AGREEMENT AND PLAN OF MERGER
Dated as of November 23, 1998
By and Among
AMERICA ONLINE, INC.
APOLLO ACQUISITION CORP.
and
NETSCAPE COMMUNICATIONS CORPORATION
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1 Defined Terms. 2
ARTICLE II
TERMS OF MERGER
Section 2.1 Statutory Merger 7
Section 2.2 Effective Time 7
Section 2.3 Certificate of Incorporation; Bylaws 7
Section 2.4 Directors and Officers 8
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.1 Merger Consideration; Conversion and Cancellation 8
of Securities
Section 3.2 Exchange of Certificates 9
Section 3.3 Closing 12
Section 3.4 Stock Transfer Books 12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization and Qualification; Subsidiaries 12
Section 4.2 Certificate of Incorporation; Bylaws 12
Section 4.3 Capitalization 13
Section 4.4 Authorization of Agreement 14
Section 4.5 Approvals 14
Section 4.6 No Violation 14
Section 4.7 Reports; Financial Statements 15
Section 4.8 No Undisclosed Liabilities 15
Section 4.9 Absence of Certain Changes or Events 15
Section 4.10 Title to Properties 16
Section 4.11 Material Contracts 16
Section 4.12 Insurance 16
Section 4.13 Permits; Compliance 16
Section 4.14 Litigation 17
Section 4.15 Compliance with Laws 17
Section 4.16 Registration Statement; 17
Proxy Statement/Prospectus
Section 4.17 Employee Benefit Plans 18
Section 4.18 Taxes. 19
Section 4.19 Environmental Laws and Regulations 20
Section 4.20 Intellectual Property 21
Section 4.21 Pooling; Tax Matters 23
Section 4.22 Affiliates 23
Section 4.23 Certain Business Practices 23
Section 4.24 Brokers 23
Section 4.25 Opinion of Financial Advisor 23
Section 4.26 Interest Rate and Foreign Exchange Contracts 23
Section 4.27 Company Rights Agreement 24
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR COMPANIES
Section 5.1 Organization and Qualification; Subsidiaries 24
Section 5.2 Certificate of Incorporation; Bylaws. 24
Section 5.3 Capitalization 25
Section 5.4 Authorization of Agreement 25
Section 5.5 Approvals 25
Section 5.6 No Violation 26
Section 5.7 Reports 26
Section 5.8 Absence of Certain Changes or Events 26
Section 5.9 Registration Statement; 27
Proxy Statement/Prospectus.
Section 5.10 Pooling; Tax Matters 27
Section 5.11 Affiliates 27
ARTICLE VI
COVENANTS RELATING TO THE CONDUCT OF BUSINESS
Section 6 Conduct of Business of the Company 28
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 No Solicitation 31
Section 7.2 Access and Information 32
Section 7.3 Meeting of Stockholders 32
Section 7.4 Registration Statement; Proxy Statement 33
Section 7.5 Appropriate Action; Consents; Filings 34
Section 7.6 Affiliates; Pooling; Tax Treatment 35
Section 7.7 Public Announcements 36
Section 7.8 Stock Exchange Listing 36
Section 7.9 Employee Benefit Plans 36
Section 7.10 Indemnification of Directors and Officers; 37
Directors & Officers Insurance
Section 7.11 Event Notices 38
Section 7.12 Assumption of Obligations to Issue Stock 38
Section 7.13 Conveyance Taxes 39
Section 7.14 Voting Agreement 39
Section 7.15 Option Agreement 39
Section 7.16 Rights Agreement 39
Section 7.17 Reasonable Efforts and Further Assurances 40
ARTICLE VIII
CLOSING CONDITIONS
Section 8.1 Conditions to Obligations of Each Party Under 40
This Agreement
Section 8.2 Additional Conditions to Obligations of the 41
Acquiror Companies
Section 8.3 Additional Conditions to Obligations of the 43
Company
ARTICLE IX
TERMINATION, AMENDMENT AND EXPENSES
Section 9.1 Termination 44
Section 9.2 Effect of Termination 45
Section 9.3 Amendment 46
Section 9.4 Waiver 46
Section 9.5 Expenses 46
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Interpretation. 46
Section 10.2 Effectiveness of Representations, Warranties 47
and Agreements
Section 10.3 Notices 47
Section 10.4 Headings 48
Section 10.5 Severability 48
Section 10.6 Entire Agreement 48
Section 10.7 Assignment 49
Section 10.8 Parties in Interest 49
Section 10.9 Failure or Indulgence Not Waiver; Remedies 49
Cumulative
Section 10.10 Governing Law 49
Section 10.11 Counterparts 49
ANNEXES
Annex A Voting Agreement A-1
Annex B Stock Option Agreement B-1
Annex C Affiliate's Agreement C-1
(Netscape Communications Corporation Affiliates)
Annex D Affiliate's Agreement (America Online, Inc. Affiliates) D-1
Annex E Form of Certificate of Officer of America Online, Inc. E-1
Annex F Form of Certificate of Officer of Netscape F-1
Communications Corporation
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of November 23, 1998 (this
"Agreement"), is by and among America Online, Inc., a Delaware corporation
("Acquiror"), Apollo Acquisition Corp., a Delaware corporation and a
newly-formed wholly owned direct subsidiary of Acquiror ("Newco"), and Netscape
Communications Corporation, a Delaware corporation (the "Company"). Acquiror and
Newco are sometimes referred to herein as the "Acquiror Companies".
RECITALS:
WHEREAS, the Boards of Directors of Acquiror, Newco and the Company
deem it advisable and in the best interests of their respective companies and
their respective stockholders to enter into a business combination by means of
the merger of Newco with and into the Company under the terms of this Agreement
and have approved and adopted this Agreement;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to the willingness of Acquiror and Newco to
enter into this Agreement, certain holders of common stock, par value $0.0001
per share, of the Company have each entered into a Voting Agreement in the form
attached hereto as Annex A (the "Voting Agreement") dated as of the date hereof
pursuant to which such holders have agreed to vote their shares of Company
Common Stock (as defined herein) in the manner set forth therein;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to the willingness of Acquiror and Newco to
enter into this Agreement, the Company has entered into a Stock Option Agreement
dated as of the date hereof in the form attached hereto as Annex B (the "Option
Agreement") granting Acquiror an irrevocable option to purchase from the Company
up to a number of authorized but unissued shares representing 19.9% of the
outstanding shares of Company Common Stock, upon the terms and subject to the
conditions set forth therein;
WHEREAS, upon the terms and subject to the conditions of this Agreement
and in accordance with the Delaware General Corporation Law (the "DGCL"), Newco
will merge with and into the Company (the "Merger") and the Company will survive
(the "Surviving Corporation"); and
WHEREAS, for United States federal income tax purposes, it is intended
that the Merger will qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and that
this Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368 of the Code.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE 1DEFINITIONS
Section 1 Defined Terms. For all purposes in this Agreement, the
following terms shall have the respective meanings set forth in this Section 1.
"Acquiror Common Stock" will mean the common stock, par value $0.01 per
share, of Acquiror and, unless the context requires otherwise, includes the
associated Acquiror Rights.
"Acquiror Rights" will mean rights to purchase shares of the preferred
stock of Acquiror pursuant to that certain Rights Agreement, dated as of May 12,
1998, between Acquiror and BankBoston, N.A., as Rights Agent.
"Acquiror's Disclosure Schedule" will mean a schedule of even date
herewith delivered by Acquiror to the Company concurrently with the execution of
this Agreement, which, among other things, will identify exceptions to
Acquiror's representations and warranties contained in Article V by specific
section references.
"Affiliate" will, with respect to any Person, mean any other Person
that controls, is controlled by or is under common control with the former.
"Agreement" will mean this Agreement and Plan of Merger made and
entered into as of November 23, 1998 by and among Acquiror, Newco and the
Company, including any amendments hereto and Schedules hereto (including
Acquiror's Disclosure Schedule and the Company's Disclosure Schedules but
excluding the Annexes hereto).
"Business Day" will mean any day other than a day on which banks in the
States of Virginia or California are authorized or obligated to be closed.
"Business Segment" will mean either of the Company's two business
segments: its Enterprise business segment and its Netcenter business segment.
"Certificate of Merger" will have the meaning ascribed to such term in
Section 2.2.
"Closing" will mean a meeting, which will be held in accordance with
Section 3.3, of all Persons interested in the transactions contemplated by this
Agreement at which all documents necessary to evidence the fulfillment or waiver
of all conditions precedent to the consummation of the transactions contemplated
by this Agreement are executed and delivered.
"Closing Date" will mean the date the Closing occurs.
"Company Common Stock" will mean the common stock, par value $0.0001
per share, of the Company and, unless the context requires otherwise, includes
the associated Company Rights.
"Company Option Plans" will mean collectively the following stock
option plans of the Company: the Company's 1994 Stock Option Plan, as amended;
the Company's 1995 Stock Plan; the Company's 1998 Stock Option Plan; the
Company's 1995 Director Option Plan; the Collabra Software, Inc. 1993 Incentive
Stock Plan; the Insoft, Inc. 1993 Stock Option Plan; the Netcode Corp. 1996
Stock Plan; the DigitalStyle Corp. 1995 Stock Option/Stock Issuance Plan; the
Portola Communications, Inc. 1996 Stock Option Plan; the Kiva Software Corp.
1995 Stock Option Plan; and the Mosaic Communications Corporation 1994 Stock
Option Plan.
"Company Rights" will mean rights to purchase shares of the preferred
stock of the Company pursuant to the Company Rights Agreement.
"Company Rights Agreement" will mean the agreement of the Company,
entered into as of November 23, 1998 between the Company and BankBoston N.A., as
Rights Agent.
"Company Stockholders' Meeting" will have the meaning ascribed to such
term in Section 4.16.
"Company Stock Purchase Plan" will mean the Company's 1995 Employee
Stock Purchase Plan.
"Company's Disclosure Schedule" will mean a schedule of even date
herewith delivered by the Company to the Acquiror Companies concurrently with
the execution of this Agreement, which, among other things, will identify
exceptions to the Company's representations and warranties contained in Article
IV by specific section and subsection references.
"Confidentiality Agreement" will mean the Confidential Non-Disclosure
Agreement by and between Acquiror and the Company dated as of September 16,
1998, as amended.
"control" (including the terms "controlled," "controlled by" and "under
common control with") will mean the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of stock or as
trustee or executor, by contract or credit arrangement or otherwise.
"Court" will mean any court or arbitration tribunal of the United
States, any domestic state, or any foreign country, and any political
subdivision thereof.
"DGCL" will mean the Delaware General Corporation Law, as amended.
"Effective Time" will mean the date and time of the completion of the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware in accordance with Section 2.2.
"Environmental Claim" means any claim, action, cause of action,
investigation or notice by any person or entity alleging potential liability
(including, without limitation, potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based on or resulting
from (a) the presence, release or disposal of any Hazardous Materials at any
location, whether or not owned or operated by the Company, or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.
"Environmental Law" will mean any Law pertaining to: (i) the protection
of health, safety and the indoor or outdoor environment; (ii) the conservation,
management or use of natural resources and wildlife; (iii) the protection or use
of surface water and ground water; (iv) the management, manufacture, possession,
presence, use, generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation or handling of, or
exposure to, any Hazardous Material; or (v) pollution (including any release to
air, land, surface water and ground water); and includes, without limitation,
the Comprehensive Environmental, Response, Compensation, and Liability Act of
1980, as amended, and the Regulations promulgated thereunder and the Solid Waste
Disposal Act, as amended, 42 U.S.C. ss. 6901 et seq.
"Exchange Act" will mean the Securities Exchange Act of 1934, as
amended, and the Regulations promulgated thereunder.
"Exchange Agent" will mean a bank or trust company organized under the
Laws of the United States or any of the states thereof and having a net worth in
excess of $100 million designated and appointed to act in the capacities
required under Section 3.2.
"Foreign Competition Laws" will mean foreign statutes, rules,
Regulations, Orders, decrees, administrative and judicial directives, and other
foreign Laws, that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization, lessening of competition
or restraint of trade.
"GAAP" will have the meaning ascribed to such term in Section 4.7(b).
"Governmental Authority" will mean any governmental agency or authority
(other than a Court) of the United States, any domestic state, or any foreign
country, and any political subdivision or agency thereof, and will include any
authority having governmental or quasi-governmental powers.
"Hazardous Material" will mean any substance, chemical, compound,
product, solid, gas, liquid, waste, by-product, pollutant, contaminant or
material which is hazardous or toxic and is regulated under any Environmental
Law, and includes without limitation, asbestos or any substance containing
asbestos, polychlorinated biphenyls or petroleum (including crude oil or any
fraction thereof).
"Intellectual Property" will mean: trademarks, service marks, trade
names, URLs and Internet domain names, designs, slogans and general intangibles
of like nature, together with all goodwill related to the foregoing
(collectively, "Trademarks"); patents (including any registrations,
continuations, continuations in part, renewals and applications for any of the
foregoing); copyrights (including any registrations and applications therefor);
computer software; databases; technology, trade secrets and other confidential
information, know-how, proprietary processes, formulae, algorithms, models, user
interfaces, customer lists, inventions, source codes, object codes,
methodologies and, with respect to all of the foregoing, related confidential
documentation (collectively, "Trade Secrets").
