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PROJECT PANAMA
AGREEMENT AND PLAN OF MERGER
By and Among
NETMANAGE, INC.
NETMANAGE ACQUISITION CORPORATION
and
WALL DATA INCORPORATED
Dated as of October 20, 1999
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TABLE OF CONTENTS
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ARTICLE I THE TENDER OFFER.......................................................................1
1.1 The Offer.........................................................................1
1.2 Company Action....................................................................3
1.3 Directors.........................................................................4
ARTICLE II THE MERGER............................................................................4
2.1 The Merger........................................................................4
2.2 Effective Time....................................................................5
2.3 Effects of the Merger.............................................................5
2.4 Restated Articles of Incorporation................................................5
2.5 Bylaws............................................................................5
2.6 Directors.........................................................................5
2.7 Officers..........................................................................5
2.8 Conversion of Shares..............................................................5
2.9 Dissenting Shares.................................................................6
2.10 Payment For Shares................................................................6
2.11 No Further Rights or Transfers....................................................7
2.12 Supplementary Action..............................................................8
2.13 Closing...........................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................8
3.1 Organization of the Company.......................................................8
3.2 Company Capital Structure.........................................................9
3.3 Obligations With Respect to Capital Stock........................................10
3.4 Authority........................................................................10
3.5 SEC Filings; the Company Financial Statements....................................11
3.6 Absence of Certain Changes or Events.............................................12
3.7 Taxes............................................................................12
3.8 Title to Properties; Absence of Liens and Encumbrances...........................14
3.9 Intellectual Property............................................................14
3.10 Compliance; Permits; Restrictions................................................17
3.11 Litigation.......................................................................17
3.12 Brokers' and Finders' Fees.......................................................18
3.13 Employee Benefit Plans...........................................................18
3.14 Employees; Labor Matters.........................................................18
3.15 Environmental Matters............................................................19
3.16 Year 2000 Compliance.............................................................19
3.17 Agreements, Contracts and Commitments............................................20
3.18 Change of Control Payments.......................................................21
3.19 Board Approval...................................................................21
3.20 Fairness Opinion.................................................................21
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TABLE OF CONTENTS
(continued)
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3.21 Chapter 23B.19 of the Washington Business Corporation Act Not Applicable.........21
3.22 Offer Documents; Proxy Statement.................................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER...............................22
4.1 Organization and Qualification...................................................22
4.2 Corporate Power, Authorization and Enforceability................................22
4.3 No Conflict; Required Filings and Consents.......................................22
4.4 Schedule 14D-1...................................................................23
4.5 Available Funds..................................................................23
ARTICLE V COVENANTS.............................................................................24
5.1 Conduct of Business by the Company...............................................24
5.2 Access to Information; Confidentiality...........................................26
5.3 Proxy Material; Shareholders' Meeting............................................27
5.4 No Solicitation; Break-up Fee....................................................28
5.5 Public Announcements.............................................................29
5.6 Notification of Certain Matters..................................................30
5.7 Actions by Company...............................................................30
5.8 Officers' and Directors' Indemnification.........................................30
5.9 Employment Agreements............................................................31
5.10 Additional Agreements............................................................31
5.11 Other Actions by the Company.....................................................31
5.12 Company Options..................................................................31
5.13 Restated Employee Stock Purchase Plan............................................31
5.14 Retirement Savings Plan Termination..............................................32
5.14 the Effective Time...............................................................32
5.15 Stockholder Litigation...........................................................32
ARTICLE VI CONDITIONS OF MERGER.................................................................32
6.1 Conditions to the Obligations of Each Party to Effect the Merger.................32
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...................................................33
7.1 Termination......................................................................33
7.2 Procedure and Effect of Termination..............................................34
7.3 Fees and Expenses................................................................34
7.4 Amendment........................................................................35
7.5 Waiver...........................................................................35
ARTICLE VIII MISCELLANEOUS......................................................................36
8.1 Severability.....................................................................36
8.2 Notices..........................................................................36
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8.3 Entire Agreement; No Third Party Beneficiaries; No Assignment....................37
8.4 Interpretation; Knowledge........................................................37
8.5 Counterparts.....................................................................38
8.6 Other Remedies; Specific Performance.............................................38
8.7 Governing Law....................................................................38
8.8 Rules of Construction............................................................38
8.9 WAIVER OF JURY TRIAL.............................................................38
EXHIBIT A Employment Agreements
EXHIBIT B Required Third Party Consents
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") is made and entered
into as of this 20th day of October, 1999, by and among NetManage, Inc., a
Delaware corporation ("PARENT"), NetManage Acquisition Corporation, a Washington
corporation and a wholly-owned subsidiary of Parent ("PURCHASER"), and Wall Data
Incorporated, a Washington corporation (the "COMPANY").
RECITALS
A. The Boards of Directors of Parent, Purchaser and the Company have
each unanimously approved the terms and conditions of a merger of Purchaser with
and into the Company (the "MERGER") upon the terms and subject to the conditions
set forth herein.
B. Pursuant to the Merger, Purchaser will acquire each issued and
outstanding share of Common Stock of the Company at a price of $9.00 net per
Share to the seller in cash and without interest thereon (the "OFFER PRICE"). In
order to accomplish the Merger, Purchaser shall first commence a tender offer
(the "OFFER") by Purchaser under Section 14(d)(1) of the Securities and Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), to purchase all outstanding shares
of the Common Stock, no par value, of the Company (shares of the Common Stock
are referred to herein as the "SHARES").
C. The Board of Directors of the Company has unanimously resolved to
recommend the acceptance of the Offer and approval of the Merger to the holders
of Shares and determined that the consideration to be paid for each Share in the
Offer and the Merger is fair to the holders of such Shares and that the Offer
and the Merger are in the best interests of the holders of such Shares.
NOW, THEREFORE, intending to be legally bound hereby, the parties agree
as follows:
ARTICLE I
THE TENDER OFFER
1.1. THE OFFER.
(a) Provided that this Agreement shall not have been
terminated pursuant to Section 7.1 and none of the events set forth in clause
(iii) of Annex I shall have occurred or be existing, Purchaser shall, and Parent
shall cause Purchaser to, within five business days after the public
announcement of the execution of this Agreement commence the Offer (within the
meaning of Rule 14d-2 under the Exchange Act) at the Offer Price.
(b) The obligations of Purchaser to consummate the Offer and
to accept for payment and pay for any of the Shares tendered shall be subject to
the conditions set forth on Annex I, including that a minimum of not less than
fifty-one percent (51%) of the Shares
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outstanding on a fully-diluted basis (including for purposes of such calculation
all Shares issuable upon exercise of all vested and unvested stock options, and
conversion of convertible securities or other rights to purchase or acquire
Shares) being validly tendered and not withdrawn prior to the expiration of the
Offer (the "MINIMUM CONDITION"). The per Share amount shall be net to the seller
in cash, upon the terms and subject to the conditions of the Offer and subject
to reduction for any applicable federal back-up or other applicable withholding
or stock transfer taxes. The Offer shall remain open until 12:00 Midnight, New
York City time, on November 24, 1999 (twenty (20) business days following the
commencement of the Offer). As used in this Agreement, the "EXPIRATION DATE"
means 12:00 Midnight, New York City time, on November 24, 1999, unless Purchaser
extends the Offer as permitted by this Agreement, in which case the "Expiration
Date" means the latest time and date to which the Offer is extended.
(c) Purchaser expressly reserves the right in its sole
discretion to waive any conditions to the Offer (other than the condition set
forth in clause (ii) or (iii)(E) of Annex I), to increase the price per Share
payable in the Offer, to extend the duration of the Offer, or to make any other
changes in the terms and conditions of the Offer; provided, however, that no
such change may be made which decreases the price per Share payable in the
Offer, reduces the maximum number of Shares to be purchased in the Offer,
imposes conditions to the Offer in addition to those set forth in Annex I or
amends any other material terms of the Offer in a manner materially adverse to
the Company's shareholders, and provided, further, that the Offer may not,
without the Company's prior written consent, be extended beyond December 8, 1999
except as necessary to provide time to satisfy the conditions set forth in Annex
I, and except that Purchaser may extend the Offer for up to 10 additional
business days, if as of such date, there shall not have been tendered at least
ninety percent (90%) of the outstanding Shares so that the Merger could be
effected without a meeting of the Company's shareholders in accordance with
applicable provisions of the Washington Business Corporation Act (the "WBCA").
(d) The Offer shall be made by means of an offer to purchase
(the "OFFER TO PURCHASE") containing the terms set forth in this Agreement and
the conditions set forth in Annex I. Concurrently with the commencement of the
Offer, Parent and Purchaser shall file with the Securities and Exchange
Commission (the "SEC") a tender offer statement on Schedule 14D-1 reflecting the
Offer (together with all exhibits, amendments and supplements thereto, the
"SCHEDULE 14D-1"). The Company and its counsel shall be given an opportunity to
review the Offer to Purchase and the Schedule 14D-1. Parent and Purchaser agree
to provide the Company and its counsel with any comments which Parent, Purchaser
or their counsel may receive from the SEC or the staff of the SEC with respect
to such documents promptly after receipt thereof. Upon the terms and subject to
the conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), Purchaser will
purchase by accepting for payment and will pay for Shares validly tendered and
not properly withdrawn, as promptly as practicable after the Expiration Date.
The Schedule 14D-1 will contain or will incorporate by reference the Offer to
Purchase (or portions thereof) and forms of the related letter of transmittal
and summary advertisements (which Schedule 14D-1, Offer to Purchase and other
documents, together with any supplements or amendments thereto, are referred to
herein collectively as the "OFFER DOCUMENTS"). Parent, Purchaser and the Company
agree promptly to correct any information
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provided by any of them for use in the Offer Documents that shall have become
false or misleading, and Parent and Purchaser further agree to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and the other Offer Documents as so corrected to be disseminated to the holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. The Offer Documents will, on the date filed, comply in all
material respects with all provisions of applicable federal securities laws.
1.2 COMPANY ACTION.
(a) The Company hereby approves of and consents to the Offer
and represents and warrants that (i) its Board of Directors has unanimously (A)
determined that this Agreement and the transactions contemplated hereby,
including each of the Offer and the Merger, are fair to and in the best
interests of the holders of the Shares, (B) approved and adopted this Agreement
and the transactions contemplated hereby and (C) resolved to recommend that the
shareholders of the Company accept the Offer and approve and adopt this
Agreement and the transactions contemplated hereby and thereby (provided,
however, that subject to the provisions of Section 5.4 such recommendation may
be withdrawn, modified or amended in connection with a Superior Proposal (as
defined in Section 5.4)) and (ii) Bear, ▇▇▇▇▇▇▇ & Co. Inc. ("BANKER") has
rendered to the Board of Directors of the Company its written opinion (which
opinion is permitted to be included in writing in the Schedule 14D-9 (as defined
in Section 1.2(b)), to the effect that the consideration to be received by the
holders of Shares pursuant to each of the Offer and the Merger is fair to the
holders of Shares from a financial point of view. The Company hereby consents to
the inclusion in the Offer Documents of the recommendation of the Company's
Board of Directors described in the first sentence of this Section 1.2(a), and
has obtained the consent of Banker to the inclusion in the Schedule 14D-9 of a
copy of the written opinion referred to in clause (ii) above.
