subject to applicable withholding of taxes, be net to
the seller in cash, upon the terms and subject to the conditions of the Offer.
Purchaser shall pay for all Shares validly tendered and not withdrawn promptly
following the acceptance of Shares for payment pursuant to the Offer.
Notwithstanding the immediately preceding sentence and subject to the
applicable rules of the SEC and the terms and conditions of the Offer,
Purchaser expressly reserves the right to delay payment for Shares in order to
comply in whole or in part with applicable laws. Any such delay shall be
effected in compliance with Rule 14e-1(c) under the Exchange Act. If the
payment equal to the Per Share Amount in cash (the "Merger Consideration") is
to be made to a person other than the person in whose name the surrendered
certificate formerly evidencing Shares is registered on the stock transfer
books of the Company, it shall be a condition of payment that the certificate
so surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the certificate
surrendered, or shall have established to the satisfaction of Purchaser that
such taxes either have been paid or are not applicable.
(b) As promptly as reasonably practicable on the date of commencement of
the Offer, Purchaser shall file with the SEC a Tender Offer Statement on
Schedule TO (together with all amendments and supplements thereto, the
"Schedule TO") with respect to the Offer. The Schedule TO shall contain or
shall incorporate by reference an offer to purchase (the "Offer to Purchase")
and forms of the related letter of transmittal and any related summary
advertisement (the Schedule TO, the Offer to Purchase and such other
documents, together with all supplements and amendments thereto, being
referred to herein collectively as the "Offer Documents"). Parent, Purchaser
and the Company agree to correct promptly any information provided by any of
them for use in the Offer Documents if and to the extent that such information
shall have become false or misleading, and Parent and Purchaser further agree
to take all steps necessary to cause the Schedule TO, as so corrected, to be
filed with the SEC, and the other Offer Documents, as so corrected, to be
disseminated to holders of Shares, in each case as and to the extent required
by applicable federal securities laws. The Company and its counsel shall be
given a reasonable opportunity to review and comment upon the Offer Documents
(and shall provide any comments thereon as soon as practicable) prior to the
filing thereof with the SEC or dissemination to stockholders of the Company.
In addition, Parent and Purchaser shall provide the Company and its counsel in
writing with any comments Parent or Purchaser or their counsel may receive
from the SEC or its staff with respect to the Schedule TO promptly after
receipt of such comments and with copies of any written responses by Parent or
Purchaser or their counsel.
SECTION 2.02 Company Action. (a) The Company hereby approves of and
consents to the Offer and represents that (i) the Board, at a meeting duly
called and held on December 6, 2000, has unanimously
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(A) determined that this Agreement and the transactions contemplated hereby,
including each of the Offer and the Merger, and the transactions contemplated
by the Stockholder Agreements (collectively, the "Transactions"), are fair to,
and in the best interests of, the holders of Shares, (B) approved, adopted and
declared advisable this Agreement and the Transactions (such approval and
adoption having been made in accordance with Delaware Law, including, without
limitation, Section 203 thereof) and (C) resolved to recommend that the
holders of Shares accept the Offer and tender Shares pursuant to the Offer,
and, if required under Delaware Law, approve and adopt this Agreement and the
Transactions and (ii) Broadview International LLC ("Broadview") has delivered
to the Board a written opinion that the consideration to be received by the
holders of Shares pursuant to each of the Offer and the Merger is fair to the
holders of Shares from a financial point of view (the "Fairness Opinion"). The
Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board described in the immediately preceding sentence,
and the Company shall not withdraw or modify such recommendation in any manner
adverse to Purchaser or Parent except as provided in Section 7.05(b). The
Company has been advised by its directors and executive officers that they
intend either to tender all Shares beneficially owned by them to Purchaser
pursuant to the Offer and, if applicable, to sell such Shares to the Purchaser
pursuant to their respective Stockholder Agreement, or to vote such Shares in
favor of the approval and adoption by the stockholders of the Company of this
Agreement and the Transactions.
(b) As promptly as reasonably practicable on the date of commencement of
the Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D9 with respect to the Offer (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing the
Fairness Opinion and, except as provided in Section 7.05(b), the
recommendation of the Board described in Section 2.02(a), and shall
disseminate the Schedule 14D9 to the extent required by Rule 14d-9 promulgated
under the Exchange Act, and any other applicable federal securities laws. The
Company, Parent and Purchaser agree to correct promptly any information
provided by any of them for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading, 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 disseminated to holders of Shares, in
each case as and to the extent required by applicable federal securities laws.
Parent, Purchaser and their counsel shall be given a reasonable opportunity to
review and comment upon the Schedule 14D-9 (and shall provide any comments
thereon as soon as practicable) prior to the filing thereof with the SEC. In
addition, the Company shall provide Parent, Purchaser and their 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 receipt of such
comments and with copies of any written responses by the Company or its
counsel.
(c) The Company shall, or shall cause its transfer agent to, promptly
furnish Purchaser with mailing labels containing the names and addresses of
all record holders of Shares and with security position listings of Shares
held in stock depositories, each as of a recent date, together with all other
available listings and computer files containing names, addresses and security
position listings of record holders and beneficial owners of Shares. The
Company shall promptly furnish Purchaser with such additional information,
including, without limitation, updated listings and computer files of
stockholders, mailing labels and security position listings, and such other
assistance in disseminating the Offer Documents to holders of Shares as Parent
or Purchaser may reasonably request. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Offer or the
Merger, Parent and Purchaser and their agents shall hold in confidence the
information contained in such labels, listings and files, shall use such
information only in connection with the Transactions, and, if this Agreement
shall be terminated in accordance with Section 9.01, shall deliver and will
use their reasonable best efforts to cause their agents to deliver to the
Company all copies of such information then in their possession or control.
ARTICLE III
THE MERGER
SECTION 3.01 The Merger. Upon the terms and subject to the conditions set
forth in Article VIII, and in accordance with Delaware Law, Purchaser shall be
merged with and into the Company.
7
SECTION 3.02 Effective Time; Closing. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VIII, the parties hereto shall cause the Merger to be consummated by filing
this Agreement or a certificate of merger or certificate of ownership and
merger (in either case, the "Certificate of Merger") with the Secretary of
State of the State of Delaware, in such form as is required by, and executed
in accordance with, the relevant provisions of Delaware Law (the date and time
of such filing being the "Effective Time"). Prior to such filing, a closing
shall be held at the offices of Shearman & Sterling, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the parties
shall agree, for the purpose of confirming the satisfaction or waiver, as the
case may be, of the conditions set forth in Article VIII hereto.
SECTION 3.03 Effect of the Merger. As a result of the Merger, the separate
corporate existence of Purchaser shall cease and the Company shall continue as
the surviving corporation of the Merger (the "Surviving Corporation"). At the
Effective Time, the effect of the Merger shall be as provided in the
applicable provisions of Delaware Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property,
rights, privileges, powers and franchises of the Company and Purchaser shall
vest in the Surviving Corporation, and all debts, liabilities, obligations,
restrictions, disabilities and duties of the Company and Purchaser shall
become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation.
SECTION 3.04 Certificate of Incorporation; By-laws. (a) At the Effective
Time, subject to Section 7.07(a), the Certificate of Incorporation of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation; provided,
however, that, at the Effective Time, Article I of the Certificate of
Incorporation of the Surviving Corporation shall be amended to read as
follows: "The name of the corporation is Nokia RNI Acquisition, Inc."
(b) Unless otherwise determined by Parent prior to the Effective Time, and
subject to Section 7.07(a), the By-laws of Purchaser, as in effect immediately
prior to the Effective Time, shall be the By-laws of the Surviving Corporation
at the Effective Time until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such By-laws.
SECTION 3.05 Directors and Officers. At the Effective Time, the directors
of Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and By-laws of the Surviving Corporation, and
the officers of the Company immediately prior to the Effective Time shall be
the initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified or until
their earlier death, resignation or approval.
SECTION 3.06 Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Purchaser, the Company or the
holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the Effective
Time (other than any Shares to be canceled pursuant to Section 3.06(b) and any
Dissenting Shares (as hereinafter defined)) shall be canceled and shall be
converted automatically into the right to receive an amount equal to the
Merger Consideration payable, without interest, to the holder of such Share,
upon surrender, in the manner provided in Section 3.09, of the certificate
that formerly evidenced such Share;
(b) Each Share held in the treasury of the Company and each Share owned by
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent
or of the Company immediately prior to the Effective Time shall be canceled
without any conversion thereof and no payment or distribution shall be made
with respect thereto; and
(c) Each share of common stock, par value $0.01 per share, of Purchaser
issued and 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.
8
SECTION 3.07 Employee Stock Options; Employee Stock Purchase Plan. (a) All
options (the "Company Stock Options") outstanding, whether or not exercisable
and whether or not vested, at the Effective Time under the Company's 2000 Non-
Statutory Stock Option Plan, the 1999 Stock Incentive Plan and the 1995 Stock
Plan (collectively, the "Company Stock Option Plans") shall be canceled as of
the Effective Time and the Company Stock Option Plans shall be terminated. As
of the Effective Time, each canceled Company Stock Option that has an exercise
price that is equal to or less than the Merger Consideration shall be replaced
with an option (a "Replacement Option") to purchase Parent American Depositary
Shares ("Parent ADSs"), each of which represents the right to receive one
share, nominal value ?0.06 per share, of Parent ("Parent Shares"), that will
be granted pursuant to the terms of the Parent Global Acquisition Equity Plan.
Each Replacement Option shall be exercisable for, and represent the right to
acquire, that whole number of Parent ADSs (rounded down to the nearest whole
Parent ADS) equal to the number of Shares subject to such Company Stock Option
multiplied by a fraction the numerator of which shall be equal to the Merger
Consideration and the denominator of which shall be equal to average closing
price of Parent ADSs on the New York Stock Exchange, as reported each day on
the Bloomberg system under NOK UN Equity, for the five (5) business day period
ending on (and including) the business day prior to the Effective Time (such
fraction (rounded down to the sixth decimal place) being hereinafter referred
to as the "Exchange Ratio") and the exercise price per Parent ADSs shall be
the amount equal to the exercise price per share subject to such Company Stock
Option divided by the Exchange Ratio (rounded upward to the nearest full
cent). Except as provided in this and the preceding sentence, the terms of any
Replacement Option need not be equivalent to the terms of the corresponding
cancelled Company Stock Option; provided, however that the existing vesting
schedule of the Company Stock Options will not be adversely changed, except
that Replacement Options may vest on a quarterly basis rather than on a
monthly basis. No Replacement Options shall be granted in respect of Company
Stock Options that have an exercise price that exceeds the Merger
Consideration.
(b) As soon as practicable after the Effective Time, Parent shall deliver
to each holder of a Replacement Option an appropriate notice setting forth
such holder's rights pursuant thereto. Parent shall take all corporate action
necessary to reserve for issuance a sufficient number of Parent ADSs for
delivery upon exercise of Replacement Options pursuant to the terms set forth
in this Section 3.07. As soon as practicable, but in no event later than
thirty (30) days, after the Effective Time, the Parent ADSs subject to Company
Stock Options shall be covered by an effective registration statement on Form
S-8 (or any successor form) or another appropriate form. Prior to the
Effective Time, the Company shall take all necessary action to approve the
disposition of the Company Stock Options and the shares of Company Common
Stock in connection with the transactions contemplated by this Agreement to
the extent necessary to exempt such dispositions under Rule 16b-3 of the
Exchange Act.
(c) Effective as of the Effective Time, the Company shall take all actions
necessary to shorten any pending Purchase Period and Offering Period (as each
such term is defined in the Company's 1999 Employee Stock Purchase Plan (the
"ESPP")) and establish a New Purchase Date (as contemplated in Section 20(b)
of the ESPP) immediately prior to the Effective Time and to terminate the ESPP
as of the Effective Time, conditioned upon the consummation of the
transactions contemplated by this Agreement.
SECTION 3.08 Dissenting Shares. (a) Notwithstanding any provision of this
Agreement to the contrary, Shares that are issued and outstanding immediately
prior to the Effective Time and that are held by stockholders who shall have
properly exercised their appraisal rights for such Shares in accordance with
Section 262 of Delaware Law (collectively, the "Dissenting Shares") shall not
be converted into, or represent the right to receive, the Merger
Consideration. Such stockholders shall be entitled to receive payment of the
appraised value of such Shares held by them in accordance with the provisions
of such Section 262, except that all Dissenting Shares held by stockholders
who shall have failed to perfect or who effectively shall have withdrawn or
lost their rights to appraisal of such Shares under such Section 262 shall
thereupon be deemed to have been converted into, and to have become
exchangeable for, as of the Effective Time, the right to receive the Merger
Consideration, without any interest thereon, upon surrender, in the manner
provided in Section 3.09, of the certificate or certificates that formerly
evidenced such Shares.