"Knowledge" - an individual will be deemed to have "Knowledge" of a
particular fact or other matter if (a) such individual is actually aware of such
fact or other matter, or (b) such fact or matter is reflected in one or more
documents (including e-mails) in such individual's files. A Person (other than
an individual) will be deemed to have "Knowledge" of a particular fact or other
matter if any individual who on the date hereof is serving as a director,
executive officer (including any Senior Vice President), in-house counsel, and,
in the case of the Company, the Vice-President of Website Development, of such
Person has Knowledge of such fact or other matter.
"Law" will mean all laws, statutes, ordinances and Regulations of any
Governmental Authority including all decisions of Courts having the effect of
law.
"Lien" will mean any mortgage, pledge, security interest, attachment,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing); provided, however, that the term "Lien" shall not include (i)
statutory liens for Taxes, which are not yet due and payable or are being
contested in good faith by appropriate proceedings, (ii) statutory or common law
liens to secure landlords, lessors or renters under leases or rental agreements
confined to the premises rented, (iii) deposits or pledges made in connection
with, or to secure payment of, workers' compensation, unemployment insurance,
old age pension or other social security programs mandated under applicable
Laws, (iv) statutory or common law liens in favor of carriers, warehousemen,
mechanics and materialmen, to secure claims for labor, materials or supplies and
other like liens, and (v) restrictions on transfer of securities imposed by
applicable state and federal securities Laws.
"Litigation" will mean any suit, action, arbitration, cause of action,
claim, complaint, criminal prosecution, investigation, demand letter,
governmental or other administrative proceeding, whether at law or at equity,
before or by any Court or Governmental Authority or before any arbitrator.
"Material Adverse Effect" will mean, with respect to a specified Person
(including, for purposes of this definition as used in Section 4.9 and Section
8.2(a)(ii), a Business Segment), any change, event or effect that individually
or in the aggregate (taking into account all other such changes, events or
effects) has had, or would be reasonably likely to have, a material adverse
effect on the consolidated business, results of operations, or financial
condition of such Person and its Subsidiaries, if any, taken as a whole, except
to the extent that any such change, event or effect is attributable to or
results from (i) the direct effect of the public announcement or pendency of the
transactions contemplated hereby on current or prospective customers or revenues
of the Company, (ii) changes in general economic conditions or changes affecting
the industry generally in which such Person operates or (iii) shareholder class
action litigation arising from allegations of a breach of fiduciary duty
relating to this Agreement; provided, however, that with respect to clause (i)
of this sentence, the Company shall bear the burden of proof in any proceeding
before a Court with regard to establishing that any change, event or effect is
attributable to or results from the direct effect of the public announcement or
pendency of the transactions contemplated hereby.
"Merger" will mean the merger of Newco with and into the Company
provided for in this Agreement.
"Newco" will mean Apollo Acquisition Corp., a newly-formed Delaware
corporation and a wholly owned direct Subsidiary of Acquiror.
"Order" will mean any judgment, order or decree of any Court or
Governmental Authority.
"Permit" will mean any and all permits, licenses, authorizations,
Orders, certificates, registrations or other approvals granted by any
Governmental Authority.
"Person" will mean an individual, partnership, limited liability
company, corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of business or
professional entity, but will not include a Governmental Authority.
"Repurchase Rights" will mean the Company's rights to repurchase stock
under any of the Company Option Plans pursuant to the terms of the applicable
Company Option Plans.
"Regulation" will mean any rule or regulation of any Governmental
Authority having the effect of Law.
"SEC" will mean the Securities and Exchange Commission.
"Securities Act" will mean the Securities Act of 1933, as amended, and
the Regulations promulgated thereunder.
A "Subsidiary" of a specified Person will be any corporation,
partnership, limited liability company, joint venture or other legal entity of
which the specified Person (either alone or through or together with any other
Subsidiary) owns, directly or indirectly, fifty percent (50%) or more of the
stock or other equity or partnership interests the holders of which are
generally entitled to vote for the election of the Board of Directors or other
governing body of such corporation or other legal entity.
"Tax Returns" will mean any declaration, return, report, schedule,
certificate, statement or other similar document (including relating or
supporting information) required to be filed with a Governmental Authority, or
where none is required to be filed with a Governmental Authority, the statement
or other document issued by a Governmental Authority in connection with any Tax,
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
"Taxes" will mean any and all federal, state, local, foreign,
provincial, territorial or other taxes, imposts, tariffs, fees, levies or other
similar assessments or liabilities and other charges of any kind, including
income taxes, ad valorem taxes, excise taxes, withholding taxes, stamp taxes or
other taxes of or with respect to gross receipts, premiums, real property,
personal property, windfall profits, sales, use, transfers, licensing,
employment, social security, workers' compensation, unemployment, payroll and
franchises imposed by or under any Law; and such terms will include any
interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any such tax or any contest or
dispute thereof.
ARTICLE II
TERMS OF MERGER
Section 2.1 Statutory Merger . Subject to the terms and conditions and
in reliance upon the representations, warranties, covenants and agreements
contained herein, Newco will merge with and into the Company at the Effective
Time. The terms and conditions of the Merger and the mode of carrying the same
into effect will be as set forth in this Agreement. As a result of the Merger,
the separate corporate existence of Newco will cease and the Company will
continue as the Surviving Corporation and shall succeed to and assume all of the
rights and obligations of Newco in accordance with the DGCL. The Merger shall
have the effect set forth in the DGCL.
Section 2.2 Effective Time . As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VIII, the parties hereto will cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, the DGCL. The Merger shall become
effective at the time at which the Certificate of Merger has been duly filed
with the Secretary of State of the State of Delaware (the time the Merger
becomes effective in accordance with the foregoing being referred to as the
"Effective Time").
Section 2.3 Certificate of Incorporation; Bylaws . At the Effective
Time, the certificate of incorporation of the Company shall be amended and
restated by deleting its provisions and substituting therefore the provisions of
the certificate of incorporation of Newco except that from and after the
Effective Time Article First of the certificate of incorporation will read in
its entirety substantially as follows: The name of the corporation is "Netscape
Communications Corporation." At the Effective Time, the by-laws of Newco, as in
effect immediately prior to the Effective Time, shall be the by-laws of the
Surviving Corporation until thereafter amended as provided by Law and the
certificate of incorporation of the Surviving Corporation and such by-laws.
Section 2.4 Directors and Officers . The directors of Newco immediately
prior to the Effective Time will be the directors of the Surviving Corporation,
each to hold office in accordance with the certificate of incorporation and
by-laws of the Surviving Corporation, and the officers of the Company
immediately prior to the Effective Time will be the officers of the Surviving
Corporation, in each case until their respective successors are duly elected or
appointed and qualify for such election.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 3.1 Merger Consideration; Conversion and Cancellation of
Securities . At the Effective Time, by virtue of the Merger and without any
action on the part of the holders of any of the following securities:
(a) Subject to the other provisions of this Article III, each
share of Company Common Stock issued and outstanding immediately prior to the
Effective Time (excluding any Company Common Stock described in Section 3.1(c))
will be converted into the right to receive 0.45 (the "Exchange Ratio") shares
of Acquiror Common Stock (the "Merger Consideration"). Notwithstanding the
foregoing, if between the date of this Agreement and the Effective Time the
outstanding shares of Acquiror Common Stock or Company Common Stock shall have
been changed into a different number of shares or a different class, by reason
of any stock dividend, subdivision, reclassification, recapitalization, split,
conversion, consolidation, combination or exchange of shares, the Exchange Ratio
will be correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, conversion, consolidation,
combination or exchange of shares.
(b) Subject to the other provisions of this Article III, all
shares of Company Common Stock will, upon conversion thereof into shares of
Acquiror Common Stock at the Effective Time, cease to be outstanding and will
automatically be cancelled and retired, and each certificate previously
evidencing Company Common Stock outstanding immediately prior to the Effective
Time (other than Company Common Stock described in Section 3.1(c)) will
thereafter represent only the right to receive (i) the number of whole shares of
Acquiror Common Stock and (ii) as provided in Section 3.2(e), cash in lieu of
fractional shares into which the shares of Company Common Stock represented by
such certificate have been converted pursuant to this Section 3.1(b). The
holders of certificates previously evidencing Company Common Stock will cease to
have any rights with respect to such Company Common Stock except as otherwise
provided herein or by Law.
(c) Notwithstanding any provision of this Agreement to the
contrary, each share of Company Common Stock held in the treasury of the Company
and each share of Company Common Stock, if any, owned by Acquiror or any direct
or indirect wholly owned Subsidiary of Acquiror or of the Company immediately
prior to the Effective Time will be cancelled.
(d) Each share of common stock, par value $.01 per share, of
Newco issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of common
stock, par value $.01 per share, of the Surviving Corporation.
Section 3.2 Exchange of Certificates .
(a) Exchange Fund. On the day of the Effective Time, Acquiror
will deposit, or cause to be deposited, with the Exchange Agent, for the benefit
of the former holders of Company Common Stock, for exchange in accordance with
this Article III, through the Exchange Agent, certificates representing shares
of Acquiror Common Stock issuable pursuant to Section 3.1 in exchange for
certificates representing Company Common Stock immediately prior to the
Effective Time (such shares of Acquiror Common Stock so deposited, together with
cash realized and held by the Exchange Agent for the benefit of such former
holders of Company Common Stock in accordance with Section 3.2(e), being
referred to as the "Exchange Fund"). Thereafter, Acquiror will deposit, or cause
to be deposited, with the Exchange Agent, for the benefit of any former holders
of Company Common Stock who have not yet surrendered their shares of Company
Common Stock for exchange, at the appropriate payment date, the amount of
dividends or other distributions, with a record date after the Effective Time
but prior to surrender, payable with respect to any shares of Acquiror Common
Stock remaining in the Exchange Fund on such record date. The Exchange Agent
will, pursuant to irrevocable instructions from Acquiror, deliver Acquiror
Common Stock and any such dividends or distributions related thereto, in
exchange for certificates theretofore evidencing Company Common Stock
surrendered to the Exchange Agent pursuant to Section 3.2(c).
(b) Letter of Transmittal. Promptly after the Effective Time,
Acquiror will cause the Exchange Agent to mail to each record holder of a
certificate or certificates representing Company Common Stock immediately prior
to the Effective Time (i) a letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
formerly representing Company Common Stock shall pass, only upon delivery of
such certificates to the Exchange Agent and shall be in such form and have such
other provisions, including appropriate provisions with respect to back-up
withholding, as Acquiror may reasonably specify, and (ii) instructions for use
in effecting the surrender of the certificates formerly representing Company
Common Stock. Upon surrender of a certificate formerly representing Company
Common Stock for cancellation to the Exchange Agent, together with such letter
of transmittal, duly executed and completed in accordance with the instructions
thereto, the holder thereof shall be entitled to receive in exchange therefor
that portion of the Exchange Fund which such holder has the right to receive
pursuant to the provisions of this Article III, after giving effect to any
required withholding Tax, and the certificate formerly representing Company
Common Stock so surrendered shall forthwith be cancelled. No interest will be
paid or accrued on the cash to be paid which is in the Exchange Fund.
(c) Exchange Procedures. Promptly after the Effective Time,
the Exchange Agent will distribute to each former holder of Company Common
Stock, upon surrender to the Exchange Agent for cancellation of one or more
certificates, accompanied by a duly executed letter of transmittal that
theretofore evidenced shares of Company Common Stock, certificates evidencing
the appropriate number of shares of Acquiror Common Stock into which such shares
of Company Common Stock were converted pursuant to the Merger and any dividends
or distributions related thereto which such former holder of Company Common
Stock is entitled to receive pursuant to the provisions of this Article III. If
shares of Acquiror Common Stock are to be issued to a Person other than the
Person in whose name the surrendered certificate or certificates are registered,
it will be a condition of issuance of Acquiror Common Stock that the surrendered
certificate or certificates shall be properly endorsed, with signatures
guaranteed by a member firm of the New York Stock Exchange or a bank chartered
under the Laws of the United States, or otherwise in proper form for transfer
and that the Person requesting such payment shall pay any transfer or other
Taxes required by reason of the issuance of Acquiror Common Stock to a Person
other than the registered holder of the surrendered certificate or certificates
or such Person shall establish to the satisfaction of Acquiror that any such Tax
has been paid or is not applicable. Notwithstanding the foregoing, neither the
Exchange Agent nor any party hereto will be liable to any former holder of
Company Common Stock for any Acquiror Common Stock or cash or dividends or
distributions thereon delivered to a public official pursuant to any applicable
escheat Law.
(d) Distributions with Respect to Unexchanged Shares of
Company Common Stock. No dividends or other distributions declared or made with
respect to Acquiror Common Stock on or after the Effective Time will be paid to
the holder of any certificate that theretofore evidenced shares of Company
Common Stock until the holder of such certificate shall surrender such
certificate. Subject to the effect of any applicable escheat Law, following
surrender of any such certificate, there will be paid from the Exchange Fund to
the holder of the certificates evidencing whole shares of Acquiror Common Stock
issued in exchange therefor, without interest, (i) promptly, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Acquiror Common Stock, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole shares of Acquiror Common Stock.
