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EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
Among
AMDOCS LIMITED,
▇▇▇▇ ACQUISITION CORP.
and
INTERNATIONAL TELECOMMUNICATION DATA SYSTEMS, INC.
Dated as of September 3, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER
SECTION 1.01 The Merger........................................................ 2
SECTION 1.02 Effect of the Merger.............................................. 2
SECTION 1.03 Consummation of the Merger........................................ 2
SECTION 1.04 Certificate of Incorporation; By-Laws; Directors and Officers..... 2
ARTICLE II
CONVERSION OF SECURITIES
SECTION 2.01 Conversion of Securities.......................................... 3
SECTION 2.02 Stock Plans....................................................... 4
SECTION 2.03 Exchange of Certificates.......................................... 4
SECTION 2.04 Stock Transfer Books.............................................. 7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01 Organization and Qualification.................................... 7
SECTION 3.02 Subsidiaries...................................................... 7
SECTION 3.03 Authority Relative to Agreements.................................. 8
SECTION 3.04 Non-Contravention................................................. 8
SECTION 3.05 Capitalization.................................................... 9
SECTION 3.06 SEC Filings....................................................... 9
SECTION 3.07 Financial Statements.............................................. 9
SECTION 3.08 Absence of Certain Changes or Events.............................. 10
SECTION 3.09 Governmental Approvals............................................ 10
SECTION 3.10 Compliance with Laws.............................................. 11
SECTION 3.11 Disclosure Documents.............................................. 11
SECTION 3.12 Litigation........................................................ 11
SECTION 3.13 Title to Properties............................................... 12
SECTION 3.14 Real Property Interests........................................... 12
SECTION 3.15 Software.......................................................... 12
SECTION 3.16 Intellectual Property Rights...................................... 13
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SECTION 3.17 Trade Secrets..................................................... 14
SECTION 3.18 Labor Matters..................................................... 14
SECTION 3.19 Severance Arrangements............................................ 14
SECTION 3.20 Taxes............................................................. 15
SECTION 3.21 Employee Benefit Plans............................................ 16
SECTION 3.22 Environmental Matters............................................. 17
SECTION 3.23 Contracts......................................................... 17
SECTION 3.24 Customer Relationships............................................ 19
SECTION 3.25 Certain Transactions.............................................. 19
SECTION 3.26 Insurance......................................................... 19
SECTION 3.27 State Takeover Statute............................................ 20
SECTION 3.28 Opinion of Financial Advisor...................................... 20
SECTION 3.29 Brokers........................................................... 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 4.01 Organization and Qualification.................................... 20
SECTION 4.02 Subsidiaries...................................................... 20
SECTION 4.03 Authority Relative to Agreement................................... 20
SECTION 4.04 Non-Contravention................................................. 21
SECTION 4.05 Capitalization.................................................... 21
SECTION 4.06 SEC Filings....................................................... 21
SECTION 4.07 Financial Statements.............................................. 22
SECTION 4.08 Governmental Approvals............................................ 22
SECTION 4.09 Disclosure Documents.............................................. 22
SECTION 4.10 Compliance with Laws.............................................. 23
SECTION 4.11 Litigation........................................................ 23
SECTION 4.12 Brokers........................................................... 23
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUISITION
SECTION 5.01 Organization and Qualification.................................... 24
SECTION 5.02 Authority Relative to Agreement................................... 24
SECTION 5.03 Non-Contravention................................................. 24
SECTION 5.04 Governmental Approvals............................................ 24
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ARTICLE VI
CERTAIN AGREEMENTS
SECTION 6.01 Conduct of the Company's Business................................. 25
SECTION 6.02 Conduct of Parent's Business...................................... 27
SECTION 6.03 Stockholder Approval.............................................. 27
SECTION 6.04 Access to Information............................................. 28
SECTION 6.05 Further Assurances................................................ 28
SECTION 6.06 Inquiries and Negotiations........................................ 29
SECTION 6.07 Notification of Certain Matters................................... 30
SECTION 6.08 Indemnification................................................... 31
SECTION 6.09 Affiliates of the Company......................................... 32
SECTION 6.10 NYSE Listing...................................................... 32
SECTION 6.11 Stock Option Registration......................................... 32
SECTION 6.12 Comfort Letters................................................... 33
SECTION 6.13 Stay Bonuses...................................................... 33
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to the Obligation of Parent and Acquisition............ 33
SECTION 7.02 Conditions to the Obligations of the Company...................... 35
ARTICLE VIII
TERMINATION AND ABANDONMENT
SECTION 8.01 Termination and Abandonment....................................... 36
SECTION 8.02 Effect of Termination............................................. 37
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Nonsurvival of Representations and Warranties..................... 37
SECTION 9.02 Expenses, Etc..................................................... 38
SECTION 9.03 Publicity......................................................... 38
SECTION 9.04 Execution in Counterparts......................................... 38
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SECTION 9.05 Notices........................................................... 38
SECTION 9.06 Waivers........................................................... 39
SECTION 9.07 Entire Agreement.................................................. 39
SECTION 9.08 Applicable Law.................................................... 40
SECTION 9.09 Binding Effect, Benefits.......................................... 40
SECTION 9.10 Assignability..................................................... 40
SECTION 9.11 Amendments........................................................ 40
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INDEX TO EXHIBITS
Exhibit Description
A Option Agreement
B Voting Agreement
C Tax Representation Letter of the Company
D Tax Representation Letter of Parent
INDEX TO SCHEDULES
Schedule Description
3.02 Subsidiaries
3.07 Certain Liabilities
3.08 Certain Changes or Events
3.09 Governmental Approvals
3.12 Litigation
3.13 Liens and Encumbrances
3.14 Real Property Interests
3.16 Intellectual Property Rights
3.19 Severance Arrangements
3.20 Taxes
3.21 Employee Benefit Plans
3.23 Material Contracts
3.24 Certain Customer Relationships
3.25 Certain Transactions
3.26 Insurance
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 3, 1999,
among AMDOCS LIMITED, a company organized under the laws of Guernsey, Channel
Islands ("Parent"), ▇▇▇▇ ACQUISITION CORP., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Acquisition"), and INTERNATIONAL
TELECOMMUNICATION DATA SYSTEMS, INC., a Delaware corporation (the "Company").
The Company and Acquisition are hereinafter sometimes referred to as the
"Constituent Corporations" and the Company as the "Surviving Corporation."
WHEREAS the respective Boards of Directors of Parent,
Acquisition and the Company deem it advisable and in the best interests of their
respective stockholders that Parent acquire the Company pursuant to the terms
and conditions of this Agreement, and, in furtherance of such acquisition, such
Boards of Directors have approved the merger of Acquisition with and into the
Company in accordance with the terms of this Agreement and the General
Corporation Law of the State of Delaware (the "Delaware GCL"); and
WHEREAS Parent, Acquisition and the Company desire that all
outstanding shares of the capital stock of the Company be converted into the
right to receive fully paid and nonassessable Ordinary Shares, pound
sterling 0.01 par value, of Parent ("Parent Ordinary Shares"), as hereinafter
provided; and
WHEREAS concurrently with the execution and delivery of this
Agreement, and as a condition and inducement to Parent and Acquisition to enter
into this Agreement, the Company and Acquisition have entered into an agreement
in the form attached hereto as Exhibit A (the "Option Agreement"), pursuant to
which the Company has granted Acquisition an irrevocable option to purchase up
to 19.9% of the then outstanding shares of Common Stock, $.01 par value, of the
Company ("Company Common Stock"), on the terms and subject to the conditions set
forth therein; and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to Parent and Acquisition to enter
into this Agreement, certain holders of shares of Company Common Stock have
entered into an agreement with Parent and Acquisition in the form attached
hereto as Exhibit B (the "Voting Agreement"), pursuant to which such holders
have agreed to vote such shares of the Company Common Stock in accordance with
the terms set forth in the Voting Agreement; and
WHEREAS, for federal income tax purposes, it is intended that
the merger of Acquisition with and into the Company shall qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code");
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NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants, agreements and conditions contained
herein, and in order to set forth the terms and conditions of the merger and the
mode of carrying the same into effect, the parties hereto hereby agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time (as hereinafter defined), in accordance
with this Agreement and the Delaware GCL, Acquisition shall be merged with and
into the Company (the "Merger"), the separate existence of Acquisition shall
cease, and the Company shall continue as the surviving corporation under the
corporate name of "ITDS, Inc."
SECTION 1.02 Effect of the Merger. Upon the effectiveness of
the Merger, the Surviving Corporation shall succeed to and assume all the rights
and obligations of the Company and Acquisition in accordance with the Delaware
GCL and the Merger shall otherwise have the effects set forth in Section 259 of
the Delaware GCL.
SECTION 1.03 Consummation of the Merger. As soon as
practicable after the satisfaction or waiver of the conditions to the
obligations of the parties to effect the Merger set forth herein, provided that
this Agreement has not been terminated previously, the parties hereto will cause
the Merger to be consummated by filing with the Secretary of State of the State
of Delaware a properly executed certificate of merger in accordance with the
Delaware GCL, which shall be effective upon filing or on such later date as may
be specified therein (the time of such effectiveness being the "Effective
Time").
SECTION 1.04 Certificate of Incorporation; By-Laws; Directors
and Officers. (a) The Certificate of Incorporation of Acquisition in effect at
the Effective Time shall be the Certificate of Incorporation of the Surviving
Corporation (except that such Certificate of Incorporation shall be amended to
provide that the name of the Surviving Corporation shall be "ITDS, Inc."), until
thereafter amended in accordance with the provisions thereof and as provided by
the Delaware GCL. The By-Laws of Acquisition in effect at the Effective Time
shall be the By-Laws of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and the Certificate of Incorporation of
the Surviving Corporation and as provided by the Delaware GCL.
(b) From and after the Effective Time and until their
respective successors are duly elected or appointed and qualified, (i) the
directors of Acquisition at the Effective Time shall be the directors of the
Surviving Corporation and (ii) the officers of the Company at the Effective Time
shall be the officers of the Surviving Corporation.
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ARTICLE II
CONVERSION OF SECURITIES
SECTION 2.01 Conversion of Securities. By virtue of the Merger
and without any action on the part of either Constituent Corporation or any
holder of the capital stock thereof, at the Effective Time:
(a) Each share of Common Stock, $.01 par value, of
Acquisition issued and outstanding immediately prior to the Effective
Time shall be converted into and become one validly issued, fully paid
and nonassessable share of Common Stock of the Surviving Corporation;
(b) Each share of Company Common Stock that is held
in the treasury of the Company or of any Subsidiary (as hereinafter
defined) shall be canceled and retired and no consideration shall be
paid or delivered in exchange therefor; and
(c) Each remaining share of Company Common Stock
issued and outstanding immediately prior to the Effective Time shall
be converted into the right to receive a number of Parent Ordinary
Shares equal to the Exchange Ratio (as hereinafter defined), subject to
the payment of cash in lieu of fractional shares as provided in Section
2.03(d) below. For this purpose, the "Exchange Ratio" shall be equal to
the quotient (rounded to the nearest thousandth, or if there shall not
be a nearest thousandth, to the next lower thousandth) derived by
dividing:
(i) $10.50; by
(ii) the average of the closing prices per Parent
Ordinary Share on the New York Stock Exchange during the ten
consecutive trading days ending on the second trading day prior to the
Effective Time (the "Pre-Closing Average Price");
provided, however that in no event shall the Exchange Ratio be less
than .3717 nor more than .4603. If, prior to the Effective Time, Parent
should split or combine the outstanding Parent Ordinary Shares, or pay
a stock dividend or other stock distribution in Parent Ordinary Shares,
then the Exchange Ratio and the Pre-Closing Average Price shall be
appropriately adjusted to reflect such split, combination, dividend or
other distribution.
All such shares of Company Common Stock to be converted into
Parent Ordinary Shares pursuant to this Section 2.01(c) shall cease to be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each certificate previously evidencing any such shares shall
thereafter represent the right to receive, upon the surrender of such
certificate in accordance with the provisions of Section 2.03, certificates
evidencing such number of whole
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Parent Ordinary Shares into which such shares were converted in accordance
herewith. The holders of such certificates previously evidencing such shares of
Company Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of Company Common Stock
except as otherwise provided herein or by law. No fraction of a Parent Ordinary
Share shall be issued and, in lieu thereof, a cash payment shall be made
pursuant to Section 2.03(d).