9
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal received by the Company, withdrawals of such demands, and any other
instruments served pursuant to Delaware Law and received by the Company and
(ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under Delaware Law. The Company shall not, except
with the prior written consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle or settle any such demands.
SECTION 3.09 Surrender of Shares; Stock Transfer Books. (a) Prior to the
Effective Time, Purchaser shall designate a bank or trust company to act as
agent (the "Paying Agent") for the holders of Shares to receive the funds to
which holders of Shares shall become entitled pursuant to Section 3.06(a). At
or prior to the Effective Time, Purchaser shall deposit in trust with the
Paying Agent immediately available funds in an amount sufficient to pay the
Merger Consideration for all such Shares to the Company's stockholders as
contemplated by this Section 3.09. Such funds shall be invested by the Paying
Agent as directed by the Surviving Corporation.
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause to be mailed to each person who was, at the Effective Time, a holder of
record of Shares entitled to receive the Merger Consideration pursuant to
Section 3.06(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal, both in a form approved by Parent and the Company. Upon surrender
to the Paying Agent of a Certificate, together with such letter of
transmittal, duly completed and validly executed in accordance with the
instructions thereto, and such other documents as may be reasonably required
pursuant to such instructions, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration for each
Share formerly evidenced by such Certificate, and such Certificate shall then
be canceled. No interest shall accrue or be paid on the Merger Consideration
payable upon the surrender of any Certificate for the benefit of the holder of
such Certificate. If the payment equal to the Merger Consideration is to be
made to a person other than the person in whose name the surrendered
certificate formerly evidencing Shares is registered on the stock transfer
books of the Company, it shall be a condition of payment that the certificate
so surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered, or shall have established to the satisfaction of Purchaser that
such taxes either have been paid or are not applicable. Each of the Surviving
Corporation, Parent and the Paying Agent shall be entitled to deduct and
withhold from any amounts otherwise payable pursuant to this Agreement to any
holder of a Certificate such amounts as it is required to deduct and withhold
with respect to the making of such payment under the Code, or any provisions
of Law. To the extent that amounts are so withheld, such withheld amounts
shall be treated for purposes of this Agreement as having been paid to the
holder of a Certificate in respect of which such deduction and withholding was
made by the Surviving Corporation, Parent or the Paying Agent, as the case may
be.
(c) At any time following the first anniversary of the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds which had been made available to the Paying Agent and not
disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and the Paying Agent's duties shall terminate. Thereafter,
such holders shall be entitled to look to the Surviving Corporation (subject
to abandoned property, escheat and other similar laws) only as general
creditors thereof with respect to any Merger Consideration that may be payable
upon due surrender of the Certificates held by them. Notwithstanding the
foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Share for any Merger Consideration delivered in
respect of such Share to a public official pursuant to any abandoned property,
escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the stock
transfer books of the Company shall be closed and thereafter there shall be no
further registration of transfers of Shares on the records of the Company.
From and after the Effective Time, the holders of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by applicable
law.
10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to such exceptions as are specifically disclosed in an
appropriately-referenced section of the Disclosure Schedule (the Disclosure
Schedule) that has been prepared by the Company and delivered to Parent and
Purchaser prior to the execution and delivery of this Agreement (subject to
Section 10.11), As an inducement to Parent and the Purchaser to enter into
this Agreement, the Company hereby represents and warrants to Parent and
Purchaser that:
SECTION 4.01 Organization and Qualification; Subsidiaries. (a) Each of the
Company and each subsidiary of the Company ("Subsidiary") is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted. The
Company and each Subsidiary is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary, except
for such failures to be so qualified or licensed and in good standing that
would not prevent or materially delay consummation of the Offer or the Merger
or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) A true and complete list of all the Subsidiaries, together with the
jurisdiction of incorporation of each Subsidiary and the percentage of the
outstanding capital stock of each Subsidiary owned by the Company and each
other Subsidiary, is set forth in Section 4.01(b) of the Disclosure Schedule.
Except as disclosed in Section 4.01(b) of the Disclosure Schedule, the Company
does not directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for any equity or
similar interest in, any corporation, partnership, joint venture or other
business association or entity.
SECTION 4.02 Certificate of Incorporation and By-laws. The Company has
heretofore furnished to Parent a complete and correct copy of the Certificate
of Incorporation and the By-laws or equivalent organizational documents, each
as amended to date, of the Company and each Subsidiary. Such Certificates of
Incorporation, By-laws or equivalent organizational documents are in full
force and effect. Neither the Company nor any Subsidiary is in violation of
any of the provisions of its Certificate of Incorporation, By-laws or
equivalent organizational documents.
SECTION 4.03 Capitalization. The authorized capital stock of the Company
consists of 100,000,000 Shares and 5,000,000 shares of preferred stock
("Company Preferred Stock"). As of December 1, 2000, (a) 21,760,920 Shares are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable, (b) no Shares are held in the treasury of the Company, (c) no
Shares are held by the Subsidiaries, and (d) 4,426,623 Shares are reserved for
future issuance pursuant to outstanding employee stock options or stock
incentive rights granted pursuant to the Company Stock Option Plans. As of the
date hereof, no shares of Company Preferred Stock are issued and outstanding.
Except as set forth in this Section 4.03 or in Section 4.03 of the Disclosure
Schedule and except as contemplated under the Stockholder Agreements, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock
of the Company or any Subsidiary or obligating the Company or any Subsidiary
to issue or sell any shares of capital stock of, or other equity interests in,
the Company or any Subsidiary. Section 4.03 of the Disclosure Schedule sets
forth the following information with respect to each Company Stock Option
outstanding on the date of this Agreement: (i) the name and address of the
option holder; (ii) the particular plan pursuant to which such Company Stock
Option was granted; (iii) the number of shares of Company Common Stock subject
to such Company Stock Option; (iv) the exercise price of such Company Stock
Option; (v) the date on which such Company Stock Option was granted; (vi) the
applicable vesting schedule; (vi) the date on which such Company Stock Option
expires; and (vii) whether the exercisability of such option will be
11
accelerated in any way by the transactions contemplated by this Agreement. All
Shares subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. There
are no outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Shares or any capital stock of any
Subsidiary or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Subsidiary or any other
person. Each outstanding share of capital stock of each Subsidiary is duly
authorized, validly issued, fully paid and nonassessable, and each such share
is owned by the Company or another Subsidiary free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or any Subsidiary's voting rights,
charges and other encumbrances of any nature whatsoever.
SECTION 4.04 Authority Relative to this Agreement. The Company has all
necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the Transactions. The
execution and delivery of this Agreement by the Company and the consummation
by the Company of the Transactions have been duly and validly authorized by
all necessary corporate action on the part of the Company, and no other
corporate proceedings on the part of the Company are necessary to authorize
this Agreement or to consummate the Transactions (other than, with respect to
the Merger, the approval and adoption of this Agreement by the holders of a
majority of the then-outstanding Shares, if and to the extent required by
applicable law, and the filing and recordation of appropriate merger documents
as required by Delaware Law). This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by ▇▇▇▇▇▇ and Purchaser, constitutes legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
its terms.
SECTION 4.05 No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by the Company do not, and the performance of
this Agreement and the consummation of the Transactions by the Company will
not, except as set forth in Section 4.05(a) of the Disclosure Schedule,
(i) conflict with or violate the Certificate of Incorporation or By-laws or
equivalent organizational documents of the Company or any Subsidiary, (ii)
conflict with or violate any United States federal, state, county or local,
or, to the Company's knowledge, any foreign statute, law, ordinance,
regulation, rule, code, executive order, injunction, judgment, decree or other
order ("Law") applicable to the Company or any Subsidiary or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) result in any breach of or constitute a default (or an event which, with
notice or lapse of time or both, would become a default) under, or give to
others any right of termination, amendment, acceleration or cancellation of,
or result in the creation of a lien or other encumbrance on any property or
asset of the Company or any Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults or other occurrences which
would not prevent or materially delay consummation of the Offer or the Merger
or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement by the Company will not, except as set forth
in Section 4.05(b) of the Disclosure Schedule, require any consent, approval,
authorization or permit of, or filing with or notification to, any United
States federal, state, county or local or, to the Company's knowledge, any
foreign government, governmental, regulatory or administrative authority,
agency, instrumentality or commission or any court, tribunal, or judicial or
arbitral body (a "Governmental Authority"), except (i) for applicable
requirements, if any, of the Exchange Act, state securities or "blue sky" laws
("Blue Sky Laws") and state takeover laws, the pre-merger notification
requirements of the HSR Act and the termination of the waiting periods
thereunder, and filing and recordation of appropriate merger documents as
required by Delaware Law and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or materially delay consummation of the Offer
or the Merger, or otherwise prevent or materially delay the Company from
performing its obligations under this Agreement, and would not, individually
or in the aggregate, have a Material Adverse Effect.
12
SECTION 4.06 Permits; Compliance. Except as set forth in Section 4.06 of
the Disclosure Schedule, each of the Company and the Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Authority necessary for each of the Company or the
Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Permits"), except where the
failure to have, or the suspension or cancellation of, any of the Permits
would not prevent or materially delay consummation of the Offer or the Merger
or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth in Section 4.06
of the Disclosure Schedule, as of the date hereof, no suspension or
cancellation of any of the Permits is pending or, to the knowledge of the
Company, threatened, except where the failure to have, or the suspension or
cancellation of, any of the Permits would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially
delay the Company from performing its obligations under this Agreement and
would not, individually or in the aggregate, have a Material Adverse Effect.
Except as set forth in Section 4.06 of the Disclosure Schedule, neither the
Company nor any Subsidiary is in conflict with, or in default, breach or
violation of, (a) any Law applicable to the Company or any Subsidiary or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (b) any note, bond, mortgage, indenture, contract, agreement,
lease, license, Permit, franchise or other instrument or obligation to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any property or asset of the Company or any Subsidiary is bound,
except for any such conflicts, defaults, breaches or violations that would not
prevent or materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not, individually or in the
aggregate, have a Material Adverse Effect.
SECTION 4.07 SEC Filings; Financial Statements. (a) The Company has filed
all forms, reports and documents required to be filed by it with the SEC on
and since June 22, 1999 , including (i) its Annual Report on Form 10-K for the
fiscal year ended December 31, 1999, (ii) its Quarterly Reports on Form 10-Q
for the periods ended March 31, 2000, June 30, 2000 and September 30, 2000,
(iii) all proxy statements relating to the Company's meetings of stockholders
(whether annual or special) held since June 22, 1999 and (iv) all other forms,
reports and other registration statements (other than Quarterly Reports on
Form 10-Q not referred to in clause (ii) above) filed by the Company with the
SEC on or since June 22, 1999 (the forms, reports and other documents referred
to in clauses (i), (ii), (iii) and (iv) above being, collectively, the "SEC
Reports"). The SEC Reports (i) were prepared in accordance with either the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and the rules and regulations
promulgated thereunder, and (ii) did not, at the time they were filed, or, if
amended, as of the date of such amendment, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. No Subsidiary is
required to file any form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the SEC Reports was prepared in accordance
with United States generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto, or in the case of unaudited interim financial
statements, as may be permitted by the SEC on Form 10-Q under the Exchange
Act) and each fairly presents, in all material respects, the consolidated
financial position, results of operations and cash flows of the Company and
its consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of the unaudited
interim financial statements to normal year-end adjustments, that have not
been and are not expected to be material in amount).
(c) Except as and to the extent set forth on the consolidated balance sheet
of the Company and the consolidated Subsidiaries as at September 30, 2000,
including the notes thereto (the "September Balance Sheet"), neither the
Company nor any Subsidiary has any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise), except for liabilities
and obligations incurred in the ordinary course of
13
business consistent with past practice since September 30, 2000, and which
would not prevent or materially delay consummation of the Offer or the Merger
or otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not, individually or in the
aggregate, have a Material Adverse Effect.