(e) No Fractional Shares.
(i) No certificates or scrip representing fractional shares of
Acquiror Common Stock shall be issued upon the surrender for exchange of
certificates formerly representing shares of Company Common Stock pursuant to
this Article III; no dividend, stock split or other change in the capital
structure of Acquiror shall relate to any fractional security; and such
fractional interests shall not entitle the owner thereof to vote or to any
rights of a security holder.
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent will determine the excess of (A) the number of whole shares of
Acquiror Common Stock delivered to the Exchange Agent by Acquiror pursuant to
Section 3.2(a) over (B) the aggregate number of whole shares of Acquiror Common
Stock to be distributed to holders of Company Common Stock pursuant to Section
3.2(c) (such excess being herein called the "Excess Shares"). Following the
Effective Time, the Exchange Agent will, on behalf of former stockholders of the
Company, sell the Excess Shares at then-prevailing prices on the New York Stock
Exchange, Inc. (the "NYSE"), all in the manner provided in Section 3.2(e)(iii).
(iii) The sale of the Excess Shares by the Exchange Agent will be
executed on the NYSE through one or more member firms of the NYSE and will be
executed in round lots to the extent practicable. The Exchange Agent will use
reasonable efforts to complete the sale of the Excess Shares as promptly
following the Effective Time as, in the Exchange Agent's sole judgment, is
practicable consistent with obtaining the best execution of such sales in light
of prevailing market conditions. Until the net proceeds of such sale or sales
have been distributed to the holders of Company Common Stock, the Exchange Agent
will hold such proceeds in trust for the former holders of Company Common Stock
(the "Common Shares Trust"). The Surviving Corporation will pay all commissions,
transfer taxes and other out-of-pocket transaction costs, including the expenses
and compensation of the Exchange Agent incurred in connection with such sale of
the Excess Shares. The Exchange Agent will determine the portion of the Common
Shares Trust to which each former holder of Company Common Stock is entitled, if
any, by multiplying the amount of the aggregate net proceeds comprising the
Common Shares Trust by a fraction, the numerator of which is the amount of the
fractional share interest to which such former holder of Company Common Stock is
entitled (after taking into account all shares of Company Common Stock held at
the Effective Time by such holder) and the denominator of which is the aggregate
amount of fractional share interests to which all holders of Company Common
Stock are entitled. For purposes of this Section 3.2(e), shares of Company
Common Stock of any former holder represented by two or more certificates may be
aggregated and in no event shall any holder be paid an amount of cash in respect
of more than one share of Acquiror Common Stock.
(iv) As soon as practicable after the determination of the amount
of cash, if any, to be paid to the former holders of Company Common Stock with
respect to any fractional share interests, the Exchange Agent will hold such
cash amounts for the benefit of, and pay such cash amounts to, such former
holders of Company Common Stock subject to and in accordance with the terms of
Section 3.2(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains unclaimed by the former holders of Company Common Stock for
twelve months after the Effective Time will be delivered to Acquiror, upon
demand, and any former holders of Company Common Stock who have not theretofore
complied with this Article III will, subject to applicable abandoned property,
escheat and other similar Laws, thereafter look only to Acquiror for Acquiror
Common Stock and any cash to which they are entitled.
(g) Withholding of Tax. Acquiror or the Exchange Agent will be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any former holder of Company Common Stock such
amounts as Acquiror (or any Affiliate thereof) or the Exchange Agent are
required to deduct and withhold with respect to the making of such payment under
the Code, or any provision of state, local or foreign Tax Law. To the extent
that amounts are so withheld by Acquiror or the Exchange Agent, such withheld
amounts will be treated for all purposes of this Agreement as having been paid
to the former holder of Company Common Stock in respect of whom such deduction
and withholding was made by Acquiror.
(h) Lost Certificates. If any certificate evidencing Company
Common Stock shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such certificate to be lost,
stolen or destroyed and, if required by Acquiror, the posting by such Person of
a bond, in such reasonable amount as Acquiror may direct, as indemnity against
claims that may be made against it with respect to such certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
certificate of Acquiror Common Stock to which the holder may be entitled
pursuant to this Article III and cash and any dividends or other distributions
to which the holder thereof may be entitled pursuant to Section 3.2(d) or
Section 3.2(e).
Section 3.3 Closing . The Closing will take place at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m. on the second Business Day following the date on
which the conditions to the Closing have been satisfied or waived or at such
other place, time and date as the parties hereto may agree. At the conclusion of
the Closing on the Closing Date, the parties hereto will cause the Certificate
of Merger to be filed with the Secretary of State of the State of Delaware.
Section 3.4 Stock Transfer Books . At the Effective Time, the stock
transfer books of the Company will be closed and there will be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company. If, after the Effective Time, certificates formerly
representing Company Common Stock are presented to the Surviving Corporation,
they shall be cancelled and exchanged for certificates representing Acquiror
Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Acquiror Companies,
subject to the exceptions set forth in the Company's Disclosure Schedule (which
exceptions shall specifically identify a Section, Subsection or clause of a
single Section or Subsection hereof, as applicable, to which such exception
relates, it being understood and agreed that each such exception shall be deemed
to be disclosed both under such Section, Subsection or clause hereof and any
other Section, Subsection or clause hereof to which such disclosure reasonably
relates) that:
Section 4.1 Organization and Qualification; Subsidiaries . The Company
and each Subsidiary of the Company are legal entities duly organized, validly
existing and in good standing under the Laws of their respective jurisdictions
of incorporation or organization, have all requisite power and authority to own,
lease and operate their respective properties and to carry on their business as
it is now being conducted and are duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
them or the ownership or leasing of their respective properties makes such
qualification necessary. Section 4.1 of the Company's Disclosure Schedule sets
forth, as of the date of this Agreement, a true and complete list of all the
Company's directly or indirectly owned Subsidiaries, together with the
jurisdiction of incorporation of each Subsidiary and the percentage of each
Subsidiary's outstanding capital stock or other equity interests owned by the
Company or another Subsidiary of the Company. Neither the Company nor any of its
Subsidiaries owns an equity interest in any partnership or joint venture
arrangement or other business entity that is material to the Company.
Section 4.2 Certificate of Incorporation; Bylaws . The Company has
furnished or made available to Acquiror complete and correct copies of the
certificate of incorporation and the bylaws or the equivalent organizational
documents, in each case as amended or restated to the date hereof, of the
Company and each of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is in violation of any of the provisions of its certificate of
incorporation or bylaws or equivalent organizational documents.
Section 4.3 Capitalization .
(a) The authorized capital stock of the Company consists of
(i) 200,000,000 shares of Company Common Stock of which, as of November 23,
1998, 99,938,928 shares were issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights of any Person and (ii) 5,000,000
shares of preferred stock, par value $.0001 per share, of which, as of November
23, 1998, none were issued.
(b) Except for the Company Rights, as of the date hereof, no
shares of Company Common Stock are reserved for issuance, and there are no
contracts, agreements, commitments or arrangements obligating the Company to
offer, sell, issue or grant any shares of, or any options, warrants or rights of
any kind to acquire any shares of, or any securities that are convertible into
or exchangeable for any shares of, capital stock of the Company, to redeem,
purchase or acquire, or offer to purchase or acquire, any outstanding shares of,
or any outstanding options, warrants or rights of any kind to acquire any shares
of, or any outstanding securities that are convertible into or exchangeable for
any shares of, capital stock of the Company or to grant any Lien on any shares
of capital stock of the Company.
(c) The authorized, issued and outstanding capital stock of,
or other equity interests in, each of the Company's Subsidiaries and the names
of the holders of record of the capital stock or other equity interests of each
such Subsidiary, in each case, as of the date hereof, are set forth in Section
4.3(c) of the Company's Disclosure Schedule. The issued and outstanding shares
of capital stock of, or other equity interests in, each of the Subsidiaries of
the Company that are owned by the Company or any of its Subsidiaries have been
duly authorized and are validly issued, and, with respect to capital stock, are
fully paid and nonassessable, and were not issued in violation of any preemptive
or similar rights of any Person. All such issued and outstanding shares or other
equity interests, that are indicated as owned by the Company or one of its
Subsidiaries in Section 4.3(c) of the Company's Disclosure Schedule, are owned
beneficially as set forth therein and free and clear of all Liens. No shares of
capital stock of, or other equity interests in, any Subsidiary of the Company
are reserved for issuance, and there are no contracts, agreements, commitments
or arrangements obligating the Company or any of its Subsidiaries (i) to offer,
sell, issue, grant, pledge, dispose of or encumber any shares of capital stock
of, or other equity interests in, or any options, warrants or rights of any kind
to acquire any shares of capital stock of, or other equity interests in, or any
securities that are convertible into or exchangeable for any shares of capital
stock of, or other equity interests in, any of the Subsidiaries of the Company,
(ii) to redeem, purchase or acquire, or offer to purchase or acquire, any
outstanding shares of capital stock of, or other equity interests in, or any
outstanding options, warrants or rights of any kind to acquire any shares of
capital stock of, or other equity interest in, or any outstanding securities
that are convertible into or exchangeable for, any shares of capital stock of,
or other equity interests in, any of the Subsidiaries of the Company or (iii) to
grant any Lien on any outstanding shares of capital stock of, or other equity
interest in, any of the Subsidiaries of the Company.
(d) There are no voting trusts, proxies or other similar
agreements or understandings to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound with respect
to the voting of any shares of capital stock of the Company or any of its
Subsidiaries or, except for the Option Agreement, with respect to the
registration of the offering, sale or delivery of any shares of capital stock of
the Company or any of its Subsidiaries under the Securities Act.
Section 4.4 Authorization of Agreement . The Company has all requisite
corporate power and authority to execute and deliver this Agreement, the Option
Agreement and each instrument required hereby to be executed and delivered by it
at the Closing, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by the Company of this Agreement, the Option Agreement and each
instrument required hereby to be executed and delivered by it at the Closing and
the performance of its obligations hereunder and thereunder have been duly and
validly authorized by all requisite corporate action on the part of the Company
other than, with respect to the Merger, the approval and adoption of this
Agreement by the stockholders of the Company, which approval and adoption in
accordance with the DGCL and the Company's certificate of incorporation shall
require the affirmative vote of the holders of at least a majority of the
outstanding shares of Company Common Stock. This Agreement and the Option
Agreement have been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery hereof by the Acquiror Companies, this
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium or similar Laws now or
hereafter in effect relating to creditors' rights generally or to general
principles of equity.
Section 4.5 Approvals . Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky Laws, (d) the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (e) Foreign Competition Laws, (f) the filing and
recordation of appropriate merger documents as required by the DGCL and (g)
those Laws, Regulations and Orders noncompliance with which would not in the
aggregate materially impair the ability of the Company to perform its
obligations under this Agreement or be material in any respect to the Company,
no filing or registration with, no waiting period imposed by and no Permit,
Order, authorization, consent or approval of, any Court or Governmental
Authority is required under any Law, Regulation or Order applicable to the
Company or any of its Subsidiaries to permit the Company to execute, deliver or
perform this Agreement or any instrument required hereby to be executed and
delivered by it at the Closing.
Section 4.6 No Violation . Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits or Orders of, Courts and/or Governmental
Authorities indicated as required in Section 4.5 and receipt of the approval of
this Agreement by the stockholders of the Company as required by the DGCL,
neither the execution and delivery by the Company of this Agreement or any
instrument required hereby to be executed and delivered by it at the Closing,
nor the performance by the Company of its obligations hereunder, nor the
execution, delivery and performance of the Voting Agreement by the parties
thereto, will violate or breach the terms of or cause a default, or accelerate
the performance of any obligation of the Company or any Company Subsidiary or
give rise to any payment obligation of any such Person, or give rise to any
right of termination (any of the foregoing a "Change of Control Effect"), or
require any consent, approval or waiver (any of the foregoing a "Change of
Control Consent") of any third party that is not a Governmental Authority,
under, any Law, Regulation or Order applicable to the Company or the certificate
of incorporation or bylaws of the Company or (b) with the passage of time or the
giving of notice have any of the effects set forth in clause (a) of this
Section, except in the case of matters referred to in clauses (a)(i) or (b) (in
the case of (b), solely with respect to clause (a)(i)) of this Section that
would not, individually or in the aggregate, have a material adverse effect upon
the ability of the Company to perform its obligations under this Agreement or be
material in any respect to the Company. Prior to the execution of this
Agreement, the Board of Directors of the Company has taken all requisite action
to cause this Agreement and the transactions contemplated hereby (including
those contemplated by the Option Agreement and the Voting Agreement) to be
exempt from the provisions of Section 203 of the DGCL.
Section 4.7 Reports; Financial Statements .
(a) The Company has timely filed all reports required to be
filed by it with the SEC since January 1, 1997 pursuant to the Exchange Act,
which reports complied, at the time of filing in all material respects with
applicable requirements of the Exchange Act, (collectively, the "Company SEC
Reports"). None of the Company SEC Reports, as of their respective dates,
contained or, if filed after the date hereof, will contain, any untrue statement
of a material fact or omitted, or, if filed after the date hereof, will omit, to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, except to the extent superseded by a Company SEC Report
filed subsequently and prior to the date hereof.