(b) The Company shall file with the SEC, concurrently with the
filing by Parent and Purchaser of the Schedule 14D-1, a
Solicitation/Recommendation Statement on Schedule 14D-9 under the Exchange Act
relating to the Offer (together with all exhibits, amendments and supplements
thereto as well as the Information Statement required pursuant to Section 14(f)
under the Exchange Act, collectively the "SCHEDULE 14D-9"), which shall contain
the recommendation of the Company's Board of Directors described in Section
1.2(a), and shall disseminate the Schedule 14D-9 as required by Rule 14d-9
promulgated under the Exchange Act. The Schedule 14D-9, and each amendment
thereto, will, on the date filed, comply in all material respects with the
provisions of applicable federal securities laws. The Company, Parent and
Purchaser agree promptly to correct any information provided by any of them for
use in the Schedule 14D-9 that shall have become false or misleading, and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and the Schedule 14D-9 as so corrected
to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Parent and its counsel shall be
given the opportunity to review and shall be reasonably satisfied with the
Schedule 14D-9 in the form in which such document is originally filed with the
SEC, and all amendments and supplements thereto, prior to the time at which such
documents and all documents related thereto are filed with the SEC. The Company
shall
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provide Purchaser and its counsel with any comments the Company or its counsel
may receive from the SEC with respect to the Schedule 14D-9 promptly after
receipt of such comments.
(c) The Company has been advised by all of its directors and
executive officers, as of the date of this Agreement, each intends to tender all
outstanding Shares beneficially owned by such person to Purchaser pursuant to
the Offer unless to do so would subject such person to liability under Section
16(b) of the Exchange Act.
(d) The Company shall promptly furnish Purchaser with mailing
labels containing the names and addresses of all record holders of Shares and
security position listings of Shares held in stock depositories, each of a
recent date, and shall promptly furnish Purchaser with such additional
information, including updated lists of shareholders, mailing labels and
security position listings, and such other assistance as Parent, Purchaser or
their agents may reasonably request in connection with communicating the Offer
and any amendments or supplements thereto to the Company's shareholders. Subject
to the requirements of applicable laws and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Purchaser shall hold in confidence the
information contained in any of such labels and lists.
1.3. DIRECTORS. Promptly upon the acquisition by Purchaser pursuant to
the Offer of such number of Shares which satisfies the Minimum Condition and
from time to time thereafter, Parent shall be entitled to designate a majority
of the members of the Company's Board of Directors, subject to compliance with
Section 14(f) of the Exchange Act. The Company shall, upon request by Parent,
promptly increase the size of the Board of Directors to the extent permitted by
its Restated Articles of Incorporation and/or secure the resignations of such
number of directors as is necessary to enable Parent's designees to be elected
to the Board of Directors and shall cause Parent's designees to be so elected.
The Company shall take, at its expense, all action necessary to effect any such
election, including mailing to its shareholders the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in form
and substance reasonably satisfactory to Parent and its counsel. Following the
election or appointment of Parent's designees pursuant to this Section 1.3 and
prior to the Effective Time, any amendment or termination of this Agreement,
extension for the performance or waiver of the obligations or other acts of
Parent or Purchaser or waiver of the Company's rights hereunder, shall require
the concurrence of a majority of the Company's directors (or the concurrence of
the director, if there is only one remaining) then in office who are directors
on the date hereof, or are directors (other than directors designated by Parent
in accordance with this Section 1.3) designated by such persons to fill any
vacancy (the "CONTINUING DIRECTORS").
ARTICLE II
THE MERGER
2.1 THE MERGER. Upon the terms and subject to the conditions hereof
and in accordance with the WBCA, Purchaser shall be merged with and into the
Company as soon as practicable following the satisfaction or waiver, if
permissible, of the conditions set forth in Article VI of this
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Agreement. Following the Merger, the Company shall continue as the surviving
corporation (the "SURVIVING CORPORATION") and the separate corporate existence
of Purchaser shall cease. At the election of Parent or Purchaser, any direct or
indirect wholly-owned subsidiary of Parent incorporated under the laws of
Washington may be substituted for Purchaser as a constituent corporation in the
Merger. As used herein, the term "PURCHASER" shall, upon such substitution,
refer to any such substituted corporation.
2.2 EFFECTIVE TIME. The Merger shall be consummated by and shall be
effective at the time there has been filed as provided by Section 2.13 with the
Secretary of State of the State of Washington the articles of merger in such
form as is required by, and executed in accordance with, the relevant provisions
of the WBCA, and such other documents as may be required by the provisions of
the WBCA. The time of such filing is referred to as the "EFFECTIVE TIME."
2.3 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in applicable sections of the WBCA. As of the Effective Time, the Company
shall be a wholly-owned subsidiary of Parent.
2.4 RESTATED ARTICLES OF INCORPORATION. The Restated Articles of
Incorporation of the Surviving Corporation shall be amended to contain the
substantive provisions of the Articles of Incorporation of the Purchaser as in
effect at the Effective Time.
2.5 BYLAWS. The Bylaws of Purchaser, as in effect immediately prior
to the Effective Time, shall be the Bylaws of the Surviving Corporation, until
thereafter duly amended in accordance with applicable law.
2.6 DIRECTORS. The directors of Purchaser immediately prior to the
Effective Time shall be the initial directors of the Surviving Corporation and
will hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the Restated
Articles of Incorporation and Bylaws of the Surviving Corporation, as such
instruments may be amended from time to time, either before or after the
Effective Time, or as otherwise provided by law.
2.7 OFFICERS. The officers of the Purchaser immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation. Such
officers of the Surviving Corporation will hold office from the Effective Time
until their respective successors are duly elected or appointed and qualified in
the manner provided in the Restated Articles of Incorporation and Bylaws of the
Surviving Corporation, as such instruments may be amended from time to time,
either before or after the Effective Time, or as otherwise provided by law.
2.8 CONVERSION OF SHARES.
(a) At the Effective Time, by virtue of the Merger and without
any action on the part of Parent, Purchaser, the Company or the holders of the
Shares:
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(i) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares held, directly or indirectly, by Parent,
Purchaser, the Company or any of their majority-owned subsidiaries, and any
Dissenting Shares (as defined in Section 2.9)) shall automatically be canceled
and extinguished and be converted into the right to receive $9.00, or such
higher amount per Share as is paid pursuant to the Offer (the "MERGER
CONSIDERATION"), in cash, without interest thereon.
(ii) Each Share issued and outstanding immediately prior to the
Effective Time which is owned or held, directly or indirectly, by Parent,
Purchaser, the Company or any of their majority-owned subsidiaries shall be
canceled and extinguished and cease to exist, without any conversion thereof,
and no payment shall be made with respect thereto.
(iii) Each holder (other than holders referred to in Section
2.8(a)(ii)) of a certificate representing any Shares shall after the Effective
Time cease to have any rights with respect to such Shares, except either to
receive the Merger Consideration upon surrender of such certificate, or to
exercise such holder's appraisal rights as provided in Section 2.9 and the WBCA.
(iv) Each share of Common Stock of Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and thereafter represent one validly issued, fully paid and nonassessable
share of Common Stock of the Surviving Corporation.
2.9 DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, Shares which are outstanding immediately prior to the Effective
Time and which are held by a holder who dissents from the Merger in the manner
provided under the WBCA and becomes entitled to obtain payment for the fair
value of such Shares pursuant to the applicable provisions of the WBCA
("DISSENTING SHARES") shall not be converted into a right to receive the Merger
Consideration pursuant to Section 2.8, but the holders of Dissenting Shares
shall instead be entitled to receive such consideration as shall be determined
pursuant to the WBCA; provided, however, that Section 2.8 shall apply to Shares
held by a dissenting shareholder who subsequently withdraws his or her demand
for payment in the manner provided under the WBCA, fails to comply fully with
the requirements of applicable provisions of the WBCA, or otherwise fails to
establish the fair value of such holder's Shares under the WBCA, in which event
such Shares shall be deemed to be converted into the right to receive the Merger
Consideration pursuant to Section 2.8. The Company shall give Parent and
Purchaser prompt notice of any written objection to the Merger and demand for
payment of the fair value of Shares. Prior to the Effective Time, the Company
shall not, except with the prior written consent of Purchaser, make any payment
with respect to, or settle or offer to settle, any such demand for payment of
the fair value of Shares. Each holder of Dissenting Shares shall have only such
rights and remedies as are granted to such holder under the WBCA.
2.10 PAYMENT FOR SHARES.
(a) Prior to the Effective Time, Purchaser shall select and
appoint a bank to act as agent for the holders of Shares (the "PAYING AGENT") to
receive and disburse the Merger Consideration to which holders of Shares shall
become entitled pursuant to Section 2.8. At the
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Effective Time, Purchaser or Parent shall provide the Paying Agent with
sufficient cash to allow the Merger Consideration to be paid by the Paying Agent
for each Share then entitled to receive the Merger Consideration.
(b) As soon as practicable after the Effective Time, Purchaser
or Parent shall cause the Paying Agent to mail to each record holder a
certificate or certificates representing Shares which as of the Effective Time
represents the right to receive the Merger Consideration (the "CERTIFICATES"), a
form of 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 Paying Agent) and instructions for
use in effecting the surrender of the Certificates for payment therefor. Upon
surrender to the Paying Agent of a Certificate, together with such letter of
transmittal duly executed and completed in accordance with the instructions
thereto, and such other documents as may be requested, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration and such Certificate shall forthwith be canceled. No interest
shall be paid or accrued on the Merger Consideration upon the surrender of the
Certificates. Until surrendered in accordance with the provisions of this
Section, each Certificate shall be deemed for all purposes to evidence only the
right to receive the Merger Consideration (without interest thereon), and shall,
subject to Section 2.9, have no other right.
(c) If the Merger Consideration (or any portion thereof) is to
be delivered to a person other than the person in whose name the Certificates
surrendered in exchange therefor are registered, it shall be a condition to the
payment that the Certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the person requesting such
payment or delivery shall pay any transfer or other taxes payable by reason of
the foregoing or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Notwithstanding the foregoing,
neither the Paying Agent nor any party hereto shall be liable to a holder of
Shares for any Merger Consideration delivered to a public official pursuant to
applicable abandoned property, escheat and similar laws.
(d) Promptly following the date that is six months after the
Effective Date, the Paying Agent shall return to the Surviving Corporation all
Merger Consideration and other cash, property and instruments in its possession
relating to the transactions described in this Agreement, and the Paying Agent's
duties shall terminate. Thereafter, each holder of a Certificate formerly
representing a Share may surrender such Certificate to the Surviving Corporation
and (subject to applicable abandoned property, escheat and similar laws) receive
in exchange therefor the Merger Consideration (without interest thereon).
Notwithstanding the foregoing, the Surviving Corporation shall be entitled to
receive from time to time all interest or other amounts earned with respect to
any cash deposited with the Paying Agent as such amounts accrue or become
available.
2.11 NO FURTHER RIGHTS OR TRANSFERS. At and after the Effective Time
the holders of Certificates to be exchanged for the Merger Consideration
pursuant to this Agreement shall cease to have any rights as to shareholders of
the Company except for the right to surrender such holder's Certificates in
exchange for payment of the Merger Consideration, and after the Effective Time
there shall be no transfers on the stock transfer books of the Surviving
Corporation of the Shares which
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were outstanding immediately prior to the Effective Time. Any Certificates
formerly representing Shares presented to the Surviving Corporation or Paying
Agent shall be canceled and exchanged for the Merger Consideration, as provided
in this Article II, subject to applicable law in the case of Dissenting Shares.
2.12 SUPPLEMENTARY ACTION. If at any time after the Effective Time,
any further assignments or assurances in law or any other things are necessary
or desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of either the Company or
Purchaser, or otherwise to carry out the provisions of this Agreement, the
officers and directors of the Surviving Corporation are hereby authorized and
empowered, in the name of and on behalf of the Company and Purchaser, to execute
and deliver any and all things necessary or proper to vest or to perfect or
confirm title to such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of this Agreement.