(d) The Company has heretofore furnished to Parent complete and correct
copies of all amendments and modifications that have not been filed by the
Company with the SEC to all agreements, documents and other instruments that
previously had been filed by the Company with the SEC and are currently in
effect.
SECTION 4.08 Absence of Certain Changes or Events. Since September 30,
2000, except as set forth in Section 4.08 of the Disclosure Schedule, or as
expressly contemplated by this Agreement, (a) the Company and the Subsidiaries
have conducted their businesses only in the ordinary course and in a manner
consistent with past practice, (b) there has not been any Material Adverse
Effect, and (c) none of the Company or any Subsidiary has taken any action
that, if taken after the date of this Agreement, would constitute a breach of
any of the covenants set forth in Section 6.01.
SECTION 4.09 Absence of Litigation. Except as set forth in Section 4.09 of
the Disclosure Schedule, there is no litigation, suit, claim, action,
proceeding or investigation (an "Action") pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary, or any property or
asset of the Company or any Subsidiary, before any Governmental Authority that
(a) would have, individually or in the aggregate, a Material Adverse Effect or
(b) seeks to materially delay or prevent the consummation of any Transaction.
Neither the Company nor any Subsidiary nor any property or asset of the
Company or any Subsidiary is subject to any continuing order of, consent
decree, settlement agreement or similar written agreement with, or, to the
knowledge of the Company, continuing investigation by, any Governmental
Authority, or any order, writ, judgment, injunction, decree, determination or
award of any Governmental Authority that would prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially
delay the Company from performing its obligations under this Agreement or
would have, individually or in the aggregate, a Material Adverse Effect.
SECTION 4.10 Employee Benefit Plans. (a) Section 4.10(a) of the Disclosure
Schedule lists (i) all employee benefit plans (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and
all bonus, stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements, and all
employment, termination, severance or other contracts or agreements, whether
legally enforceable or not, to which the Company or any Subsidiary is a party,
with respect to which the Company or any Subsidiary has any obligation or
which are maintained, contributed to or sponsored by the Company or any
Subsidiary for the benefit of any current or former employee, officer or
director of the Company or any Subsidiary, (ii) each employee benefit plan for
which the Company or any Subsidiary could incur liability under Section 4069
of ERISA in the event such plan has been or were to be terminated, (iii) any
plan in respect of which the Company or any Subsidiary could incur liability
under Section 4212(c) of ERISA, and (iv) any contracts, arrangements or
understandings between the Company or any Subsidiary and any employee of the
Company or any Subsidiary including, without limitation, any contracts,
arrangements or understandings relating in any way to a sale of the Company or
any Subsidiary (collectively, the "Plans"). Each Plan is in writing and the
Company has furnished to Purchaser a true and complete copy of each Plan and
has delivered to Purchaser a true and complete copy of each material document,
if any, prepared in connection with each such Plan, including, without
limitation, (i) a copy of each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications, (iii) the most
recently filed Internal Revenue Service ("IRS") Form 5500, (iv) the most
recently received IRS determination letter for each such Plan, and (v) the
most recently prepared actuarial report and financial statement in connection
with each such Plan. Neither the Company nor any Subsidiary has any express or
implied commitment, whether legally enforceable or not, (i) to create, incur
liability with respect to or cause to exist any other employee benefit plan,
program or arrangement, (ii) to enter into any contract or agreement to
provide compensation or benefits to any individual, or (iii) to modify, change
or terminate any Plan, other than with respect to a modification, change or
termination required by ERISA or the Internal Revenue Code of 1986, as amended
(the "Code").
14
(b) None of the Plans is a multiemployer plan (within the meaning of
Section 3(37) or 4001(a)(3) of ERISA) (a "Multiemployer Plan") or a single
employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for
which the Company or any Subsidiary could incur liability under Section 4063
or 4064 of ERISA (a "Multiple Employer Plan"). None of the Plans provides for
or promises retiree medical, disability or life insurance benefits to any
current or former employee, officer or director of the Company or any
Subsidiary (other than as required under Section 4980B of the Code or Part 6
of Subtitle B of Title I of ERISA or similar state law).
(c) Each Plan is now and always has been operated in all material respects
in accordance with its terms and the requirements of all applicable Laws
including, without limitation, ERISA and the Code. The Company and the
Subsidiaries have performed all material obligations required to be performed
by them under, are not in any material respect in default under or in
violation of, and have no knowledge of any default or violation by any party
to, any Plan. No Action is pending or, to the knowledge of the Company,
threatened with respect to any Plan (other than claims for benefits in the
ordinary course) and no fact or event exists that could reasonably be expected
to give rise to any such Action.
(d) Each Plan that is intended to be qualified under Section 401(a) of the
Code or Section 401(k) of the Code has timely received a favorable
determination letter from the IRS covering all of the provisions applicable to
the Plan for which determination letters are currently available that the Plan
is so qualified and each trust established in connection with any Plan which
is intended to be exempt from federal income taxation under Section 501(a) of
the Code has received a determination letter from the IRS that it is so
exempt, or there is time remaining in which to apply for such favorable
determination letter within the remedial amendment period under Code Section
401(b) and the IRS regulations and pronouncements thereunder, or the Company
may rely on an opinion letter issued with respect to a standardized prototype
plan adopted in accordance with the procedures for such reliance, and to the
knowledge of the Company no fact or event has occurred since the date of such
determination letter or letters from the IRS to adversely affect the qualified
status of any such Plan or the exempt status of any such trust.
(e) There has not been any prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code and not exempt under Section
408 of ERISA or Section 4975 of the Code) with respect to any Plan. Neither
the Company nor any Subsidiary has incurred any liability under, arising out
of or by operation of Title IV of ERISA (other than liability for premiums to
the Pension Benefit Guaranty Corporation arising in the ordinary course),
including, without limitation, any liability in connection with (i) the
termination or reorganization of any employee benefit plan subject to Title IV
of ERISA, or (ii) the withdrawal from any Multiemployer Plan or Multiple
Employer Plan, and no fact or event exists which could reasonably be expected
to give rise to any such liability. Neither the Company nor any Subsidiary has
incurred any liability for any penalty or tax arising under Section 4971,
4972, 4980, 4980B or 6652 of the Code or any liability under Section 502 of
ERISA, and no fact or event exists that could give rise to any such liability.
No complete or partial termination has occurred within the five-years
preceding the date hereof with respect to any Plan. None of the assets of the
Company or any Subsidiary is the subject of any lien arising under Section
302(f) of ERISA or Section 412(n) of the Code. Neither the Company nor any
Subsidiary has been required to post any security under Section 307 of ERISA
or Section 401(a)(29) of the Code. No fact or event exists that could give
rise to such lien or requirement to post any such security.
(f) All contributions, premiums or payments required to be made with
respect to any Plan have been made on or before their due dates. Except as set
forth in Section 4.10(f) of the Disclosure Schedule, all such contributions
(other than excess contributions distributed pursuant to Code Section
401(k)(8) or excess aggregate contributions distributed pursuant to Code
Section 401(m)(6)) have been fully deducted for income tax purposes and no
such deduction has been challenged or disallowed by any Governmental Authority
and no fact or event exists which could reasonably be expected to give rise to
any such challenge or disallowance
(g) Except as set forth in Section 4.10(g) at the Disclosure Schedule, all
directors, officers, management employees, and technical and professional
employees of the Company and the Subsidiaries are under written
15
obligation to the Company and the Subsidiaries to maintain in confidence all
confidential or proprietary information acquired by them in the course of
their employment and to assign to the Company and the Subsidiaries all
inventions made by them within the scope of their employment during such
employment and for a reasonable period thereafter.
(h) In addition to the foregoing, with respect to each Plan that is not
subject to United States law (a "Non-U.S. Benefit Plan"):
(i) all employer and employee contributions to each Non-U.S. Benefit
Plan required by law or by the terms of such Non-U.S. Benefit Plan have
been made, or, if applicable, accrued in accordance with normal accounting
practices, and a pro rata contribution for the period prior to and
including the date of this Agreement has been made or accrued;
(ii) the fair market value of the assets of each funded Non-U.S. Benefit
Plan, the liability of each insurer for any Non-U.S. Benefit Plan funded
through insurance or the book reserve established for any Non-U.S. Benefit
Plan, together with any accrued contributions, is sufficient to procure or
provide for the benefits determined on any ongoing basis (actual or
contingent) accrued to the date of this Agreement with respect to all
current and former participants under such Non-U.S. Benefit Plan according
to the actuarial assumptions and valuations most recently used to determine
employer contributions to such Non-U.S. Benefit Plan, and no Transaction
shall cause such assets or insurance obligations to be less than such
benefit obligations; and
(iii) each Non-U.S. Benefit Plan required to be registered has been
registered and has been maintained in good standing with applicable
regulatory authorities. Each Non-U.S. Benefit Plan is now and always has
been operated in full compliance with all applicable non-United States
laws.
(i) Except as set forth in Section 4.10(i) of the Disclosure Schedule, the
consummation of the transactions contemplated by this Agreement will not,
either alone or in combination with another event, (i) entitle any current or
former employee, officer or director of the Company or any Subsidiary to
severance pay, unemployment compensation or any other payment, (ii) accelerate
the time of payment or vesting, or increase the amount of compensation due any
such employee, officer or director (except as required under Code Section
411(d)(3)), or (iii) fail to be deductible for federal income tax purposes by
virtue of Section 280G of the Code.
SECTION 4.11 Labor and Employment Matters. (a) Except as set forth in
Section 4.11 of the Disclosure Schedule, (a) there are no controversies
pending or, to the knowledge of the Company, threatened between the Company or
any Subsidiary and any of their respective employees; (b) neither the Company
nor any Subsidiary is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by the Company or any
Subsidiary, nor, to the knowledge of the Company, are there any activities or
proceedings of any labor union to organize any such employees; (c) neither the
Company nor any Subsidiary has in any material respect breached or otherwise
failed to comply with any provision of any such agreement or contract, and
there are no grievances outstanding against the Company or any Subsidiary
under any such agreement or contract; (d) there are no unfair labor practice
complaints pending against the Company or any Subsidiary before the National
Labor Relations Board or any current union representation questions involving
employees of the Company or any Subsidiary; and (e) there is no strike,
slowdown, work stoppage or lockout, or, to the knowledge of the Company,
threat thereof, by or with respect to any employees of the Company or any
Subsidiary.
(b) The Company and the Subsidiaries are in compliance with all applicable
laws relating to the employment of labor, including those related to wages,
hours, immigration and naturalization, collective bargaining and the payment
and withholding of taxes and other sums as required by the appropriate
Governmental Authority and has withheld and paid to the appropriate
Governmental Authority or are holding for payment not yet due to such
Governmental Authority all amounts required to be withheld from employees of
the Company or any Subsidiary and are not liable for any arrears of wages,
taxes, penalties or other sums for failure to comply with any of the
foregoing. The Company and the Subsidiaries have paid in full to all employees
or adequately accrued for in accordance with GAAP consistently applied all
wages, salaries, commissions,
16
bonuses, benefits and other compensation due to or on behalf of such employees
and there is no claim with respect to payment of wages, salary or overtime pay
that has been asserted or is now pending or threatened before any Governmental
Authority with respect to any persons currently or formerly employed by the
Company or any Subsidiary. Neither the Company nor any Subsidiary is a party
to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices. There is
no charge or proceeding with respect to a violation of any occupational safety
or health standards that has been asserted or is now pending or threatened
with respect to the Company. There is no charge of discrimination in
employment or employment practices, for any reason, including, without
limitation, age, gender, race, religion or other legally protected category,
which has been asserted or is now pending or, to the Company's knowledge,
threatened before the United States Equal Employment Opportunity Commission,
or any other Governmental Authority in any jurisdiction in which the Company
or any Subsidiary have employed or employ any person.
SECTION 4.12 Offer Documents; Schedule 14D-9; Proxy Statement. Neither the
Schedule 14D-9 nor any information supplied by the Company for inclusion in
the Offer Documents shall, at the times the Schedule 14D-9, the Offer
Documents or any amendments or supplements thereto are filed with the SEC or
are first published, sent or given to stockholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Schedule 14D-9 shall comply in all material respects
as to form with the requirements of the Exchange Act and the rules and
regulations thereunder.
SECTION 4.13 Property and Leases. (a) The Company and the Subsidiaries have
sufficient title to all their properties and assets to conduct their
respective businesses as currently conducted or as contemplated to be
conducted, with only such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect.