(b) The consolidated statements of financial position and the
related consolidated statements of operations, stockholders' equity and cash
flows (including the related notes thereto) of the Company included in the
Company SEC Reports complied in all material respects with applicable accounting
requirements and the published rules and Regulations of the SEC with respect
thereto, have been prepared in conformity with United States generally accepted
accounting principles ("GAAP") (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a basis consistent with prior
periods (except as otherwise noted therein), and present fairly the consolidated
financial position of the Company as at their respective dates, and the
consolidated results of its operations and its cash flows for the periods
presented therein subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments that have not been and are not
expected to be material in amount.
Section 4.8 No Undisclosed Liabilities . Neither the Company nor any of
its Subsidiaries has any liabilities or obligations of any nature, whether or
not accrued, contingent or otherwise, except (a) liabilities or obligations
reflected in the Company SEC Reports through the date of the filing of the
Company's Quarterly Report on Form 10-Q in respect of the fiscal quarter ending
July 31, 1998, (b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since July 31, 1998 which are not, and
will not have, individually or in the aggregate, a Material Adverse Effect on
the Company and (c) liabilities or obligations which are not and will not have,
individually or in the aggregate, a Material Adverse Effect on the Company.
Section 4.9 Absence of Certain Changes or Events .
Since July 31, 1998, there is not and has not been a Material Adverse
Effect on any Business Segment.
Section 4.10 Title to Properties . The Company or its Subsidiaries,
individually or together, have good, valid and marketable title to or a valid
leasehold in, all of the properties and assets (real, personal and mixed,
tangible and intangible) that are necessary to the conduct of the business of
the Company and its Subsidiaries as it is currently being conducted, including
all of the properties and assets reflected in the Company's consolidated balance
sheet as at July 31, 1998, which was filed with the SEC as part of its report on
Form 10-Q, other than any such properties or assets that have been sold or
otherwise disposed of in the ordinary course of business since July 31, 1998.
None of such properties are securities pledged for interest rate swap, cap or
floor contracts. The Company or its Subsidiaries, individually or together, hold
under valid lease agreements all real and personal properties being held by the
Company or its Subsidiaries under capitalized leases, and all real and personal
property held by the Company or its Subsidiaries that is subject to operating
leases, and enjoy peaceful and undisturbed possession of such properties under
such leases, other than (i) any properties as to which such leases have expired
in accordance with their terms without any liability of any party thereto and
(ii) any immaterial properties. Neither the Company nor any of its Subsidiaries
has received any written notice or has Knowledge of any adverse claim to the
title to any properties owned by them or with respect to any lease under which
any properties are held by them, other than any claims that, individually or in
the aggregate, are immaterial to the Company. Notwithstanding anything to the
contrary, nothing in this Section 4.10 shall be construed to relate to
Intellectual Property (it being understood that Section 4.20 contains
representations and warranties relating to Intellectual Property).
Section 4.11 Material Contracts . Each Material Contract (as defined
herein) is in full force and effect, and is a legal, valid and binding
obligation of the Company or a Subsidiary and, to the Knowledge of the Company,
each of the other parties thereto, enforceable in accordance with its terms,
except (a) that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law) and (b) as would not, individually or in the aggregate,
materially adversely impact any Business Segment. No condition exists or event
has occurred which (whether with or without notice or lapse of time or both, or
the happening or occurrence of any other event) would constitute a default by
the Company or a Subsidiary or, to the Knowledge of the Company, any other party
thereto under, or result in a right in termination of, any Material Contract,
except as would not, individually or in the aggregate, materially adversely
impact any Business Segment. The term "Material Contract" shall mean any
contract which is material to the Company and its Subsidiaries taken as a whole
or to any Business Segment.
Section 4.12 Insurance . The Company and its Subsidiaries self-insure
or maintain with third parties policies of fire and casualty, liability and
other forms of insurance in such amounts, with such deductibles and retained
amounts, and against such risks and losses, as are consistent with industry
practice and as are reasonable for the conduct of the business as conducted on
the date hereof and for the assets of the Company and its Subsidiaries.
Section 4.13 Permits; Compliance . The Company and its Subsidiaries
have obtained all material Permits that are necessary to carry on their
businesses as currently conducted. Such Permits are in full force and effect in
all material respects, have not been violated in any material respect, and, to
the Knowledge of the Company, no suspension, revocation or cancellation thereof
has been threatened and there is no Litigation pending or, to the Knowledge of
the Company, threatened regarding suspension, revocation or cancellation of any
of such Permits.
Section 4.14 Litigation . As of the date hereof, there is no Litigation
pending, or to the Knowledge of the Company, threatened against the Company or
any Subsidiary of the Company, which if adversely determined would be or have a
Material Adverse Effect on the Company. As of the Closing, there will be no
Litigation pending, or to the Knowledge of the Company, threatened against the
Company or any Subsidiary of the Company that would be or have a Material
Adverse Effect on the Company.
Section 4.15 Compliance with Laws . Neither the Company nor any
Subsidiary is subject to any written agreement, written directive, memorandum of
understanding or Order with or by any Court or Governmental Authority
restricting in any material respect its operation or requiring any materially
adverse actions by the Company. The Company and its Subsidiaries are in
compliance in all material respects with all applicable Laws and Regulations and
are not in default in any material respect with respect to any material Order
applicable to the Company or any of its Subsidiaries.
Section 4.16 Registration Statement; Proxy Statement/Prospectus . The
information supplied by the Company or required to be supplied by the Company
(except to the extent revised or superseded by amendments or supplements) for
inclusion in the registration statement on Form S-4, or any amendment or
supplement thereto, pursuant to which the shares of Acquiror Common Stock to be
issued in the Merger will be registered with the SEC (including any amendments
or supplements, the "Registration Statement") shall not, at the time the
Registration Statement (including any amendments or supplements thereto) is
declared effective by the SEC, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The information supplied by the Company or
required to be supplied by the Company (except to the extent revised or
superseded by amendments or supplements) for inclusion in the proxy
statement/prospectus or any amendment or supplement thereto to be sent to the
stockholders of the Company in connection with the meeting of the Company's
stockholders to consider the Merger (the "Company Stockholders' Meeting") (such
proxy statement/prospectus, as amended or supplemented, is referred to herein as
the "Proxy Statement") shall not, on the date the Proxy Statement is first
mailed to the Company's stockholders, at the time of the Company Stockholders'
Meeting and at the Effective Time, contain any statement which, at such time, is
false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they are made, not false or misleading; or omit
to state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies by or on behalf of the
Company for the Company Stockholders' Meeting which has become false or
misleading. The Proxy Statement will comply in all material respects with the
provisions of the Exchange Act. Notwithstanding the foregoing, the Company makes
no representation, warranty or covenant with respect to any information supplied
or required to be supplied by Acquiror which is contained in or omitted from any
of the foregoing documents.
Section 4.17 Employee Benefit Plans .
(a) Section 4.17 of the Company's Disclosure Schedule contains
a true and complete list of each deferred compensation, incentive compensation,
stock purchase, stock option and other equity compensation plan, "welfare" plan,
fund or program (within the meaning of Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")); each "pension" plan, fund or
program (within the meaning of Section 3(2) of ERISA); each employment,
termination or severance agreement with individuals whose annual compensation is
at a base rate exceeding $125,000, and each other material employee benefit
plan, fund, program, agreement or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to by the Company or
any entity, that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA (an "ERISA Affiliate"), or to
which the Company or an ERISA Affiliate is a party, whether written or oral, for
the benefit of any employee or former employee of the Company or any of its
Subsidiaries (the "Company Plans").
(b) With respect to each Company Plan, the Company has
heretofore delivered or made available to Acquiror true and complete copies of
the Company Plan and any amendments thereto (or if the Company Plan is not a
written Company Plan, a description thereof), any related trust or other funding
vehicle, any reports or summaries required under ERISA or the Code and the most
recent determination letter received from the Internal Revenue Service with
respect to each Company Plan intended to qualify under Section 401 of the Code.
(c) No material liability under Title IV or Section 302 of
ERISA has been incurred by the Company or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a material risk to the
Company or any ERISA Affiliate of incurring any such liability.
(d) No Company Plan is subject to Title IV of ERISA or Section
412 of the Code, nor is any Company Plan a "multiemployer pension plan", as
defined in Section 3(37) of ERISA, or subject to Section 302 of ERISA.
(e) Except as would not be materially adverse to the Company,
each Company Plan has been operated and administered in all respects in
accordance with its terms and applicable Law, including ERISA and the Code.
(f) Each Company Plan intended to be "qualified" within the
meaning of Section 401(a) of the Code and the trusts maintained thereunder that
are intended to be exempt from taxation under Section 501(a) of the Code have
received a favorable determination or other letter indicating that they are so
qualified, and, to the Knowledge of the Company, no event has occurred since the
date of said letter(s) that will adversely affect the qualification of such
Company Plan.
(g) No Company Plan provides material medical, surgical,
hospitalization, death or similar benefits (whether or not insured) for
employees or former employees of the Company or any of its Subsidiaries for
periods extending beyond their retirement or other termination of service, other
than (i) coverage mandated by applicable Law, (ii) death benefits under any
"pension plan", or (iii) benefits the full cost of which is borne by the current
or former employee (or his beneficiary).
(h) No amounts payable under the Company Plans will fail to be
deductible for federal income Tax purposes by virtue of Section 280G of the
Code.
(i) The execution, delivery and performance of, and
consummation of the transactions contemplated by, this Agreement, the Option
Agreement or the Voting Agreement will not (i) entitle any current or former
employee or officer of the Company or any ERISA Affiliate to severance pay,
unemployment compensation or any other payment, except as expressly provided in
this Agreement, (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or officer, or (iii) assuming the
Acquiror takes the action specified in Section 7.12(a), accelerate the vesting
of any stock option or of any shares of restricted stock.
(j) Except as would not be material in any respect to the
Company, there are no pending or, to the Knowledge of the Company, any
threatened or anticipated claims by or on behalf of any Company Plan, by any
employee or beneficiary covered under any such Company Plan, or otherwise
involving any such Company Plan (other than routine claims for benefits).
Section 4.18 Taxes. Except as set forth in Section 4.18 of the
Company's Disclosure Schedule, the Company represents and warrants as follows:
(a) Except as would not be materially adverse to the Company,
all federal, state, local and foreign Tax Returns required to be filed (taking
into account extensions) by or on behalf of the Company, each of its
Subsidiaries, and each affiliated, combined, consolidated or unitary group of
which the Company or any of its Subsidiaries is or has been a member have been
timely filed, and all such Tax Returns are true, complete and correct.
(b) Except as would not be materially adverse to the Company,
all Taxes payable by or with respect to the Company or any Subsidiary of the
Company have been timely paid, or adequately reserved for in accordance with
GAAP. No deficiencies for any Taxes have been proposed, asserted or assessed
either orally or in writing against the Company or any of its Subsidiaries that
are not adequately reserved for in accordance with GAAP. All assessments for
Taxes due and owing by or with respect to the Company or any Subsidiary of the
Company with respect to completed and settled examinations or concluded
Litigation have been paid.
(c) Prior to the date of this Agreement, the Company has
provided Acquiror with written schedules setting forth the taxable years of the
Company for which the statutes of limitations with respect to federal and
material state income Taxes have not expired and with respect to federal and
material state income Taxes, those years for which examinations have been
completed and those years for which examinations are presently being conducted.
(d) Except as would not be materially adverse to the Company,
the Company and each of its Subsidiaries have complied in all material respects
with all rules and Regulations relating to the payment and withholding of Taxes
(including, without limitation, withholding of Taxes pursuant to Sections 1441
and 1442 of the Code or similar provisions under any foreign Laws) and have,
within the time and in the manner required by law, withheld from employee wages
and paid over to the proper Governmental Authorities all material amounts
required to be so withheld and paid over under all applicable Laws.
(e) Neither the Company nor any of its Subsidiaries (i) has
waived any statutory period of limitations in respect of its or their Taxes or
Tax Returns or (ii) is a party to, bound by, or has any obligation under any Tax
sharing, allocation, indemnity, or similar contract or arrangement.
(f) The net operating losses ("NOL") of the Company or any
Subsidiary of the Company are not, as of the date hereof, subject to Section 382
or 269 of the Code, Regulation Section 1.1502-21T(c), or any similar provisions
or Regulations otherwise limiting the use of the NOL's of the Company or the
Subsidiaries of the Company.
(g) No property of the Company or any of the Subsidiaries of
the Company is "tax-exempt use property" (as such term is defined in Section 168
of the Code).
(h) None of the Company or any of the Subsidiaries of the
Company has filed a consent pursuant to 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 such term is defined in Section 341(f)(4) of the Code) owned by the
Company or any of the Subsidiaries of the Company.
(i) The Company is not, and has not been for the five years
preceding the Closing, a "United States real property holding company" (as such
term is defined in Section 897(c)(2) of the Code).