2.13 CLOSING. Upon the terms and subject to the conditions of this
Agreement, as soon as practicable after all the conditions to the obligations of
the parties hereto to effect the Merger under Article VI of this Agreement shall
have been satisfied or waived, the Company and Purchaser shall (i) file with the
Delaware Secretary of State a certificate or agreement of merger or a
certificate of ownership and merger in such form as may be required by, and
executed in accordance with, the relevant provisions of the WBCA and (ii) take
all such other and further actions as may be required by law to make the Merger
effective. Contemporaneous with the filing referred to in this Section, a
closing (the "CLOSING") will be held at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other
location as the parties may establish for the purpose of confirming all the
foregoing. The date and the time of such Closing are referred to as the "CLOSING
DATE."
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company (which for purposes of this Article III shall include the
Company and each of its subsidiaries unless the context otherwise requires)
represents and warrants to Parent and Purchaser, subject to the exceptions
specifically disclosed in writing in the disclosure letter supplied by the
Company to Parent and Purchaser dated as of the date hereof and certified by a
duly authorized officer of the Company (the "Company Schedules"), as follows:
3.1 ORGANIZATION OF THE COMPANY.
(a) The Company and each of its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as now
being conducted and as proposed to be conducted; and is duly qualified or
licensed to do business and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing
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necessary, except where the failure to be so qualified would not have a
Material Adverse Effect (as defined below) on the Company.
(b) The Company has delivered to Parent a true and complete
list of all of the Company's subsidiaries, indicating the jurisdiction of
incorporation of each subsidiary, the jurisdictions in which such subsidiary is
qualified or licensed, and the Company's and any other person's equity interest
therein. All shares of subsidiaries owned of record by persons other than the
Company are owned beneficially (or the substantive equivalent) by the Company.
(c) The Company has delivered or made available to Parent a
true and correct copy of the Restated Articles of Incorporation and Bylaws of
the Company and similar governing instruments of each of its subsidiaries, each
as amended to date, and each such instrument is in full force and effect.
Neither the Company nor any of its subsidiaries is in violation of any of the
provisions of its Restated Articles of Incorporation or Bylaws or equivalent
governing instruments.
(d) When used in connection with the Company, the term
"MATERIAL ADVERSE EFFECT" means, for purposes of this Agreement, any change,
event or effect that is materially adverse to the business, assets (including
intangible assets), financial condition or results of operations of Company and
its subsidiaries taken as a whole.
3.2 COMPANY CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 45,000,000 shares of Common Stock, no par value, of which
there are 10,189,969 shares were issued and outstanding as of September 30,
1999, and 5,000,000 shares of Preferred Stock, no par value, of which no shares
are issued or outstanding. No shares of capital stock have been issued since
September 30, 1999 except pursuant to option exercises. All outstanding shares
of the Company Common Stock are duly authorized, validly issued, fully paid and
nonassessable and are not subject to preemptive rights created by statute, the
Restated Articles of Incorporation or Bylaws of the Company or any agreement or
document to which the Company is a party or by which it is bound. As of the date
of this Agreement, the Company had reserved an aggregate of 5,226,789 shares of
the Company Common Stock, net of exercises, for issuance to employees,
consultants and non-employee directors pursuant to the Amended and Restated 1983
Stock Option Plan, Restated 1993 Stock Option Plan and Restated 1993 Stock
Option Plan for Non-Employee Directors and 1994 Non-Officer Stock Option Plan
("the Option Plans"). (Stock options granted by the Company pursuant to the
Option Plans or otherwise are referred to in this Agreement as "Company
Options.") As of September 30, 1999, there were Company Options outstanding to
purchase an aggregate of 2,477,892 shares of Common Stock, issued to employees,
consultants and non-employee directors pursuant to the Option Plans. No Company
Options have been granted since September 30, 1999. All shares of the Company
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable. The
Company Schedules list for each person who held restricted stock or options, the
name of the holder of such shares or option, the exercise price of such option,
the number of shares which will have vested at such date, the vesting schedule
for such shares or option and whether the lapsing of the Company's repurchase
rights or exercisability of such option will be
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accelerated in any way by the transactions contemplated by this Agreement, and
indicate the extent of acceleration, if any.
3.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in
Section 3.2, there are no equity securities, partnership interests or similar
ownership interests of any class of the Company, or any securities exchangeable
or convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except for securities the Company owns, directly or indirectly
through one or more subsidiaries, there are no equity securities, partnership
interests or similar ownership interests of any class of any subsidiary of the
Company, or any security exchangeable or convertible into or exercisable for
such equity securities, partnership interests or similar ownership interests,
issued, reserved for issuance or outstanding. Except as set forth in Section
3.2, there are no options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which the Company or any of its
subsidiaries is a party or by which it is bound obligating the Company or any of
its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition, of any shares of capital stock, partnership interests
or similar ownership interests of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to grant, extend, accelerate
the vesting of or enter into any such option, warrant, equity security, call,
right, commitment or agreement. There are no registration rights and, to the
knowledge of the Company, as of the date of this Agreement, there are no voting
trusts, proxies or other agreements or understandings with respect to any equity
security of any class of the Company or with respect to any equity security,
partnership interest or similar ownership interest of any class of any of its
subsidiaries.
3.4 AUTHORITY.
(a) The Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, subject only to
the approval and adoption of this Agreement and the approval of the Merger by
the Company's shareholders and the filing and recordation of the Restated
Articles of Merger pursuant to the WBCA. A vote of the holders of fifty-one
percent (51%) of the outstanding Shares is required for the Company's
shareholders to approve and adopt this Agreement and approve the Merger. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Parent and, if applicable,
Purchaser, constitutes valid and binding obligations of the Company, enforceable
in accordance with its terms, except as enforceability may be limited by
bankruptcy and other similar laws and general principles of equity. The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Restated Articles of Incorporation or Bylaws of the Company or the
equivalent organizational documents of any of its subsidiaries, (ii) subject to
obtaining the approval and adoption of this Agreement and the approval of the
Merger by the Company's shareholders, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable
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to the Company or any of its subsidiaries or by which its or any of their
respective properties is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair the Company's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of the
Company or any of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or its or any of
their respective properties are bound or affected. The Company Schedules list
all consents, waivers and approvals under any of the Company's or any of its
subsidiaries' material agreements, contracts, licenses or leases required to be
obtained in connection with the consummation of the transactions contemplated
hereby.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental authority or instrumentality, foreign or
domestic ("GOVERNMENTAL ENTITY"), is required by or with respect to the Company
in connection with the execution and delivery of this Agreement or the
consummation of the Merger, except for (i) the filing of the Certificate of
Merger with the Delaware Secretary of State, (ii) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal and state securities laws and the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), and the securities or antitrust laws of any foreign country, and (iii)
such other consents, authorizations, filings, approvals and registrations which
if not obtained or made would not be material to the Company, Parent or
Purchaser or have a material adverse effect on the ability of the parties to
consummate the Offer or the Merger.
3.5 SEC FILINGS; THE COMPANY FINANCIAL STATEMENTS.
(a) The Company has filed in a timely manner all forms,
reports and documents required to be filed with the SEC since January 1, 1997,
and has made available to Parent all such forms, reports and documents. All such
required forms, reports and documents (including those that the Company may file
subsequent to the date hereof) are referred to herein as the "COMPANY SEC
REPORTS." As of their respective dates, the Company SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such the Company SEC
Reports, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. None of the Company's subsidiaries is required to file any
forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) contained in the Company SEC Reports
(the "COMPANY FINANCIALS"),
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including any of the Company SEC Reports filed after the date hereof until the
Closing, (x) complied as to form in all material respects with the published
rules and regulations of the SEC with respect thereto, (y) was prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC on Form 10-Q, 8-K or any successor form under the
Exchange Act) and (z) fairly presented the consolidated financial position of
the Company and its subsidiaries as at the respective dates thereof and the
consolidated results of the Company's operations and cash flows for the periods
indicated, except that the unaudited interim financial statements may not
contain footnotes and were or are subject to normal and recurring year-end
adjustments. The balance sheet of the Company contained in the Company SEC
Reports as of July 31, 1999 is hereinafter referred to as the "COMPANY BALANCE
SHEET." Except as disclosed in the Company Financials, since the date of the
Company Balance Sheet neither the Company nor any of its subsidiaries has any
liabilities (absolute, accrued, contingent or otherwise) of a nature required to
be disclosed on a balance sheet or in the related notes to the consolidated
financial statements prepared in accordance with GAAP which are, individually or
in the aggregate, material to the business, results of operations or financial
condition of the Company and its subsidiaries taken as a whole, except
liabilities (i) provided for in the Company Balance Sheet, or (ii) incurred
since the date of the Company Balance Sheet in the ordinary course of business
consistent with past practices and immaterial in the aggregate and liabilities
incurred in connection with this Agreement.
(c) The Company has heretofore furnished to Parent a complete
and correct copy of any amendments or modifications, which have not yet been
filed with the SEC but which are required to be filed, to agreements, documents
or other instruments which previously had been filed by the Company with the SEC
pursuant to the Securities Act or the Exchange Act.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the
Company Balance Sheet there has not been: (i) any Material Adverse Effect, (ii)
any material change by the Company in its accounting methods, principles or
practices, except as required by concurrent changes in GAAP, or (iii) any
material revaluation by the Company of any of its assets, including, without
limitation, writing down the value of capitalized inventory or writing off notes
or accounts receivable other than in the ordinary course of business.
3.7 TAXES.
(a) Definition of Taxes. For the purposes of this Agreement,
"TAX" or "TAXES" refers to any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities
relating to taxes, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts and any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity.
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(b) Tax Returns and Audits.
The Company and each of its subsidiaries have timely filed all
federal, state, local and foreign returns, estimates, information statements and
reports ("RETURNS") relating to Taxes required to be filed by the Company and
each of its subsidiaries, except such Returns which are not material to the
Company, and have timely paid all Taxes shown to be due on such Returns. Such
Returns are true and correct and have been completed in accordance with
applicable law.
Except as is not material to the Company, the Company and each of
its subsidiaries as of the Effective Time will have withheld with respect to its
employees all federal and state income taxes, the Federal Insurance Contribution
Act ("FICA"), the Federal Unemployment Tax Act ("FUTA") and other Taxes required
to be withheld and have timely paid to the proper government authorities all
amounts required to be withheld and paid.
Except as is not material to the Company, neither the Company nor
any of its subsidiaries has been delinquent in the payment of any Tax nor is
there any Tax deficiency outstanding, proposed or assessed against the Company
or any of its subsidiaries, nor has the Company or any of its subsidiaries
executed any waiver of any statute of limitations on or extending the period for
the assessment or collection of any Tax.
Except as is not material to the Company, no audit or other
examination of any Return of the Company or any of its subsidiaries is presently
in progress, nor has the Company or any of its subsidiaries been notified of any
request for such an audit or other examination.
Except as is not material to the Company, no adjustment relating
to any Returns filed by the Company or any of its subsidiaries has been proposed
formally or informally by any Tax authority to the Company or any of its
subsidiaries or any representative thereof.
Except as is not material to the Company, neither the Company nor
any of its subsidiaries has any liability for unpaid Taxes which has not been
accrued for or reserved on the Company Balance Sheet, whether asserted or
unasserted, contingent or otherwise.
There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any employee or
former employee of the Company or any of its subsidiaries that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G, 404 or 162(m) of the Code.
Neither the Company nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
defined in Section 341(f)(4) of the Code) owned by the Company.
Neither the Company nor any of its subsidiaries (i) has ever been
a member of an affiliated group filing a consolidated federal income Tax Return
(other than a consolidated group the common parent of which is the Company),
(ii) is a party to any Tax sharing or Tax allocation
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agreement, arrangement or understanding, (iii) is liable for the Taxes of any
other person under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract or otherwise, and (iv) is a party to any joint venture, partnership or
other arrangement that could be treated as a partnership for income Tax
purposes.
Neither the Company nor any of its subsidiaries is and has never
been at any time, a "United States Real Property Holding Corporation" within the
meaning of Section 897(c)(2) of the Code.