(b) Section 4.13(b) of the Disclosure Schedule sets forth a true and
complete list of all real property owned or leased by the Company or any
Subsidiary. Each parcel of real property owned or leased by the Company or any
Subsidiary (i) is owned or leased free and clear of all mortgages, pledges,
liens, security interests, conditional and installment sale agreements,
encumbrances, charges or other claims of third parties of any kind, including,
without limitation, any easement, right of way or other encumbrance to title,
or any option, right of first refusal, or right of first offer (collectively,
"Liens"), other than (A) Liens for current taxes and assessments not yet past
due, (B) inchoate mechanics' and materialmen's Liens for construction in
progress, (C) workmen's, repairmen's, warehousemen's and carriers' Liens
arising in the ordinary course of business of the Company or such Subsidiary
consistent with past practice, and (D) all matters of record, Liens and other
imperfections of title and encumbrances that, individually or in the
aggregate, would not, individually or in the aggregate, a Material Adverse
Effect (collectively, "Permitted Liens"), and (ii) is neither subject to any
governmental decree or order to be sold nor is being condemned, expropriated
or otherwise taken by any public authority with or without payment of
compensation therefor, nor, to the knowledge of the Company, has any such
condemnation, expropriation or taking been proposed.
(c) All leases of real property leased for the use or benefit of the
Company or any Subsidiary to which the Company or any Subsidiary is a party,
and all amendments and modifications thereto, are in full force and effect and
have not been modified or amended, and there exists no default under any such
lease by the Company or any Subsidiary, nor any event which, with notice or
lapse of time or both, would constitute a default thereunder by the Company or
any Subsidiary, except as would not prevent or materially delay consummation
of the Offer or the Merger or otherwise prevent or materially delay the
Company from performing its obligations under this Agreement and would not,
individually or in the aggregate, have a Material Adverse Effect.
(d) There are no contractual or legal restrictions that preclude or
restrict the ability to use any real property owned or leased by the Company
or any Subsidiary for the purposes for which it is currently being used. There
are no material latent defects or material adverse physical conditions
affecting the real property, and improvements thereon, owned or leased by the
Company or any Subsidiary other than those that would not
17
prevent or materially delay consummation of the Offer or the Merger or
otherwise prevent or materially delay the Company from performing its
obligations under this Agreement and would not, individually or in the
aggregate, a Material Adverse Effect.
SECTION 4.14 Intellectual Property. (a) Section 4.14(a)(i) of the
Disclosure Schedule sets forth a true and complete list of: (i) all U.S. and
foreign patents and patent applications; (ii) all trademark, servicemark,
trade name, brand name or the like, whether registered or unregistered
(collectively, "Proprietary Names"), and registrations and applications for
registration of such Proprietary Names in all countries of the world; (iii)
all copyright registrations and applications for registration of copyrights;
(iv) all domain names and applications for registration of domain names; (v)
all Company Software; (vi) all other Intellectual Property included in the
Company Owned Intellectual Property and Company Licensed Intellectual
Property; and (vii) all Licenses (other than licenses of commercial off-the-
shelf or shrink-wrap computer software), that are owned or controlled (in the
sense of having the right to license others) by the Company and any of its
Subsidiaries. Section 4.14(a)(ii) of the Disclosure Schedule sets forth a list
of all licenses, commitments and other agreements relating to patents, patent
applications, inventions, know-how, technology, or the like that are material
to the conduct of the business of the Company and the Subsidiaries (as
currently conducted or contemplated to be conducted), and a list of all
licenses, leases, commitments and other agreements relating to Proprietary
Names, copyrights, domain names, Company Software and other Intellectual
Property that are material to the conduct of the business of the Company and
the Subsidiaries (as currently conducted or contemplated to be conducted) to
which the Company or a Subsidiary is a party or by which the Company or any
Subsidiary or any of their property is in any way bound or affected.
(b) The operation of the business of the Company and the Subsidiaries as
currently conducted or as contemplated to be conducted, the use of the Company
Owned Intellectual Property and Company Licensed Intellectual Property in
connection therewith and the transmission, use, linking and other practices of
the Company and the Subsidiaries related to their web sites, the content
thereof and the advertisements contained therein, do not conflict with,
infringe, misappropriate or otherwise violate the Intellectual Property of any
third party, and no claim is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary alleging any of the
foregoing. For the conduct of the business of the Company and the Subsidiaries
as presently conducted and the continuation hereafter of such business as
presently conducted, no right, license, lease, consent, or other agreement is
or will be required with respect to any patent, invention, know-how,
technology, or the like, or any Proprietary Name, copyright, domain name,
Company Software or other Intellectual Property, other than those described in
Section 4.14(a) of the Disclosure Schedule. No infringement of any patents or
proprietary rights or of any Proprietary Name, copyright, domain name, Company
Software or other Intellectual Property has occurred or is involved in
connection with the business or operations of any person. No claim of
infringement has been made to the Company or any Subsidiary or implied to the
Company or any Subsidiary, and, to the Company's knowledge, there is no patent
or proprietary rights or Proprietary Name, copyright, domain name, Company
Software or other Intellectual Property of a third party that poses any such
infringement issue. None of the patents or patent applications listed in
Section 4.14(a) of the Disclosure Schedule is involved in any interference,
reexamination, conflict or opposition proceeding, and, to the Company's
knowledge, there has been no threat or other indication that any such
proceeding will hereafter be commenced. None of the Proprietary Names or
registrations or applications to use or register such Proprietary Names listed
in Section 4.14(a) of the Disclosure Schedule is involved in any opposition,
cancellation, nullification, interference, conflict or concurrent use
proceeding, and, to the Company's knowledge, there has been no threat or other
indication that any such proceeding will hereafter be commenced.
(c) The Company or a Subsidiary is the exclusive owner of the entire and
unencumbered right, title and interest in and to each item of the Company
Owned Intellectual Property, and is entitled to use the Company Owned
Intellectual Property and Company Licensed Intellectual Property in the
ordinary course of its business as presently conducted or as contemplated to
be conducted, subject only to the terms of the Licenses.
(d) The Company Owned Intellectual Property and Company Licensed
Intellectual Property include all of the Intellectual Property used in the
ordinary day-to-day conduct of the business of the Company and its
18
Subsidiaries, and there are no other items of Intellectual Property that are
material to such ordinary day-to-day conduct of such business. The Company
Owned Intellectual Property and, to the knowledge of the Company, the Company
Licensed Intellectual Property are all without challenge of any kind, and are
valid and enforceable, and have not been adjudged invalid or unenforceable in
whole or part.
(e) No legal proceedings have been asserted, are pending, or, to the
Company's knowledge, threatened against the Company or any Subsidiary (i)
based upon or challenging or seeking to deny or restrict the use by the
Company or any Subsidiary of any of the Company Owned Intellectual Property or
Company Licensed Intellectual Property, (ii) alleging that any services
provided by, processes used by, or products manufactured or sold by the
Company or any Subsidiary infringe or misappropriate any Intellectual Property
right of any third party, or (iii) alleging that the Licenses being licensed
are in conflict with the terms of any license or other agreement.
(f) To the Company's knowledge, no person is engaging in any activity that
infringes or misappropriates the Company Owned Intellectual Property or
Company Licensed Intellectual Property. Except as set forth in Section 4.14 of
the Disclosure Schedule and except for the non-exclusive licenses granted to
the Company's customers in the ordinary course of its business, neither the
Company nor any Subsidiary has granted any license or other right to any third
party with respect to the Company Owned Intellectual Property or Company
Licensed Intellectual Property. The consummation of the transactions
contemplated by this Agreement will not result in the termination or
impairment of any of the Company Owned Intellectual Property or Company
Licensed Intellectual Property.
(g) The Company has delivered or made available to Parent true and correct
and complete copies of patents, patent applications, license commitments and
other agreements listed or described in the Disclosure Schedule and all
applications and registrations for Proprietary Names and copyrights, licenses,
leases, commitments and other agreements listed or described in Section 4.14
of the Disclosure Schedule, other than licenses of commercial off-the-shelf or
shrink-wrap computer software. With respect to each such agreement:
(i) Each such agreement is valid and binding and in full force and
effect and represents the entire agreement between the respective parties
with respect to the subject matter of such agreement. There are no defaults
under each such agreement that will result in payments by the Company or
any Subsidiary. To the Company's knowledge, no party to any such agreement
has threatened to terminate such agreement on account of any breach (actual
or alleged);
(ii) such agreement will not cease to be valid and binding and in full
force and effect on terms identical to those currently in effect as a
result of the consummation of the transactions contemplated by this
Agreement, nor will the consummation of the transactions contemplated by
this Agreement constitute a breach or default under such agreement or
otherwise give the other party to such agreement a right to terminate such
agreement. Each such agreement will be enforceable by the Parent after the
Closing without the consent or agreement of any other person, except
consents and agreements described in Section 4.14 of the Disclosure
Schedule;
(iii) neither the Company nor any Subsidiary has (A) received any notice
of termination or cancellation under such agreement, (B) received any
notice of breach or default under such agreement, which breach has not been
cured, and (C) granted to any other third party any rights, adverse or
otherwise, under such agreement that would constitute a breach of such
agreement; and
(iv) none of the Company, the Subsidiaries and, to the Company's
knowledge, any other party to such agreement, are in breach or default
thereof in any material respect, and no event has occurred that, with
notice or lapse of time, would constitute such a breach or default or
permit termination, modification or acceleration under such agreement.
(h) To the knowledge of the Company, the Company Software is free of all
viruses, worms, trojan horses and other material known contaminants, and does
not contain any bugs, errors, or problems of a material nature that materially
disrupt its operation or have a material adverse impact on the operation of
other software
19
programs or operating systems other than as documented in the product release
notes for such Company Software. The Company has obtained all approvals
necessary for exporting the Company Software outside the United States to any
country in which the Company Software is currently sold or licensed for use
and importing the Company Software into any country in which the Company
Software is now sold or licensed for use, and all such export and import
approvals in the United States and throughout the world are valid, current,
outstanding and in full force and effect. No rights in the Company Software
have been transferred to any third party except to the customers of the
Company to whom the Company has licensed such Company Software in the ordinary
course of business and to resellers or distributors of the Company for the
purpose of reselling or distributing the Company Software.
(i) The Company and the Subsidiaries have the right to use all software
development tools, library functions, compilers and other third party software
that are material to the business of the Company and the Subsidiaries, or that
are currently used in the operation or modification of the Company Software.
(j) The Company and the Subsidiaries have taken reasonable steps in
accordance with normal industry practice to maintain the confidentiality of
their trade secrets and other confidential Intellectual Property. To the
knowledge of the Company, (i) there has been no misappropriation of any
material trade secrets or other material confidential Intellectual Property of
the Company or the Subsidiaries by any person, (ii) no employee, independent
contractor or agent of the Company or any Subsidiary has misappropriated any
trade secrets of any other person in the course of such performance as an
employee, independent contractor or agent, and (iii) no employee, independent
contractor or agent of the Company or any Subsidiary is in default or breach
of any term of any employment agreement, non-disclosure agreement, assignment
of invention agreement or similar agreement or contract relating in any way to
the protection, ownership, development, use or transfer of Intellectual
Property.
(k) Each current and former employee and consultant of the Company and the
Subsidiaries has executed an agreement with the Company or a Subsidiary
regarding confidentiality and proprietary information substantially in the
form or forms attached as Section 4.14(j)(i) of the Disclosure Schedule.
Neither the Company nor any Subsidiary is aware that any of its employees or
consultants is in violation thereof. All vendors of the Company and the
Subsidiaries with access to confidential information of the Company or a
Subsidiary are parties to written agreements substantially in the form
attached to Section 4.14(j)(ii) of the Disclosure Schedule, or a substantially
similar form supplied by such vendor, under which, among other things, each
such consultant or vendor is obligated to maintain the confidentiality of
confidential information of the Company and the Subsidiaries. Neither the
Company nor the Subsidiary is aware that any of its consultants or vendors are
in violation thereof.