Section 4.19 Environmental Laws and Regulations . Except as would not
be or result in a Material Adverse Effect on the Company: (a) the Company and
its Subsidiaries are and have been in compliance with all applicable
Environmental Laws; (b) the Company and its Subsidiaries have obtained all
Permits required by any applicable Environmental Law and all such permits are in
full force and effect; (c) neither the Company nor any of its Subsidiaries has,
and the Company has no Knowledge of any other Person who has, caused any
release, threatened release or disposal of any Hazardous Material at any
properties or facilities previously or currently owned, leased or occupied by
the Company or its Subsidiaries; (d) the Company has no Knowledge that any of
its or its Subsidiaries' properties or facilities are adversely affected by any
release, threatened release or disposal of a Hazardous Material originating or
emanating from any other property; (e) neither the Company nor any of its
Subsidiaries (i) has any liability for response or corrective action, natural
resources damage, or any other harm pursuant to any Environmental Law, (ii) is
subject to, has notice or Knowledge of, or is required to give any notice of any
environmental claim or (iii) has Knowledge of any condition or occurrence which
could form the basis of an Environmental claim against the Company, any
Subsidiary or any of their properties or facilities; (f) the Company and its
Subsidiaries' properties and facilities are not subject to any, and the Company
has no Knowledge of any, imminent restriction on the ownership, occupancy, use
or transferability of their properties and facilities arising from any (i)
Environmental Law or (ii) release, threatened release or disposal of any
Hazardous Material; and (g) there is no Environmental Claim pending, or, to the
Company's knowledge, threatened, against the Company or, to the Company's
knowledge, against any Person whose liability for any Environmental Claim the
Company has or may have retained or assumed either contractually or by operation
of law.
Section 4.20 Intellectual Property .
(a) Section 4.20(a) of the Company's Disclosure Schedule sets
forth, for the Intellectual Property owned by the Company or its Subsidiaries, a
complete and accurate list of all United States and foreign (a) patents and
patent applications; (b) Trademark registrations (including material Internet
domain registrations) and applications and material unregistered Trademarks; (c)
copyright registrations and applications, indicating for each, the applicable
jurisdiction, registration number (or application number), and date issued (or
date filed).
(b) Section 4.20(b) of the Company's Disclosure Schedule sets
forth a complete and accurate list of all material license agreements granting
to the Company or any of its Subsidiaries any material right to use or practice
any rights under any Intellectual Property other than Intellectual Property
which is used for infrastructural purposes and is commercially available on
reasonable terms, (collectively, the "License Agreements"), indicating for each
the title and the parties thereto.
(c) Except as would not be materially adverse to the Company
or any Business Segment:
(i) the Company or its Subsidiaries own, free and clear of
Liens, Orders and arbitration awards, all owned Intellectual Property used in
the Company's business, and have a valid and enforceable right to use all of the
Intellectual Property licensed to the Company and used in the Company's
business;
(ii) the Company has taken reasonable steps to protect the
Intellectual Property of the Company;
(iii) the conduct of the Company's and its Subsidiaries'
businesses as currently conducted does not infringe upon any rights owned or
controlled by any third party;
(iv) there is no Litigation pending or to the Company's
Knowledge threatened or any written claim from any Person (A) alleging that the
Company's activities or the conduct of its businesses or that of any of its
Subsidiaries infringes upon, violates, or constitutes the unauthorized use of
the Intellectual Property rights of any third party or (B) challenging the
ownership, use, validity or enforceability of any Company Intellectual Property;
(v) to the Knowledge of the Company and its Subsidiaries, no
third party is misappropriating, infringing, diluting, or violating any
Intellectual Property owned by the Company or any of its Subsidiaries and no
such claims have been brought against any third party by the Company or any of
its Subsidiaries; and
(vi) the execution, delivery and performance by the Company
of this Agreement, the Option Agreement and the Voting Agreement, and the
consummation of the transactions contemplated hereby and thereby, will not
result in the loss or impairment of, or give rise to any right of any third
party to terminate, any of the Company's or any of its Subsidiaries' rights to
own any of its Intellectual Property or their respective rights under the
License Agreements, nor require the consent of any Governmental Authority or
third party in respect of any such Intellectual Property.
(vii) The Software owned or purported to be owned by the
Company or any of its Subsidiaries, was either (i) developed by employees of
Company or any of its Subsidiaries within the scope of their employment; (ii)
developed by independent contractors who have assigned their rights to the
Company or any of its Subsidiaries pursuant to written agreements; or (iii)
otherwise acquired by the Company or a Subsidiary from a third party. For
purposes of this Section 4.20(c)(vii), "Software" means any and all (i) computer
programs, including any and all software implementations of algorithms, models
and methodologies, whether in source code or object code, (ii) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (iii) descriptions, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing, (iv)
the technology supporting any Internet site(s) operated by or on behalf of the
Company or any of its Subsidiaries, and (iv) all documentation, including user
manuals and training materials, relating to any of the foregoing.
(d) All material Trademarks registered in the United States
have been in continuous use by the Company or its Subsidiaries. To the Knowledge
of the Company and its Subsidiaries, there has been no prior use of such
Trademarks by any third party which would confer upon said third party superior
rights in such Trademarks; the Company and its Subsidiaries have adequately
policed the Trademarks against third party infringement; and the material
Trademarks registered in the United States have been continuously used in the
form appearing in, and in connection with the goods and services listed in,
their respective registration certificates.
(e) Except as would not be materially adverse to the Company
or any Business Segment, the Company has taken reasonable steps in accordance
with normal industry practice to protect the Company's rights in confidential
information and Trade Secrets of the Company. Without limiting the foregoing and
except as would not be materially adverse to the Company or any Business
Segment, the Company enforces a policy of requiring each relevant employee,
consultant and contractor to execute proprietary information, confidentiality
and assignment agreements substantially in the Company's standard forms, and,
except under confidentiality obligations, there has been no disclosure by the
Company or any Subsidiary of material confidential information or Trade Secrets.
(f) Except as would not be materially adverse to the Company
or any Business Segment, the Company has taken reasonable steps with the intent
of ensuring that its products (including existing products and technology and
products and technology currently under development) will, when used in
accordance with associated documentation on a specified platform or platforms,
be capable upon installation of accurately processing, providing, and receiving
date data from, into, and between the Twentieth and Twenty-First centuries,
including the years 1999 and 2000, and making leap-year calculations, provided
that all other non-Company products (e.g., hardware, software and firmware) used
in or in combination with the Company's products, properly exchange data with
the Company's products.
Section 4.21 Pooling; Tax Matters . As of the date hereof, to the
Knowledge of the Company, neither the Company nor any of its Affiliates has
taken or agreed to take any action or failed to take any action that would
prevent (a) the Merger from being treated for financial accounting purposes as a
"pooling of interests" in accordance with GAAP and the Regulations and
interpretations of the SEC or (b) the Merger from constituting a reorganization
within the meaning of Section 368(a) of the Code.
Section 4.22 Affiliate Letters . Section 4.22 of the Company's
Disclosure Schedule contains a true and complete list of all Persons who, as of
the date hereof, to the Knowledge of the Company, may be deemed to be Affiliates
of the Company, excluding all its Subsidiaries but including all directors and
executive officers of the Company.
Section 4.23 Certain Business Practices . Neither the Company nor any
of its Subsidiaries nor any director, officer, employee or agent of the Company
or any of its Subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful payments relating to political activity,
(ii) made any unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political party or campaign or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, (iii)
consummated any transaction, made any payment, entered into any agreement or
arrangement or taken any other action in violation of Section 1128B(b) of the
Social Security Act, as amended, or (iv) made any other unlawful payment except
for the foregoing matters that are not material in any respect to the Company.
Section 4.24 Brokers . No broker, finder, investment banker or other
Person (other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co.) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company. Prior to the date of this Agreement, the Company has
made available to Acquiror a complete and correct copy of all agreements between
the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co. pursuant to which such firm
will be entitled to any payment relating to the transactions contemplated by
this Agreement.
Section 4.25 Opinion of Financial Advisor . The Board of Directors of
the Company has received the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co., the
Company's financial advisor, substantially to the effect that the consideration
to be received by the holders of the Company Common Stock in the Merger is fair
to such holders from a financial point of view, a copy of which has been, or
promptly will be, provided to Acquiror.
Section 4.26 Interest Rate and Foreign Exchange Contracts . All
material interest rate swaps, caps, floors and option agreements and other
interest rate risk management arrangements and foreign exchange contracts to
hedge its investments in foreign subsidiaries, whether entered into for the
account of the Company or one of its Subsidiaries, were entered into in the
ordinary course of business and, to the Company's Knowledge, in accordance with
prudent business practice and applicable rules, Regulations and policies of any
Governmental Authority and with counterparties believed to be financially
responsible at the time, and in all material respects are valid and binding
obligations of the Company or one of its Subsidiaries enforceable in accordance
with their terms (except as may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar Laws affecting the rights of creditors
generally and the availability of equitable remedies), and are in full force and
effect in all material respects. The Company and each of its Subsidiaries have
duly performed in all material respects their material obligations thereunder to
the extent that such obligations to perform have accrued, and, to the Company's
Knowledge, there are no material breaches, violations or defaults or allegations
or assertions of such by any other party thereunder.
Section 4.27 Company Rights Agreement . The Company has taken all
action such that (i) (A) no "Shares Acquisition Date" (as defined in the Company
Rights Agreement) shall occur and neither Acquiror nor its Affiliates,
individually or taken together, shall become an "Acquiring Person" (as defined
in the Company Rights Agreement) and (B) the Company Rights Agreement and the
Company Rights shall not apply to Acquiror or any of its Affiliates,
individually or taken together, in the case of (A) or (B), solely as a result of
this Agreement, the Option Agreement, the Voting Agreement or the transactions
contemplated hereby and thereby and (ii) all Company Rights issued under the
Company Rights Agreement shall, immediately prior to the Effective Time, be
cancelled, void and of no further force or effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR COMPANIES
The Acquiror Companies hereby represent and warrant to the Company,
subject to the exceptions set forth in the Acquiror's Disclosure Schedule (which
exceptions shall specifically identify a Section, Subsection or clause of a
single Section or Subsection hereof, as applicable, to which such exception
relates, it being understood and agreed that each such exception shall be deemed
to be disclosed both under such Section, Subsection or clause hereof and any
other Section, Subsection or clause hereof to which such disclosure reasonably
relates) that:
Section 5.1 Organization and Qualification; Subsidiaries . The Acquiror
Companies are legal entities duly organized, validly existing and in good
standing under the Laws of their respective jurisdictions of incorporation or
organization, have all requisite power and authority to own, lease and operate
their respective properties and to carry on their business as it is now being
conducted and are duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by them or the
ownership or leasing of their respective properties makes such qualification
necessary.
Section 5.2 Certificate of Incorporation; Bylaws. The Acquiror has
furnished or made available to the Company complete and correct copies of the
certificate of incorporation and the bylaws in each case as amended or restated
to the date hereof, of Acquiror and Newco. Neither the Acquiror nor Newco is in
violation of any of the provisions of its certificate of incorporation or
bylaws.
Section 5.3 Capitalization .
(a) As of the date hereof, the authorized capital stock of
Acquiror consists of (i) 1,800,000,000 shares of Acquiror Common Stock of which,
as of November 17, 1998, 459,333,610 shares were issued and outstanding, and
(ii) 5,000,000 shares of preferred stock, par value $.01 per share, of which
none are issued. All of the outstanding shares of Acquiror Common Stock are, and
all shares to be issued as part of the Merger Consideration will be, when issued
in accordance with the terms hereof, duly authorized, validly issued, fully paid
and nonassessable.
(b)As of the date hereof, no shares of Acquiror Common Stock
are reserved for issuance, and there are no contracts, agreements, commitments
or arrangements obligating Acquiror to offer, sell, issue or grant any shares
of, or any options, warrants or rights of any kind to acquire any shares of, or
any securities that are convertible into or exchangeable for any shares of,
capital stock of Acquiror, to redeem, purchase or acquire, or offer to purchase
or acquire, any outstanding shares of, or any outstanding options, warrants or
rights of any kind to acquire any shares of, or any outstanding securities that
are convertible into or exchangeable for any shares of, capital stock of
Acquiror or to grant any Lien on any shares of capital stock of Acquiror.
Section 5.4 Authorization of Agreement . Each of the Acquiror Companies
has all requisite corporate power and authority to execute and deliver this
Agreement and, in the case of Acquiror, the Option Agreement, and each
instrument required hereby to be executed and delivered by the Acquiror
Companies at the Closing, to perform its obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery by the Acquiror Companies of this Agreement and, in the
case of Acquiror, the Option Agreement, and each instrument required hereby to
be executed and delivered by the Acquiror Companies at the Closing and the
performance of their respective obligations hereunder and thereunder have been
duly and validly authorized by the Board of Directors of each of Acquiror and
Newco and by Acquiror as the sole stockholder of Newco. Except for filing of the
Certificate of Merger, no other corporate proceedings on the part of Acquiror or
Newco are necessary to authorize the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
of the Acquiror Companies and, assuming due authorization, execution and
delivery hereof by the Company, constitutes a legal, valid and binding
obligation of each of the Acquiror Companies, enforceable against each of the
Acquiror Companies in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or similar Laws now or hereafter in
effect relating to creditors' rights generally or to general principles of
equity.