3.8 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) The Company Schedules list the real property owned by the
Company. The Company Schedules list all real property leases to which the
Company is a party and each amendment thereto. All such current leases are in
full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or
both, would constitute a default) that would give rise to a claim in an amount
greater than $100,000.
(b) The Company has good and valid title to, or, in the case
of leased properties and assets, valid leasehold interests in, all of its
tangible properties and assets, real, personal and mixed, used or held for use
in its business, free and clear of any liens, pledges, charges, claims, security
interests or other encumbrances of any sort ("LIENS"), except as reflected in
the Company Financials or in the Company Schedules and except for liens for
taxes not yet due and payable and such imperfections of title and encumbrances,
if any, which are not material in character, amount or extent, and which do not
materially detract from the value, or materially interfere with the present use,
of the property subject thereto or affected thereby.
3.9 INTELLECTUAL PROPERTY.
For the purposes of this Agreement, the following terms have the
following definitions:
"INTELLECTUAL PROPERTY" shall mean any or all of the following
and all rights in, arising out of, or associated therewith: (i)
all United States, international and foreign patents and
applications therefor and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part
thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary
information, know how, technology, technical data and customer
lists, and all documentation relating to any of the foregoing;
(iii) all copyrights, copyrights registrations and applications
therefor, and all other rights corresponding thereto throughout
the world; (iv) all industrial designs and any registrations and
applications therefor throughout the world; (v) all trade names,
logos, common law trademarks and service marks, trademark and
service ▇▇▇▇ registrations and applications therefor throughout
the world; (vi) all databases and data collections and all rights
therein throughout the world; and (vii) any similar or equivalent
rights to any of the foregoing anywhere in the world.
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"COMPANY INTELLECTUAL PROPERTY" shall mean any Intellectual
Property that is owned by, or exclusively licensed to, the
Company.
"REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (i) patents and patent applications
(including provisional applications); (ii) registered trademarks,
applications to register trademarks, intent-to-use applications,
or other registrations or applications related to trademarks;
(iii) registered copyrights and applications for copyright
registration; and (iv) any other Intellectual Property that is
the subject of an application, certificate, filing, registration
or other document issued, filed with, or recorded by any state,
government or other public legal authority.
(a) The Company has made available to Parent, a list of the
Registered Intellectual Property owned by, or filed in the name of, the Company
(the "COMPANY REGISTERED INTELLECTUAL PROPERTY").
(b) The Company has made available to Parent, a list of all
proceedings or actions before any court, tribunal (including the United States
Patent and Trademark Office ("PTO") or equivalent authority anywhere in the
world) related to any Company Intellectual Property.
(c) No Company Intellectual Property or product or service of
the Company is subject to any proceeding or outstanding decree, order, judgment,
agreement, or stipulation restricting in any manner the use, transfer, or
licensing thereof by the Company, or which may affect the validity, use or
enforceability of such Company Intellectual Property.
(d) Each item of Company Registered Intellectual Property is
valid and subsisting, all necessary registration, maintenance and renewal fees
in connection with such Registered Intellectual Property have been made and all
necessary documents and certificates in connection with such Registered
Intellectual Property have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign jurisdictions, as
the case may be, for the purposes of maintaining such Registered Intellectual
Property.
(e) Except as set forth in Schedule 3.9: (i) the Company owns
and has good and exclusive title to each item of Company Intellectual Property,
including all Company Registered Intellectual Property listed on Schedule 3.9,
free and clear of any lien or encumbrance; and (ii) the Company is the exclusive
owner of all trademarks and trade names used in connection with the operation or
conduct of the business of the Company, including the sale of any products or
the provision of any services by the Company.
(f) The Company owns exclusively, and has good title to, all
copyrighted works that are Company products or which the Company otherwise
purports to own.
(g) To the extent that any work, invention, or material has
been developed or created by a third party for the Company, the Company has a
written agreement with such third party with respect thereto and the Company
thereby has obtained ownership of, and is the exclusive owner
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of, all Intellectual Property in such work, material or invention by operation
of law or by valid assignment.
(h) Except as set forth in Schedule 3.9, the Company has not
transferred ownership of, or granted any exclusive license with respect to, any
Intellectual Property that is material Company Intellectual Property, to any
third party.
(i) Schedule 3.9 lists all material contracts, licenses and
agreements to which the Company is a party (i) with respect to Company
Intellectual Property licensed or transferred to any third party; or (ii)
pursuant to which a third party has licensed or transferred any Intellectual
Property to the Company, with a cost or royalty value in excess of $50,000.
Schedule 3.9 lists any material agreements pursuant to which the Company has
licensed any Company Intellectual Property or products to any third party that
differs in any material respect from its standard form.
(j) The contracts, licenses and agreements listed on Schedule
3.9 are in full force and effect. The consummation of the transactions
contemplated by this Agreement will neither violate nor result in the breach,
modification, cancellation, termination, or suspension of such contracts,
licenses and agreements. The Company is in compliance with, and has not breached
any term any of such contracts, licenses and agreements and, to the knowledge of
the Company, all other parties to such contracts, licenses and agreements are in
compliance with, and have not breached any term of, such contracts, licenses and
agreements. Following the Closing Date, Purchaser will be permitted to exercise
all of the Company's rights under the contracts, licenses and agreements listed
on Schedule 3.9 to the same extent the Company would have been able to had the
transactions contemplated by this Agreement not occurred and without the payment
of any additional amounts or consideration other than ongoing fees, royalties or
payments which the Company would otherwise be required to pay.
(k) Schedule 3.9 lists all contracts, licenses and agreements
between the Company and any third party wherein or whereby the Company has
agreed to, or assumed, any obligation or duty to warrant, indemnify, hold
harmless or otherwise assume or incur any obligation or liability with respect
to the infringement or misappropriation by the Company or such third party of
the Intellectual Property of any third party.
(l) The operation of the business of the Company as such
business currently is conducted, or is reasonably is contemplated to be
conducted, including the Company's design, development, manufacture, marketing
and sale of the products or services of the Company (including with respect to
products currently under development) has not, does not and will not infringe or
misappropriate the Intellectual Property of any third party or constitute unfair
competition or trade practices under the laws of any jurisdiction.
(m) The Company has not received notice from any third party
that the operation of the business of the Company or any act, product or service
of the Company, infringes or misappropriates the Intellectual Property of any
third party or constitutes unfair competition or trade practices under the laws
of any jurisdiction. To the knowledge of the Company, there is no current
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claim asserted against any customer of the Company which alleges that the
customer's use or distribution of the Company's products violates any
Intellectual Property of any third party.
(n) Except as set forth in Schedule 3.9, to the knowledge of
the Company, no Person has or is infringing or misappropriating any Company
Intellectual Property.
(o) The Company has taken all steps that are reasonably
required to protect the Company's rights in the Company's confidential
information and trade secrets or any trade secrets or confidential information
of third parties provided to the Company, and, without limiting the foregoing,
the Company has and enforces a policy requiring each employee and contractor to
execute a proprietary information/confidentiality agreement substantially in
the Company's standard form and all current and former employees and contractors
of the Company have executed such an agreement.
3.10 COMPLIANCE; PERMITS; RESTRICTIONS.
(a) Neither the Company nor any of its subsidiaries is, in any
material respect, in conflict with, or in default or violation of (i) any law,
rule, regulation, order, judgment or decree applicable to the Company or any of
its subsidiaries or by which the Company or any of its subsidiaries or any of
their respective properties is bound or affected, or (ii) any material note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other material instrument or obligation to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or its or any of their respective properties is bound or affected.
To the knowledge of the Company, no investigation or review by any Governmental
Entity is pending or threatened against the Company or any of its subsidiaries,
nor has any Governmental Entity indicated an intention to conduct the same.
There is no material agreement, judgment, injunction, order or decree binding
upon the Company or any of its subsidiaries which has or could reasonably be
expected to have the effect of prohibiting or materially impairing any business
practice of the Company or any of its subsidiaries, any acquisition of material
property by the Company or any of its subsidiaries or the conduct of business by
the Company as currently conducted.
(b) The Company and its subsidiaries hold all permits,
licenses, variances, exemptions, orders and approvals from governmental
authorities that are material to the operation of the business of the Company
(collectively, the "COMPANY PERMITS"). The Company and its subsidiaries are in
compliance in all material respects with the terms of the Company Permits.
3.11 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which the Company or any of its
subsidiaries has received any notice of assertion nor, to the knowledge of the
Company, is there a threatened action, suit, proceeding, claim, arbitration or
investigation against the Company or any of its subsidiaries which reasonably
would be likely to be material to the Company. To the knowledge of the Company,
no Governmental Entity has at any time challenged or questioned in writing the
legal right of the Company to manufacture, offer or sell any of its products in
the present manner or style thereof.
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3.12 BROKERS' AND FINDERS' FEES. Except for fees payable to Banker
pursuant to an engagement letter dated December 18, 1999, as amended a copy of
which has been provided to Parent, the Company has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
3.13 EMPLOYEE BENEFIT PLANS.
(i) With respect to each material employee benefit plan, program,
arrangement and contract (including, without limitation, any "EMPLOYEE BENEFIT
PLAN" as defined in Section 3(3) of ERISA) maintained or contributed to by the
Company or any trade or business which is under common control with the Company
within the meaning of Section 414 of the Code (the "COMPANY EMPLOYEE PLANS"),
the Company has made available to Parent a true and complete copy of, to the
extent applicable, (i) such Company Employee Plan, (ii) the most recent annual
report (Form 5500), (iii) each trust agreement related to such Company Employee
Plan, (iv) the most recent summary plan description for each Company Employee
Plan for which such a description is required, (v) the most recent actuarial
report relating to any Company Employee Plan subject to Title IV of ERISA and
(vi) the most recent IRS determination letter issued with respect to any Company
Employee Plan.
(ii) Each Company Employee Plan which is intended to be qualified
under Section 401(a) of the Code is the subject of a favorable determination
from the IRS covering the provisions of the Tax Reform Act of 1986 and, to the
knowledge of the Company, nothing has occurred since the date of such letter
that could reasonably be expected to affect the qualified status of such plan so
as to result in a Material Adverse Effect on the Company other than changes in
applicable law for which the remedial amendment period has not expired. Each
Company Employee Plan has been operated in all material respects in accordance
with its terms and the requirements of applicable law. Neither the Company nor,
to the knowledge of the Company, any ERISA Affiliate of the Company has incurred
or expects to incur any material liability under Title IV of ERISA in connection
with any Company Employee Plan.
3.14 EMPLOYEES; LABOR MATTERS. To the Company's knowledge, no employee
of the Company (i) is in violation of any term of any employment contract,
patent disclosure agreement, non-competition agreement, or any restrictive
covenant to a former employer relating to the right of any such employee to be
employed by the Company because of the nature of the business conducted or
presently proposed to be conducted by the Company or to the use of trade secrets
or proprietary information of others and (ii) has given notice to the Company,
nor is the Company otherwise aware, that any employee intends to terminate his
or her employment with the Company except for terminations of a nature and
number that are consistent with the Company's prior experience. To the Company's
knowledge, there are no activities or proceedings of any labor union to organize
any employees of the Company or any of its subsidiaries and there are no
strikes, or material slowdowns, work stoppages or lockouts, or threats thereof
by or with respect to any employees of the Company or any of its subsidiaries.
The Company and its subsidiaries are and have been in compliance in all material
respects with all applicable laws regarding employment practices, terms and
conditions of
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employment, and wages and hours (including, without limitation, OSHA, ERISA,
WARN or any similar state or local law).