SECTION 2.02 Stock Plans. (a) At the Effective Time, each
stock option granted under the Company's 1996, 1997, 1998 and 1999 Stock
Incentive Plans (the "Company Stock Plans") that is outstanding immediately
prior to the Effective Time shall be assumed by Parent and converted
automatically into an option to purchase Parent Ordinary Shares (a "New Option")
in an amount and at an exercise price determined as provided below:
(i) The number of Parent Ordinary Shares to be subject to the
New Option shall be equal to the product of the number of shares of
Company Common Stock remaining subject (as of immediately prior to the
Effective Time) to the original option and the Exchange Ratio, provided
that any fractional shares resulting from such multiplication shall be
rounded down to the nearest share; and
(ii) The exercise price per Parent Ordinary Share under the
New Option shall be equal to the exercise price per share of Company
Common Stock under the original option divided by the Exchange Ratio,
provided that such exercise price shall be rounded up to the nearest
cent.
The adjustment provided herein with respect to any options that are "incentive
stock options" (as defined in Section 422 of the Code) shall be and is intended
to be effected in a manner that is consistent with Section 424(a) of the Code.
After the Effective Time, each New Option shall be subject to the same terms and
conditions and shall be exercisable and shall vest upon the same terms and
conditions, as were applicable to the related Company Stock Option immediately
prior to the Effective Time, except that all references to the Company shall be
deemed to be references to Parent.
(b) As of the Effective Time, the 1996 Employee Stock Purchase
Plan shall terminate without the purchase of any additional shares of Company
Common Stock and all amounts contributed by participants in such plan shall be
returned to such participants in accordance with Section 16(b)(ii) thereof.
SECTION 2.03 Exchange of Certificates. (a) As of the Effective
Time, Parent shall deposit, or shall cause to be deposited, with or for the
account of a bank or trust company designated by Parent, which shall be
reasonably satisfactory to the Company (the "Exchange Agent"), for the benefit
of the holders of shares of Company Common Stock, for exchange in accordance
with this Article II, through the Exchange Agent, certificates evidencing the
Parent Ordinary Shares issuable pursuant to Section 2.01(c) in exchange for
outstanding shares of
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Company Common Stock (such certificates for Parent Ordinary Shares, together
with any dividends or distributions thereto, being hereinafter referred to as
the "Exchange Fund").
(b) As soon as reasonably practicable after the Effective Time
(but in any event within five business days of the Effective Time), Parent will
instruct the Exchange Agent to mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time evidenced outstanding
shares of Company Common Stock (the "Certificates"), (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Exchange Agent and shall be in such form and have such other provisions as
Parent may reasonably specify) and (ii) instructions to effect the surrender of
the Certificates in exchange for the certificates evidencing Parent Ordinary
Shares. Upon surrender of a Certificate for cancellation to the Exchange Agent
together with such letter of transmittal, duly executed, and such other
customary documents as may be required pursuant to such instructions, the holder
of such Certificate shall be entitled to receive in exchange therefor (A)
certificates evidencing that number of whole Parent Ordinary Shares which such
holder has the right to receive in accordance with Section 2.01(c) in respect of
the shares of Company Common Stock formerly evidenced by such Certificate, and
(B) cash in lieu of a fraction of a Parent Ordinary Share to which such holder
is entitled pursuant to Section 2.03(d) (the Parent Ordinary Shares and cash
described in clauses (A) and (B) being, collectively, the "Merger
Consideration"), and the Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of shares of Company Common Stock which
is not registered in the transfer records of the Company, Parent Ordinary Shares
and cash (in lieu of a fraction of a Parent Ordinary Share) may be issued and
paid in accordance with this Article II to a transferee if the certificate
evidencing such shares of Company Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid. If any Certificate representing Parent Ordinary Shares is to be issued in
a name other than that in which the Certificate surrendered in exchange therefor
is registered, it shall be a condition of such exchange that the Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the person requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of certificates for
such Parent Ordinary Shares in a name other than that of the registered holder
of the Certificate surrendered, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.03, each Certificate shall be
deemed at any time after the Effective Time to evidence only the right to
receive upon such surrender the Merger Consideration.
(c) No dividends or other distributions declared or made after
the Effective Time with respect to Parent Ordinary Shares with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the Parent Ordinary Shares he is entitled to receive
until the holder of such Certificate shall surrender such Certificate, at which
time such dividends or distributions shall be paid. In no event shall the
persons entitled to receive
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such dividends or other distributions be entitled to receive interest on such
dividends or other distributions.
(d) No certificates or scrip representing a fraction of a
Parent Ordinary Share shall be issued upon the conversion of Company Common
Stock pursuant to Section 2.01(c), and such fractional share interests shall not
entitle the owner thereof to vote or to any rights of a stockholder of Parent.
As promptly as practicable following the Effective Time, the Exchange Agent
shall determine the excess of (A) the number of Parent Ordinary Shares delivered
to the Exchange Agent by Parent pursuant to Section 2.03(a) over (B) the
aggregate number of whole Parent Ordinary Shares to be issued to holders of
Company Common Stock pursuant to Section 2.01(c) (such excess being herein
called the "Excess Shares"). As soon after the Effective Time as practicable,
the Exchange Agent, as agent for the holders of Company Common Stock, shall sell
the Excess Shares at then prevailing prices on the New York Stock Exchange (the
"NYSE"), all in the manner provided in this paragraph (d). The sale of the
Excess Shares by the Exchange Agent shall be executed on the NYSE and shall be
executed in round lots to the extent practicable. Until the net proceeds of such
sale or sales have been distributed to the holders of Company Common Stock
entitled thereto, the Exchange Agent shall hold such proceeds in trust for such
holders of Company Common Stock (the "Common Shares Trust"). The Exchange Agent
shall determine the portion of the Common Shares Trust to which each holder of a
Certificate shall be entitled, if any, by multiplying the amount of the
aggregate net proceeds comprising the Common Shares Trust by a fraction, the
numerator of which is the amount of the fractional share interest in a Parent
Ordinary Share to which such holder is entitled under Section 2.01(c) (or would
be entitled but for this Section 2.03(d)) and the denominator of which is the
aggregate amount of fractional interests in Parent Ordinary Shares to which all
holders of Company Common Stock are entitled.
(e) Any portion of the Exchange Fund that remains
undistributed to the holders of Company Common Stock for six months after the
Effective Time shall be delivered to Parent, upon demand, and any holders of
Company Common Stock who have not theretofore complied with this Article II
shall thereafter look only to Parent for the Merger Consideration to which they
are entitled pursuant to this Agreement and any dividends or distributions with
respect to the Merger Consideration.
(f) Neither Parent nor the Company shall be liable to any
holder of shares of Company Common Stock for any Parent Ordinary Shares (or
dividends or distributions with respect thereto) or cash from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(g) Parent or the Exchange Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Agreement
to any holder of shares of Company Common Stock such amounts as Parent or the
Exchange Agent is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by Parent or the
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Exchange Agent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Company Common
Stock in respect of which such deduction and withholding was made by Parent or
the Exchange Agent.
(h) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person or entity
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent or the Exchange Agent, the posting by such person or entity of a bond in
such reasonable amount as Parent or the Exchange Agent may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent shall exchange for such lost, stolen or destroyed Certificate
the Merger Consideration pursuant to this Agreement.
SECTION 2.04 Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed, and there shall be no
further registration of transfers of shares of Company Common Stock thereafter
on the records of the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Acquisition
as follows:
SECTION 3.01 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own or lease and operate its properties and assets and to carry on its business
as it is now being conducted. The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction in
which the character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not have a Material Adverse Effect (as hereinafter defined) on
the Company. As used herein, "Material Adverse Effect" shall mean, with respect
to any party, a material adverse effect on the business, operations, assets,
condition (financial or other) or operating results of such party and its
subsidiaries, taken as a whole.
SECTION 3.02 Subsidiaries. (a) Except for shares of the
Subsidiaries or as set forth on Schedule 3.02 hereto (as hereinafter defined),
the Company does not own of record or beneficially, directly or indirectly, (i)
any shares of outstanding capital stock or securities convertible into capital
stock of any other corporation or (ii) any participating interest in any
partnership, joint venture or other non-corporate business enterprise. Each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as it is now being conducted. Each
Subsidiary is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction in
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which the character of its properties owned or leased or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified would not have a Material Adverse Effect on the Company. Each
Subsidiary and its jurisdiction of formation is identified in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998.
(b) Except as set forth on Schedule 3.02 hereto, all the
outstanding shares of capital stock of each Subsidiary are validly issued, fully
paid and nonassessable and are owned by the Company or by a wholly-owned
Subsidiary of the Company, free and clear of any liens, claims, charges,
encumbrances or adverse claims, and there are no proxies outstanding or
restrictions on voting with respect to any such shares.
(c) For purposes of this Agreement, the term "Subsidiary"
shall mean any corporation or other business entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time
owned by the Company and/or one or more other Subsidiaries.
SECTION 3.03 Authority Relative to Agreements. The Company has
all requisite corporate power and authority to execute and deliver this
Agreement and the Option Agreement and to perform its respective obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement and the Option Agreement by the Company and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by
the Company's Board of Directors and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement and the Option
Agreement and the transactions contemplated hereby and thereby, other than the
approval of the Merger by a majority of the stockholders of the Company. This
Agreement and the Option Agreement have been duly executed and delivered by the
Company and, subject to such stockholder approval, constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
SECTION 3.04 Non-Contravention. Except as set forth on
Schedule 3.04, the execution and delivery of this Agreement and the Option
Agreement by the Company do not and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) conflict with any
provision of the Certificate of Incorporation or By-Laws of the Company; (ii)
result (with the giving of notice or the lapse of time or both) in any violation
of or default or loss of a benefit under, or permit the acceleration of any
obligation under, any mortgage, indenture, lease, agreement or other
instrument, permit, concession, grant, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to the Company or
any Subsidiary or their respective properties; or (iii) result in the creation
or imposition of any lien, charge or encumbrance of any nature whatsoever upon
any asset of the Company or any Subsidiary; other than (in the cases of clauses
(ii) and (iii) above) such as could not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect on the Company.
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SECTION 3.05 Capitalization. The authorized capital stock of
the Company consists of (i) 40,000,000 shares of Company Common Stock and (ii)
2,000,000 shares of Preferred Stock, $.01 par value ("Preferred Stock"). As of
August 4, 1999, 17,457,996 shares of Company Common Stock were issued and
outstanding, all of which were duly and validly issued, fully paid and
nonassessable, and no shares of Preferred Stock are outstanding. Except for
options to purchase an aggregate 3,141,270 shares of Company Common Stock
granted pursuant to the Company Stock Plans, no subscription, warrant, option,
convertible security, stock appreciation or other right (contingent or other) to
purchase or acquire, or any securities convertible into or exchangeable for, any
shares of any class of capital stock of the Company or any Subsidiary is
authorized or outstanding and there is not any commitment of the Company or any
Subsidiary to issue any shares, warrants, options or other such rights or to
distribute to holders of any class of its capital stock any evidences of
indebtedness or assets. Neither the Company nor any Subsidiary has any
obligation (contingent or other) to purchase, redeem or otherwise acquire any
shares of its capital stock or any interest therein or to pay any dividend or
make any other distribution in respect thereof.
SECTION 3.06 SEC Filings. The Company has provided or made
available to Parent and Acquisition true and complete copies of (i) the Annual
Reports of the Company on Form 10-K for the years ended December 31, 1996, 1997
and 1998, (ii) the Quarterly Reports of the Company on Form 10-Q for the three
months ended March 31, 1999 and June 30, 1999, (iii) its proxy or information
statements relating to meetings of, or actions taken without a meeting by, the
stockholders of the Company subsequent to January 1, 1997 and prior to the date
hereof, and (iv) all other reports, statements and registration statements filed
by the Company with the Securities and Exchange Commission (the "SEC")
subsequent to January 1, 1997 (collectively, the "Company SEC Filings"). The
Company SEC Filings (including, without limitation, any financial statements or
schedules included therein) (i) were prepared in compliance with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, and (ii) did not at the time of filing (or if amended, supplemented
or superseded by a filing prior to the date hereof, on the date of that filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. None of the Subsidiaries is required to file any forms, reports or
other documents with the SEC.