Section 5.5 Approvals . Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky Laws, (d) the HSR Act, (e) Foreign Competition Laws, (f) the New York Stock
Exchange, (g) the filing and recordation of appropriate merger documents as
required by the DGCL and (h) those Laws, Regulations and Orders noncompliance
with which would not in the aggregate materially impair the ability of Acquiror
or Newco to perform its obligations under this Agreement or be material in any
respect to Acquiror, no notices to, consents or approvals of, or filings or
registrations with any Court or Governmental Authority is required under any
Law, Regulation or Order applicable to Acquiror or Newco to permit Acquiror or
Newco to execute, deliver or perform this Agreement or the Option Agreement or
any instrument required hereby to be executed and delivered by it at the
Closing.
Section 5.6 No Violation . Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits or Orders of, Courts and/or Governmental
Authorities indicated as required in Section 5.5, neither the execution and
delivery by Acquiror or Newco of this Agreement, or any instrument required
hereby to be executed and delivered by Acquiror or Newco at the Closing nor the
performance by Acquiror or Newco of their respective obligations hereunder or
thereunder will (a) violate or breach the terms of or cause a default under any
Law, Regulation or Order applicable to Acquiror or Newco, the articles of
incorporation or by-laws of Acquiror or Newco or any contract, note, bond,
mortgage, indenture, license, agreement or other instrument to which Acquiror or
any of its Subsidiaries is a party or by which it or any of its properties or
assets is bound, or (b) with the passage of time, the giving of notice or the
taking of any action by a third Person, have any of the effects set forth in
clause (a) of this Section, except in any such case for any matters described in
this Section 5.6 that would not in the aggregate have a material adverse effect
upon the ability of Acquiror or Newco to perform its obligations under this
Agreement or be material in any respect to Acquiror.
Section 5.7 Reports .
(a) Acquiror has timely filed all reports required to be filed
by it with the SEC since January 1, 1997 pursuant to the Exchange Act which
complied, at the time of filing, in all material respects with applicable
requirements of the Exchange Act (collectively, the "Acquiror SEC Reports").
None of Acquiror SEC Reports, as of their respective dates, contained or, if
filed after the date hereof, will contain any untrue statement of a material
fact or omitted or, if filed after the date hereof, will omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent superseded by an Acquiror SEC Report filed
subsequently and prior to the date hereof.
(b) The consolidated statements of financial position and the
related consolidated statements of operations, stockholders' equity and cash
flows (including the related notes thereto) of Acquiror included in the Acquiror
SEC Reports complied in all material respects with applicable accounting
requirements and the published rules and Regulations of the SEC with respect
thereto, have been prepared in conformity with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a basis
consistent with prior periods (except as otherwise noted therein), and present
fairly the consolidated financial position of Acquiror as at their respective
dates, and the consolidated results of its operations and its cash flows for the
periods presented therein subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments that have not been and are
not expected to be material in amount.
Section 5.8 Absence of Certain Changes or Events . Since September 30,
1998 there is not and has not been a Material Adverse Effect on Acquiror.
Section 5.9 Registration Statement; Proxy Statement/Prospectus. The
information supplied by Acquiror or required to be supplied by the Acquiror
(except to the extent revised or superseded by amendments or supplements) for
inclusion in the Registration Statement, or any amendment or supplement thereto,
shall not, at the time the Registration Statement (including any amendments or
supplements thereto) is declared effective by the SEC, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The information
supplied by Acquiror or required to be supplied by the Acquiror (except to the
extent revised or superseded by amendments or supplements) for inclusion in the
Proxy Statement shall not, on the date the Proxy Statement is first mailed to
the Company's stockholders, at the time of the Company Stockholders' Meeting and
at the Effective Time, contain any statement which, at such time, is false or
misleading with respect to any material fact, or omit to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies by or on behalf of the
Company for the Company Stockholders' Meeting which has become false or
misleading. The Registration Statement will comply as to form in all material
respects with the provisions of the Securities Act. Notwithstanding the
foregoing, Acquiror makes no representation, warranty or covenant with respect
to any information supplied or required to be supplied by the Company which is
contained in or omitted from any of the foregoing documents.
Section 5.10 Pooling; Tax Matters . As of the date hereof, to the
Knowledge of Acquiror, neither Acquiror nor any of its Affiliates has taken or
agreed to take any action or failed to take any action that would prevent (a)
the Merger from being treated for financial accounting purposes as a "pooling of
interests" in accordance with GAAP and the Regulations and interpretations of
the SEC or (b) the Merger from constituting a reorganization within the meaning
of Section 368(a) of the Code.
Section 5.11 Affiliates . Section 5.11 of Acquiror's Disclosure Schedule
contains a true and complete list of all Persons who, as of the date hereof, to
the Knowledge of Acquiror, may be deemed to be Affiliates of Acquiror, excluding
all its Subsidiaries but including all directors and executive officers of
Acquiror.
ARTICLE VI
COVENANTS RELATING TO THE CONDUCT OF BUSINESS
Section 6 Conduct of Business of the Company . Except as set forth in
Section 6 of the Company's Disclosure Schedule, during the period from the date
of this Agreement to the Closing Date (unless Acquiror shall otherwise consent
in writing and except as otherwise expressly contemplated or permitted by this
Agreement), the Company will, and will cause the Subsidiaries of the Company to,
to the extent permitted by this Agreement, operate their businesses in good
faith with the goal of preserving intact their assets and current business
organizations, keeping available the services of their current officers and
employees, maintaining their Material Contracts and preserving their
relationships with customers, suppliers, creditors, brokers, agents and others
having business dealings with them, it being understood that the failure to so
preserve, keep or maintain shall not be a breach of this Section 6 so long as
such businesses are operated in good faith as aforesaid. Without limiting the
generality of the foregoing, and except as otherwise expressly contemplated by
this Agreement, or as set forth in Section 6 of the Company's Disclosure
Schedule, or as agreed to in writing by Acquiror, the Company agrees as to
itself and its Subsidiaries that:
(a) Issuance and Redemption of Securities. Except as required
by the Option Agreement or the Company Rights Agreement, and, subject to Section
7.6(e)(ii), except for grants of stock options in the ordinary course consistent
with past practice pursuant to the Company Option Plans or Company Stock
Purchase Plan, in each case as in effect on the date hereof, or issuance of
Company Common Stock pursuant to the exercise of options granted thereunder or
the exercise or conversion of other securities outstanding on the date hereof,
the Company and its Subsidiaries shall not issue, sell or grant any shares of
capital stock of any class, or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares of capital
stock, or any rights, warrants, options, calls, commitments or any other
agreements of any character to purchase or acquire any shares of capital stock
or any securities or rights convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of capital stock or any other securities
in respect of, in lieu of, or in substitution for, shares outstanding on the
date hereof. In no event shall the vesting or exercisability of any Company
stock option or shares of restricted Company Common Stock granted or issued
under any Company Plan be accelerated as a result of or in connection with the
execution, delivery or performance of this Agreement, the Option Agreement or
the Voting Agreement or the consummation of the transactions contemplated hereby
and thereby, except to the extent required under the terms of the applicable
Company Plan or applicable individual agreement as in effect on the date hereof
(or if entered into after the date hereof in compliance with this Section 6(a),
such agreement which shall be in the standard form thereof as in effect on the
date hereof).
(b) Dividends. The Company shall not, nor shall it permit any
of its Subsidiaries to (i) split, combine, subdivide or reclassify any shares of
its capital stock or (ii) declare, set aside for payment or pay any dividend, or
make any other distribution in respect of, any of its capital stock, or redeem
or repurchase any of its capital stock or any outstanding options, warrants or
rights of any kind to acquire any shares of, or any outstanding securities that
are convertible into or exchangeable for any shares of, capital stock of the
Company or any of the Company's Subsidiaries, except for (A) the distribution of
the Rights pursuant to the Company Rights Agreement, (B) dividends by a wholly
owned Subsidiary of the Company to the Company or another wholly owned
Subsidiary of the Company and (C) repurchases of unvested shares in connection
with the termination of a relationship with any employee, consultant or director
pursuant to stock option or purchase agreements in effect on the date hereof or
approved by Acquiror.
(c) Restructuring. The Company and its Subsidiaries shall not
adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any Subsidiary.
(d) Governing Documents. Except as required by the Company
Rights Agreement, the Company and its Subsidiaries shall not adopt any
amendments to their articles or certificates of incorporation, as the case may
be, or their bylaws or other equivalent organizational documents, or alter
through merger, liquidation, reorganization, restructuring or in any other
fashion the corporate structure or ownership of the Company or any such
Subsidiary.
(e) Indebtedness. The Company and its Subsidiaries shall not
incur any indebtedness for money borrowed other than in the ordinary course of
business or guarantee any such indebtedness of another Person (other than the
Company or any other Subsidiary of the Company), enter into any "keep well" or
other agreement to maintain any financial condition of another Person (other
than the Company or any Subsidiary of the Company) or enter into any arrangement
having the economic effect of any of the foregoing in each case, other than (i)
in connection with the financing of ordinary course trade payables in the
ordinary course of business, (ii) pursuant to existing credit facilities in the
ordinary course of business or (iii) the guarantee by the Company of any
indebtedness of any Subsidiary of the Company.
(f) No Acquisitions. The Company and its Subsidiaries shall
not acquire or agree to acquire (i) by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner, any
business or any corporation, limited liability company, partnership, joint
venture, association or other business organization or division thereof or (ii)
any assets that, individually or in the aggregate, are material to the Company
and its Subsidiaries except (without limitation of paragraph (h) below but
subject to paragraph (i) below), in the ordinary course of business consistent
with past practice.
(g) No Dispositions. Except in the ordinary course of
business, the Company and its Subsidiaries shall not sell, lease, license or
otherwise encumber or subject to any Lien or otherwise dispose of any of the
properties or assets of the Company or any of its Subsidiaries that,
individually or in the aggregate, are material, in nature or amount, to any
Business Segment.
(h) Capital Expenditures. The Company and its Subsidiaries
shall not make or agree to make any capital expenditures relating to a single
project in excess of $5 million or in the aggregate in excess of $25 million.
(i) Contracts. Except in the ordinary course of business, the
Company and its Subsidiaries shall not (A) enter into any Material Contract, or
(B) modify, amend or transfer in any material respect or terminate any Material
Contract (other than the Company Rights Agreement) to which the Company or any
of its Subsidiaries is a party or waive, release or assign any material rights
or claims thereunder. Without limitation of the previous sentence, without the
consent of Acquiror not to be unreasonably withheld or delayed (notwithstanding
the last sentence of the first paragraph of this Section 6), the Company and its
Subsidiaries will not enter into any Netcenter agreement or commitment
(including any extension, amendment, renewal or modification to any existing
agreement) (i) having a term of more than one year from the date hereof
(including if the other party or parties thereto have the unilateral right to
extend such term beyond one year from the date hereof) and (A) providing any of
the following restrictions on the Company: exclusivity across Netcenter or any
channels within Netcenter, "most favored nations" or rights of first refusal or
first offer or (B) providing inventory commitments on Netcenter with respect to
twelve and one-half percent (12.5%) or more of the saleable inventory on either
the Netcenter home page or NetSearch page during the term of the applicable
agreement, or (ii) providing for or allowing the termination thereof upon the
Merger, or upon a "change in control" of Acquiror or the sale or spin-off of the
Company or portions of its business after the Effective Time.
(j) Employee Matters. Except as required by Law or in the
ordinary course of business, or in accordance with this Agreement, the Company
and its Subsidiaries shall not (i) increase the compensation or fringe benefits
of any of their respective employees, (ii) enter into any contract with any of
their respective employees, officers or directors regarding his or her
employment, compensation or benefits, or (iii) adopt any plan, arrangement or
policy which would become a Company Plan or amend any Company Plan to the extent
such adoption or amendment would create or increase any liability or obligation
on the part of the Company or its Subsidiaries.
(k) Accounting Policies and Procedures. The Company and its
Subsidiaries shall not make any change to their accounting methods, principles
or practices, except as may be required by GAAP, Regulation S-X promulgated by
the SEC or applicable statutory accounting principles.
(l) Liens. The Company shall not, and shall not permit any of
its Subsidiaries to, create, incur or assume any material Lien on any of their
material assets.
(m) Claims. The Company and its Subsidiaries shall not settle
any material Litigation or waive, assign or release any material rights or
claims except in either case (i) in the ordinary course of business and (ii) for
any such settlement which (A) would not impose either material restrictions on
the conduct of the business of the Company or any of its Subsidiaries or (B) for
Litigation items settled for money, involve in the aggregate in excess of
$10,000,000 in cost to the Company or any of its Subsidiaries. The Company and
its Subsidiaries shall not pay, discharge or satisfy any liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), except in the ordinary course of business or in accordance with
their terms.
(n) Interest Rate and Foreign Exchange. Except in the ordinary
course of business, the Company and its Subsidiaries shall not materially
restructure or materially change its gap position, through purchases, sales,
▇▇▇▇▇▇, swaps, caps or collars or otherwise or the manner in which any current
▇▇▇▇▇▇ are classified or reported.
(o) Taxes. The Company and its Subsidiaries shall not make any
Tax election or settle or compromise any material Tax liability, except in
respect of ongoing matters or in the ordinary course of business.
(p) No Agreements. The Company and its Subsidiaries shall not
authorize, recommend, propose or announce an intention to do any of the
foregoing, or agree or enter into any contract to do any of the foregoing.