SECTION 4.15 Taxes. The Company and the Subsidiaries have filed all United
States federal, state, local and non-United States Tax returns and reports
required to be filed by them and have paid and discharged all Taxes required
to be paid or discharged, other than (a) such payments as are being contested
in good faith by appropriate proceedings, (b) such amounts as may be
adequately reserved for on the September Balance Sheet, and (c) such filings,
payments or other occurrences that would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the IRS nor any other
United States or non-United States taxing authority or agency is now asserting
or, to the knowledge of the Company, threatening to assert against the Company
or any Subsidiary any deficiency or claim for any Taxes or interest thereon or
penalties in connection therewith. Neither the Company nor any Subsidiary has
granted any waiver of any statute of limitations with respect to, or any
extension of a period for the assessment of any Tax. The accruals and reserves
for Taxes reflected in the September Balance Sheet are adequate to cover all
Taxes accruable through such date (including interest and penalties, if any,
thereon) in accordance with GAAP. There are no Tax liens upon any property or
assets of the Company or any of the Subsidiaries except liens for current
Taxes not yet due. Neither the Company nor any of the Subsidiaries has been
required to include in income any adjustment pursuant to Section 481 of the
Code by reason of a voluntary change in accounting method initiated by the
Company or any of the Subsidiaries, and the IRS has not initiated or proposed
any such adjustment or change in accounting method, in either case which
adjustment or change would have a Material Adverse Effect. Except as set forth
in the financial statements described in Section 4.07, neither the Company nor
any of the Subsidiaries has entered into a transaction which
20
is being accounted for under the installment method of Section 453 of the
Code, which would prevent or materially delay consummation of the Offer or the
Merger or otherwise prevent or materially delay the Company from performing
its obligations under this Agreement or would have a Material Adverse Effect.
SECTION 4.16 Environmental Matters. Except as described in Section 4.16 of
the Disclosure Schedule or as would not prevent or materially delay
consummation of the Offer or the Merger or otherwise prevent or materially
delay the Company from performing its obligations under this Agreement and
would not, individually or in the aggregate, have a Material Adverse Effect,
(a) the Company has not violated and is not in violation of any Environmental
Law; (b) to the Company's knowledge, none of the properties currently or
formerly owned, leased or operated by the Company (including, without
limitation, soils and surface and ground waters) are contaminated with any
Hazardous Substance; (c) to the Company's knowledge, the Company is not
actually, potentially or allegedly liable for any off-site contamination by
Hazardous Substances; (d) the Company is not actually, potentially or
allegedly liable under any Environmental Law (including, without limitation,
pending or threatened liens); (e) the Company has all permits, licenses and
other authorizations required under any Environmental Law ("Environmental
Permits"); (f) the Company has always been and is in compliance with its
Environmental Permits; and (g) to the Company's knowledge, neither the
execution of this Agreement nor the consummation of the Transactions will
require any investigation, remediation or other action with respect to
Hazardous Substances, or any notice to or consent of Governmental Authorities
or third parties, pursuant to any applicable Environmental Law or
Environmental Permit.
SECTION 4.17 No Rights Agreements. The Company has not adopted any
stockholders' rights plan or comparable arrangement.
SECTION 4.18 Material Contracts. (a) Section 4.18(a) of the Disclosure
Schedule contains a list of the following types of contracts, agreements and
arrangements, whether written, oral or otherwise, to which the Company or any
Subsidiary is a party (such contracts, agreements and arrangements as are
required to be set forth in Section 4.18(a) of the Disclosure Schedule being
the "Material Contracts"):
(i) each contract and agreement, whether or not made in the ordinary
course of business, that contemplates an exchange of consideration with an
aggregate value greater than $50,000;
(ii) all broker, exclusive dealing or exclusively, distributor, dealer,
manufacturer's representative, franchise, agency, sales promotion, market
research, marketing consulting and advertising contracts and agreements to
which the Company or any Subsidiary is a party or any other contract that
compensates any person based on any sales by the Company;
(iii) all leases and subleases of real property;
(iv) all draft, prospective or final term sheets, memoranda of
understanding, letters of intent or other similar agreements or
correspondence relating to (A) any pending or proposed sales, options or
grants of securities of the Company or any of its Subsidiaries or (B)
prospective strategic alliances, joint ventures or other similar
relationships or transactions;
(v) all management contracts (excluding contracts for employment) and
contracts with other consultants, including any contracts involving the
payment of royalties or other amounts calculated based upon the revenues or
income of the Company or any Subsidiary or income or revenues related to
any product of the Company or any Subsidiary to which the Company or any
Subsidiary is a party;
(vi) all contracts and agreements evidencing indebtedness;
(vii) all contracts and agreements with any Governmental Authority to
which the Company or any Subsidiary is a party;
(viii) all contracts and agreements that limit, or purport to limit, the
ability of the Company or any Subsidiary to compete in any line of business
or with any person or entity or in any geographic area or during any period
of time;
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(ix) all material contracts or arrangements that result in any person or
entity holding a power of attorney from the Company or any Subsidiary that
relates to the Company, any Subsidiary or their respective businesses;
(x) all contracts pursuant to which the Company or any Subsidiary
obtains from any third party any rights to use Company Licensed
Intellectual Property or the right to manufacture, distribute or sell any
product of the Company or such third party that, in either case, is
material to the Company and its Subsidiaries, taken as a whole;
(xi) all contracts pursuant to which the Company or any Subsidiary
grants to any third party any rights to use Company Owned Intellectual
Property or the right to manufacture, distribute or sell any product of the
Company or such third party; and
(xii) all other contracts and agreements, whether or not made in the
ordinary course of business, which are material to the Company or any
Subsidiary or the conduct of their respective businesses, or the absence of
which would prevent or materially delay consummation of the Offer or the
Merger or otherwise prevent or materially delay the Company from performing
its obligations under this Agreement or would, individually or in the
aggregate, have a Material Adverse Effect.
(b) Except as set forth in Section 4.18(b) of the Disclosure Schedule, (i)
each Material Contract is a legal, valid and binding agreement, and none of
the Material Contracts is in default by its terms or has been canceled by the
other party; (ii) to the Company's knowledge, no other party is in material
breach or violation of, or material default under, any Material Contract;
(iii) the Company and the Subsidiaries are not in receipt of any claim of
default under any such agreement; and (iv) neither the execution of this
Agreement nor the consummation of any Transaction shall constitute default,
give rise to cancellation rights, or otherwise adversely affect any of the
Company's rights under any Material Contract. The Company has furnished or
made available to Parent true and complete copies of all Material Contracts,
including any amendments thereto.
(c) With respect to those contracts, agreements and arrangements set forth
in Section 4.18(c) of the Disclosure Schedule (collectively, the "Specified
Contracts"), neither the Company nor any Subsidiary has agreed, orally or in
writing, to any modification, amendment or addition to the Specified Contracts
and neither the Company nor any Subsidiary has entered into any additional
contract, agreement or arrangement, whether oral or written, with any party to
a Specified Contract, the subject matter of which is substantially similar to
such Specified Contract.
(d) With respect to any person set forth in Section 4.18(d) of the
Disclosure Schedule (each a "Specified Person" and collectively, the
"Specified Persons"), neither the Company nor any Subsidiary has agreed,
whether orally, in writing or otherwise, to any agreement, commitment,
contract, obligation or arrangement with any Specified Person.
SECTION 4.19 Insurance. (a) Section 4.19(a) of the Disclosure Schedule sets
forth, with respect to each insurance policy under which the Company or any
Subsidiary has been an insured, a named insured or otherwise the principal
beneficiary of coverage at any time within the past three years, (i) the names
of the insurer, the principal insured and each named insured, (ii) the policy
number, (iii) the period, scope and amount of coverage and (iv) the premium
charged. The types and amounts of coverage provided therein are usual and
customary in the context of the businesses and operations in which the Company
and the Subsidiaries are engaged.
(b) With respect to each such insurance policy: (i) the policy is legal,
valid, binding and enforceable in accordance with its terms and, except for
policies that have expired under their terms in the ordinary course, is in
full force and effect; (ii) neither the Company nor any Subsidiary is in
material breach or default (including any such material breach or default with
respect to the payment of premiums or the giving of notice), and no event has
occurred which, with notice or the lapse of time, would constitute such a
breach or default, or permit termination or modification, under the policy;
and (iii) to the knowledge of the Company, no insurer on the policy has been
declared insolvent or placed in receivership, conservatorship or liquidation.
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(c) At no time subsequent to December 31, 1998 has the Company or any
Subsidiary (i) been denied any insurance or indemnity bond coverage which it
has requested, (ii) made any material reduction in the scope or amount of its
insurance coverage, or (iii) received notice from any of its insurance
carriers that any insurance premiums will be subject to increase in an amount
materially disproportionate to the amount of the increases with respect
thereto (or with respect to similar insurance) in prior years or that any
insurance coverage listed in Section 3.20(a) of the Disclosure Schedule will
not be available in the future substantially on the same terms as are now in
effect.
(d) The current annual premium paid by the Company for its directors' and
officers' liability insurance policies as in effect immediately prior to the
Effective Time (the "Existing D&O Policies") is $294,547.50.
SECTION 4.20 Customers and Suppliers. As of the date hereof, no customer
that individually accounted for more than two percent of the Company's
consolidated gross revenues during the 12-month period preceding the date
hereof, and no material supplier of the Company and its Subsidiaries, has
cancelled or otherwise terminated any contract with the Company or any
Subsidiary prior to the expiration of the contract term, or, to the Company's
knowledge, has threatened to cancel or otherwise terminate its relationship
with the Company or its Subsidiaries or to substantially reduce its purchase
from or sale to the Company or any Subsidiary of any products, equipment,
goods or services. Neither the Company nor any Subsidiary has (i) breached any
agreement with or (ii) engaged in any fraudulent conduct with respect to, any
such customer or supplier of the Company or a Subsidiary.
SECTION 4.21 Brokers. No broker, finder or investment banker (other than
Broadview) is entitled to any brokerage, finder's or other fee or commission
in connection with the Transactions based upon arrangements made by or on
behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and Broadview
pursuant to which such firm would be entitled to any payment relating to the
Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
As an inducement to the Company to enter into this Agreement, Parent and
Purchaser hereby, jointly and severally, represent and warrant to the Company
that:
SECTION 5.01 Corporate Organization. Each of Parent and Purchaser is a
company duly organized and validly existing under the laws of its jurisdiction
of its incorporation and has the requisite corporate power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized or existing or to have such power, authority and
governmental approvals would not prevent or materially delay consummation of
the Transactions, or otherwise prevent Parent or Purchaser from performing its
material obligations under this Agreement. Purchaser was formed solely for the
purpose of engaging in the transactions contemplated hereby and has not
engaged in any business activities or conducted any operations other than in
connection with the transactions contemplated hereby. All the issued and
outstanding shares of capital stock of Purchaser are owned of record and
beneficially by ▇▇▇▇▇▇.
SECTION 5.02 Authority Relative to This Agreement. Each of Parent and
Purchaser has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by ▇▇▇▇▇▇ and
Purchaser and the consummation by Parent and Purchaser of the Transactions
have been duly and validly authorized by all necessary corporate action, and
no other corporate proceedings on the part of Parent or Purchaser are
necessary to authorize this Agreement or to consummate the Transactions (other
than, with respect to the Merger, the filing and recordation of appropriate
merger documents as required by Delaware Law). This Agreement has been duly
23
and validly executed and delivered by ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ and, assuming due
authorization, execution and delivery by the Company, constitutes legal, valid
and binding obligation of each of Parent and Purchaser enforceable against
each of Parent and Purchaser in accordance with its terms.
SECTION 5.03 No Conflict; Required Filings and Consents. (a) The execution
and delivery of this Agreement by ▇▇▇▇▇▇ and Purchaser do not, and the
performance of this Agreement and the consummation of the Transactions by
Parent and Purchaser will not, (i) conflict with or violate the organizational
documents of either Parent or Purchaser, (ii) assuming that all consents,
approvals, authorizations and other actions described in Section 5.03(b) have
been obtained and all filings and obligations described in Section 5.03(b)
have been made, conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Parent or Purchaser or by which any property
or asset of either of them is bound or affected, or (iii) result in any breach
of, or constitute a default (or an event which, with notice or lapse of time
or both, would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of Parent or
Purchaser pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or Purchaser is a party or by which Parent or Purchaser or any
property or asset of either of them is bound or affected, except, with respect
to clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences which would not prevent or materially delay
consummation of the Transactions or otherwise prevent Parent and Purchaser
from performing their material obligations under this Agreement.