3.15 ENVIRONMENTAL MATTERS.
(i) Hazardous Material. No underground storage tanks and no
amount of any substance that has been designated by any Governmental Entity or
by applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended, and the regulations promulgated pursuant to said laws, (a
"HAZARDOUS MATERIAL"), but excluding office and janitorial supplies, are present
in, on or under any property, including the land and the improvements, ground
water and surface water thereof, that the Company or any of its subsidiaries has
at any time owned, operated, occupied or leased.
(ii) Hazardous Materials Activities. Neither the Company nor any
of its subsidiaries has transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous Materials in violation
of any law in effect on or before the Closing Date, nor has the Company or any
of its subsidiaries disposed of, transported, sold, used, released, exposed its
employees or others to or manufactured any product containing a Hazardous
Material (collectively "HAZARDOUS MATERIALS ACTIVITIES") in violation of any
rule, regulation, treaty or statute promulgated by any Governmental Entity in
effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity.
(iii) Permits. The Company and its subsidiaries currently hold
all environmental approvals, permits, licenses, clearances and consents (the
"COMPANY ENVIRONMENTAL PERMITS") necessary for the conduct of the Company's and
its subsidiaries' Hazardous Material Activities and other businesses of the
Company and its subsidiaries as such activities and businesses are currently
being conducted.
(iv) Environmental Liabilities. No material action, proceeding,
revocation proceeding, amendment procedure, writ, injunction or claim is
pending, or to the Company's knowledge, threatened concerning any Company
Environmental Permit, Hazardous Material or any Hazardous Materials Activity of
the Company or any of its subsidiaries. The Company is not aware of any fact or
circumstance which could involve the Company or any of its subsidiaries in any
material environmental litigation or impose upon the Company any material
environmental liability.
3.16 YEAR 2000 COMPLIANCE. All of the current versions of the
Company's products (including products currently under development) will record,
store, process, calculate and present calendar dates falling on and after (and
if applicable, spans of time including) January 1, 2000, and will calculate any
information dependent on or relating to such dates in the same manner, and with
the same functionality, data integrity and performance, as the products record,
store, process, calculate and present calendar dates on or before December 31,
1999, or calculate any information
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dependent on or relating to such dates (collectively, "Year 2000 Compliant").
The Company's material internal computer and technology products and systems are
Year 2000 Compliant, except for upgrades or replacements which may be made
without disruption to the Company's operations and for which the cost to the
Company is estimated to be less than $300,000 in aggregate.
3.17 AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as set forth in the
Company Schedules, neither the Company nor any of its subsidiaries is a party to
or is bound by:
(i) any employment or consulting agreement, contract or
commitment with any officer or director level employee or member of the
Company's Board of Directors, other than those that are terminable by the
Company or any of its subsidiaries on no more than thirty days notice without
liability or financial obligation, except to the extent general principles of
wrongful termination law may limit the Company's or any of its subsidiaries'
ability to terminate employees at will;
(ii) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation right plan, stock purchase plan or
restricted stock purchase agreement, any of the benefits of which will be
increased, or the vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement;
(iii) any agreement of indemnification or guaranty not entered
into in the ordinary course of business other than indemnification agreements
between the Company or any of its subsidiaries and any of its officers or
directors;
(iv) any agreement, contract or commitment currently in force
containing any covenant limiting the freedom of the Company or any of its
subsidiaries to engage in any line of business or compete with any person or
granting any exclusive distribution rights;
(v) any agreement, contract or commitment currently in force
relating to the disposition or acquisition of assets not in the ordinary course
of business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise;
(vi) any material joint marketing or development agreement; or
(vii) any agreement, contract or commitment currently in force to
provide source code to any party for any product or technology that is material
to the Company and its subsidiaries taken as a whole.
Neither the Company nor any of its subsidiaries, nor to the Company's
knowledge any other party to a Company Contract (as defined below), has
breached, violated or defaulted under, or received notice that it has breached
violated or defaulted under, any of the material terms or conditions of any
agreement, contract or commitment to which the Company or any of its
subsidiaries is a party of the type described above or any other material
agreement, contract or
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commitment (any such agreement, contract or commitment, as well as any
agreement, contract or commitment that is an exhibit to any Company SEC Report,
a "COMPANY CONTRACT") in such a manner as would permit any other party to cancel
or terminate any such Company Contract, or would permit any other party to seek
damages, which would be reasonably likely to be material to the Company.
3.18 CHANGE OF CONTROL PAYMENTS. The Company Schedules set forth each
plan or agreement pursuant to which any amounts may become payable (whether
currently or in the future) to current or former officers and directors of the
Company as a result of or in connection with the Offer and/or the Merger, and
the nature and amount of any such obligation.
3.19 BOARD APPROVAL. The Board of Directors of the Company has, as of
the date of this Agreement (A) determined that this Agreement and the
transactions contemplated hereby, including each of the Offer and the Merger,
are fair to and in the best interests of the holders of the Shares, (B) approved
and adopted this Agreement and the transactions contemplated hereby and (C)
resolved to recommend that the shareholders of the Company accept the Offer and
approve and adopt this Agreement and the transactions contemplated hereby and
thereby.
3.20 FAIRNESS OPINION. The Company's Board of Directors has received a
written opinion from Banker to the effect that the consideration to be received
by the holders of Shares pursuant to each of the Offer and the Merger is fair to
the holders of Shares from a financial point of view, and the Company has
delivered to Parent a copy of such opinion.
3.21 CHAPTER 23B.19 OF THE WASHINGTON BUSINESS CORPORATION ACT NOT
APPLICABLE. The Board of Directors of Company has taken all actions so that (a)
the restrictions contained in Chapter 23B.19 of the WBCA will not apply to the
execution, delivery or performance of this Agreement or to the consummation of
the Merger or the other transactions contemplated by this Agreement, (b)
approval of shareholders holding fifty-one percent (51%) of the outstanding
shares will be sufficient under the WBCA to approve the Merger, and (c) the
execution, delivery and performance of this Agreement and the consummation of
the Merger will not cause any change, effect or result under the Company Rights
Plan which is adverse to the interests of Parent. Without limiting the
generality of the foregoing, if necessary to accomplish the foregoing, the
Company Rights Plan has been (or will be within five business days of the date
hereof) amended to (i) render the Company Rights Plan inapplicable to the Merger
and the other transactions contemplated by this Agreement, (ii) ensure that (x)
neither Parent nor Purchaser is an Acquiring Person (as defined in the Company
Rights Plan) pursuant to the Company Rights Plan by virtue of the Offer or the
consummation of the Merger or the other transactions contemplated hereby and
thereby and (y) a Distribution Date or Shares Acquisition Date (as such terms
are defined in the Company Rights Plan) does not occur by reason of the
execution of this Agreement, the consummation of the Merger, or the consummation
of the transactions contemplated hereby or thereby, and such amendment may not
be further amended by Company without the prior consent of Parent in its sole
discretion.
3.22 OFFER DOCUMENTS; PROXY STATEMENT. Neither the Schedule 14D-9, nor
any of the information supplied by the Company for inclusion in the Offer
Documents, shall, at the respective times that the Schedule 14D-9, the Offer
Documents or any amendments or supplements thereto are
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filed with the SEC or are first published, sent or given to shareholders, as the
case may be, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. Neither the proxy statement to be sent to the shareholders
of the Company in connection with the meeting of the Company's shareholders to
consider the Merger (the "Company Shareholders' Meeting") or the information
statement to be sent to such shareholders, as appropriate (such proxy statement
or information statement, as amended or supplemented, is referred to as the
"Proxy Statement"), shall, at the date the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to shareholders, at the time of
the Company Shareholders' Meeting and at the Effective Time, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading or
necessary to correct any statement in any earlier communication with respect to
the solicitation of proxies for the Company Shareholders' Meeting which has
become false or misleading. The Schedule 14D-9 and the Proxy Statement will
comply in all material respects as to form and substance with the requirements
of the Exchange Act and the rules and regulations thereunder. Notwithstanding
the foregoing, the Company makes no representation or warranty with respect to
any information supplied to the Company by Parent or Purchaser which is
contained in the foregoing document.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and warrant to
the Company that:
4.1 ORGANIZATION AND QUALIFICATION. Each of Parent and Purchaser is a
corporation duly organized validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has all requisite corporate power
and authority to own, operate and lease its properties and to carry on its
business as it is now being conducted.
4.2 CORPORATE POWER, AUTHORIZATION AND ENFORCEABILITY. Each of Parent
and Purchaser has full corporate power and authority to enter into this
Agreement and to perform its obligations hereunder and to consummate all the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Purchaser, the performance by each of Parent and Purchaser of
their respective obligations hereunder and the consummation by Parent and
Purchaser of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of each of Parent and Purchaser and no
other corporate action on the part of Parent or Purchaser are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
(other than the filing and recordation of appropriate merger documents as
required by the WBCA). This Agreement has been duly executed and delivered by
each of Parent and Purchaser and is a legal, valid and binding obligation of
each of Parent and Purchaser, enforceable against Parent and Purchaser in
accordance with its terms.
4.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
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(a) Assuming satisfaction of all applicable requirements
referred to in Section 4.3 (b) below, the execution and delivery of this
Agreement by Parent and Purchaser, the compliance by Parent and Purchaser with
the provisions hereof and the consummation by Parent and Purchaser of the
transactions contemplated hereby will not conflict with or violate (i) any
statute, law, ordinance, rule, regulation, order, writ, judgment, award,
injunction, decree or ruling applicable to Parent or Purchaser or any of their
properties, other than such conflicts or violations which individually or in the
aggregate do not and will not have a material adverse effect on the business,
properties, assets, results of operations or financial condition of Parent and
Purchaser, taken as a whole, or (ii) conflict with or violate the Restated
Articles of Incorporation or Bylaws of Parent or Purchaser.
(b) Other than in connection with or in compliance with the
provisions of the WBCA, the Exchange Act, the "takeover" or "blue sky" laws of
various states and the HSR Act, (i) neither Parent nor Purchaser is required to
submit any notice, report, registration, declaration or other filing with any
Governmental Entity in connection with the execution or delivery of this
Agreement by Parent and Purchaser or the performance by Parent and Purchaser of
their obligations hereunder or the consummation by Parent and Purchaser of the
transactions contemplated by this Agreement and (ii) no waiver, consent,
approval, order or authorization of any Governmental Entity is required to be
obtained by Parent or Purchaser in connection with the execution or delivery of
this Agreement by Parent and Purchaser or the performance by Parent and
Purchaser of their obligations hereunder or the consummation by Parent and
Purchaser of the transactions contemplated by this Agreement. None of the
information supplied by Parent or Purchaser for inclusion in the Proxy Statement
shall, at the date the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to shareholders or at the time of the Company
Shareholders' Meeting, contain any untrue statement of a material fact required
to be stated therein or necessary in order to make the statements made therein
in light of the circumstances under which they were made, not misleading.
4.4 SCHEDULE 14D-1. Neither the Schedule 14D-1 nor the Offer
Documents, nor any of the information supplied by Parent and Purchaser for
inclusion in the Schedule 14D-9, shall at the respective times the Schedule
14D-1 or the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to shareholders or upon the
expiration of the Offer, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein in the light of the
circumstances under which they were made not misleading (except for information
supplied by the Company for inclusion in the Schedule 14D-1 and the Offer
Documents, as to which Parent and Purchaser make no representation). None of the
information supplied by Parent or Purchaser for inclusion in the Proxy Statement
shall, at the date the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to shareholders, at the time of the Company
Shareholders' Meeting and at the Effective Time, contain any untrue statement of
a material fact required to be stated therein or necessary in order to make the
statements made therein in light of the circumstances under which they were
made, not misleading.
4.5 AVAILABLE FUNDS. Parent has or has available to it, and will make
available to Purchaser, all funds necessary to satisfy all of Parent's and
Purchaser's obligations under this
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Agreement and in connection with the transaction contemplated hereby, including,
without limitation, the obligation to purchase all outstanding Shares pursuant
to the Offer and the Merger and to pay all related fees and expenses in
connection with the Offer and the Merger.