(q) Insurance. The Company shall, and shall cause its
Subsidiaries to, use commercially reasonable efforts to maintain in full force
and effect all self-insurance or insurance, as the case may be, currently in
effect.
(r) Y2K Compliance Plan. The Company shall, and shall cause its Subsidiaries
to, use commercially reasonable efforts to carry forward in all material
respects the Y2K Review and Assessment Report and Recommendations dated
November 13, 1998, previously made available by the Company to Acquiror.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 No Solicitation . From the date hereof until the Effective
Time or, if earlier, the termination of this Agreement pursuant to Article IX,
the Company shall not (whether directly or indirectly through advisors, agents
or other intermediaries), and the Company shall cause its respective officers,
directors, advisors, representatives or other agents of the Company not to, (a)
solicit, initiate or knowingly encourage any Acquisition Proposal (as defined
herein) or (b) engage in discussions or negotiations with, or disclose any
non-public information relating to the Company or its Subsidiaries or afford
access to the properties, books or records of the Company or its Subsidiaries
to, any Person that has made an Acquisition Proposal or has advised the Company
that it is interested in making an Acquisition Proposal; provided that, if and
only if (i) the Company's Board of Directors believes in good faith, based on
such matters as it deems relevant, including the advice of the Company's
financial advisor, that such Acquisition Proposal is a Financially Superior
Proposal (as defined herein) and (ii) the Company's Board of Directors
determines in good faith, based on such matters as it deems relevant, including
consultation with the Company's outside legal counsel, that the failure to
engage in such negotiations or discussions or provide such information is a
breach of the fiduciary duties of the Board of Directors of the Company under
applicable Law, then the Company may engage in any act otherwise proscribed by
clause (b) above. The Company shall as promptly as practicable provide Acquiror
with a copy of any written Acquisition Proposal received and a written statement
with respect to any nonwritten Acquisition Proposal received, which statement
shall include the identity of the Person making the Acquisition Proposal and the
material terms thereof. The Company shall inform Acquiror as promptly as
practicable of any change in the price, structure, form of consideration or
material terms and conditions regarding the Acquisition Proposal. For purposes
of this Agreement, "Acquisition Proposal" means any offer or proposal for a
merger, consolidation, recapitalization, liquidation or other business
combination involving the Company or any of its Material Subsidiaries (as
defined herein) or the acquisition or purchase of 20% or more of any class of
equity securities of the Company or any of its Material Subsidiaries, or any
tender offer or exchange offer, that, if consummated, would result in any Person
(other than Acquiror and its affiliates) beneficially owning 20% or more of any
class of equity securities of the Company or any of its Material Subsidiaries,
or the acquisition, license or purchase of a substantial portion of the
technology, business or assets of the Company and its Subsidiaries, other than
the transactions contemplated by this Agreement and other than in the ordinary
course of business. As used herein, a "Financially Superior Proposal" shall mean
an Acquisition Proposal which in the reasonable judgment of the Company's Board
of Directors, based on such matters as it deems relevant, including the advice
of the Company's financial advisor, (i) will result in a transaction providing
aggregate value greater than that provided pursuant to this Agreement and (ii)
is reasonably capable of being financed by the Person making such Acquisition
Proposal. As used herein, "Material Subsidiary" means any Subsidiary of the
Company whose consolidated revenues, net income or assets constitute 20% or more
of the revenues, net income or assets of the Company and its Subsidiaries, taken
as a whole. Nothing in this Agreement, including Section 6(g), shall prohibit
the Company or the Company's Board of Directors from taking and disclosing to
the Company's stockholders a position with respect to a tender or exchange offer
by a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the
Exchange Act or from making any disclosure required by an applicable Law.
Section 7.2 Access and Information . Each of the parties will, and will
cause its Subsidiaries to, (i) afford to the other party and its officers,
directors, employees, accountants, consultants, legal counsel, agents and other
representatives (collectively, the "Representatives") full access at reasonable
times upon reasonable prior notice to the officers, employees, agents,
properties, offices and other facilities of such party and its Subsidiaries and
to their books and records, (ii) furnish promptly to the other party and its
Representatives such information concerning the business, properties, contracts,
records and personnel of such party and its Subsidiaries (including financial,
operating and other data and information) as may be reasonably requested, from
time to time, by or on behalf of the other party. No investigation by any party
hereto shall affect any representation or warranty in this Agreement of any
party hereto or any condition to the obligations of the parties hereto. All
information obtained by Acquiror or the Company pursuant to this Section 7.2
shall be kept confidential in accordance with the Confidentiality Agreement.
Section 7.3 Meeting of Stockholders . The Company, acting through its
Board of Directors, shall, in accordance with the DGCL and its certificate of
incorporation and bylaws, promptly and duly call, give notice of, convene and
hold as soon as practicable following the date upon which the Registration
Statement becomes effective, the Company Stockholders' Meeting, and the Company
shall consult with Acquiror in connection therewith. Unless the Board of
Directors determines, based on such matters as it deems relevant, including
consultation with the Company's outside legal counsel, that to do so is a breach
of the fiduciary duties of the Board of Directors of the Company under
applicable Law, the Board of Directors of the Company shall declare that this
Agreement is advisable and recommend that the Agreement and the transactions
contemplated hereby be approved and adopted by the stockholders of the Company
and include in the Registration Statement and Proxy Statement a copy of such
recommendations; provided, however, that, the Board of Directors of the Company
shall submit this Agreement to the Company's stockholders, whether or not the
Board of Directors of the Company at any time subsequent to the date hereof
determines that this Agreement is no longer advisable or recommends that the
stockholders of the Company reject it. Unless the Board of Directors of the
Company has withdrawn its recommendation of this Agreement in compliance
herewith, the Company shall use reasonable efforts to solicit from stockholders
of the Company proxies in favor of the approval and adoption of this Agreement
and the Merger and to secure the vote or consent of stockholders required by the
DGCL and its certificate of incorporation and bylaws to approve and adopt this
Agreement and the Merger.
Section 7.4 Registration Statement; Proxy Statement .
(a) As promptly as practicable following the date of this
Agreement, the Company shall prepare and file with the SEC a preliminary proxy
or information statement relating to the Merger and this Agreement and obtain
and furnish the information required to be included by the SEC in the Proxy
Statement and, after consultation with Acquiror, respond promptly to any
comments made by the SEC with respect to the Proxy Statement to be mailed to its
stockholders at the earliest practicable date after the Registration Statement
is declared effective by the SEC, provided that no amendment or supplement to
the Proxy Statement will be made by the Company without consultation with
Acquiror and its counsel.
(b) Acquiror shall prepare and file with the SEC the
Registration Statement, in which the Proxy Statement shall be included as a
prospectus, and shall use reasonable efforts to have the Registration Statement
declared effective by the SEC as promptly as practicable. Acquiror shall obtain
and furnish the information required to be included in the Registration
Statement and, after consultation with the Company, respond promptly to any
comments made by the SEC with respect to the Registration Statement and cause
the prospectus included therein, including any amendment or supplement thereto,
to be mailed to the Company's stockholders at the earliest practicable date
after the Registration Statement is declared effective by the SEC, provided that
no amendment or supplement to the Registration Statement will be made by
Acquiror without consultation with the Company and its counsel. Acquiror shall
also take any action required to be taken under state blue sky or other
securities Laws in connection with the issuance of Acquiror Common Stock in the
Merger.
Section 7.5 Appropriate Action; Consents; Filings .
(a) The Company and Acquiror will each use reasonable efforts
(i) to take, or to cause to be taken, all appropriate action, and to do, or to
cause to be done, all things necessary, proper or advisable under applicable Law
or otherwise to consummate and make effective the transactions contemplated by
this Agreement, unless the Board of the Directors of the Company has withdrawn
its recommendation of this Agreement in compliance herewith, (ii) to obtain from
any Governmental Authorities any Permits or Orders required to be obtained by
Acquiror or the Company or any of their Subsidiaries in connection with the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, including the Merger,
(iii) to make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (A)
the Securities Act and the Exchange Act, and any other applicable federal or
state securities Laws, (B) the HSR Act (C) Foreign Competition Laws and (D) any
other applicable Law; provided that Acquiror and the Company will cooperate with
each other in connection with the making of all such filings, including
providing copies of all such documents to the nonfiling party and its advisors
prior to filings and, if requested, will accept all reasonable additions,
deletions or changes suggested in connection therewith and (iv) to furnish all
information required for any application or other filing to be made pursuant to
any applicable Law or any applicable Regulations of any Governmental Authority
(including all information required to be included in the Proxy Statement or the
Registration Statement) in connection with the transactions contemplated by this
Agreement provided, however, that neither Acquiror nor any of its Affiliates
shall be under any obligation to make proposals, execute or carry out agreements
or submit to Orders providing for the sale or other disposition or holding
separate (through the establishment of a trust or otherwise) of any material (in
nature or amount) assets or categories of material (in nature or amount) assets
of Acquiror, any of its Affiliates or the Company or the holding separate of the
shares of Company Common Stock or imposing or seeking to impose any material
limitation on the ability of Acquiror or any of its Subsidiaries or Affiliates
to conduct their business or own such assets or to acquire, hold or exercise
full rights of ownership of the shares of Company Common Stock.
(b) Each of the Company and Acquiror will give prompt notice to the other of (i)
any notice or other communication from any Person alleging that the consent of
such Person is or may be required in connection with the Merger, (ii) any notice
or other communication from any Governmental Authority in connection with the
Merger, (iii) any Litigation, relating to or involving or otherwise affecting
the Company, Acquiror or their Subsidiaries that relates to the consummation of
the Merger; and (iv) any change that is reasonably likely to have a Material
Adverse Effect on the Company or Acquiror.
(c) Each of the Company and Acquiror will give (or will cause
their respective Subsidiaries to give) any notices to third Persons, and use,
and cause their respective Subsidiaries to use, reasonable efforts to obtain any
consents from third Persons necessary, proper or advisable (as determined in
good faith by Acquiror with respect to such notices or consents to be delivered
or obtained by the Company) to consummate the transactions contemplated by this
Agreement.
(d) To the extent requested by Acquiror, the Company shall
cooperate with Acquiror to identify any "Encumbrances" that may adversely affect
the Company's or its Subsidiaries' right to sublicense any Intellectual Property
rights owned or licensed by the Company (including the right to further
sublicense such rights) in the Company's or its Subsidiaries' client or server
software (including without limitation development tools, tests and other
development components) which will exist as of the Closing Date, and any
maintenance upgrades and new releases of such software, if any, which will be
already in progress at the Company as of the Closing Date, and/or any components
of the foregoing (collectively, the "Software Products"). Such cooperation shall
include, upon Acquiror's written request, granting Acquiror full access, subject
to existing or other reasonable confidentiality restrictions, to the Company's
technology licenses, acquisition agreements and Intellectual Property claims
relating to the Software Products. "Encumbrance" means any restriction or limit
that would prevent or materially limit or restrict the Company's ability to
sublicense any Intellectual Property right owned or licensed by the Company
(including the right to further sublicense such rights) with respect to the
Software Products, including, without limitation, limitations on source code
access and sublicensing rights, as well as prohibitions or required consents to
assignment of rights from the Company to the Acquiror upon the Closing Date,
which rights, if not available, would constitute an Encumbrance. The Company
shall use reasonable efforts in consultation with Acquiror to remove, limit or
diminish such Encumbrances in a reasonable priority order designated by
Acquiror, with the goal of removing or minimizing as soon as practicable all
such Encumbrances and having no ongoing financial obligations in connection
therewith.
Section 7.6 Affiliates; Pooling; Tax Treatment .
(a) The Company will use reasonable efforts to obtain an
executed letter agreement substantially in the form of Annex C hereto from (i)
each Person identified in Section 4.22 of the Company's Disclosure Schedule
within 15 days following the execution and delivery of this Agreement and (ii)
from any Person who, to the Company's Knowledge, may be deemed to have become an
Affiliate of the Company after the date of this Agreement and prior to the
Effective Time as soon as practicable after attaining such status.
(b) Acquiror will use reasonable efforts to obtain an executed
letter agreement substantially in the form of Annex D hereto from (i) each
Person identified in Section 5.11 of Acquiror's Disclosure Schedule within 15
days following the execution and delivery of this Agreement and (ii) from any
Person who, to Acquiror's Knowledge, may be deemed to have become an Affiliate
of Acquiror after the date of this Agreement and prior to the Effective Time as
soon as practicable after attaining such status.
(c) Acquiror Companies will not be required to maintain the
effectiveness of the Registration Statement for the purpose of resale by
stockholders of the Company who may be Affiliates of the Company pursuant to
Rule 145 under the Securities Act.
(d) Acquiror and the Company will each use reasonable efforts
before and after the Closing to cause the Merger to qualify as a reorganization
within the meaning of Section 368(a) of the Code, and will not take, and will
use reasonable efforts to prevent any Affiliate of such party from taking, any
actions which could prevent the Merger from qualifying as such a reorganization,
and will take such action as is available and may be reasonably required to
negate the impact of any past actions by such party or its respective Affiliates
which would reasonably be expected to adversely impact the qualification of the
Merger as a reorganization within the meaning of Section 368(a) of the Code.