(b) The execution and delivery of this Agreement by Parent and Purchaser do
not, and the performance of this Agreement by Parent and Purchaser will not,
require any consent, approval, authorization or permit of, or filing with, or
notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover
laws, the HSR Act and the termination of the waiting periods thereunder, and
filing and recordation of appropriate merger documents as required by Delaware
Law, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or materially delay consummation of the Transactions, or otherwise
prevent Parent or Purchaser from performing their material obligations under
this Agreement.
SECTION 5.04 Financing. Parent has, or shall have, sufficient cash or cash-
equivalent funds available to permit Purchaser to consummate all the
Transactions, including, without limitation, acquiring all the outstanding
Shares in the Offer and the Merger and to pay all related fees and expenses
incurred in connection with the Offer and the Merger.
SECTION 5.05 Offer Documents; Proxy Statement. The Offer Documents shall
not, at the time the Offer Documents are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading. The information supplied by Parent for inclusion in
the Proxy Statement shall not, at the date the Proxy Statement (or any
amendment or supplement thereto) is first mailed to stockholders of the
Company, at the time of the Stockholders' Meeting or at the Effective Time,
contain any untrue statement of a material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not false or misleading, or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the
Stockholders' Meeting which shall have become false or misleading.
Notwithstanding the foregoing, Parent and Purchaser make no representation or
warranty with respect to any information supplied by the Company or any of its
representatives for inclusion in any of the foregoing documents or the Offer
Documents. The Offer Documents shall comply in all material respects as to
form with the requirements of the Exchange Act and the rules and regulations
thereunder.
SECTION 5.06 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Parent or
Purchaser.
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ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.01 Conduct of Business by the Company Pending the Merger. The
Company agrees that, between the date of this Agreement and the Cut-Off Date,
unless Parent shall otherwise agree in writing, the businesses of the Company
and the Subsidiaries shall be conducted only in, and the Company and the
Subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice; and the Company shall
use its reasonable best efforts to preserve substantially intact the business
organization of the Company and the Subsidiaries, to keep available the
services of the current officers, employees and consultants of the Company and
the Subsidiaries and to preserve the current relationships of the Company and
the Subsidiaries with customers, suppliers and other persons with which the
Company or any Subsidiary has significant business relations. By way of
amplification and not limitation, except as expressly contemplated by this
Agreement and Section 6.01 of the Disclosure Schedule or Section 7.16 of this
Agreement, neither the Company nor any Subsidiary shall, between the date of
this Agreement and the Effective Time, directly or indirectly, do, or propose
to do, any of the following without the prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or By-laws
or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares
of any class of capital stock of the Company or any Subsidiary, or any
options, warrants, convertible securities or other rights of any kind to
acquire any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of the Company or any
Subsidiary or (ii) except in the ordinary course of business and in a manner
consistent with past practice, any assets of the Company or any Subsidiary;
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation,
or acquisition of stock or assets or any other business combination) any
corporation, partnership, other business organization or any division thereof
or any significant amount of assets; (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or
otherwise become responsible for, the obligations of any person, or make any
loans or advances, or grant any security interest in any of its assets; (iii)
enter into any contract or agreement other than in the ordinary course of
business and consistent with past practice; (iv) authorize, or make any
commitment with respect to capital expenditures which are, in the aggregate,
in excess of $100,000 for the Company and the Subsidiaries taken as a whole;
or (v) enter into or amend any contract, agreement, commitment or arrangement
with respect to any matter set forth in this Section 6.01(e);
(f) hire additional employees or increase the compensation payable or to
become payable or the benefits provided to its directors, officers or
employees, except for increases in the ordinary course of business and
consistent with past practice in salaries, wages, bonuses, incentives or
pension benefits of employees of the Company or any Subsidiary who are not
directors or officers of the Company, or grant any severance or termination
pay to, or enter into any employment or severance agreement with, any
director, officer or other employee of the Company or of any Subsidiary, or
establish, adopt, enter into or amend any collective bargaining, bonus,
profit-sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee, except for the stay put cash bonus payments to
non-executive employees approved by the Board on September 22, 2000 as
described in Section 6.01(f) of the Disclosure Schedule;
(g) change any of the accounting methods used by it unless required by
GAAP;
25
(h) make any Tax election or settle or compromise any United States
federal, state, local or non-United States income Tax liability;
(i) pay, discharge or satisfy any claim, liability or obligation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary course of business and
consistent with past practice, of liabilities reflected or reserved against in
the September Balance Sheet or subsequently incurred in the ordinary course of
business and consistent with past practice;
(j) amend, modify or consent to the termination of any Material Contract,
or amend, waive, modify or consent to the termination of the Company's or any
Subsidiary's rights thereunder;
(k) commence or settle any Action; or
(l) announce an intention, enter into any formal or informal agreement or
otherwise make a commitment, to do any of the foregoing.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Stockholders' Meeting. (a) If required by applicable law in
order to consummate the Merger, the Company, acting through the Board, shall,
in accordance with applicable law and the Company's Certificate of
Incorporation and By-laws, (i) duly call, give notice of, convene and hold an
annual or special meeting of its stockholders as promptly as practicable
following consummation of the Offer for the purpose of considering and taking
action on this Agreement and the Transactions (the "Stockholders' Meeting")
and (ii) (A) include in the Proxy Statement, and not subsequently withdraw or
modify in any manner adverse to Purchaser or Parent, the unanimous
recommendation of the Board that the stockholders of the Company approve and
adopt this Agreement and the Transactions and (B) use its reasonable best
efforts to obtain such approval and adoption. At the Stockholders' Meeting,
Parent and Purchaser shall cause all Shares then owned by them and their
subsidiaries to be voted in favor of the approval and adoption of this
Agreement and the Transactions.
(b) Notwithstanding the foregoing, in the event that Purchaser shall
acquire at least 90% of the then outstanding Shares, the parties shall take
all necessary and appropriate action to cause the Merger to become effective,
in accordance with Section 253 of Delaware Law, as promptly as reasonably
practicable after such acquisition, without a meeting of the stockholders of
the Company.
SECTION 7.02 Proxy Statement. If approval of the Company's stockholders is
required by applicable law to consummate the Merger, promptly following
consummation of the Offer, the Company shall file the proxy statement to be
sent to the stockholders of the Company in connection with the Stockholders
Meeting or the information statement to be sent to such stockholders, as
appropriate (such proxy statement or information statement, as amended or
supplemented, the "Proxy Statement") with the SEC under the Exchange Act, and
shall use its best efforts to have the Proxy Statement cleared by the SEC
promptly. Parent, Purchaser and the Company shall cooperate with each other in
the preparation of the Proxy Statement, and the Company shall notify Parent of
the receipt of any comments of the SEC with respect to the Proxy Statement and
of any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the Company and
the SEC. The Company shall give Parent and its counsel the opportunity to
review the Proxy Statement, including all amendments and supplements thereto,
prior to its being filed with the SEC and shall give Parent and its counsel
the opportunity to review 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, Parent and Purchaser agrees to use its reasonable best
efforts, after consultation with the other parties hereto, to respond promptly
to all such comments of and requests by the SEC and to cause the Proxy
Statement and all required amendments and supplements thereto to be mailed to
the holders of Shares entitled to vote at the Stockholders' Meeting at the
earliest practicable time.
26
SECTION 7.03 Company Board Representation; Section 14(f). (a) Promptly upon
the purchase by Purchaser of Shares pursuant to the Offer and from time to
time thereafter, Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Board as shall give
Purchaser representation on the Board equal to the product of the total number
of directors on the Board (giving effect to the directors elected pursuant to
this sentence) multiplied by the percentage that the aggregate number of
Shares beneficially owned by Purchaser or any affiliate of Purchaser following
such purchase bears to the total number of Shares then outstanding, and the
Company shall, at such time, promptly take all actions necessary to cause
Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors, or both. At such times, the Company shall use its reasonable best
efforts to cause persons designated by Purchaser to constitute the same
percentage as persons designated by Purchaser shall constitute of the Board of
(i) each committee of the Board, (ii) each board of directors of each
Subsidiary, and (iii) each committee of each such board, in each case only to
the extent permitted by applicable law. Notwithstanding the foregoing, until
the Effective Time, the Company shall use its reasonable best efforts to
ensure that at least one member of the Board and each committee of the Board
and such boards and committees of the Subsidiaries, as of the date hereof, who
is not an employee of the Company or any Subsidiary shall remain a member of
the Board and of such boards and committees. The first date on which designees
of Purchaser shall constitute a majority of the Company's Board is referred to
in this Agreement as the "Cut-Off Date."
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder to
fulfill its obligations under this Section 7.03, and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1 to fulfill
such obligations. Parent or Purchaser shall supply to the Company, and be
solely responsible for, any information with respect to either of them and
their nominees, officers, directors and affiliates required by such Section
14(f) and Rule 14f-1.
(c) Following the election of designees of Purchaser pursuant to this
Section 7.03, prior to the Effective Time, any amendment of this Agreement or
the Certificate of Incorporation or By-laws of the Company, any termination or
amendment of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations or other acts of Parent
or Purchaser, or waiver of any of the Company's rights hereunder, shall
require the concurrence of a majority of the directors of the Company then in
office who neither were designated by Purchaser nor are employees of the
Company or any Subsidiary.
SECTION 7.04 Access to Information; Confidentiality. (a) From the date
hereof until the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of
the Company and the Subsidiaries to, afford the officers, employees and agents
of Parent and Purchaser reasonable access during normal business hours to the
officers, employees, agents, properties, offices, plants and other facilities,
books and records of the Company and each Subsidiary, and shall furnish Parent
and Purchaser with such financial, operating and other data and information as
Parent or Purchaser, through its officers, employees or agents, may reasonably
request. The Company shall permit Parent and/or Purchaser to have one or more
observers on the premises of the Company daily until the earlier of the
Effective Time or the termination of this Agreement.
(b) All information obtained by Parent or Purchaser pursuant to this
Section 7.04 shall be kept confidential in accordance with the confidentiality
agreement, dated October 16, 2000 (the "Confidentiality Agreement"), between
Parent and the Company.
(c) No investigation pursuant to this Section 7.04 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto or any condition to the
Offer.
SECTION 7.05 No Solicitation of Transactions. (a) Except to the extent
permitted by Section 7.16, neither the Company nor any Subsidiary shall,
directly or indirectly, through any officer, director, agent or
27
otherwise, (i) solicit, initiate or encourage the submission of, any
Acquisition Proposal or (ii) except as required by the fiduciary duties of the
Board under applicable law after having received advice from outside legal
counsel and after giving prior written notice to Parent and Purchaser and
entering into a customary confidentiality agreement on terms no less favorable
to the Company than those contained in the Confidentiality Agreement,
participate in any discussions or negotiations regarding, or furnish to any
person, any information with respect to, or otherwise cooperate in any way
with respect to, or assist or participate in, facilitate or encourage, any
unsolicited proposal that constitutes, or may reasonably be expected to lead
to, an Acquisition Proposal.
(b) Except as set forth in this Section 7.05(b) or to the extent permitted
by Section 7.16, neither the Board nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Parent or Purchaser, the approval or recommendation by the Board or any such
committee of this Agreement, the Offer, the Merger or any other Transaction,
(ii) approve or recommend, or propose to approve or recommend, any Acquisition
Proposal or (iii) enter into any agreement with respect to any Acquisition
Proposal. Notwithstanding the foregoing, in the event that, prior to the time
of acceptance for payment of Shares pursuant to the Offer, the Board
determines in good faith that it is required to do so by its fiduciary duties
under applicable law after having received advice from outside legal counsel,
the Board may withdraw or modify its approval or recommendation of the Offer
and the Merger, but only to terminate this Agreement in accordance with
Section 9.01(d)(ii) (and, concurrently with such termination, cause the
Company to enter into an agreement with respect to a Superior Proposal).
(c) The Company shall, and shall direct or cause its directors, officers,
employees, representatives and agents to, immediately cease and cause to be
terminated any discussions or negotiations with any parties that may be
ongoing with respect to any Acquisition Proposal.
(d) The Company shall (within one Business Day) advise Parent orally and in
writing of (i) any Acquisition Proposal or any request for information with
respect to any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or request and the identity of the person making such
Acquisition Proposal or request and (ii) any changes in any such Acquisition
Proposal or request.
(e) The Company agrees, except as required by the Board's fiduciary duties
under applicable law after having received advice from outside legal counsel,
not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party.