SECTION 3.07 Financial Statements. The consolidated financial
statements of the Company included in the Company SEC Filings have been prepared
in accordance with generally accepted accounting principles consistently applied
and consistent with prior periods, subject, in the case of unaudited interim
consolidated financial statements, to year-end adjustments (which consist of
normal recurring accruals) and the absence of certain footnote disclosures. The
consolidated balance sheets of the Company included in the Company SEC Filings
fairly present the financial position of the Company and the Subsidiaries as of
their respective dates, and the related consolidated statements of operations,
stockholders' equity and cash flows included in the Company SEC Filings fairly
present the results of operations of the
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Company and the Subsidiaries for the respective periods then ended, subject, in
the case of unaudited interim financial statements, to year-end adjustments
(which consist of normal recurring accruals) and the absence of certain footnote
disclosures. Except for liabilities or obligations that are accrued or reserved
against in the Company's financial statements (or reflected in the notes hereto)
included in the Company SEC Filings made prior to the date hereof or that were
incurred subsequent to June 30, 1999 in the ordinary course of business and
consistent with past practice, and except as set forth on Schedule 3.07 hereto,
none of the Company and its Subsidiaries has any liabilities or obligations
(whether absolute, accrued, contingent or otherwise) of a nature required by
generally accepted accounting principles to be reflected in a consolidated
balance sheet (or reflected in the notes thereto) or which would have a Material
Adverse Effect on the Company.
SECTION 3.08 Absence of Certain Changes or Events. Except as
disclosed in the Company SEC Filings made prior to the date hereof or as set
forth on Schedule 3.08 hereto, since December 31, 1998, neither the Company nor
any Subsidiary has (i) issued any stock, bonds or other corporate securities,
(ii) borrowed any amount or incurred any material liabilities (absolute or
contingent), except in the ordinary course of business, (iii) discharged or
satisfied any lien or incurred or paid any obligation or liability (absolute or
contingent) other than current liabilities shown on the consolidated balance
sheet of the Company and the Subsidiaries as of December 31, 1998 referred to in
Section 3.06 hereof and current liabilities incurred since the date of such
balance sheet in the ordinary course of business, (iv) declared or made any
payment or distribution to stockholders or purchased or redeemed any shares of
its capital stock or other securities, (v) mortgaged, pledged or subjected to
lien any of its assets, tangible or intangible, other than liens for current
real property taxes not yet due and payable, (vi) sold, assigned or transferred
any of its tangible assets, or canceled any debts or claims, except in the
ordinary course of business or as otherwise contemplated hereby, (vii) sold,
assigned or transferred any patents, trademarks, trade names, copyrights, trade
secrets or other intangible assets, (viii) made any changes in officer or
executive compensation, (ix) agreed, in writing or otherwise, to take any of the
actions listed in clauses (i) through (viii) above, (x) suffered any Material
Adverse Effect or waived any rights of substantial value, whether or not in the
ordinary course of business, or (xi) entered into any material transaction,
except in the ordinary course of business or as otherwise contemplated hereby.
SECTION 3.09 Governmental Approvals. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state, local or foreign governmental or regulatory authority is
required to be made or obtained by the Company in connection with the execution
and delivery of this Agreement and the Option Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby and thereby,
except for (i) compliance by the Company with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), (▇▇) the filing of a certificate of
merger with the Secretary of State of the State of Delaware in accordance with
the Delaware GCL, (iii) such as are listed on Schedule 3.09 hereto and (iv) such
consents, approvals, orders or authorizations which if not obtained, or
registrations, declarations or filings which if not made, would not materially
adversely affect the ability of the Company to consummate the transactions
contem-
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plated hereby or by the Option Agreement or the ability of the Surviving
Corporation or any Subsidiary to conduct its business after the Effective Time
substantially as currently conducted by the Company or such Subsidiary.
SECTION 3.10 Compliance with Laws. Neither the Company nor any
Subsidiary is in default under or in violation of any order of any court,
governmental authority or arbitration board or tribunal to which the Company or
such Subsidiary is or was subject or in violation of any laws, ordinances,
governmental rules or regulations (including, but not limited to, those relating
to export controls, labor and employment matters and foreign corrupt practices)
to which the Company or any Subsidiary is or was subject, except for such
defaults or violations that, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect on the Company. Neither the Company nor any
Subsidiary has failed to obtain any licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its properties or to
the conduct of its business, which failure could reasonably be expected to have
a Material Adverse Effect on the Company, and, after giving effect to the
transactions contemplated hereby, all such licenses, permits, franchises and
other governmental authorizations will continue to be valid and in full force
and effect except where such failure to be in full force and effect would not
reasonably be expected to have a Material Adverse Effect on the Company.
SECTION 3.11 Disclosure Documents. None of the information to
be supplied by the Company for inclusion in (i) the Registration Statement to be
filed with the SEC by Parent on Form F-4 under the Securities Act for the
purpose of registering the Parent Ordinary Shares to be issued in connection
with the Merger (the "Registration Statement") or (ii) the proxy statement to be
distributed in connection with the Company's meeting of stockholders to vote
upon this Agreement (the "Proxy Statement") will, in the case of the
Registration Statement, at the time it becomes effective and at the Effective
Time, or, in the case of the Proxy Statement or any amendments thereof or
supplements thereto, at the time of the mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the meeting of
stockholders of the Company to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the applicable provisions of the Exchange Act, and the rules and
regulations promulgated thereunder, except that no representation is made by the
Company with respect to statements made therein based on information supplied by
Parent or its representatives for inclusion in the Proxy Statement or with
respect to information concerning Parent or any of its subsidiaries incorporated
by reference in the Proxy Statement.
SECTION 3.12 Litigation. Except as set forth on Schedule 3.12
hereto, there is no action, suit, investigation, proceeding or claim pending or,
to the best knowledge of the Company, threatened against or affecting the
Company or any Subsidiary, or their respective properties or rights, before any
governmental body or arbitration board or tribunal, either alone or
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together with other similar actions, the outcome of which could be reasonably
expected to have a Material Adverse Effect on the Company.
SECTION 3.13 Title to Properties. The Company and the
Subsidiaries have good and valid title to the properties and assets reflected on
the consolidated balance sheet of the Company and the Subsidiaries as of June
30, 1999 referred to in Section 3.06 hereof (other than non-material properties
and assets disposed of in the ordinary course of business consistent with past
practice since the date of such balance sheet), and all such properties and
assets are free and clear of liens and encumbrances, except (i) as described on
Schedule 3.13 hereto, (ii) liens for current taxes not yet due and payable and
(iii) minor imperfections of title, if any, not material in amount and not
materially detracting from the value or impairing the use of the property
subject thereto or impairing the operations or proposed operations of the
Company or any of the Subsidiaries (collectively, "Permitted Liens").
SECTION 3.14 Real Property Interests. Schedule 3.14 hereto
sets forth a complete and accurate list of (i) the real properties owned by the
Company or any of the Subsidiaries having a net book value as of June 30, 1999
in excess of $500,000 (the "Fee Properties") and (ii) the real properties
leased by the Company or any of the Subsidiaries for annual rental payments in
excess of $500,000 (the "Leased Properties"). Complete and accurate copies of
all leases or other agreements relating to the Leased Properties have been
delivered to Parent and there have been no changes or amendments to such leases
or agreements since such delivery. Each lease or other agreement relating to the
Leased Properties is a valid and subsisting agreement, without any material
default of the Company or any Subsidiary thereunder and, to the best knowledge
of the Company, without any material default thereunder of the other party
thereto, and such leases and agreements give the Company and the Subsidiaries
the right to use or occupy, as the case may be, all real properties as are
sufficient and adequate to operate the business of the Company and the
Subsidiaries as it is currently being conducted. Except as set forth on Schedule
3.14, the Company's or any Subsidiary's possession of such property has not been
disturbed nor, to the best knowledge of the Company, has any claim been asserted
against the Company or such Subsidiary materially adverse to its rights in such
leasehold interests.
SECTION 3.15 Software. (a) Each of the Company and the
Subsidiaries has valid licenses to all copies of all software that is not owned
by it and is used by it in connection with the conduct of its business ("Third
Party Software"), and the use by the Company or such Subsidiary of such Third
Party Software, including, without limitation, all modifications and
enhancements thereto (whether or not created by the Company or such Subsidiary),
complies with such license (except for such noncompliance as could not,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect on the Company). The Company or a Subsidiary owns all right,
title and interest in and to, or has sufficient rights in, all software used by
the Company and the Subsidiaries in providing services to customers and all
software marketed or licensed by the Company and the Subsidiaries to customers
or held for use or in development for marketing and licensing to customers
(collectively, "Proprietary Software"), and all such rights, titles and
interests will continue to be valid and in full force and effect after the
Effective Time.
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(b) None of the Third Party Software or Proprietary Software,
no use thereof by the Company or any Subsidiary, and no permitted use thereof by
any licensee infringes upon or violates in any respect material to the business
of the Company any patent, copyright, trade secret or other intellectual
property or contractual right of any customer or other person or entity, and no
claim or demand with respect to any such infringement or violation has been made
or, to the knowledge of the Company, threatened.
(c) To the best knowledge of the Company, there are no viruses
in the Proprietary Software and there are no defects in the Proprietary Software
that would prevent such software from performing in all material respects the
tasks and functions that it was intended to perform except those that can be
cured without a Material Adverse Effect on the Company.
(d) Except as set forth on Schedule 3.15 hereto, all
Proprietary Software that contains or calls on a calendar function, including,
without limitation, any function that is indexed to a computer processing unit
clock or provides specific dates or calculates spans of dates, (i) is capable of
recognizing, processing, managing, representing, interpreting and manipulating
correctly date-related data for dates earlier and later than January 1, 2000,
(ii) has the ability to provide date recognition for any data element without
limitation, (iii) has the ability to function automatically into and beyond the
year 2000 without human intervention and without any change in operations
associated with the advent of the year 2000, (iv) has the ability to interpret
data, dates and time correctly into and beyond the year 2000, (v) has the
ability not to produce noncompliance in existing data, nor otherwise corrupt
such data, into and beyond the year 2000, (vi) has the ability to process
correctly after January 1, 2000, data containing dates before that date, and
(vii) has the ability to recognize all "leap year" dates, including February 29,
2000 ("Year 2000 Functionality"). The Company and the Subsidiaries are in
compliance with all commitments made to customers with respect to the Year 2000
Functionality of the Proprietary Software or Third Party Software used in the
operations of the Company and the Subsidiaries.
SECTION 3.16 Intellectual Property Rights. The Company and the
Subsidiaries own or hold, or are validly licensed or have a legal right to use,
all patents, trademarks and trade names, trademark and trade name registrations,
servicemark, brandmark and brand name registrations and copyrights, the
applications therefor and the licenses with respect thereto (collectively,
"Intellectual Property Rights") that are necessary to the conduct of the
business of the Company and the Subsidiaries as conducted as of the date hereof.
Except as set forth on Schedule 3.16 hereto, (i) the Company and the
Subsidiaries conduct such business in all material respects without infringement
or claim of infringement of any Intellectual Property Right of others and the
conduct by the Surviving Corporation after the Effective Time of such business,
in substantially the same manner as it is currently conducted, will not infringe
or misappropriate or otherwise violate in any respect material to the business
of the Company the Intellectual Property Rights of any other person or
constitute in any respect material to the business of the Company a breach or
violation of any agreement relating to the Intellectual Property Rights of the
Company and the Subsidiaries (other than as a result of agreements to which
Parent or any of its affiliates is a party); (ii) the Company or a Subsidiary
is, and after the consummation of the Merger will be,
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the sole and exclusive owner of, or have a valid license or other legal right to
use, each Intellectual Property Right that is material to the business of the
Company and the Subsidiaries, in each case free and clear of any liens and
encumbrances (other than Permitted Liens) and, to the best knowledge of the
Company, no person is challenging, infringing, misappropriating or otherwise
violating any such Intellectual Property Rights or claiming that the conduct of
the business of the Company and the Subsidiaries, as conducted as of the date
hereof, infringes, misappropriates or otherwise violates the Intellectual
Property Rights of any third party; (iii) the Company is not aware of any
impediment to the registration of any material trademark that is currently the
subject of any application for registration ; and (iv) none of the material
Intellectual Property Rights of the Company and the Subsidiaries is the subject
of any outstanding order, ruling, decree, judgment or stipulation.
SECTION 3.17 Trade Secrets. No third party has claimed or
notified the Company or any Subsidiary that any person employed by or otherwise
affiliated with the Company or any Subsidiary has, in respect of his or her
activities to date, violated any of the terms or conditions of his or her
employment contract with any third party, or disclosed or utilized any trade
secrets or proprietary information or documentation of any third party, or
interfered in the employment relationship between any third party and any of its
employees, and to the best knowledge of the Company, no person employed by or
otherwise affiliated with the Company or any Subsidiary has employed any trade
secrets or any information or documentation proprietary to any former employer,
or violated any confidential relationship which such person may have had with
any third party, in connection with the development or sale of any products of
the Company or any Subsidiary.