ARTICLE V
COVENANTS
5.1 CONDUCT OF BUSINESS BY THE COMPANY. During the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms and the Effective Time, the Company (which
for the purposes of this Article V shall include the Company and each of its
subsidiaries) agrees, except to the extent that Parent shall otherwise consent
in writing, to carry on its business diligently and in accordance with good
commercial practice and to carry on its business in the usual, regular and
ordinary course, in substantially the same manner as heretofore conducted and in
compliance with all applicable laws and regulations, to pay its debts and taxes
when due subject to good faith disputes over such debts or taxes, to pay or
perform other material obligations when due, and use its commercially reasonable
efforts consistent with past practices and policies to preserve intact its
present business organization, keep available the services of its present
officers and employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings. In addition, the Company will promptly notify Parent of any material
event involving its business or operations.
In addition, except as permitted by the terms of this Agreement (other
than as provided in Article 5.1 of the Company Schedules), without the prior
written consent of Parent, the Company shall not do any of the following, and
shall not permit any of its subsidiaries to do any of the following:
(i) Waive any stock repurchase rights, accelerate, amend or
change the period of exercisability of options or restricted stock, or reprice
options granted under any employee, consultant or director stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(ii) Grant any severance or termination pay to any officer or
employee except payments in amounts consistent with policies and past practices
or pursuant to written agreements outstanding, or policies existing, on the date
hereof and as previously disclosed in writing to the other, or adopt any new
severance plan;
(iii) Transfer or license to any person or entity or otherwise
extend, amend or modify in any material respect any rights to the Company's
intellectual property or other proprietary rights, or enter into grants to
future patent rights, other than in the ordinary course of business, consistent
with past practice;
(iv) Buy any Intellectual Property of a third party or enter into
any license agreement with respect to the Intellectual Property of any third
party for an acquisition or license,
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the price for which exceeds $50,000 individually (or in the aggregate for a
single third party), other than "shrink wrap," "click wrap," and similar widely
available commercial end-user licenses;
(v) Declare or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any capital
stock or split, combine or reclassify any capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for any capital stock.
(vi) Repurchase or otherwise acquire, directly or indirectly, any
shares of capital stock except pursuant to rights of repurchase of any such
shares under any employee, consultant or director stock plan existing on the
date hereof (which repurchase rights the Company shall be obligated to exercise
if the repurchase price is less than the Merger Consideration).
(vii) Issue, deliver, sell, authorize or propose the issuance,
delivery or sale of, any shares of capital stock or any securities convertible
into shares of capital stock, or subscriptions, rights, warrants or options to
acquire any shares of capital stock or any securities convertible into shares of
capital stock, or enter into other agreements or commitments of any character
obligating it to issue any such shares or convertible securities, other than (i)
the issuance of Shares, pursuant to the exercise of stock options therefor
outstanding as of the date of this Agreement, (ii) Shares issuable pursuant to
the Option Plans;
(viii) Cause, permit or propose any amendments to any charter
document or Bylaw (or similar governing instruments of any subsidiaries);
(ix) Acquire or agree to acquire by merging or consolidating
with, or by purchasing any equity interest in or a material portion of the
assets of, or by any other manner, any business or any corporation, partnership
interest, association or other business organization or division thereof, or
otherwise acquire or agree to acquire any assets which are material,
individually or in the aggregate, to the business of the Company, or enter into
any joint ventures, strategic partnerships or alliances;
(x) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of the Company, except in the ordinary course of business
consistent with past practice;
(xi) Incur any indebtedness for borrowed money (other than
ordinary course trade payables or pursuant to existing credit facilities in the
ordinary course of business) or guarantee any such indebtedness or issue or sell
any debt securities or warrants or rights to acquire debt securities, or
guarantee any debt securities of others;
(xii) Adopt or amend any employee benefit or employee stock
purchase or employee option plan (other than is necessary to comply with law),
or enter into any employment contract, pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
of its officers or employees other than in the ordinary course of business,
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consistent with past practice, or change in any material respect any management
policies or procedures;
(xiii) Pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than in the ordinary course of business;
(xiv) Make any grant of exclusive rights to any third party; or
(xv) Except in the ordinary course of business, modify, amend or
terminate any material contract or agreement involving payments of $50,000 or
more to which the Company or any Subsidiary thereof is a party or waive, release
or assign any material rights or claims thereunder;
(xvi) Materially revalue any of its assets or, except as required
by GAAP, make any change in accounting methods, principles or practices;
(xvii) Make or change any material election in respect of Taxes,
adopt or change any accounting method in respect of Taxes, enter into any
closing agreement, settle any claim or assessment in respect of Taxes, or
consent to any extension or waiver of the limitation period applicable to any
claim or assessment in respect of Taxes in an amount in excess of $50,000 in the
aggregate;
(xviii) Commence any litigation or settle any litigation for an
amount in excess of the greater of $100,000 in the aggregate or the amount
reserved in respect thereof in the Company Balance Sheet, as set forth in
Section 5.1 of the Company Schedules;
(xix) Agree in writing or otherwise to take any of the actions
described in (i) through (xviii) above.
5.2 ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Subject to and in accordance with the terms and conditions of
that certain letter dated April 29, 1999 between Parent and the Company (the
"CONFIDENTIALITY AGREEMENT"), from the date of this Agreement to the Effective
Time, the Company shall, and shall cause its subsidiaries, officers, directors,
employees and agents to, afford the officers, employees and agents of Parent,
Purchaser and their affiliates and the attorneys, accountants, banks, other
financial institutions and investment banks working with Parent or Purchaser,
and their respective officers, employees and agents, reasonable access at all
reasonable times to its officers, employees, agents, properties, books, records
and contracts, and shall furnish Parent, Purchaser and their affiliates and the
attorneys, banks, other financial institutions and investment banks working with
Parent or Purchaser, all financial, operating and other data and information as
they reasonably request.
(b) Subject to the requirements of law, Parent and Purchaser
shall, and shall use their reasonable efforts to cause their officers, employees
and agents, and the attorneys, banks, other financial institutions and
investment banks who obtain such information to, hold all information
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obtained pursuant to this Agreement or the Confidentiality Agreement in
accordance with the terms and conditions of the Confidentiality Agreement.
(c) No investigation pursuant to this Section 5.2 shall affect
any representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
5.3 PROXY MATERIAL; SHAREHOLDERS' MEETING.
(a) The Company and each of Parent and Purchaser shall prepare
and file, or shall cause to be prepared and filed, with the SEC those documents,
schedules and amendments and supplements thereto required to be filed with
respect to the transactions contemplated by this Agreement. The Company, acting
through its Board of Directors, shall, if necessary, cause the Company
Shareholders' Meeting to be duly called (including establishing the record date,
if requested, to be a date immediately after the date the Purchaser first
purchases any Shares pursuant to the Offer) and shall give notice of, convene
and hold the Company Shareholders' Meeting as soon as practicable, and at such
time and place designated by Parent or Purchaser, for the purpose of approving
the Merger, this Agreement and any other actions contemplated hereby which
require the approval of the Company's shareholders. The Company shall recommend
to its shareholders approval of the Merger and take all reasonable actions
necessary to solicit such approval. The Company shall use its best efforts to
obtain and furnish the information required to be included by it in the Proxy
Statement and, after consultation with Parent and Purchaser, shall respond
promptly to any comments of the SEC relating to any preliminary proxy statement
regarding the Merger and the other transactions contemplated by this Agreement
and to cause the Proxy Statement to be mailed to its shareholders, all at the
earliest practicable time. Whenever any event occurs which should be set forth
in an amendment or supplement to the Proxy Statement or any other filing
required to be made with the SEC with respect to the Proxy Statement or the
Company Shareholders' Meeting, each party shall promptly inform the other of
such occurrence and cooperate in filing with the SEC and/or mailing to the
Company's shareholders such amendment or supplement. The Proxy Statement and all
amendments and supplements thereto shall comply with applicable law and be in
form and substance satisfactory to each of Parent and Purchaser and the Company.
The Company, acting through its Board of Directors, shall include in the Proxy
Statement the recommendation of its Board of Directors that shareholders of the
Company vote in favor of the approval and adoption of this Agreement and the
Merger and shall disclose that each of the Company's directors and executive
officers and Banker and its affiliates intend to tender all outstanding shares
beneficially owned by such persons to Purchaser pursuant to the offer unless to
do so would subject such person to liability under Section 16(b) of the Exchange
Act. The Company shall use its best efforts to solicit from shareholders of the
Company proxies in favor of such approval and adoption and shall take all other
actions necessary or, in the reasonable judgment of Parent and Purchaser,
advisable to secure the vote or consent of the Company's shareholders required
by the WBCA to effect the Merger.
(b) Notwithstanding the foregoing, in the event that Purchaser
shall acquire at least ninety percent (90%) of the outstanding Shares, the
parties hereto agree, at the request of Purchaser, subject to Article VI, to
take all necessary and appropriate action to cause the Merger to
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become effective as soon as reasonably practicable after such acquisition,
without a meeting and without a vote of the Company's shareholders, in
accordance with the WBCA.
5.4 NO SOLICITATION; BREAK-UP FEE.
(a) From and after the date of this Agreement until the earlier
of the Effective Time or termination of this Agreement pursuant to its terms,
the Company and its subsidiaries shall not, and will instruct their respective
directors, officers, employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, (i) solicit or encourage submission
of, any proposals or offers by any person, entity or group (other than Parent
and its affiliates, agents and representatives), or (ii) participate in any
discussions or negotiations with, or disclose any non-public information
concerning the Company or any of its subsidiaries to, or afford any access to
the properties, books or records of the Company or any of its subsidiaries to,
or otherwise assist or facilitate, or enter into any agreement or understanding
with, any person, entity or group (other than Parent and its affiliates, agents
and representatives), in connection with any Acquisition Proposal with respect
to the Company. For the purposes of this Agreement, an "ACQUISITION PROPOSAL"
with respect to an entity means any proposal or offer relating to (i) any
merger, consolidation, sale of substantial assets or similar transactions
involving the entity or any subsidiaries of the entity (other than sales of
assets or inventory in the ordinary course of business or as permitted under the
terms of this Agreement), (ii) sale of outstanding shares of capital stock of
the entity (including without limitation by way of a tender offer or an exchange
offer), (iii) the acquisition by any person of beneficial ownership or a right
to acquire beneficial ownership of, or the formation of any "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) which beneficially owns, or has the right to acquire beneficial
ownership of, 10% or more of the then outstanding shares of capital stock of the
entity (except for acquisitions for passive investment purposes only in
circumstances where the person or group qualifies for and files a Schedule 13G
with respect thereto); or (iv) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing. The Company will immediately cease any and all existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. The Company will (i) notify Parent as promptly as
practicable if any inquiry or proposal is made or any information or access is
requested in connection with an Acquisition Proposal or potential Acquisition
Proposal and (ii) as promptly as practicable notify Parent of the terms and
conditions of any such Acquisition Proposal. In addition, subject to the other
provisions of this Section 5.4(a), from and after the date of this Agreement
until the earlier of the Effective Time and termination of this Agreement
pursuant to its terms, the Company and its subsidiaries will not, and will
instruct their respective directors, officers, employees, representatives,
investment bankers, agents and affiliates not to, directly or indirectly, make
or authorize any public statement, recommendation or solicitation in support of
any Acquisition Proposal made by any person, entity or group (other than
Parent).