SECTION 7.06 Employee Benefits Matters. (a) Individuals who were employees
of the Company or any of its subsidiaries immediately prior to the Effective
Time and who become employed by Parent or the Surviving Corporation from and
after the Effective Time shall be referred to herein as "Affected Employees."
As soon as practicable after the Effective Time, each Affected Employee will
be eligible to participate in the benefit programs, plans, arrangements,
payroll practices (including vacation or paid time off entitlement)
established or maintained by, or contributed to, the Surviving Corporation
from time to time pursuant to the terms of each such plan, or in the absence
of plan terms or provisions, in accordance with the regularly established
policies or procedures of the Surviving Corporation. The Surviving Corporation
shall be responsible for providing to individuals who terminate from
employment with the Company in connection with the transactions contemplated
herein the coverage required under Code Section 4980B.
(b) Parent will cause the Surviving Corporation to, recognize the
employment service of each Affected Employee with the Company for purposes of
eligibility and vesting (but not benefit accrual) under any applicable plan.
Each Affected Employee's years of service with the Company shall be otherwise
recognized for all general employment purposes including, without limitation,
seniority, vacation, personal time and similar general employment purposes,
provided, that any vacation time offered by Parent or Surviving Corporation in
the calendar year of the Effective Time to any Affected Employee shall be
offset by any vacation time used by or paid to an Affected Employee by the
Company in the calendar year of the Effective Time.
(c) The Company shall terminate its 401(k) plan and other pension benefit
plans (as defined in ERISA Section 3(2)) prior to the Effective Time. All of
the Company's employees participating in the plan(s) as of that
28
date shall automatically become fully vested in their account balances as of
the date that the 401(k) plan is terminated. The Company shall take all steps
necessary to maintain the qualified status of such plan(s) through and
following termination, and shall apply for an IRS determination letter upon
termination for each such terminated plan.
(d) Simultaneously with the execution of this Agreement, the Company has
entered into the Employment Agreements in forms acceptable to Parent with the
individuals set forth in Section 7.06(d) of the Disclosure Schedule.
SECTION 7.07 Intentionally Omitted.
SECTION 7.08 Directors' and Officers' Indemnification and
Insurance. (a) The Certificate of Incorporation and the By-laws of the
Surviving Corporation shall contain provisions no less favorable with respect
to indemnification than are set forth in Article XIII of the Certificate of
Incorporation of the Company and Article VI of the By-laws of the Company,
respectively, which provisions shall not be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would affect adversely the rights thereunder of individuals who, at or prior
to the Effective Time, were directors, officers, employees, fiduciaries or
agents of the Company, unless such modification shall be required by law.
(b) The Surviving Corporation shall use commercially reasonable efforts to
maintain in effect for six years from the Effective Time (the "Tail Period")
the Existing D&O Policies (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms
and conditions that are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that in no event
shall the Surviving Corporation be required to expend pursuant to this Section
7.07(b) more than an amount equal to 175% of the annual premium of the
Existing D&O Policies for the entire Tail Period, in the aggregate.
(c) In the event the Company 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 and assets to any person, then, and in each such case,
proper provision shall be made so that the successors and assigns of the
Company or the Surviving Corporation, as the case may be, or at Parent's
option, Parent, shall assume the obligations set forth in this Section 7.08.
(d) The Surviving Corporation and Parent shall honor and fulfill in all
respects the obligations of the Company pursuant to indemnification agreements
with the Company's directors and officers existing at or before the Effective
Time.
(e) This Section shall survive the consummation of the Offer and the
Merger, is intended to benefit the Company, the Surviving Corporation and each
indemnified party, shall be binding, jointly and severally, on all successors
and assigns of the Surviving Corporation and Parent, and shall be enforceable
by the indemnified parties.
SECTION 7.09 Notification of Certain Matters. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (a)
the occurrence, or non-occurrence, of any event the occurrence, or non-
occurrence, of which reasonably could be expected to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect and (b) any failure of the Company, Parent or Purchaser, as
the case may be, to comply with or satisfy any covenant or agreement to be
complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 7.09 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 7.10 Further Action; Reasonable Best Efforts. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall (i) make
promptly its respective filings, and thereafter make any other
29
required submissions under the HSR Act with respect to the Transactions and
(ii) use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the Transactions, including, without limitation, using its
reasonable best efforts to obtain all Permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with the Company and the Subsidiaries as are necessary
for the consummation of the Transactions and to fulfill the conditions to the
Offer and the Merger; provided that neither Purchaser nor Parent will be
required by this Section 7.10 to take any action, including entering into any
consent decree, hold separate orders or other arrangements, that (A) requires
the divestiture of any assets of the Purchaser, Parent, Company or any of
their respective subsidiaries, or (B) limits Parent's freedom of action with
respect to, or its ability to retain, the Company and the Subsidiaries or any
portion thereof or any of Parent's or its affiliates' other assets or
businesses. Without limiting the foregoing, the Company, Parent and Purchaser
shall file as soon as practicable notifications under the HSR Act and respond
as promptly as practicable to any inquiries received from the Federal Trade
Commission and the Antitrust Division of the United States Department of
Justice for additional information or documentation and respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Authority in connection with antitrust matters.
Concurrently with the filing of notifications under the HSR Act or as soon
thereafter as practicable, the Company and Parent shall each request early
termination of the HSR Act waiting-period. In addition, the Company, Parent
and Purchaser agree to make as soon as practicable such other filings as may
be necessary or required by any non-United States Governmental Authority. In
case, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall use their reasonable best
efforts to take all such action.
SECTION 7.11 Public Announcements. Parent, Purchaser and the Company agree
that no public release or announcement concerning the Transactions, the Offer
or the Merger shall be issued by either party without the prior consent of the
other party (which consent shall not be unreasonably withheld), except as such
release or announcement may be required by Law or the rules or regulations of
any United States or non-United States securities exchange, in which case the
party required to make the release or announcement shall use its best efforts
to allow the other party reasonable time to comment on such release or
announcement in advance of such issuance. The parties have agreed upon the
form of a joint press release announcing the Offer and the execution of this
Agreement.
SECTION 7.12 Confidentiality Agreement. Parent, Purchaser and Company
acknowledge that the existing Confidentiality Agreement shall remain in full
force and effect at all times prior to the Effective Time and after any
termination of this Agreement, and such parties agree to comply with the terms
of such Agreement. The Company hereby waives the provisions of the
Confidentiality Agreement as and to the extent necessary to permit the
consummation of the Transactions. Upon the acceptance for payment of Shares
pursuant to the Offer, the Confidentiality Agreement shall be deemed to have
terminated without further action by the parties thereto.
SECTION 7.13 Confirmation of No Withholding. The Company shall provide the
Purchaser with copies of (i) a statement issued by the Company pursuant to
Section 1.897-2(h)(1) of the Treasury Regulations, dated no more than thirty
days prior to the Effective Time, certifying, to the effect that the Shares
are not a United States real property interest and (ii) the notice to the IRS
provided for in Section 1.897-2(h)(2) of the Treasury Regulations with regard
to the statement referred to in clause (i) of this section.
SECTION 7.14 Obligations of Purchaser. Parent will take all action
necessary to cause the Purchaser to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth
in this Agreement.
SECTION 7.15 Voting of Shares. Parent agrees to cause Purchaser (i) to vote
all Shares beneficially owned by it in favor of adoption of this Agreement and
the Merger at the Stockholders' Meeting, if any such meeting shall be required
by Delaware Law, and (ii) if no Stockholders' Meeting shall be required by
Delaware Law, to file the Certificate of Merger as soon as permitted under
applicable regulatory requirements and law.
30
SECTION 7.16 Extension of Offer. If (a) Purchaser shall not have purchased
all of the Shares validly tendered and not withdrawn pursuant to the Offer on
or prior to the fifth (5th) business day following the initial date that the
Offer would have otherwise first expired (the Extension Date) and (b) this
Agreement shall not have been terminated in accordance with Article IX prior
thereto, Purchaser agrees that commencing as of the Extension Date, the
Company may begin to solicit potential financial investors to make private
investments in the Company after any termination of this Agreement of up to
ten million dollars US$ (10,000,000) in cash; provided, however, that the
Company may not so solicit such investments if Parent or the Purchaser, at
their option, agree on or prior to the Extension Date to loan (or cause to be
loaned) to the Company an aggregate principal amount of five million dollars
(US$5,000,000) (the Loan) pursuant to mutually agreed upon loan documentation
to be entered into at or prior to the extension of the Loan. Any Loan made
pursuant to this Section 7.16: shall (a) be conditioned upon the Company
having provided to Purchaser customary lending documents, including legal
opinions; (b) be secured by liens on all of the assets of the Company
presently owned or acquired in the future; (c) be made on commercially
reasonable terms and shall accrue interest at competitive fair market terms
that the Company would otherwise then be in the position to reasonably
procure; and (d) be due and payable in full, together with accrued interest
thereon, the date that is ninety (90) days after the advancement of such Loan.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Merger. The obligations of each party to
effect the Merger shall be subject to the satisfaction, at or prior to the
Effective Time, of the following conditions:
(a) Stockholder Approval. If and to the extent required by Delaware Law and
the Certificate of Incorporation of the Company, this Agreement and the
Transactions shall have been approved and adopted by the affirmative vote of
the stockholders of the Company;
(b) HSR Act. Any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or been
terminated;
(c) No Order. No Governmental Authority in the United States or the
European Union shall have enacted, issued, promulgated, enforced or entered
any Law (whether temporary, preliminary or permanent) which is then in effect
and has the effect of making the acquisition of Shares by Parent or Purchaser
or any affiliate of either of them illegal or otherwise restricting,
preventing or prohibiting consummation of the Transactions; and
(d) Offer. Purchaser or its permitted assignee shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that this condition shall not be applicable to the obligations of
Parent or Purchaser if, in breach of this Agreement or the terms of the Offer,
Purchaser fails to purchase any Shares validly tendered and not withdrawn
pursuant to the Offer.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination. This Agreement may be terminated and the Merger
and the other Transactions may be abandoned at any time prior to the Effective
Time, notwithstanding any requisite approval and adoption of this Agreement
and the Transactions by the stockholders of the Company:
(a) By mutual written consent of each of Parent, Purchaser and the Company
duly authorized by the Boards of Directors of Parent, Purchaser and the
Company; or
(b) By either Parent, Purchaser or the Company if (i) the Effective Time
shall not have occurred on or before February 15, 2001; provided, however,
that the right to terminate this Agreement under this Section 9.01(b) shall
not be available to any party whose failure to fulfill any obligation under
this Agreement has been
31
the cause of, or resulted in, the failure of the Effective Time to occur on or
before such date or (ii) any Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any injunction, order, decree or
ruling (whether temporary, preliminary or permanent) which has become final
and nonappealable and has the effect of making consummation of the Offer or
the Merger illegal or otherwise preventing or prohibiting consummation of the
Offer or the Merger; or
(c) By Parent if (i) due to an occurrence or circumstance that would result
in a failure to satisfy any condition set forth in Annex A hereto, Purchaser
shall have (A) failed to commence the Offer within 60 days following the date
of this Agreement, (B) terminated the Offer without having accepted any Shares
for payment thereunder or (C) failed to accept Shares for payment pursuant to
the Offer within 90 days following the commencement of the Offer (provided,
however, that the applicable time period specified in (A) and (C) above shall
be extended until the earlier to occur of (x) the fifth business day following
the expiration or termination of any applicable waiting period under the HSR
Act and (y) February 15, 2001), unless such action or inaction under (A), (B)
or (C) shall have been caused by or resulted from the failure of Parent or
Purchaser to perform, in any material respect, any of their material covenants
or agreements contained in this Agreement, or the material breach by Parent or
Purchaser of any of their material representations or warranties contained in
this Agreement or (ii) prior to the purchase of Shares pursuant to the Offer,
the Board or any committee thereof shall have withdrawn or modified in a
manner adverse to Purchaser or Parent its approval or recommendation of this
Agreement, the Offer, the Merger or any other Transaction, or shall have
recommended or approved any Acquisition Proposal, or shall have resolved to do
any of the foregoing; or
(d) By the Company, upon approval of the Board, if (i) Purchaser shall have
(A) failed to commence the Offer within 60 days following the date of this
Agreement, (B) terminated the Offer without having accepted any Shares for
payment thereunder or (C) failed to accept Shares for payment pursuant to the
Offer within 90 days following the commencement of the Offer (provided,
however, that the applicable time period specified in (A) and (C) above shall
be extended until the earlier to occur of (x) the fifth business day following
the expiration or termination of any applicable waiting period under the HSR
Act and (y) February 15, 2001), unless such action or inaction under (A), (B)
or (C) shall have been caused by or resulted from the failure of Company to
perform, in any material respect, any of its material covenants or agreements
contained in this Agreement, or the material breach by the Company of any of
its material representations or warranties contained in this Agreement or (ii)
prior to the purchase of Shares pursuant to the Offer, the Board determines in
good faith that it is required to do so by its fiduciary duties under
applicable law after having received advice from outside legal counsel in
order to enter into a definitive agreement with respect to a Superior
Proposal, upon 72 hours' prior written notice to Parent, setting forth in
reasonable detail the identity of the person making, and the final terms and
conditions of, the Superior Proposal and after duly considering any proposals
that may be made by Parent during such 72-hour period; provided, however, that
any termination of this Agreement pursuant to this Section 9.01(d)(ii) shall
not be effective until the Company has made full payment of all amounts
provided under Section 9.03.