SECTION 3.18 Labor Matters. Neither the Company nor any of the
Subsidiaries is or has been a party to any collective bargaining or union
agreement, and no such agreement is or has been applicable to any employees of
the Company or any of the Subsidiaries. There are not any controversies between
the Company or any of the Subsidiaries and any of such employees that might
reasonably be expected to have a Material Adverse Effect on the Company, or any
unresolved labor union grievances or unfair labor practice or labor arbitration
proceedings pending, or, to the best knowledge of the Company, threatened
against the Company or any Subsidiary. To the best knowledge of the Company,
there are no labor unions or other organizations representing or purporting to
represent any employees of the Company or any of the Subsidiaries and there are
not any organizational efforts currently being made or threatened involving any
of such employees.
SECTION 3.19 Severance Arrangements. Except as set forth on
Schedule 3.19 hereto, neither the Company nor any Subsidiary is party to any
agreement with any employee (i) the benefits of which (including, without
limitation, severance benefits) are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
or any Subsidiary of the nature of any of the transactions contemplated by this
Agreement or (ii) providing severance benefits in excess of those generally
available under the Company's severance policies as in effect on the date hereof
(which are described on Schedule 3.19), or which are
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conditioned upon a change of control, after the termination of employment of
such employees regardless of the reason for such termination of employment.
Except as set forth on Schedule 3.19, neither the Company nor any Subsidiary is
a party to any employment agreement or compensation guarantee extending for a
period longer than one year from the date hereof.
SECTION 3.20 Taxes. (a) Except as set forth on Schedule 3.20
hereto, each of the Company and the Subsidiaries has (i) timely filed all
federal, state, local and foreign returns, declarations, reports, estimates,
information returns and statements ("Returns") required to be filed by it in
respect of any Taxes (as hereinafter defined), which Returns correctly reflect
the facts regarding the income, business, assets, operations, activities and
status of the Company and the Subsidiaries, (ii) timely paid or withheld all
Taxes that are due and payable with respect to the Returns referred to in clause
(i) (other than Taxes that are being contested in good faith by appropriate
proceedings and are adequately reserved for in the Company's most recent
consolidated financial statements included in the Company SEC Filings made prior
to the date hereof), (iii) established reserves that are adequate for the
payment of all Taxes not yet due and payable with respect to the results of
operations of the Company and the Subsidiaries through the date hereof, and (iv)
to the best knowledge of the Company, complied in all material respects with all
applicable laws, rules and regulations relating to the payment and withholding
of Taxes and has timely withheld from employee wages and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over.
Except for Taxes for which adequate reserves have been established as indicated
in clauses (ii) and (iii), neither the Company nor any Subsidiary has any
liability for any Taxes as a member, or as a result of having been a member, of
any consolidated, combined, unitary, or aggregate group of companies.
(b) Except as set forth on Schedule 3.20, (i) there is no
deficiency, claim, audit, action, suit, proceeding, or investigation now pending
or, to the best knowledge of the Company, threatened against or with respect to
the Company or any Subsidiary in respect of any Taxes; and (ii) there are no
requests for rulings or determinations in respect of any Taxes pending between
the Company or any Subsidiary and any taxing authority.
(c) Except as set forth on Schedule 3.20, neither the Company
nor any Subsidiary has executed or entered into (or prior to the Effective Time
will execute or enter into) with the Internal Revenue Service or any taxing
authority (i) any agreement or other document extending or having the effect of
extending the period for assessments or collection of any Taxes for which the
Company or any Subsidiary would be liable or (ii) a closing agreement pursuant
to Section 7121 of the Code, or any predecessor provision thereof or any similar
provision of foreign, state or local Tax law that relates to the assets or
operations of the Company or any Subsidiary.
(d) For purposes of this Agreement, "Tax" (and with
correlative meaning, "Taxes") shall mean all federal, state, local, foreign or
other taxing authority net income, franchise, sales, use, ad valorem, property,
payroll, withholding, excise, severance, transfer, employment, alternative or
add-on minimum, stamp, occupation, premium, environmental or
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windfall profits taxes, and other taxes, charges, fees, levies, imposts,
customs, duties, licenses or other assessments, together with any interest and
any penalties, additions to tax or additional amounts imposed by any taxing
authority.
SECTION 3.21 Employee Benefit Plans. (a) Except as set forth
on Schedule 3.21 hereto, each of the Company and the Subsidiaries has complied
and currently is in compliance in all material respects, both as to form and
operation, with the applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and the Code with respect to each
"employee benefit plan" as defined under Section 3(3) of ERISA (a "Plan") which
the Company or any Subsidiary (i) has ever adopted, maintained, established or
to which any of the same has been required to contribute to or has ever
contributed or (ii) currently maintains or to which any of the same currently
contributes or is required to contribute or (iii) currently participates in or
is required to participate in.
(b) Except as set forth on Schedule 3.21, neither the Company
nor any Subsidiary has ever maintained, adopted or established, contributed or
been required to contribute to, or otherwise participated in or been required to
participate in, a "multiemployer plan" (as defined in Section 3(37) of ERISA).
No amount is due or owing from the Company or any of the Subsidiaries on account
of a "multiemployer plan" (as defined in Section 3(37) of ERISA) or on account
of any withdrawal therefrom.
(c) Other than routine claims for benefits and liability for
premiums due to the Pension Benefit Guaranty Corporation, neither the Company
nor any Subsidiary has incurred any material liability with respect to a Plan
that is currently due and owing and has not yet been satisfied, including,
without limitation, under ERISA (including, without limitation, Title I or Title
IV thereof), the Code or other applicable law, and no event has occurred, and,
to the best knowledge of the Company, there exists no condition or set of
circumstances (other than the accrual of benefits under the normal terms of the
Plans), that could result in the imposition of any material liability on the
Company or any Subsidiary with respect to a Plan, including, without limitation,
under ERISA (including, without limitation, Title I or Title IV of ERISA), the
Code or other applicable law with respect to a Plan.
(d) Except as required by applicable law or as set forth on
Schedule 3.21, neither the Company nor any Subsidiary has committed itself,
orally or in writing, (x) to provide or cause to be provided to any person any
payments or provision of any "welfare" or "pension" benefits (as defined in
Sections 3(1) and 3(2) of ERISA) in addition to, or in lieu of, those payments
or benefits set forth under any Plan, (y) to continue the payment of, or
accelerate the payment of, benefits under any Plan, except as expressly set
forth thereunder or (z) to provide or cause to be provided any severance or
other post-employment benefit, salary continuation, termination, disability,
death, retirement, health or medical benefit to any person (including, without
limitation, any former or current employee) except as set forth under any Plan.
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SECTION 3.22 Environmental Matters. Each of the Company and
the Subsidiaries conducts its business and operations in material compliance
with all applicable environmental laws, ordinances and regulations, and neither
the Company nor any Subsidiary has received notice of any claim, action, suit,
proceeding, hearing or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling, or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, or hazardous or toxic material or
waste (collectively, an "Environmental Event") by the Company or any Subsidiary.
To the best knowledge of the Company, no notice of any Environmental Event was
given to any person or entity that occupied any of the premises occupied by or
used by the Company or any Subsidiary prior to the date such premises were so
occupied. Without limiting the generality of the foregoing, to the best
knowledge of the Company, neither the Company nor any Subsidiary has disposed of
or placed on or in any property or facility used in its business any waste
materials, hazardous materials or hazardous substances in violation of law.
SECTION 3.23 Contracts. Schedule 3.23 sets forth a list of the
following contracts, agreements, commitments and other instruments:
(i) all continuing contracts for the future purchase,
sale, development or manufacture of products, material,
supplies, equipment, software or services requiring payment to
or from the Company or any Subsidiary in an amount in excess
of $1,000,000 per annum (x) which is not terminable on 120
days' or less notice without costs or other liability at or at
any time after the Effective Time, or (y) in which the Company
or such Subsidiary has granted or received manufacturing
rights, most favored nations pricing provisions or exclusive
marketing or other exclusive rights relating to any software
or types of products or services or territory or (z) which
require consent or are otherwise terminable upon a change of
control of the Company;
(ii) all contracts providing for the development of
software for, or license of software to, the Company or any
Subsidiary at a cost of $250,000 or more (other than software
licensed to the Company or any Subsidiary from a third party
as to which the Company or such Subsidiary has a fully-paid
perpetual license to use and distribute without any
restrictions or limitations, or that is generally available to
the public from such third party at a per copy license fee of
less than $5,000, but including any site or corporate license
and each agreement providing for either the delivery of source
code or the escrow of source code for the benefit of the
licensee or any original equipment manufacturer, and each
distribution or other agreement that requires the Company or
any Subsidiary to perform any ongoing development of software
including updates and error corrections);
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(iii) all joint venture, partnership or other
agreements that involve or are reasonably expected to involve
a sharing of profits or losses in excess of $100,000 per annum
with any other party;
(iv) any indenture, mortgage, promissory note, loan
agreement, guarantee or other agreement or commitment for the
borrowing of money, for a line of credit or for a leasing
transaction of a type required to be capitalized in accordance
with generally accepted accounting principles which require
payment by the Company of amounts in excess of $50,000 per
annum;
(v) any agreement specified in (i) above that
restricts the Company or any Subsidiary from engaging in any
material aspect of its business or competing in any line of
business in any geographic area or in any functional area or
that requires the Company or any Subsidiary to distribute or
use exclusively a third party technology or product and any
other such agreements not listed in (i) above where the
restrictions contained therein could have a Material Adverse
Effect on the Company;
(vi) any agreement between or among the Company and
any Subsidiary regarding intercompany loans, revenue or cost
sharing, ownership or license of Intellectual Property Rights,
intercompany royalties or dividends or similar matters;
(vii) all dealer, distributor, sales representative,
original equipment manufacturer, value added remarketer,
subcontractor or other agreements for the ongoing distribution
by third parties of the products and services of the Company
or any Subsidiary which require payments in excess of $50,000
per annum;
(viii) any agreement by the Company or any Subsidiary
regarding directors and officers indemnification;
(ix) any other agreement, contract or commitment by
the Company or any Subsidiary relating to capital expenditures
or involving future obligations in excess of $750,000;
(x) any voting trust or stockholders agreement known
to the Company between or among the Company or any Subsidiary
and stockholders of the Company; and
(xi) any tax sharing or tax indemnification agreement
between or among the Company or any Subsidiary.
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Except as set forth on Schedule 3.23 or as disclosed in the
Company SEC Filings made prior to the date hereof, there are not contracts or
agreements that are material to the conduct of the business of the Company and
the Subsidiaries or to the financial condition or results of operations of the
Company and the Subsidiaries, taken as a whole. The Company has delivered to
Parent complete and accurate copies of the contracts and agreements set forth on
Schedule 3.23 and each such contract or agreement is a valid and subsisting
agreement, without any material default of the Company or any Subsidiary
thereunder and, to the best knowledge of the Company, without any material
default thereunder of the other party thereto. Except as set forth on Schedule
3.23, the Company has not received notice of any cancellation or termination of,
or of any threat to cancel or terminate, any such contracts or agreements. The
Company has no contracts requiring payment to the Company of amounts in excess
of $1,000,000 per annum which may be terminated by the customer on 120 days'
notice or less. The Company has no obligation to extend or to provide any
services pursuant to any customer contracts that by their own terms expire on or
before December 31, 1999.
SECTION 3.24 Customer Relationships. Except as set forth on
Schedule 3.24 hereto, neither the Company nor any Subsidiary has, since December
31, 1998, lost, or been notified that it will lose or suffer diminution in, and
to the best knowledge of the Company no representative of any customer has
notified the Company or any Subsidiary that, in the event of a change of
ownership of the Company such as contemplated by this Agreement, the Company or
any Subsidiary would, lose or suffer diminution in its relationship with any
material customer, except, with respect to events occurring after the date
hereof and on or prior to Effective Time, where any such loss or diminution
would not have a Material Adverse Effect on the Company.
SECTION 3.25 Certain Transactions. Except as disclosed in the
Company SEC Filings made prior to the date hereof or as set forth on Schedule
3.25 hereto, there are no existing or proposed material transactions or
arrangements between the Company or any Subsidiary and (i) any director or
executive officer of the Company or (ii) any other person or entity controlling
or under common control with the Company.