(b) Notwithstanding the provisions of paragraph (a) above, prior
to consummation of the Offer, the Company may, to the extent the Board of
Directors of the Company determines, in good faith, after consultation with
outside legal counsel, that the Board's fiduciary duties under applicable law
require it to do so, participate in discussions or negotiations with, and,
subject to the
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requirements of paragraph (c), below, furnish information to any person, entity
or group after such person, entity or group has delivered to the Company in
writing, an unsolicited bona fide Acquisition Proposal which the Board of
Directors of the Company in its good faith reasonable judgment determines, after
consultation with its independent financial advisors, would result in a
transaction more favorable than the Offer and the Merger to the shareholders of
the Company from a financial point of view and for which financing, to the
extent required, is then committed or which, in the good faith reasonable
judgment of the Board of Directors of the Company (based upon the advice of
independent financial advisors), is reasonably capable of being financed by such
person, entity or group and which is likely to be consummated (a "SUPERIOR
PROPOSAL"). In the event the Company receives a Superior Proposal, nothing
contained in this Agreement (but subject to the terms hereof) will prevent the
Board of Directors of the Company from recommending such Superior Proposal to
the Company's shareholders, provided that (i) the Board determines in good
faith, after consultation with outside legal counsel, that such action is
required by its fiduciary duties under applicable law; (ii) the Company shall
not recommend to its shareholders a Superior Proposal until at least 48 hours
after Parent's receipt of a copy of such Superior Proposal (or a description of
its terms and conditions, if not in writing), and (iii) the Company shall not
recommend to its shareholders a Superior Proposal unless the Company shall have
terminated this Agreement and paid the Break-up Fee pursuant to Section
7.1(d)(ii).
(c) Notwithstanding anything to the contrary herein, the Company
will not provide any non-public information to a third party unless: (x) the
Company provides such non-public information pursuant to a nondisclosure
agreement with terms regarding the protection of confidential information at
least as restrictive as such terms in the Confidentiality Agreement; and (y)
such non-public information has been previously delivered to Parent.
(d) Nothing contained in this Section 5.4 shall prohibit the
Company from at any time taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's shareholders if, in the good faith judgment of
the Company Board, after consultation with outside counsel, failure so to
disclose would constitute a breach of its fiduciary duties to the Company's
shareholders under applicable law; provided, however, that neither the Company
nor its Board of Directors nor any committee thereof shall, except as permitted
by Section 5.4(b), withdraw or modify, or propose to withdraw or modify, its
position with respect to the Merger or this Agreement or approve or recommend,
or propose to approve or recommend, an Acquisition Proposal. The taking of a
position by the Company pursuant to Rule 14e-2(a)(2) or (3) of the Exchange Act
in respect of an Acquisition Proposal shall not be deemed a withdrawal, a
modification or a proposal to withdraw or modify its position with respect to
the Acquisition for purposes hereof.
5.5. PUBLIC ANNOUNCEMENTS. Parent and Purchaser on the one hand and
the Company on the other hand will consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement or the Merger or the other transactions contemplated hereby, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as may be required by law. This Section 5.5 shall supersede
any conflicting provisions in the Confidentiality Agreement.
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5.6 NOTIFICATION OF CERTAIN MATTERS.
(a) The Company shall give prompt notice (which notice shall
state that it is delivered pursuant to Section 5.6(a) of this Agreement) in
writing to Parent, and Parent and Purchaser shall give prompt notice in writing
to the Company, of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date of this Agreement through the Effective Time and (ii)
any failure of the Company, Parent or Purchaser, as the case may be, or of any
officer, director, employee or agent thereof, to comply with or satisfy in all
material respects any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement; provided, however, no such notification
shall affect the representations or warranties of the parties or the conditions
to the obligations of the parties hereunder.
(b) The Company shall give prompt notice in writing (which notice
shall state that it is delivered pursuant to Section 5.6(b) of this Agreement)
to Parent of (i) any act, omission to act, event or occurrence which, with the
passage of time or otherwise, would likely have a Material Adverse Effect on the
Company and (ii) any material contingent liability of the Company or any of its
subsidiaries for which such party reasonably believes it will, with the passage
of time or otherwise, become liable; provided, however, that no such
notification shall affect the representations or warranties of the parties or
the conditions to the obligations of the parties hereunder.
5.7 ACTIONS BY COMPANY. Subject to the terms and conditions hereof,
the Company shall, and shall cause its Subsidiaries to, cooperate with Parent
and Purchaser and take all such actions as may be reasonably requested by Parent
and Purchaser to accomplish the Merger.
5.8 OFFICERS' AND DIRECTORS' INDEMNIFICATION.
(a) From and after the Effective Time, Parent will cause the
Surviving Corporation to fulfill and honor in all respects the obligations of
the Company pursuant to any indemnification agreements between the Company and
its directors and officers as of the Effective Time (the "Indemnified Parties").
The Restated Articles of Incorporation and Bylaws of the Surviving Corporation
will contain provisions with respect to exculpation and indemnification that are
at least as favorable to the Indemnified Parties as those contained in the
Restated Articles of Incorporation and Bylaws of the Company as in effect on the
date hereof, which provisions will not be amended, repealed or otherwise
modified for a period of three years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who, immediately
prior to the Effective Time, were directors, officers, employees or agents of
the Company, unless such modification is required by law.
(b) For a period of three years after the Effective Time, Parent
will cause the Surviving Corporation to use its commercially reasonable efforts
to maintain in effect, if available, directors' and officers' liability
insurance covering those persons who are currently covered by the Company's
directors' and officers' liability insurance policy on terms comparable to those
applicable
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to the current directors and officers of the Company; provided, however, that in
no event will Parent or the Surviving Corporation be required to expend in
excess of 150% of the annual premium currently paid by the Company for such
coverage (or such coverage as is available for such 150% of such annual
premium).
5.9 EMPLOYMENT AGREEMENTS. Prior to commencement of the Offer, the
Company shall offer to enter into employment agreements (the "EMPLOYMENT
AGREEMENTS") with the persons set forth in Exhibit A, which Employment
Agreements shall be substantially in the form of Exhibit A hereto or such other
terms as may be accepted in writing by Parent.
5.10 ADDITIONAL AGREEMENTS.
(a) Subject to the terms and conditions hereof, each of the
parties to this Agreement agrees to use all reasonable efforts to take, or cause
to be taken, all actions, 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 consummation of the
Offer and the Merger) and to cooperate with each other in connection with the
foregoing.
(b) Subject to the terms and conditions hereof, each of the
parties to this Agreement agrees to use (i) all reasonable efforts to obtain all
necessary waivers, consents and approvals from other parties to loan agreements,
leases, licenses and other contracts, and (ii) all reasonable efforts to obtain
all necessary consents, approvals and authorizations as required to be obtained
under any federal, state or foreign law or regulations, including, but not
limited to, those required under the HSR Act, to defend all lawsuits or other
legal proceedings challenging this Agreement or the consummation of the
transactions contemplated hereby, to lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby, to effect all necessary
registrations and filings, including, but not limited to, filings under the HSR
Act and submissions of information requested by Governmental Entities, and to
fulfill all conditions to this Agreement.
5.11 OTHER ACTIONS BY THE COMPANY. If any "fair price," "moratorium,"
"control share acquisition," "shareholder protection" or other form of
anti-takeover statute, regulation or charter provision or contract is or shall
become applicable to the Offer or the Merger or the transactions contemplated
hereby, the Company and the Board of Directors of the Company shall grant such
approvals and take such actions as are necessary under such laws and provisions
so that the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to eliminate or
minimize the effects of such statute, regulation, provision or contract on the
transactions contemplated hereby.
5.12 COMPANY OPTIONS. The Company agrees to take all necessary actions
to ensure that all outstanding compensatory options to purchase common stock of
the Company terminate and become without further force and effect immediately
prior to the Effective Time.
5.13 RESTATED EMPLOYEE STOCK PURCHASE PLAN. The Company agrees to take
all necessary actions to ensure that all offering periods outstanding under the
Company's Restated
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Employee Stock Purchase Plan (the "ESPP") terminate immediately prior to the
Effective Time, and to ensure that the ESPP terminates immediately prior to the
Effective Time.
5.14 RETIREMENT SAVINGS PLAN TERMINATION. The Company and its ERISA
Affiliates, as applicable, each agrees to terminate its Retirement Savings Plan
immediately prior to Effective Time, unless the Parent, in its sole and absolute
discretion, agrees to sponsor and maintain such plans by providing the Company
with written notice of such election at least three (3) days before the
Effective Time. Unless the Parent provides such notice to the Company, the
Parent shall receive from the Company evidence that the Company's and each ERISA
Affiliate's (as applicable) 401(k) plan has been terminated pursuant to
resolutions of each such entity's Board of Directors (the form and substance of
which resolutions shall be subject to review and approval of the Parent),
effective as of the day immediately preceding the Effective Time.
5.15 STOCKHOLDER LITIGATION. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to any of the
transactions contemplated by this Agreement until the purchase of Company Common
Stock pursuant to the Offer, and thereafter, shall give Parent the opportunity
to direct the defense of such litigation and, if Parent so chooses to direct
such litigation, Parent shall give the Company and its directors an opportunity
to participate in such litigation; provided, however, that no settlement of such
litigation shall be agreed to without Parent's consent; and provided further
that no settlement requiring a payment by a director shall be agreed to without
such director's consent.
ARTICLE VI
CONDITIONS OF MERGER
6.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of each of the following
conditions:
(a) If required by the WBCA, this Agreement and the Merger
shall have been approved and adopted by the requisite vote of the shareholders
of the Company.
(b) Any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated.
(c) Shares shall have been purchased pursuant to the Offer.
(d) No temporary restraining order, preliminary or permanent
injunction, judgment or other order, decree or ruling nor any statute, rule,
regulation or order shall be in effect which would (i) make the acquisition or
holding by Parent or its affiliates of Shares or shares of Common Stock of the
Surviving Corporation illegal or otherwise prevent the consummation of the
Merger, (ii) prohibit Parent's or Purchaser's ownership or operation of, or
compel Parent or Purchaser to dispose of or hold separate, all or a material
portion of the business or assets
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of Purchaser, the Company or any Significant Subsidiary thereof, (iii) compel
Parent, Purchaser or the Company to dispose of or hold separate all or a
material portion of the business or assets of Parent or any of its Subsidiaries
or the Company or any of its Significant Subsidiaries, (iv) impose material
limitations on the ability of Parent or Purchaser or their affiliates
effectively to exercise full ownership and financial benefits of the Surviving
Corporation, or (v) impose any material condition to the Offer, this Agreement
or the Merger.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. TERMINATION. This Agreement may be terminated, at any time prior
to the Effective Time, whether before or after approval by the shareholders of
the Company:
(a) by mutual written agreement of the Boards of Directors of
Parent and the Company;
(b) by either Parent or the Company:
(i) if the Offer shall be terminated or expire without any
Shares having been purchased pursuant to the Offer; provided, however,
that a party shall not be entitled to terminate this Agreement pursuant to this
Section 7.1(b)(i) if it is in material breach of its representations and
warranties, covenants or other obligations under this Agreement; or
(ii) if any court of competent jurisdiction in the United
States or other United States governmental body shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Offer or the Merger and such order, decree, ruling or
other action shall have become final and nonappealable;
(c) by Parent:
(i) if the Board of Directors of the Company or any
committee thereof shall have approved, or recommended that shareholders
of the Company accept or approve, an Acquisition Proposal by a third party, or
shall have resolved to do any of the foregoing;
(ii) if the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified its approval of, or
recommendation that the shareholders of the Company accept or approve (as the
case may be), the Offer, this Agreement and the Merger, or shall have resolved
to do any of the foregoing;
(iii) if the Company shall have failed to include in the
Schedule 14D-9 the recommendation of the Board of Directors of the
Company that the shareholders of the Company accept the Offer;
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(iv) prior to the purchase of Shares pursuant to the Offer, in
the event that the conditions to the Offer set forth in clause (i) or (ii) of
Annex I shall not be satisfied or if any of the events set forth in clause (iii)
thereof shall have occurred; or
(v)if the Company is in material breach of any of its
covenants or obligations under this Agreement, or if there shall have
been or be any material inaccuracy in the representations and warranties of the
Company contained in this Agreement, either as of the date of this Agreement or
subsequently;
(d) by the Company:
(i) if the Offer shall not have been commenced in accordance
with Section 1.1, or Parent or Purchaser shall have failed to purchase
validly tendered Shares in violation of the terms of the Offer within ten
business days after the expiration of the Offer; provided, however, that the
Company shall not be entitled to terminate this Agreement pursuant to this
Section 7.1(d)(i) if it is in material breach of its representations and
warranties, covenants or other obligations under this Agreement;
(ii) if the Board of Directors of the Company has resolved to,
and in fact does, recommend to the Company's Shareholders that they accept a
Superior Proposal, provided that all the provisions of Section 5.4 have been
fully complied with, and provided further that the Company shall have paid to
Parent the entire Break-up Fee as provided in Section 7.3(b); or
(iii) prior to the purchase of Shares pursuant to the Offer,
if Parent or Purchaser is in material breach of any of its covenants or
obligations under this Agreement, or any representation or warranty of Parent
or Purchaser contained in this Agreement shall have been incorrect, in any
material respect, when made or shall have since ceased to be true and correct
in any material respect.