SECTION 9.02 Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become
void, and there shall be no liability on the part of any party hereto, except
(a) as set forth in Section 9.03 and (b) nothing herein shall relieve any
party from liability for any intentional breach hereof prior to the date of
such termination; provided, however, that the Confidentiality Agreement shall
survive any termination of this Agreement.
SECTION 9.03 Fees and Expenses. (a) In the event that this Agreement is
terminated pursuant to Section 9.01(c)(ii) or 9.01(d)(ii), then, in any such
event, the Company shall pay Parent promptly (but in no event later than one
business day after termination) a fee of $4,000,000 million (the "Fee"), which
amount shall be payable in immediately available funds.
(b) In the event that this Agreement is terminated pursuant to Section
9.01(b) or Section 9.01(c)(i) and the Company shall have intentionally failed
to perform, in any material respect, any of its material covenants or
agreements contained in this Agreement, then, in any such event, the Company
shall reimburse Parent and Purchaser (not later than one business day after
submission of statements thereto) for all Expenses of Parent and Purchaser (up
to a maximum of $750,000), which amount shall be payable in immediately
available funds.
32
(c) In the event that the Company enters into an agreement related to an
Acquisition Proposal within nine (9) months after the date of termination of
this Agreement, the Company shall pay Parent the Fee promptly after (but in no
event later than one business day after) consummation of such Acquisition
Proposal.
(d) Notwithstanding anything to the foregoing in this Section 9.03, no Fee
or Expenses shall be payable to Parent or Purchaser in the event this
Agreement is terminated pursuant to Section 9.01(b) or 9.01(d)(i) to the
extent that termination, the failure to commence or failure to accept any
Shares for payment, as set forth in Section 9.01(d)(i), shall relate to a
failure of either Parent or Purchaser to perform, in any material respect, any
material covenant or agreement contained in this Agreement or a material
breach by Parent or Purchaser of any of their material representations or
warranties contained in this Agreement.
(e) Except as set forth in this Section 9.03, all costs and expenses
incurred in connection with this Agreement, the Stockholders Agreements and
the Transactions shall be paid by the party incurring such expenses, whether
or not any Transaction is consummated.
(f) In the event that the Company shall fail to pay the Fee or any Expenses
when due, the term "Expenses" shall be deemed to include the costs and
expenses actually incurred or accrued by Parent and Purchaser (including,
without limitation, fees and expenses of counsel) in connection with the
collection under and enforcement of this Section 9.03, together with interest
on such unpaid amounts, commencing on the date that the respective amounts
became due, at a rate equal to the rate of interest publicly announced by
Citibank, N.A., from time to time, in the City of New York, as such bank's
Base Rate plus 1.5%.
SECTION 9.04 Amendment. Subject to Section 7.03, this Agreement may be
amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement and
the Transactions by the stockholders of the Company, no amendment may be made
that would reduce the amount or change the type of consideration into which
each Share shall be converted upon consummation of the Merger. This Agreement
may not be amended except by an instrument in writing signed by each of the
parties hereto.
SECTION 9.05 Waiver. Subject to Section 7.03, at any time prior to the
Effective Time, any party hereto may (a) extend the time for the performance
of any obligation or other act of any other party hereto, (b) waive any
inaccuracy in the representations and warranties of any other party contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any agreement of any other party or any condition to its own obligations
contained herein. Any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the party or parties to be bound thereby.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
telecopy or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in
accordance with this Section 10.01):
if to Parent or Purchaser:
Nokia Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
33
with a copy to:
Nokia Corporation
P.O. Box 226
00045 Nokia Group
Finland
Telecopy: ▇▇▇▇-▇-▇▇▇-▇▇▇
Attention: General Counsel
with a copy to:
Shearman & Sterling
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
if to the Company:
Ramp Networks, Inc.
▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇.
Santa Clara, California 95054
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
Venture Law Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
SECTION 10.02 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner
in order that the Transactions be consummated as originally contemplated to
the fullest extent possible.
SECTION 10.03 Entire Agreement; Assignment. This Agreement and the
Stockholder Agreements and Employment Agreements constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede, except as set forth in Sections 7.04(b) and 7.11, all prior
agreements and undertakings, both written and oral, among the parties, or any
of them, with respect to the subject matter hereof. This Agreement shall not
be assigned (whether pursuant to a merger, by operation of law or otherwise),
except that Parent and Purchaser may assign all or any of their rights and
obligations hereunder to any affiliate of Parent, provided that no such
assignment shall relieve the assigning party of its obligations hereunder if
such assignee does not perform such obligations.
SECTION 10.04 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any
34
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, other than Sections 7.08 (which is intended to be
for the benefit of the persons covered thereby and may be enforced by such
persons).
SECTION 10.05 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
were not performed in accordance with the terms hereof and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 10.06 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State. The parties hereto
hereby (a) submit to the jurisdiction of any state or federal court sitting in
the Borough of Manhattan of The City of New York for the purpose of any Action
arising out of or relating to this Agreement brought by any party hereto, and
(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the Transactions may not be enforced in or by any of the above-
named courts.
SECTION 10.07 Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any litigation directly or indirectly
arising out of, under or in connection with this Agreement or the
Transactions. Each of the parties hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce
that foregoing waiver and (b) acknowledges that it and the other hereto have
been induced to enter into this Agreement and the Transactions, as applicable,
by, among other things, the mutual waivers and certifications in this Section
10.07.
SECTION 10.08 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 10.09 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 10.10 Execution. This Agreement may be executed by facsimile
signatures and such signature shall be deemed binding for all purposes hereof,
without delivery of an original signature being thereafter required.
SECTION 10.11 Disclosure Schedule. The parties acknowledge and agree that
if any section of the Disclosure Schedule discloses an item or information in
such a way as to make its relevance to the disclosure required by another
section of the Disclosure Schedule readily apparent, the matter shall be
deemed to have been disclosed in such other section of the Disclosure
Schedule, notwithstanding the omission of an appropriate cross-reference to
such other section.
35
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
NOKIA CORPORATION
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Attorney-in-fact
BLACKBIRD ACQUISITION, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: President
RAMP NETWORKS, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: _________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and CEO
36
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment any Shares tendered pursuant to the Offer, and
may extend, terminate or amend the Offer, if (i) immediately prior to the
expiration of the Offer, the Minimum Condition shall not have been satisfied,
(ii) any applicable waiting period under the HSR Act or under any applicable
material foreign statutes or regulations shall not have expired or been
terminated prior to the expiration of the Offer or (iii) at any time on or
after the date of this Agreement and prior to the expiration of the Offer, any
of the following conditions shall exist:
(a) there shall have been instituted or be pending any Action before any
Governmental Authority (i) challenging or seeking to make illegal, materially
delay, or otherwise, directly or indirectly, restrain or prohibit or make
materially more costly, the making of the Offer, the acceptance for payment of
any Shares by Parent, Purchaser or any other affiliate of Parent, or the
purchase of Shares pursuant to any Stockholder Agreement, or the consummation
of any other Transaction, or seeking to obtain damages in connection with any
Transaction that are material in relation to the Transactions taken as a
whole; (ii) seeking to prohibit or materially limit the ownership or operation
by the Company, Parent or any of their subsidiaries of all or any of the
business or assets of the Company, Parent or any of their subsidiaries or to
compel the Company, Parent or any of their subsidiaries, as a result of the
Transactions, to dispose of or to hold separate all or any material portion of
the business or assets of the Company, Parent or any of their subsidiaries;
(iii) seeking to impose or confirm any material limitation on the ability of
Parent, Purchaser or any other affiliate of Parent to exercise effectively
full rights of ownership of any Shares, including, without limitation, the
right to vote any Shares acquired by Purchaser pursuant to the Offer or any
Stockholder Agreement or otherwise on all matters properly presented to the
Company's stockholders, including, without limitation, the approval and
adoption of this Agreement and the Transactions; (iv) seeking to require
divestiture by Parent, Purchaser or any other affiliate of Parent of any
Shares; or (v) which otherwise would prevent or materially delay consummation
of the Offer or the Merger or otherwise prevent or materially delay the
Company from performing its obligations under this Agreement or would,
individually or in the aggregate, have a Material Adverse Effect;
(b) any Governmental Authority or court of competent jurisdiction shall
have issued an order, decree, injunction or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting or materially
delaying or preventing the Transactions and such order, decree, injunction,
ruling or other action shall have become final and non-appealable;
(c) there shall have been any statute, rule, regulation, legislation or
interpretation enacted, promulgated, amended, issued or deemed applicable to
(i) Parent, the Company or any subsidiary or affiliate of Parent or the
Company or (ii) any Transaction, by any United States or non-United States
legislative body or Governmental Authority with appropriate jurisdiction,
other than the routine application of the waiting period provisions of the HSR
Act to the Offer, the Stockholder Agreements or the Merger, that is reasonably
likely to result, directly or indirectly, in any of the consequences referred
to in clauses (i) through (v) of paragraph (a) above;
(d) any Material Adverse Effect shall have occurred;
(e) there shall have occurred (i) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or Finland
that materially and adversely affects the ability of Parent to pay for the
Shares for more than five business days after the expiration of the Offer or
(ii) a commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States or
Finland that materially and adversely affects the ability of Purchaser and
Parent to consummate the Offer or, in the case of such calamity existing on
the date hereof, a material acceleration or worsening thereof;
(f) (A) the Board, or any committee thereof, shall have withdrawn or
modified, in a manner adverse to Parent or Purchaser, the approval or
recommendation of the Offer, the Merger, the Agreement or the Stockholder
Agreements, or approved or recommended any Acquisition Proposal other than the
Offer, the Merger and the Stockholder Agreements or (B) the Board, or any
committee thereof, shall have resolved to do any of the foregoing;
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(g) any representation or warranty of the Company in the Agreement, or of
any Stockholder in the Stockholders Agreements, shall not be true and correct
as if such representation or warranty was made as of such time on or after the
date of this Agreement (except for those representations or warranties that
address matters only as of a specific date, which must be true and correct as
of such date) (in each case, without for this purpose giving effect to
qualifications or limitations as to materiality or the absence of a Material
Adverse Effect on the Company contained in such representations and
warranties), except for such non-intentional failures to be true and accurate
as would not, individually or in the aggregate, have, or be reasonably likely
to result in, a Material Adverse Effect;
(h) the Company shall have failed to perform, in any material respect, any
obligation or to comply, in any material respect, with any agreement or
covenant of the Company to be performed or complied with by it under the
Agreement or the Stockholders shall have failed to perform in any material
respect, any obligation or to comply, in any material respect, with any
agreement or covenant of the Stockholders to be performed or complied with by
them under the Stockholder Agreements;
(i) the Agreement shall have been terminated in accordance with its terms;
or
(j) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of Shares
thereunder;
which, in the reasonable judgment of Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
any of its affiliates) giving rise to any such condition, makes it inadvisable
to proceed with such acceptance for payment.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be asserted by Purchaser or Parent regardless of the circumstances
giving rise to any such condition or, subject to the terms of this Agreement,
may be waived by Purchaser or Parent in whole or in part at any time and from
time to time in their sole discretion. The failure by Parent or Purchaser at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right; the waiver of any such right with respect to particular
facts and other circumstances shall not be deemed a waiver with respect to any
other facts and circumstances; and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time.
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