SECTION 3.26 Insurance. The Company and the Subsidiaries
maintain policies of fire, liability, workers' compensation and other forms of
insurance providing insurance coverage to or for the Company or any of the
Subsidiaries for events or occurrences arising or taking place, in the case of
occurrence type insurance, and for claims made and/or suits commenced, in the
case of claims-made type insurance, that provide insurance in such amounts and
against such risks as is customary for companies engaged in similar businesses
to protect the employees, properties, assets, businesses and operations of the
Company and the Subsidiaries. Except as set forth on Schedule 3.26 hereto, all
premiums with respect thereto covering all periods up to and including the date
hereof have been paid, and no notice of cancellation or termination has been
received with respect to any such policy. All such policies are in full force
and effect in all material respects and will remain in full force and effect and
will not in any way in any material respect be affected by, or terminate or
lapse by reason of, any of the transactions contemplated hereby.
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SECTION 3.27 State Takeover Statute. Prior to the date hereof,
the Board of Directors of the Company has approved this Agreement, the Option
Agreement and the Merger and the other transactions contemplated hereby and
thereby, and such approval is sufficient to render inapplicable to the Merger
and any of such other transactions the provisions of Section 203 of the Delaware
GCL.
SECTION 3.28 Opinion of Financial Advisor. The Company has
received the opinion of ▇▇▇▇▇▇ Brothers Inc., dated September 3, 1999,
substantially to the effect that the consideration to be received in the Merger
by the holders of Company Common Stock is fair to such holders from a financial
point of view, a copy of which opinion has been delivered to Parent.
SECTION 3.29 Brokers. No person is entitled to any brokerage
or finder's fee or commission in connection with the transactions contemplated
by this Agreement as a result of any action taken by or on behalf of the
Company, other than ▇▇▇▇▇▇ Brothers Inc. pursuant to an engagement letter dated
August 16, 1999, a copy of which has been furnished to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company as follows:
SECTION 4.01 Organization and Qualification. Parent is a
company duly organized, validly existing and in good standing under the laws of
Guernsey, Channel Islands and has all requisite corporate power and authority to
own or lease and operate its properties and assets and to carry on its business
as it is now being conducted. Parent is duly qualified as a foreign corporation
to do business, and is in good standing, in each jurisdiction in which the
character of its properties owned or leased or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
would not have a Material Adverse Effect on Parent.
SECTION 4.02 Subsidiaries. Each subsidiary of Parent is a
corporation duly organized, validly existing and, where applicable, in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as it is now being conducted. Each
subsidiary of Parent is duly qualified as a foreign corporation to do business,
and is in good standing, in each jurisdiction in which the character of its
properties owned or leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would not
have a Material Adverse Effect on Parent.
SECTION 4.03 Authority Relative to Agreement. Parent has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations
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hereunder. The execution and delivery of this Agreement by Parent and the
consummation by Parent of the transactions contemplated hereby have been duly
authorized by the Board of Directors of Parent, and no other corporate
proceedings on the part of Parent (including, without limitation, any action by
its stockholders) are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Parent and constitutes the legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms.
SECTION 4.04 Non-Contravention. The execution and delivery of
this Agreement by Parent and the consummation by Parent of the transactions
contemplated hereby will not (i) conflict with any provision of the Memorandum
or Articles of Association of Parent or (ii) result (with the giving of notice
or the lapse of time or both) in any violation of or default or loss of a
benefit under, or permit the acceleration of any obligation under, any mortgage,
indenture, lease, agreement or other instrument, permit, concession, grant,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or any of its properties, other than any such
violation, default, loss or acceleration that would not materially adversely
affect the ability of Parent to consummate the transactions contemplated hereby
and which would not otherwise have a Material Adverse Effect on Parent.
SECTION 4.05 Capitalization. The authorized capital stock of
Parent consists of (i) 500,000,000 Ordinary Shares, pound sterling 0.01 par
value, (ii) 50,000,000 Ordinary Nonvoting Shares, pound sterling 0.01 par value,
and (iii) 25,000,000 Preferred Shares, pound sterling 0.01 par value. As of
August 24, 1999, 174,589,951 Ordinary Shares and 24,210,073 Ordinary Nonvoting
Shares were issued and outstanding, all of which were duly and validly issued,
fully paid and nonassessable, and no Preferred Shares were outstanding. Except
for options to purchase an aggregate 6,600,000 Ordinary Shares granted pursuant
to Parent's Stock Option Plans, as of the date hereof no subscription, warrant,
option, convertible security, stock appreciation or other right (contingent or
other) to purchase or acquire, or any securities convertible into or
exchangeable for, any shares of any class of capital stock of Parent or any
subsidiary thereof is authorized or outstanding and as of the date hereof there
is not any commitment of Parent or any such subsidiary to issue any shares,
warrants, options or other such rights or to distribute to holders of any class
of its capital stock any evidences of indebtedness or assets. As of the date
hereof, neither Parent nor any of its subsidiaries has any obligation
(contingent or other) to purchase, redeem or otherwise acquire any shares of its
capital stock or any interest therein or to pay any dividend or to make any
other distribution in respect thereof.
SECTION 4.06 SEC Filings. Parent has provided to the Company
true and complete copies of (i) the Annual Report of Parent on Form 20-F for the
year ended September 30, 1998, (ii) the Quarterly Reports of Parent on Form 6-K
for the three months ended December 31, 1998, March 31, 1999 and June 30, 1999,
(iii) its proxy or information statements relating to meetings of, or actions
taken without a meeting by, the stockholders of the Company subsequent to June
1, 1998, and (iv) all other reports, statements and registration statements
filed by Parent with the SEC subsequent to June 1, 1998 (collectively, the
"Parent SEC Filings"). The Parent
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SEC Filings (including, without limitation, any financial statements or
schedules included therein) (i) were prepared in compliance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
(ii) did not at the time of filing (or if amended, supplemented or superseded by
a filing prior to the date hereof, on the date of that filing) contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
SECTION 4.07 Financial Statements. The consolidated financial
statements of Parent included in the Parent SEC Filings have been prepared in
accordance with generally accepted accounting principles consistently applied
and consistent with prior periods, subject, in the case of unaudited interim
consolidated financial statements, to year-end adjustments (which consist of
normal recurring accruals) and the absence of certain footnote disclosures. The
consolidated balance sheets of Parent included in the Parent SEC Filings fairly
present the financial position of Parent and its subsidiaries as of their
respective dates, and the related consolidated statements of operations,
stockholders' equity and cash flows included in the Parent SEC Filings fairly
present the results of operations of Parent and its subsidiaries for the
respective periods then ended, subject, in the case of unaudited interim
financial statements, to year-end adjustments (which consist of normal recurring
accruals) and the absence of certain footnote disclosures. Except for
liabilities or obligations that are accrued or reserved against in the Company's
financial statements (or reflected in the notes thereto) included in the Company
SEC Filings made prior to the date hereof or that were incurred subsequent to
June 30, 1999 in the ordinary course of business and consistent with past
practice, none of the Company and its Subsidiaries has any liabilities or
obligations (whether absolute, accrued, contingent or otherwise) of a nature
required by generally accepted accounting principles to be reflected in a
consolidated balance sheet (or reflected in the notes thereto) or which would
have a Material Adverse Effect on Parent.
SECTION 4.08 Governmental Approvals. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state, local or foreign governmental or regulatory authority is
required to be made or obtained by Parent in connection with the execution and
delivery of this Agreement by Parent or the consummation by Parent of the
transactions contemplated hereby, except for (i) compliance by Parent with the
HSR Act, (ii) filings pursuant to Securities Act and the Exchange Act and the
rules and regulations promulgated by the SEC thereunder, as contemplated by
Section 6.02 hereof, (iii) the filing of a certificate of merger with the
Secretary of State of the State of Delaware in accordance with the Delaware GCL,
and (iv) such consents, approvals, orders or authorizations which if not
obtained, or registrations, declarations or filings which if not made, would not
materially adversely affect the ability of Parent to consummate the transactions
contemplated hereby.
SECTION 4.09 Disclosure Documents. None of the information to
be supplied by Parent or Acquisition for inclusion in the Registration Statement
or the Proxy Statement will, in the case of the Registration Statement, at the
time it becomes effective and at the Effective
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Time, or, in the case of the Proxy Statement or any amendments thereof or
supplements thereto, at the time of the mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the meeting of
stockholders of the Company to be held in connection with the Merger, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Registration Statement will comply as to form in all material
respects with the applicable provisions of the Securities Act, and the rules and
regulations promulgated thereunder, except that no representation is made by
Parent with respect to statements made therein based on information supplied by
the Company, or its respective representatives for inclusion in the Registration
Statement or the Proxy Statement or with respect to information concerning the
Company or any of the Subsidiaries incorporated by reference in the Registration
Statement or the Proxy Statement.
SECTION 4.10 Compliance with Laws. Neither Parent nor any
subsidiary of Parent is in default under or in violation of any order of any
court, governmental authority or arbitration board or tribunal to which Parent
or such subsidiary is or was subject or in violation of any laws, ordinances,
governmental rules or regulations (including, but not limited to, those relating
to export controls, labor and employment matters and foreign corrupt practices)
to which Parent or any subsidiary of Parent is or was subject, except for such
defaults or violations that, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect on Parent. Neither Parent nor any subsidiary
of Parent has failed to obtain any licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its properties or to
the conduct of its business, which failure could reasonably be expected to have
a Material Adverse Effect on Parent, and, after giving effect to the
transactions contemplated hereby, all such licenses, permits, franchises and
other governmental authorizations will continue to be valid and in full force
and effect except where such failure to be in full force and effect would not
reasonably be expected to have a Material Adverse Effect on Parent.
SECTION 4.11 Litigation. There is no action, suit,
investigation, proceeding or claim pending or, to the best knowledge of Parent,
threatened against or affecting Parent or any subsidiary of Parent, or their
respective properties or rights, before any governmental body or arbitration
board or tribunal, either alone or together with other similar actions, the
outcome of which could be reasonably expected to have a Material Adverse Effect
on Parent.
SECTION 4.12 Brokers. No person is entitled to any brokerage
or finder's fee or commission in connection with the transactions contemplated
by this Agreement as a result of any action taken by or on behalf of Parent or
Acquisition, other than ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUISITION
Acquisition represents and warrants to the Company as follows:
SECTION 5.01 Organization and Qualification. (a) Acquisition
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own or lease and operate its properties and assets and to carry on
its business as it is now being conducted.
(b) Since the date of its incorporation, Acquisition has not
engaged in any activity other than in connection with or as contemplated by this
Agreement and the Merger.
SECTION 5.02 Authority Relative to Agreement. Acquisition has
all requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution and delivery of this Agreement
by Acquisition and the consummation by Acquisition of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
Acquisition and by Parent as its sole stockholder, and no other corporate
proceedings on the part of Acquisition are necessary to authorize this Agreement
and the transactions contemplated hereby. This Agreement has been duly executed
and delivered by Acquisition and constitutes the legal, valid and binding
obligation of Acquisition, enforceable against Acquisition in accordance with
its terms.
SECTION 5.03 Non-Contravention. The execution and delivery of
this Agreement by Acquisition and the consummation by Acquisition of the
transactions contemplated hereby will not (i) conflict with any provision of the
Certificate of Incorporation or By-Laws of Acquisition or (ii) result (with the
giving of notice or the lapse of time or both) in any violation of or default or
loss of a benefit under, or permit the acceleration of any obligation under, any
mortgage, indenture, lease, agreement, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Acquisition or its
properties, other than any such violation, default, loss or acceleration that
would not materially adversely affect the ability of Acquisition to consummate
the transactions contemplated hereby.
SECTION 5.04 Governmental Approvals. No consent, approval,
order or authorization of, or registration, declaration or filing with, any
federal, state, local or foreign governmental or regulatory authority is
required to be made or obtained by Acquisition in connection with the execution
and delivery of this Agreement by Acquisition or the consummation by Acquisition
of the transactions contemplated hereby, except for (i) compliance by
Acquisition with the HSR Act, (ii) filings pursuant to Securities Act and the
Exchange Act and the rules and regulations promulgated by the SEC thereunder, as
contemplated by Section 6.02 hereof, (iii) the filing of a certificate of merger
with the Secretary of State of the State of Delaware in accordance with the
Delaware GCL, and (iv) such consents, approvals, orders or
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authorizations which if not obtained, or registrations, declarations or filings
which if not made, would not materially adversely affect the ability of
Acquisition to consummate the transactions contemplated hereby.