7.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the
termination of this Agreement by the Company or Parent or both of them pursuant
to Section 7.1, the terminating party shall provide written notice of such
termination to the other party and this Agreement shall forthwith become void
and there shall be no liability on the part of Parent, Purchaser or the Company,
except as set forth in this Section 7.2 and in Sections 5.2(b) and 7.3. The
foregoing shall not relieve any party for liability for damages actually
incurred as a result of any breach of this Agreement. Sections 5.2(b), 7.2, 7.3
and Article VIII shall survive the termination of this Agreement.
7.3 FEES AND EXPENSES.
(a) Except as otherwise provided in this Agreement and whether
or not the transactions contemplated by the Offer and this Agreement are
consummated, all costs and expenses incurred in connection with the transactions
contemplated by the Offer and this Agreement shall be paid by the party
incurring such expenses.
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(b) The Company shall pay to Parent, in same day funds, upon
demand, a fee of U.S. $5,000,000 (the "BREAK-UP FEE"), if any of the following
shall occur:
(i) if the Board of Directors of the Company or any committee
thereof shall have approved, or recommended that shareholders of the Company
accept or approve, an Acquisition Proposal by a third party, or shall have
resolved to do any of the foregoing;
(ii) if the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified its approval of, or recommendation that
the shareholders of the Company accept or approve (as the case may be), the
Offer, this Agreement and the Merger, or shall have resolved to do any of the
foregoing; or
(iii) if the Company shall have failed to include in the
Schedule 14D-9 the recommendation of the Board of Directors of the
Company that the shareholders of the Company accept the Offer.
(c) The Break-up Fee shall not be deemed to be liquidated
damages, and the right to the payment of the Break-up Fee shall be in addition
to (and not a maximum payment in respect of) any other damages or remedies at
law or in equity to which Parent or Purchaser may be entitled as a result of the
Company's violation or breach of any term or provision of this Agreement.
7.4 AMENDMENT. This Agreement may be amended by each of the parties
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time; provided, however, that (i) such amendment
shall be in writing signed by all of the parties, (ii) any such waiver,
amendment or supplement by the Company shall be effective as against the Company
only if approved by a majority of the Continuing Directors and (iii) after
adoption of this Agreement and the Merger by the shareholders of the Company, no
amendment may be made without the further approval of the shareholders of the
Company which reduces the Merger Consideration or changes the form thereof or
changes any other terms and conditions of this Agreement if the changes, alone
or in the aggregate, would materially adversely affect the shareholders of the
Company.
7.5 WAIVER. At any time prior to the Effective Time, whether before
or after the Company's Shareholders Meeting, any party hereto, by action taken
by its Board of Directors, may (i) extend the time for the performance of any of
the obligations or other acts of any other party hereto or (ii) subject to the
provisions of Section 7.4, waive compliance with any of the agreements of any
other party or with any conditions to its own obligations. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party by a duly
authorized officer of such party. Notwithstanding the above, any waiver given
shall not apply to any subsequent failure of compliance with agreements of the
other party or conditions to its own obligations.
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ARTICLE VIII
MISCELLANEOUS
8.1 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by rule of law or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain
in full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
8.2 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given,
or made as of the date delivered if sent via telecopier or delivered personally
(including, without limitation, delivery by commercial carrier warranting
next-day delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by similar notice, except that notices
of changes of address shall be effective upon receipt):
(a) If to Parent or Purchaser:
NetManage, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
NetManage Acquisition Corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) If to the Company:
Wall Data Incorporated
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇, Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇ Coie LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
8.3 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; NO ASSIGNMENT.
This Agreement, Annex I, the documents delivered pursuant hereto or in
connection herewith and the Confidentiality Agreement (i) constitute the entire
agreement and supersede all other prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof, (ii) are not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder (except as expressly set forth
in Section 5.9 with respect to present officers and directors of the Company),
and (iii) may not be assigned, except that Parent or Purchaser may assign their
rights hereunder in whole or in part to one or more direct or indirect
subsidiaries or affiliates of Parent which, in written instruments reasonably
satisfactory to the Company, shall agree to make all representations and
warranties of Purchaser set forth herein and shall agree to assume all of such
party's obligations hereunder and be bound by all of the terms and conditions of
this Agreement; provided, however, that no such assignment shall relieve the
assignor of its obligations hereunder.
8.4 INTERPRETATION; KNOWLEDGE.
(i) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
The words "INCLUDE," "INCLUDES" and "INCLUDING" when used herein shall be deemed
in each case to be followed by the words "without limitation." The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. When reference is made herein to "THE BUSINESS OF" an entity, such
reference shall be deemed to include the business of all direct and indirect
subsidiaries of such entity. Reference to the subsidiaries of an entity shall be
deemed to include all direct and indirect subsidiaries of such entity.
(ii) For purposes of this Agreement, the term "KNOWLEDGE" means,
with respect to any matter in question, that any of the Chief Executive Officer,
Chief Operating Officer, Chief Financial Officer or Controller (or principal
accounting officer if different from the foregoing) of the parties, as the case
may be, have knowledge of such matter.
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8.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.6 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise
provided herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy. The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, regardless of the laws
that might otherwise govern under applicable principles of conflicts of law
thereof; provided that issues involving the corporate governance of any of the
parties hereto shall be governed by their respective jurisdictions of
incorporation. Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of any state or federal court within the Northern District of
California, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, other than issues involving the
corporate governance of any of the parties hereto, agrees that process may be
served upon them in any manner authorized by the laws of the State of California
for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jurisdiction and such process.
8.8 RULES OF CONSTRUCTION. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
8.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
*****
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IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
NETMANAGE, INC.
By: /s/ ▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇ ▇▇▇▇, Chief Executive Officer
NETMANAGE ACQUISITION CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇ ▇▇▇▇, Chief Executive Officer
WALL DATA INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and
Chief Executive Officer
*****SIGNATURE PAGE -- AGREEMENT AND PLAN OF MERGER*****
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ANNEX I
CONDITIONS OF THE OFFER
The term "AGREEMENT" as used in this Annex I shall mean the Agreement
and Plan of Merger to which this Annex I is attached, and all capitalized terms
used in this Annex I and not defined in this Annex I shall have the respective
meanings set forth in the Agreement.
Notwithstanding any other provision of the Offer, and in addition to
(and not in limitation of) Purchaser's rights to extend and amend the Offer at
any time, Purchaser shall not be required to accept for payment, purchase or pay
for, or may terminate or amend the Offer and may postpone the acceptance of, and
payment for, subject to Rule 14e-1(c) under the Exchange Act (whether or not any
Shares have theretofore been accepted for payment or paid for pursuant to the
Offer), any Shares tendered pursuant to the Offer if:
(i) any waiting period (and any extension thereof) under the
HSR Act applicable to the purchase of Shares pursuant to the Offer shall
not have expired or been terminated;
(ii) the Minimum Condition is not satisfied;
(iii) at any time on or after the date of the Agreement, any
of the following events shall be determined by Parent or Purchaser to
have occurred:
(A) there shall have been any action taken or threatened,
or any statute, rule, regulation, judgment, temporary restraining order,
preliminary or permanent injunction or other order, decree or ruling proposed,
sought, promulgated, enacted, entered, enforced or deemed applicable to the
Offer or the Merger by any Governmental Entity or arbitration panel that could
reasonably be expected to, directly or indirectly, (1) make the acceptance for
payment or the payment for, or the purchase of some or all of the Shares
pursuant to the Offer illegal or otherwise delay, restrict or prohibit
consummation of the Offer or the Merger or the consummation of any transaction
contemplated by the Merger Agreement, (2) result in a delay in or restrict the
ability of Purchaser, or render Purchaser unable, to accept for payment, pay for
or purchase some or all of the Shares, (3) require the divestiture by Parent,
Purchaser, the Company or any of their respective Subsidiaries or affiliates of
all or any portion of the business, assets or property of any of them or any
Shares or impose any material limitation on the ability of any of them to
conduct their business and own such assets, properties or Shares, (4) impose any
material limitation on the ability of Parent, Purchaser or their affiliates to
acquire or hold or to exercise effectively all rights of ownership of the
Shares, including the right to vote any Shares purchased by any of them on all
matters properly presented to the shareholders of the Company, including,
without limitation, the adoption and approval of the Agreement and the Merger,
(5) result in a material diminution in the benefits expected to be derived by
Parent or Purchaser as a result of the transactions contemplated by the Offer or
the Agreement (other than legislation or rule-making affecting the industry as a
whole), or (6) impose any material condition to the Offer, the Agreement or the
Merger unacceptable to Parent or Purchaser; or
45
(B) the Company shall have failed to obtain all of the
consents of third parties set forth in Exhibit B by the Expiration Date; or
(C) the Company shall have breached, or failed to comply
with, in any material respect, any of its covenants or obligations under the
Agreement or if there shall have been or be any material inaccuracy in the
representations and warranties of the Company contained in the Agreement, either
as of the date of this Agreement or subsequently; or
(D) the Board of Directors of the Company or any committee
thereof shall have (1) withdrawn or modified (including without limitation, by
amendment of the Company's Schedule 14D-9) in a manner adverse to Parent or
Purchaser its approval or recommendation of the Offer, the Merger or the
Agreement, (2) approved or recommended any Acquisition Proposal by a third party
other than the Offer and the Merger, (3) publicly resolved to do any of the
foregoing, or (4) upon a request to reaffirm the Company's approval or
recommendation of the Offer, the Agreement or the Merger, the Board of Directors
of the Company shall fail to do so within two business days after such request
is made; or
(E) the Agreement shall have been terminated in accordance
with its terms; or
(F) there shall have occurred any Material Adverse Effect
on the Company, or any event, fact or change which could reasonably be expected
to result in a Material Adverse Effect on the Company; or
(G) any of the Employment Agreements shall not have been
executed and delivered or any Employment Agreement is not in full force and
effect.
The foregoing conditions are for the sole benefit of Parent, Purchaser
and their affiliates and may be asserted by Parent or Purchaser regardless of
the circumstances giving rise to such condition. All the foregoing conditions
may be waived by Parent or Purchaser in whole or in part at any time and from
time to time in the sole discretion of Parent or Purchaser. The failure by
Parent or Purchaser at any time to exercise its rights with respect to the
foregoing conditions shall not be deemed a waiver of any such condition, and
each condition shall be deemed an ongoing condition with respect to which Parent
or Purchaser may assert its rights at any time and from time to time.
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