ARTICLE VI
CERTAIN AGREEMENTS
SECTION 6.01 Conduct of the Company's Business. The Company
covenants and agrees that, prior to the Effective Time, unless Parent shall
otherwise consent in writing or as otherwise expressly contemplated by this
Agreement:
(a) the business 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
consistent with past practice;
(b) neither the Company nor any Subsidiary shall,
directly or indirectly, do any of the following: (i) sell, pledge,
dispose of or encumber (or permit any Subsidiary to sell, pledge,
dispose of or encumber) any assets of the Company or any Subsidiary,
except in the ordinary course of business; (ii) amend or propose to
amend its Certificate of Incorporation or By-Laws; (iii) split, combine
or reclassify any outstanding shares of its capital stock, or declare,
set aside or pay any dividend payable in cash, stock, property or
otherwise with respect to such shares (except for any dividends paid in
the ordinary course to the Company or to any wholly-owned Subsidiary);
(iv) redeem, purchase, acquire or offer to acquire (or permit any
Subsidiary to redeem, purchase, acquire or offer to acquire) any
shares of its capital stock; or (v) enter into any contract, agreement,
commitment or arrangement with respect to any of the matters set forth
in this paragraph (b);
(c) neither the Company nor any Subsidiary shall (i)
issue, sell, pledge or dispose of, or agree to issue, sell, pledge or
dispose of, any additional shares of, or securities convertible or
exchangeable for, or any options, warrants or rights of any kind to
acquire any shares of, its capital stock of any class or other property
or assets whether pursuant to the Company Stock Plans or otherwise;
provided that the Company may issue shares of Company Common Stock upon
the exercise of currently outstanding options referred to in Section
3.05 hereof and the Company may grant options under the Company Stock
Plans to new non-management employees in amounts and on terms
consistent with past practice, in any event not to exceed 150,000
shares in the aggregate; (ii) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership or other
business organization or division thereof (except an existing
wholly-owned Subsidiary); (iii) incur any indebtedness for borrowed
money or issue any debt securities in an amount exceeding $1,000,000 in
the aggregate; (iv) enter into or modify any material contract, lease,
agreement or commitment, except in the ordinary course of business and
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consistent with past practice; (v) terminate, modify, assign, waive,
release or relinquish any material contract rights or amend any
material rights or claims except in the ordinary course of business or
(vi) settle or compromise any material claim, action, suit or
proceeding pending or threatened against the Company, or, if the
Company may be liable or obligated to provide indemnification, against
the Company's directors or officers, before any court, governmental
agency or arbitrator; provided that nothing herein shall require any
action that might impair or otherwise affect the obligation of any
insurance carrier under any insurance policy maintained by the Company;
(d) neither the Company nor any Subsidiary shall
grant any increase in the salary or other compensation of its employees
or grant any bonus to any employee or enter into any employment
agreement or make any loan to or enter into any material transaction of
any other nature with any employee of the Company or any Subsidiary
except (i) pursuant to the terms of employment agreements in effect on
the date hereof and previously disclosed to Parent, (ii) in the case of
employees who are not executive officers of the Company, in the
ordinary course of business and consistent with past practice, and
(iii) that the Company may grant options under the Company Stock Plans
to new non-management employees in amounts and on terms consistent with
past practice, in any event not to exceed 150,000 shares in the
aggregate;
(e) neither the Company nor any Subsidiary shall
(except for salary increases for employees who are not executive
officers of the Company in the ordinary course of business and
consistent with past practice) adopt or amend, in any respect, except
as contemplated hereby or as may be required by applicable law or
regulation, any collective bargaining, bonus, profit sharing,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment or other employee benefit plan,
agreement, trust, fund, plan or arrangement for the benefit or welfare
of any directors, officers or employees (including, without limitation,
any such plan or arrangement relating to severance or termination pay);
(f) neither the Company nor any Subsidiary shall take
any action that would make any representation or warranty of the
Company hereunder inaccurate in any material respect at, or as of any
time prior to, the Effective Time, or omit to take any action necessary
to prevent any such representation or warranty from being inaccurate in
any material respect at any such time; and
(g) each of the Company and the Subsidiaries shall
use its commercially reasonable efforts, to the extent not prohibited
by the foregoing provisions of this Section 6.01, to maintain its
relationships with its suppliers and customers, and if and as requested
by Parent or Acquisition, (i) the Company shall use its reasonable best
efforts to make reasonable arrangements for representatives of Parent
or Acquisition to meet with customers and suppliers of the Company or
any Subsidiary, and (ii) the Company shall make reasonable arrangements
to schedule, and to the extent reasonably requested, the
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management of the Company shall participate in, meetings of
representatives of Parent or Acquisition with employees of the Company
or any Subsidiary.
SECTION 6.02 Conduct of Parent's Business. Parent covenants
and agrees that, on or prior to the Effective Time, unless the Company shall
otherwise consent in writing or as otherwise expressly provided by this
Agreement:
(a) neither Parent nor any of its subsidiaries shall declare,
set aside or pay any dividend payable in cash, stock, property or otherwise with
respect to its shares (except for any dividends paid to Parent or to any
wholly-owned subsidiary) unless Parent also makes provision for such dividend to
be declared and paid on the Parent Ordinary Shares to be issued in the Merger;
(b) neither Parent nor any of its subsidiaries shall take any
action that would make any representation or warranty of Parent or Acquisition
hereunder inaccurate in any material respect at, or as of any time prior to, the
Effective Time, or omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any material respect at any
such time.
SECTION 6.03 Stockholder Approval. (a) As soon as reasonably
practicable, the Company shall take all action necessary in accordance with the
Delaware GCL and its Certificate of Incorporation and By-Laws to call, give
notice of and convene a meeting (the "Company Meeting") of its stockholders to
consider and vote upon the approval and adoption of this Agreement and the
Merger and for such other purposes as may be necessary or desirable. The Board
of Directors of the Company has determined that the Merger is advisable and in
the best interests of the stockholders of the Company and shall, subject to its
fiduciary duties as advised by counsel, recommend that the stockholders of the
Company vote to approve and adopt this Agreement and the Merger and any other
matters to be submitted to stockholders in connection therewith.
(b) Parent and the Company shall, as promptly as practicable,
prepare and file with the SEC a proxy statement/prospectus and form of proxy, in
connection with the vote of the Company's stockholders with respect to the
Merger and the issuance of Parent Ordinary Shares pursuant to the Merger (such
proxy statement/prospectus, together with any amendments thereof or supplements
thereto, in each case in the form or forms mailed to the Company's stockholders,
is herein referred to as, the "Proxy Statement"). Parent will, as promptly as
practicable, prepare and file with the SEC a registration statement on Form F-4
containing the Proxy Statement, in connection with the registration under the
Securities Act of the Parent Ordinary Shares issuable upon conversion of the
shares of Company Common Stock and the other transactions contemplated hereby.
Parent and the Company shall use their best efforts to have or cause the
Registration Statement declared effective as promptly as practicable, including,
without limitation, causing their accountants to deliver necessary or required
instruments such as opinions and certificates, and will take any other action
required or necessary to be taken under federal or state
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securities laws or otherwise in connection with the registration process. The
Company will use its reasonable best efforts to cause the Proxy Statement to be
mailed to stockholders of the Company at the earliest practicable date and shall
use its reasonable best efforts to hold the Company Meeting as soon as
practicable after the date hereof.
(c) Parent and the Company shall notify each other of the
receipt of any comments of the staff of the SEC and of any requests by the staff
for amendments or supplements to the Proxy Statement or the Registration
Statement, or for additional information, and shall promptly supply the Company
with copies of all correspondence between Parent or the Company (or its
representatives) and the staff of the SEC with respect thereto. If, at any time
prior to the Company Meeting, any event should occur relating to or affecting
the Company, Parent or Acquisition, or to their respective officers or
directors, which event should be described in an amendment or supplement to the
Proxy Statement or the Registration Statement, the parties shall promptly inform
one another and shall cooperate in promptly preparing, filing and clearing with
the SEC and, if required by applicable securities laws, distributing to the
Company's stockholders such amendment or supplement.
SECTION 6.04 Access to Information. (a) The Company shall, and
shall cause the Subsidiaries and its and their respective officers, directors,
employees, representatives and agents to, afford, from the date hereof to the
Effective Time, the officers, employees, representatives and agents of Parent
reasonable access during regular business hours to its officers, employees,
agents, properties, books, records and workpapers, and shall promptly furnish
Parent all financial, operating and other information and data as Parent,
through its officers, employees or agents, may reasonably request.
(b) Except as required by law, Parent shall hold, and will
cause its respective officers, employees, representatives and agents to hold any
confidential information in accordance with the Confidentiality Agreement dated
August 21, 1999 between the Company and Parent (the "Confidentiality
Agreement").
(c) No investigation pursuant to this Section 6.03 shall
affect, add to or subtract from any representations or warranties of the parties
hereto or the conditions to the obligations of the parties hereto to effect the
Merger.
SECTION 6.05 Further Assurances. (a) Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement, including, without limitation, using all reasonable efforts to obtain
all necessary waivers, consents and approvals and to effect all necessary
registrations and filings (including, without limitation, any necessary filings
under the HSR Act); provided that the foregoing shall not require Parent to
agree to make, or to permit the Company or any Subsidiary to make, any
divestiture of a significant asset in order to obtain any waiver, consent or
approval.
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(b) The Company agrees to cooperate with Parent in the
preparation by Parent of a registration statement on Form S-3 in connection with
Parent's proposed secondary offering of its Ordinary Shares, as well as any
necessary amendments and post-effective amendments thereto. The Company agrees
to provide financial statements and any other information with respect to the
Company not previously provided to be included in such registration statement
and will use its reasonable best efforts to cause the Company's accountants to
deliver any necessary or required information or instruments, including opinions
and consents.
SECTION 6.06 Inquiries and Negotiations. (a) From the date
hereof until the termination hereof, the Company, the Subsidiaries and their
respective officers, directors, employees, representatives and other agents will
not, directly or indirectly, solicit or initiate any discussions, submissions of
proposals or offers or negotiations with or, subject to the fiduciary duties of
the Company's Board of Directors as advised by counsel, participate in any
negotiations or discussions with, or provide any information or data of any
nature whatsoever to, or otherwise cooperate in any other way with, or assist or
participate in, facilitate or encourage any effort or attempt by, any person,
corporation, entity or "group" (as defined in Section 13(d) of the Exchange Act)
other than Parent and its affiliates, representatives and agents (each, a "Third
Party") in connection with any merger, consolidation, sale of any Subsidiary or
division that is material to the business of the Company and the Subsidiaries,
sale of shares of capital stock or other equity securities, tender or exchange
offer, recapitalization, debt restructuring or similar transaction involving the
Company (such transactions being hereinafter referred to as "Alternative
Transactions"). The Company shall immediately notify Parent if any proposal,
offer, inquiry or other contact is received by, any information is requested
from, or any discussions or negotiations are sought to be initiated or continued
with, the Company in respect of an Alternative Transaction, and shall, in any
such notice to Parent, indicate the identity of the Third Party and the terms
and conditions of any proposals or offers or the nature of any inquiries or
contacts, and thereafter shall keep Parent informed, on a current basis, of the
status and terms of any such proposals or offers and the status of any such
discussions or negotiations. Prior to furnishing any non-public information to,
or entering into negotiations or discussions with, any Third Party, the Company
shall obtain an executed confidentiality agreement from such Third Party on
terms substantially the same as, or no less favorable to the Company in any
material respect than, those contained in the Confidentiality Agreement. The
Company shall not release any Third Party from, or waive any provision of, any
such confidentiality agreement or any other confidentiality or standstill
agreement to which the Company is a party. As of the date hereof, except as
contemplated above, the Company shall cease, and shall cause the Subsidiaries
and the officers, directors, employees, representatives and other agents of the
Company and the Subsidiaries to cease all discussions, negotiations and
communications with all Third Parties and demand the immediate return of all
confidential information previously provided to Third Parties.
(b) If a Payment Event (as hereinafter defined) occurs, the
Company shall pay to Parent, within two business days following such Payment
Event, (i) a fee of $6,420,000 in cash, plus (ii) all reasonable and documented
out-of-pocket costs and expenses of Parent and Acquisition, including, without
limitation, fees and expenses of counsel, accountants, investment
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bankers and other advisors, filling fees and printing expenses. In the event
that this Agreement shall be terminated for any other reason and the Company
shall have failed to comply with or per form, or shall have breached, in any
material respect, any of its covenants or agreements contained herein, the
Company shall pay to Parent, within two business days following such
termination, the fees and expenses referred to in clause (ii) of the preceding
sentence; provided that the fees and expenses described in clauses (i) and (ii)
above shall not be so payable if Parent or Acquisition shall have failed to
comply with or perform, or shall have breached, in any material respect, any of
its covenants or agreements contained herein.
(c) For purposes of this Agreement, the term "Payment Event"
means any of (x) the termination of this Agreement by Parent pursuant to Section
8.01(d); (y) the Company's entering into a written agreement with respect to an
Alternative Transaction or the commencement of a tender offer by a Third Party,
as contemplated by Section 8.01(c); or (z) the occurrence of any of the
following events within six months of the date of termination of this Agreement
(unless this Agreement was terminated pursuant to Section 8.01(a) and the
Company was not in breach in any material respect of any representation,
warranty or covenant at the time of such termination) whereby stockholders of
the Company receive, pursuant to such event, cash, securities or other
consideration having an aggregate value, when taken together with the value of
any securities of the Company or the Subsidiaries otherwise held by the
stockholders of the Company after such event, in excess of $10.50 per share of
Company Common Stock: (i) the Company is acquired by merger or otherwise by a
Third Party; (ii) a Third Party acquires more than 50% of the total assets of
the Company and the Subsidiaries, taken as a whole; (iii) a Third Party acquires
more than 30% of the outstanding shares of Company Common Stock or (iv) the
Company adopts and implements a plan of liquidation or share repurchase relating
to more than 50% of such outstanding shares or an extraordinary dividend
relating to more than 50% of the outstanding Shares or 50% of the assets of the
Company and the Subsidiaries, taken as a whole.
(d) The Company acknowledges that the agreements contained in
this Section 6.06 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, Parent and Acquisition would not
enter into this Agreement; accordingly, if the Company fails to promptly pay any
amount due pursuant to this Section 6.06, and, in order to obtain such payment,
the other party commences a suit which results in a judgment against the Company
for the fee or fees and expenses set forth in this Section 6.06, the Company
shall also pay to Parent and Acquisition their costs and expenses incurred in
connection with such litigation.
(e) This Section 6.06 shall survive any termination of this
Agreement, however caused.
SECTION 6.07 Notification of Certain Matters. The Company
shall give prompt notice to Parent and Acquisition, and Parent and Acquisition
shall give prompt notice to the Company, of (i) the occurrence, or failure to
occur, of any event that such party believes would be likely to cause any of its
representations or warranties contained in this Agreement to be untrue or
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inaccurate in any material respect at any time from the date hereof to the
Effective Time and (ii) any material failure of the Company, Parent or
Acquisition, as the case may be, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that failure to
give such notice shall not constitute a waiver of any defense that may be
validly asserted.
SECTION 6.08 Indemnification. (a) The Company shall and, from
and after the Effective Time, Parent and the Surviving Corporation shall,
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date of this Agreement or who becomes prior to the Effective
Time, an officer, director or employee of the Company or any of the Subsidiaries
(the "Indemnified Parties") against all losses, claims, damages, costs,
expenses, liabilities or judgments or amounts that are paid in settlement with
the approval of the indemnifying party (which approval shall not be unreasonably
withheld or delayed) of or in connection with any claim, action, suit,
proceeding or investigation based in whole or in part on or arising in whole or
in part out of the fact that such person is or was a director, officer or
employee of the Company or any of the Subsidiaries, whether pertaining to any
matter existing or occurring at or prior to the Effective Time and whether
asserted or claimed prior to, or at or after, the Effective Time ("Indemnified
Liabilities"), including all losses, claims, damages, costs, expenses,
liabilities or judgments based in whole or in part on, or arising in whole or in
part out of, or pertaining to this Agreement or the transactions contemplated
hereby, in each case to the full extent a corporation is permitted under the
Delaware GCL to indemnify its own directors, officers and employees, as the case
may be (the Company, Parent and the Surviving Corporation, as the case may be,
will pay expenses in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the full extent permitted by law upon
receipt of an undertaking contemplated by Section 145(e) of the Delaware GCL).
Without limiting the foregoing, in the event any such claim, action, suit,
proceeding or investigation is brought against any Indemnified Party (whether
arising before or after the Effective Time), (i) the Indemnified Parties may
retain counsel satisfactory to them and the Company (or them and Parent and the
Surviving Corporation after the Effective Time), (ii) the Company (or after the
Effective Time, Parent and the Surviving Corporation) shall pay all reasonable
fees and expenses of such counsel for the Indemnified Parties promptly as
statements therefor are received, and (iii) the Company (or after the Effective
Time, Parent and the Surviving Corporation) will use all reasonable efforts to
assist in the vigorous defense of any such matter, provided that none of the
Company, Parent or the Surviving Corporation shall be liable for any settlement
of any claim effected without its written consent, which consent, however, shall
not be unreasonably withheld or delayed. Any Indemnified Party wishing to claim
indemnification under this Section 6.08, upon learning of any such claim,
action, suit or proceeding or investigation, shall promptly notify the Company,
Parent or the Surviving Corporation (but the failure to so notify an
indemnifying party shall not relieve it from any liability which it may have had
under this Section 6.08 except to the extent such failure prejudices such
party), and shall deliver to the Company (or after the Effective Time, Parent
and the Surviving Corporation) the undertaking contemplated by Section 145(e) of
the Delaware GCL. The Indemnified Parties as a group may retain only one law
firm to represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a
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conflict on any significant issue between the positions of any two or more
Indemnified Parties. The obligations of the parties set forth in this Section
6.08(a) shall be in furtherance of and not in limitation of succeeding
paragraphs of this Section 6.08.
(b) From and after the Effective Time, the Surviving
Corporation and Parent will fulfill, assume and honor in all respects the
obligations of the Company pursuant to the Company's Certificate of
Incorporation, Bylaws and any indemnification agreement between the Company and
the Company's directors and officers existing and in force as of the Effective
Time.
(c) Parent and the Surviving Corporation shall, until the
sixth anniversary of the Effective Time or such earlier date as may be mutually
agreed upon by Parent, the Surviving Corporation and the applicable Indemnified
Party, cause to be maintained in effect, to the extent available, the policies
of directors' and officers' liability insurance maintained by the Company and
the Subsidiaries as of the date hereof (or policies of at least the same
coverage and amounts containing terms that are not less advantageous to the
insured parties) with respect to claims arising from facts or events that
occurred on or prior to the Effective Time. In lieu of the purchase of such
insurance by Parent or the Surviving Corporation, the Company may purchase a
six-year extended reporting period endorsement ("reporting tail coverage") under
its existing directors' and liability insurance coverage. In no event shall
Parent or the Surviving Corporation be obligated to expend in order to maintain
or procure insurance coverage pursuant to this paragraph (c) any amount per year
in excess of 150% of the aggregate premiums paid by the Company and the
Subsidiaries in the fiscal year ending December 31, 1999 for directors' and
officers' liability insurance.
(d) This Section 6.08 shall survive the consummation of the
Merger is intended to benefit the Company, Parent, the Surviving Corporation and
the Indemnified Parties, and shall be binding on the successors and assigns of
the Surviving Corporation.
SECTION 6.09 Affiliates of the Company. The Company has
identified to Parent each person who is, as of the date hereof, an affiliate of
the Company for purposes of Rule 145 under the Securities Act. The Company shall
use its commercially reasonable efforts to cause each such affiliate to deliver
to Parent, on or prior to the Effective Time, a written agreement that the
affiliate will not sell, pledge, transfer or otherwise dispose of shares of
Parent Common Stock issued to such affiliate pursuant to the Merger, except in
compliance with Rule 145 or an exemption from the registration requirements of
the Securities Act.
SECTION 6.10 NYSE Listing. Parent shall use its best efforts
to cause the Parent Ordinary Shares constituting the Merger Consideration and
the Parent Ordinary Shares issuable upon exercise of the New Options to be
listed on the NYSE, subject to official notice of issuance thereof.
SECTION 6.11 Stock Option Registration. Parent shall file with
the SEC a registration statement on Form S-8 (or other appropriate form) or a
post-effective amendment to
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the Registration Statement and shall take any action required to be taken under
state securities "blue sky" laws for purposes of registering all shares of
Parent Common Stock issuable after the Effective Time upon exercise of the New
Options contemplated by Section 2.02 hereof, and shall use all reasonable
efforts to have such registration statement or post-effective amendment become
effective with respect thereto as promptly as practicable after the Effective
Time, but not later than 30 days after the Effective Time. The Company Stock
Plans shall terminate effective as of the Effective Time. Parent shall reserve
for issuance sufficient Parent Ordinary Shares issuable upon exercise of the New
Options.
SECTION 6.12 Comfort Letters. Each of the Company and Parent
shall use their respective commercially reasonable efforts to cause to be
delivered to the other a letter of its independent certified public accountants,
dated a date within two business days before the date on which the Registration
Statement shall become effective and addressed to the other, in form and
substance reasonably satisfactory to the other and customary in scope and
substance for letters delivered by independent public accountants in connection
with registration statements similar to the Registration Statement.
SECTION 6.13 Stay Bonuses. The Parent and the Company agree
that from and after the date hereof, the Company and Parent shall allocate cash
and options with an aggregate value of approximately $3,500,000 in "stay
bonuses" (of which at least $2,000,000 will be payable in cash) to be paid to
key employees of the Company identified by the Company upon consultation with
Parent. Such stay bonuses shall be in such amounts and payable on such dates,
beginning three months after the Effective Time, as determined by the Company
upon consultation with Parent to such key employees who remain employees in good
standing with the Company.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01 Conditions to the Obligation of Parent and
Acquisition. The respective obligations of Parent and Acquisition to consummate
the Merger are subject to the fulfillment at or prior to the Effective Time of
the following conditions, any or all of which may be waived in whole or in part
by Parent or Acquisition, as the case may be, to the extent permitted by
applicable law.
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all respects material to the business of the Company on and as of the
Effective Time with the same force and effect as if made on and as of the
Effective Time (provided that representations and warranties made as of a
particular date shall be true as of such date); the Company shall have performed
in all material respects all of its obligations under this Agreement theretofore
to be performed, and Parent shall
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have received at the Effective Time a certificate to that effect dated the
Effective Time and executed by the chief executive officer or chief financial
officer of the Company.
(b) Stockholder Approval. This Agreement shall have been duly
approved by the holders of a majority of the outstanding shares of Company
Common Stock, in accordance with applicable law and the Certificate of
Incorporation and By-Laws of the Company.
(c) Injunction, etc. There shall not be (i) in effect any
preliminary or permanent injunction or other order or governmental or regulatory
agency of competent jurisdiction which restrains, enjoins or otherwise
prohibits, or imposes material and adverse conditions upon consummation of the
transactions contemplated herein, (ii) in effect any pending or threatened suit,
action or proceeding by any governmental or regulatory agency of competent
jurisdiction or any third party seeking to prohibit or limit the ownership or
operations by Parent, the Company or any of their respective subsidiaries, or to
compel Parent, the Company or their respective subsidiaries, in the aggregate,
to dispose of or hold separate, any of the material assets or business segments
of the Company, in each case, as a result of the transactions contemplated
hereby, or (iii) any pending or threatened action by a government or regulatory
agency of competent jurisdiction which could have any of the effects referred to
in (i) above; provided, however, that prior to invoking this condition Parent
shall use all commercially reasonable efforts to have such injunction or order
vacated.
(d) Registration Statement; "Blue Sky" Permits. The
Registration Statement shall have become effective and no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for such purpose shall have been initiated and be continuing or
threatened by the SEC. Parent shall have received all state securities laws or
"blue sky" permits and other authorizations necessary to issue Parent Ordinary
Shares in exchange for the shares of Company Common Stock in the Merger.
(e) Listing of Parent Ordinary Shares. The Parent Ordinary
Shares constituting the Merger Consideration and the other such shares required
to be reserved for issuance in connection with the Merger, including the Parent
Ordinary Shares issuable upon exercise of the New Options, shall have been
authorized for listing on the NYSE, subject to notice of official issuance.
(f) Governmental Filings and Consents. All governmental
filings required to be made prior to the Effective Time by the Company with, and
all governmental consents required to be obtained prior to the Effective Time by
the Company or Parent from, governmental and regulatory authorities in
connection with the execution and delivery of this Agreement by the Company or
Parent and the consummation of the transactions contemplated hereby shall have
been made or obtained, except where the failure to make such filing or obtain
such consent would not reasonably be expected to result in a Material Adverse
Effect on Parent (assuming the Merger had taken place) and the waiting periods
under the HSR Act shall have expired or been terminated.
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(g) Delivery of Comfort Letter. The Company's independent
certified public accountants shall have delivered to the Company, for delivery
by it to Parent, one or more letters with respect to the financial information
contained in the Proxy Statement and Registration Statement in form and
substance reasonably satisfactory to Parent and customary in scope and substance
for letters delivered by independent certified public accountants in connection
with registration statements similar to the Registration Statement.
(h) Affiliate Letters. Each affiliate of the Company shall
have executed and delivered to Parent an affiliate letter as contemplated by
Section 6.09 hereof.
(i) Tax Opinion. Parent shall have received a written opinion,
dated as of the Effective Time, from counsel to Parent to the effect that the
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code; it being understood that in
rendering such opinion, such counsel shall be entitled to rely upon customary
representations provided by the parties hereto and certain stockholders of the
Company substantially in the forms attached hereto as Exhibits C and D.
(j) No Material Adverse Effect. The Company shall not have
suffered after the date of this Agreement any change which has had, or in the
reasonable opinion of Parent could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on the Company.
SECTION 7.02 Conditions to the Obligations of the Company. The
obligation of the Company to consummate the Merger is subject to the fulfillment
at or prior to the Effective Time of the following conditions, any or all of
which may be waived in whole or in part by the Company to the extent permitted
by applicable law.
(a) Representations and Warranties. The representations and
warranties of Parent and Acquisition set forth in this Agreement shall be true
and correct in all respects material to the business of Parent on and as of the
Effective Time with the same force and effect as if made on and as of the
Effective Time (provided that representations and warranties made as of a
particular date shall be true as of such date); Parent and Acquisition shall
have performed in all material respects all of their respective obligations
under this Agreement theretofore to be performed, and the Company shall have
received at the Effective Time a certificate to that effect dated the Effective
Time and executed by the chief executive officer or chief financial officer of
Parent.
(b) Stockholder Approval. This Agreement shall have been duly
approved by the holders of a majority of the outstanding shares of Company
Common Stock, in accordance with applicable law and the Certificate of
Incorporation and By-Laws of the Company.
(c) Injunction. There shall not be (i) in effect any
preliminary or permanent injunction or other order of a court or governmental or
regulatory agency of competent
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jurisdiction which restrains, enjoins or otherwise prohibits, or imposes
material and adverse conditions upon consummation of the transactions
contemplated herein, or (ii) any pending or threatened action by a governmental
or regulatory agency of competent jurisdiction which could have any of the
effects referred to in (i) above; provided, however, that prior to invoking this
condition the Company shall use all commercially reasonable efforts to have such
injunction or order vacated.
(d) Registration Statement; "Blue Sky" Permits. The
Registration Statement shall have become effective and no stop order suspending
the effectiveness of the Registration Statements shall have been issued and no
proceedings for such purpose shall have been initiated and be continuing or
threatened by the SEC. Parent shall have received all state securities laws or
"blue sky" permits and other authorizations necessary to issue Parent Ordinary
Shares in exchange for the shares of Company Common Stock in the Merger.
(e) Listing of Parent Ordinary Shares. The Parent Ordinary
Shares constituting the Merger Consideration and such other shares required to
be reserved for issuance in connection with the Merger, including Parent
Ordinary Shares issuable upon exercise of the New Options, shall have been
authorized for listing on the NYSE, subject to official notice of issuance.
(f) Tax Opinion. The Company shall have received a written
opinion, dated as of the Effective Time, from counsel to the Company to the
effect that for federal income tax purposes the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code. In rendering
such opinion, counsel to the Company may receive and rely upon customary
representations contained in certificates of Parent, Acquisition and the
Company, and certain stockholders of the Company, substantially in the forms
attached hereto as Exhibits C and D, and upon such other certificates as such
counsel may reasonably request.
(g) No Material Adverse Effect. Parent shall not have suffered
since June 30, 1999 any change which has had, or in the reasonable opinion of
the Company could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent.
(h) Payment of Fees. Payment in full of all transaction
expenses of the Company (including the fees and expenses of lawyers,
accountants, investment bankers and other advisors of the Company, which fees
and expenses shall not exceed $4,500,000) and all change of control payments and
other amounts due employees at the Effective Time.
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ARTICLE VIII
TERMINATION AND ABANDONMENT
SECTION 8.01 Termination and Abandonment. This Agreement may
be terminated and the Merger may be abandoned at any time prior to the Effective
Time, whether before or after approval by the stockholders of the Company:
(a) by mutual action of the boards of directors of Parent and
the Company;
(b) by either the Company or Parent, if (i) the conditions to
its obligations under Sections 7.01 and 7.02, as applicable, shall not have been
complied with or performed in any material respect and such noncompliance or
nonperformance shall not have been cured or eliminated (or by its nature cannot
be cured or eliminated) by the other party on or before February 28, 2000, or
(ii) the Merger shall not have been effected on or prior to the close of
business on February 28, 2000; unless, in any case, such event has been caused
by the breach of this Agreement by the party seeking such termination;
(c) by the Company if, prior to stockholder approval of this
Agreement and the Merger, the Company shall enter into a definitive written
agreement with respect to an Alternative Transaction with a Third Party, or a
Third Party has commenced a tender offer which, in either case, the Board of
Directors of the Company believes in good faith is more favorable to the
Company's stockholders than the transactions contemplated by this Agreement;
provided, that all amounts payable under Section 6.06 hereof shall have been
paid prior to such termination; or
(d) by Parent, if the Board of Directors of the Company shall
have withdrawn, modified or amended in a manner adverse to Parent and
Acquisition its approval or recommendation of the Merger or approved,
recommended or endorsed any proposal for, or authorized the Company to enter
into, an Alternative Transaction.
Any party desiring to terminate this Agreement pursuant to this Section 8.01
shall give notice to the other party in accordance with Section 9.05.
SECTION 8.02 Effect of Termination. Except as provided in
Sections 6.06 and 9.02 hereof, in the event of the termination of this Agreement
and the abandonment of the Merger pursuant to Section 8.01, this Agreement shall
thereafter become void and have no effect, and no party hereto shall have any
liability to any other party hereto or its stockholders or directors or officers
in respect thereof, except that nothing herein shall relieve any party from
liability for any willful breach hereof.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Nonsurvival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant hereto shall survive the Effective Time, provided
that this Section 9.01 shall not limit any covenant or agreement of the parties
that by its terms contemplates performance after the Effective Time.
SECTION 9.02 Expenses, Etc. (a) Except as provided in Section
6.06, in the event that the transactions contemplated by this Agreement are not
consummated, neither the Company, on the one hand, nor Parent and Acquisition,
on the other hand, shall have any obligation to pay any of the fees and expenses
of the other incident to the negotiation, preparation and execution of this
Agreement, including the fees and expenses of counsel, accountants, investment
bankers and other experts and Parent or Acquisition shall pay all such fees and
expenses incurred by Acquisition, provided, however, that if this Agreement
shall have been terminated as a result of the willful and material
misrepresentations by a party or the willful and material breach by a party of
any of its covenants and agreements contained herein, such party shall pay the
costs and expenses incurred by the other parties in connection with this
Agreement.
(b) In the event that the transactions contemplated by this
Agreement are consummated, Parent shall pay all of the fees and expenses of the
Company incident to the negotiation, preparation and execution of this
Agreement, including the fees and expenses of counsel, accountants, investment
bankers and other advisors (which fees and expenses, the Company represents and
warrants, shall not exceed $4,500,000 in the aggregate), and Parent shall pay
all such fees and expenses incurred by Acquisition and Parent.
SECTION 9.03 Publicity. The Company and Parent agree that they
will not issue any press release or make any other public announcement
concerning this Agreement or the transactions contemplated hereby without the
prior consent of the other party, except that the Company or Parent may make
such public disclosure that it believes in good faith to be required by law (in
which event such party shall consult with the other prior to making such
disclosure).
SECTION 9.04 Execution in Counterparts. For the convenience of
the parties, this Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
SECTION 9.05 Notices. All notices that are required or may be
given pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and delivered by hand or national
overnight courier service, transmitted by telecopy or mailed by registered or
certified mail, postage prepaid, as follows:
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If to Parent to:
Amdocs Limited
c/o Amdocs, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
with a copy to:
Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Company, to:
International Telecommunication Data System, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
or such other address or addresses as any party hereto shall have designated by
notice in writing to the other parties hereto.
SECTION 9.06 Waivers. The Company, on the one hand, and Parent
and Acquisition, on the other hand, may, by written notice to the other, (i)
extend the time for the performance of any of the obligations or other actions
of the other under this Agreement; (ii) waive any inaccuracies in the
representations or warranties of the other contained in this Agreement or in any
document delivered pursuant to this Agreement; (iii) waive compliance with any
of the conditions of the other contained in this Agreement; or (iv) waive
performance of any of the obligations of the other under this Agreement. Except
as provided in the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representations, warranties, covenants or
agreements
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contained in this Agreement. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
SECTION 9.07 Entire Agreement. This Agreement, its Schedules,
the Option Agreement, the Voting Agreement, the documents executed on the date
hereof or at the Effective Time in connection herewith and the Confidentiality
Agreement constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral and written, among the parties hereto with respect to the
subject matter hereof. No representation, warranty, promise, inducement or
statement of intention has been made by any party that is not embodied in this
Agreement or such other documents, and none of the parties shall be bound by, or
be liable for, any alleged representation, warranty, promise, inducement or
statement of intention not embodied herein or therein.
SECTION 9.08 Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
regard to principles of conflict of laws.
SECTION 9.09 Binding Effect, Benefits. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective permitted successors and assigns. Notwithstanding anything contained
in this Agreement to the contrary, nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective permitted successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement; provided,
however, that the provisions of Section 6.07 hereof shall accrue to the benefit
of, and shall be enforceable by, each of the current and former directors and
officers of the Company.
SECTION 9.10 Assignability. Neither this Agreement nor any of
the parties' rights hereunder shall be assignable by any party hereto without
the prior written consent of the other parties hereto.
SECTION 9.11 Amendments. This Agreement may be varied, amended
or supplemented at any time before or after the approval and adoption of this
Agreement by the stockholders of the Company by action of the respective boards
of directors of the Company, Parent and Acquisition, without action by the
stockholders thereof; provided that, after approval and adoption of this
Agreement by the Company's stockholders, no such variance, amendment or
supplement shall, without consent of such stockholders if such action is
required by law, reduce the amount or alter the form of the consideration that
the holders of the capital stock of the Company shall be entitled to receive
upon the Effective Time pursuant to Section 2.05 hereof. Without limiting the
generality of the foregoing, this Agreement may only be amended, varied or
supplemented by an instrument in writing, signed by the parties hereto.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement and Plan of Merger as of the day and year first above written.
AMDOCS LIMITED
By /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title: Treasurer and Secretary
▇▇▇▇ ACQUISITION CORP.
By /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇
Title: President
INTERNATIONAL TELECOMMUNICATION
DATA SYSTEMS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: President and CEO
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INDEX TO DEFINED TERMS
THIS INDEX IS INCLUDED FOR CONVENIENCE ONLY AND
DOES NOT CONSTITUTE A PART OF THE AGREEMENT
Term Section Reference
---- -----------------
"Acquisition" Recitals
"Alternative Transactions" 6.06(a)
"Certificate" 2.03(b)
"Code" Recitals
"Company" Recitals
"Company Common Stock" Recitals
"Company SEC Filings" 3.06
"Company Stock Plans" 2.02
"Confidentiality Agreement" 6.04(b)
"Constituent Corporations" Recitals
"Delaware GCL" Recitals
"Effective Time" 1.03
"Environmental Event" 3.22
"ERISA" 3.21(a)
"Exchange Act" 3.06
"Exchange Agent" 2.07(a)
"Exchange Fund" 2.07(a)
"HSR Act" 3.09
"Indemnified Parties" 6.08(a)
"Material Adverse Effect" 3.01
"Meeting" 6.03(a)
"Merger" 2.01
"Merger Consideration" 2.05(c)
"Option" Recitals
"Option Agreement" Recitals
"Parent" Recitals
"Payment Event" 6.06(c)
"Plans" 3.17(a)
"Preferred Stock" 3.05
"Proprietary Software" 3.13(a)
"Proxy Statement" 6.03(b)
"Returns" 3.16(a)
"Required Amounts" 4.07
"SEC" 1.01
"Securities Act" 3.06
49
"Shares" 1.01
"Subsidiary" 3.02(c)
"Surviving Corporation" Recitals
"Third Party" 6.06(a)
"Third Party Software" 3.13(a)
"Tax" 3.16(d)