Acquiror and the Company will each use reasonable efforts to obtain executed
representation letters described in Sections 8.2(d) and 8.3(c), respectively,
substantially in the respective forms attached hereto as Annexes E and F.
(e) (i) Acquiror will not knowingly take, or knowingly permit
any controlled Affiliate of Acquiror to take, any actions which could prevent
the Merger from being treated for financial accounting purposes as a "pooling of
interests" under GAAP, it being understood and agreed that if Ernst & Young LLP,
Acquiror's independent accountants, advises Acquiror that an action would not
prevent the Merger from being so treated, such action will be conclusively
deemed not to constitute a breach of this Section 7.6 (e)(i).
(ii) The Company will not knowingly take, or knowingly
permit any controlled Affiliate of the Company to take, any actions which could
prevent the Merger from being treated for financial accounting purposes as a
"pooling of interests" under GAAP, it being understood and agreed that if Ernst
& Young LLP, the Company's independent accountants, advises the Company that an
action would not prevent the Merger from being so treated, such action will be
conclusively deemed not to constitute a breach of this Section 7.6 (e)(ii).
Section 7.7 Public Announcements . The parties will consult with each
other and will mutually agree upon any press release or public announcement
pertaining to the Merger and shall not issue any such press release or make any
such public announcement prior to such consultation and agreement, except as may
be required by applicable Law or by obligations pursuant to any listing
agreement with any national securities exchange or national automated quotation
system, in which case the party proposing to issue such press release or make
such public announcement shall use reasonable efforts to consult in good faith
with the other party before issuing any such press release or making any such
public announcement. Notwithstanding the foregoing, in the event the Company's
Board of Directors withdraws its recommendation of this Agreement in compliance
herewith, the Company will no longer be required to consult with or obtain the
agreement of Acquiror or Newco in connection with any press release or public
announcement.
Section 7.8 Stock Exchange Listing . Acquiror will use reasonable
efforts to cause the shares of Acquiror Common Stock to be issued in the Merger
to be approved for listing (subject to official notice of issuance) on the New
York Stock Exchange prior to the Effective Time.
Section 7.9 Employee Benefit Plans .
(a) Acquiror agrees that individuals who are employed by the
Company or any Subsidiary of the Company immediately prior to the Effective Time
shall become employees of the Surviving Corporation or one of its Subsidiaries
following the Effective Time (each such employee, an "Affected Employee");
provided, however, that this Section 7.9(a) shall not be construed to limit the
ability of the applicable employer to terminate the employment of any Affected
Employee at any time.
(b) Acquiror will, or will cause the Surviving Corporation to,
give Affected Employees full credit for purposes of eligibility (including
service and waiting period requirements), vesting, benefit accrual and
determination of the level of benefits under any employee benefit plans or
arrangements maintained by the Acquiror, the Surviving Corporation or any
Subsidiary of the Acquiror for such Affected Employees' service with the Company
or any Subsidiary of the Company to the same extent recognized by the Company or
any Subsidiary of the Company immediately prior to the Effective Time.
(c) Acquiror will, or will cause the Surviving Corporation to,
(i) waive all limitations as to preexisting conditions, exclusions and waiting
periods and service requirements with respect to participation and coverage
requirements applicable to the Affected Employees under any welfare benefit
plans that such employees may be eligible to participate in after the Effective
Time, other than limitations, waiting periods or service requirements that are
already in effect with respect to such employees and that have not been
satisfied as of the Effective Time under any welfare plan maintained for the
Affected Employees immediately prior to the Effective Time, and (ii) provide
each Affected Employee with credit for any co-payments and deductibles paid
prior to the Effective Time (as shown on the Company's records) in satisfying
any applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Effective Time.
(d) For a period of six months immediately following the
Effective Time, the coverage and benefits provided to Affected Employees
pursuant to employee benefit plans or arrangements maintained by Acquiror, the
Company or any Subsidiary of the Company, or any Subsidiary of the Acquiror
shall be, in the aggregate, not less favorable than those provided to such
employees immediately prior to the Effective Time.
Section 7.10 Indemnification of Directors and Officers; Directors &
Officers Insurance .
(a) From and after the Effective Time, Acquiror will fulfill
and honor and 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 or prior to
the date hereof (or indemnification agreements in the Company's customary form
for directors joining the Company's Board of Directors prior to the Effective
Time) and any indemnification provisions under the Company's certificate of
incorporation or bylaws as in effect immediately prior to the Effective Time.
(b) For a period of six years after the Effective Time,
Acquiror will maintain or cause the Surviving Corporation to maintain in effect,
if available, directors' and officers' liability insurance covering those
Persons who, as of immediately prior to the Effective Time, are covered by the
Company's directors' and officers' liability insurance policy (the "Insured
Parties") on terms no less favorable to the Insured Parties than those of the
Company's present directors' and officers' liability insurance policy; provided,
however, that in no event will Acquiror 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 150% of such annual
premium).
(c) The provisions of this Section 7.10 are intended to be for
the benefit of, and will be enforceable by, each Person entitled to
indemnification hereunder and the heirs and representatives of such Person.
Acquiror will not permit the Surviving Corporation to merge or consolidate with
any other Person unless the Surviving Corporation will ensure that the surviving
or resulting entity assumes the obligations imposed by this Section 7.10.
Section 7.11 Event Notices . From and after the date of this Agreement
until the Effective Time, each party hereto will promptly notify the other party
hereto of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any condition to the obligations
of such party to effect the Merger and the other transactions contemplated by
this Agreement not to be satisfied and (ii) the failure of such party to comply
with any covenant or agreement to be complied with by it pursuant to this
Agreement which would be likely to result in any condition to the obligations of
such party to effect the Merger and the other transactions contemplated by this
Agreement not to be satisfied. No delivery of any notice pursuant to this
Section 7.11 will cure any breach of any representation or warranty of such
party contained in this Agreement or otherwise limit or affect the remedies
available hereunder to the party receiving such notice.
Section 7.12 Assumption of Obligations to Issue Stock .
(a) Simultaneously with the Merger, (i) each outstanding
option or warrant to purchase or acquire a share of Company Common Stock under
any Company Option Plan or otherwise shall, in accordance with the terms
thereof, be converted into an option or warrant to purchase the number of shares
of Acquiror Common Stock equal to the Exchange Ratio times the number of shares
of Company Common Stock which could have been obtained prior to the Effective
Time upon the exercise of each such option or warrant (rounded down to the
nearest whole share), at an exercise price per share equal to the exercise price
for each such share of Company Common Stock (rounded up to the nearest whole
cent) subject to such option or warrant divided by the Exchange Ratio, and all
references in each such option or warrant to the Company shall be deemed to
refer to Acquiror, where appropriate, and (ii) Acquiror shall assume the
obligations of the Company under the Company Option Plans. The other terms of
each such option or warrant and any Company Option Plans under which they were
issued, shall continue to apply in accordance with their terms, including any
provisions providing for acceleration.
(b) Simultaneously with the Merger, each outstanding award
(including restricted stock, stock equivalents and stock units) ("Company
Award") under any employee incentive or benefit plans, programs or arrangements
presently maintained by the Company or any Company Subsidiary which provide for
grants of equity-based awards shall be amended or converted into a similar
instrument of Acquiror, in each case with such adjustments to the terms of such
Company Awards as are appropriate to preserve the value inherent in such Company
Awards with no detrimental effects on the holders thereof. The other terms of
each Company Award, and the plans or agreements under which they were issued,
shall continue to apply in accordance with their terms, including any provisions
providing for acceleration.
(c) The Company and Acquiror agree that each of their
respective employee incentive or benefit plans, programs and arrangements shall
be amended, to the extent necessary and appropriate, to reflect the transactions
contemplated by this Agreement, including, but not limited to the conversion of
shares of Company Common Stock held or to be awarded or paid pursuant to such
benefit plans, programs or arrangements into shares of Acquiror Common Stock on
a basis consistent with the transactions contemplated by this Agreement.
(d) Acquiror shall (i) reserve for issuance the number of
shares of Acquiror Common Stock that will become subject to the benefit plans,
programs, arrangements and warrants referred to in this Section 7.12 and (ii)
issue or cause to be issued the appropriate number of shares of Acquiror Common
Stock pursuant to such plans, programs, arrangements and warrants, upon the
exercise or maturation of rights existing thereunder at the Effective Time or
thereafter granted or awarded.
(e) The parties will use their reasonable efforts to mutually
agree with respect to the treatment of the Company Stock Purchase Plan in the
Merger on terms not inconsistent with the Company Stock Purchase Plan or the
terms of this Agreement; provided, however, that in no event may Company Common
Stock be purchased under the Company Stock Purchase Plan after the Effective
Time.
(f) Acquiror agrees to file a registration statement on Form
S-8 for the shares of Acquiror Common Stock issuable with respect to options
under any Company Option Plan at or prior to the Effective Time and shall use
its commercially reasonable efforts to maintain the effectiveness of such
registration statement thereafter for as long as any of such options remain
outstanding, to the same extent as Acquiror maintains the effectiveness of its
existing Form S-8.
(g) The Company hereby assigns all Repurchase Rights to the
Surviving Corporation as of the Effective Time.
Section 7.13 Conveyance Taxes . Acquiror and the Company shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding (i) any real property
transfer gains, sales, use, transfer, value-added, stock transfer (subject to
Section 3.2(c)), and stamp Taxes (ii) any recording, registration and other
fees, and (iii) any similar Taxes or fees that become payable in connection with
the transactions contemplated hereby. The Taxes described in clause (i) above
shall be paid by the Company.
Section 7.14 Voting Agreement . The Company shall use reasonable
efforts, on behalf of Acquiror and pursuant to the request of Acquiror, to cause
each Company stockholder named on the signature pages to the Voting Agreement to
execute and deliver to Acquiror the Voting Agreement concurrently with the
execution of this Agreement.
Section 7.15 Option Agreement . Concurrently with the execution of this
Agreement, the Company shall deliver to Acquiror an executed Option Agreement in
the form of Annex B attached hereto. The Company agrees to fully perform to the
fullest extent permitted under applicable Law its obligations under the Option
Agreement.
Section 7.16 Rights Agreement . The Company covenants and agrees with
Acquiror that the Company shall not take any action which would cause (A) a
"Shares Acquisition Date" to occur, or Acquiror or any of its Affiliates,
individually or taken together, to be or be deemed to be an "Acquiring Person"
under the Company Rights Agreement, or (B) the Company Rights Agreement or the
Company Rights to apply to Acquiror or any of its Affiliates, individually or
taken together, in the case of (A) or (B), solely as a result of this Agreement,
the Option Agreement, the Voting Agreement or the transactions contemplated
hereby and thereby. The Company agrees to take all actions as are required to
prevent any event described in (A) or (B) from occurring, in any such case
solely as a result of this Agreement, the Option Agreement, the Voting Agreement
or the transactions contemplated hereby and thereby.
Section 7.17 Reasonable Efforts and Further Assurances . Subject to the
terms and conditions hereof, each of the parties to this Agreement shall use
reasonable efforts to effectuate the transactions contemplated hereby and to
fulfill and cause to be fulfilled the conditions to Closing under this
Agreement. Subject to the terms and conditions hereof, each party hereto, at the
reasonable request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
ARTICLE VIII
CLOSING CONDITIONS
Section 8.1 Conditions to Obligations of Each Party Under This
Agreement . The respective obligations of each party to effect the Merger and
the other transactions contemplated hereby will be subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived by the party entitled to the benefit thereof, in whole or in
part, to the extent permitted by applicable Law:
(a) Effectiveness of the Registration Statement. The
Registration Statement shall have become effective in accordance with the
provisions of the Securities Act; no stop Order suspending the effectiveness of
the Registration Statement shall be in effect; and no proceedings for that
purpose shall be pending before or threatened by the SEC.
(b) Stockholder Approval. This Agreement and the Merger shall
have been approved and adopted by the requisite vote of the stockholders of the
Company in accordance with the DGCL and the certificate of incorporation and
bylaws of the Company.
(c) No Order. No Court or Governmental Authority having
jurisdiction over the Company or Acquiror shall have enacted, issued,
promulgated, enforced or entered any Law, Regulation or Order (whether
temporary, preliminary or permanent) which is then in effect and which has the
effect of making the Merger illegal or otherwise prohibiting consummation of the
Merger substantially on the terms contemplated by this Agreement.
(d) Regulatory Approvals. All approvals and consents of
applicable Courts and/or Governmental Authorities required to consummate the
Merger shall have been received, and all applicable waiting periods under the
HSR Act and Foreign Competition Laws shall have expired or been terminated.
(e) Stock Exchange Listing. The shares of Acquiror Common
Stock to be issued pursuant to the Merger shall have been approved for listing,
subject to official notice of issuance, on the New York Stock Exchange.
(f) Pooling of Interests. Acquiror shall have been advised in
writing by Ernst & Young LLP as of the date upon which the Effective Time is to
occur, in a form and in substance reasonably acceptable to Acquiror and the
Company, that the transactions contemplated by this Agreement, if consummated,
can properly be accounted for as a "pooling of interests" business combination
in accordance with GAAP and the criteria of Accounting Principles Board Opinion
No. 16 and the Regulations of the SEC. It is understood and agreed that (i) the
obligations of the Company to effect the Merger shall not be subject to the
condition set forth in this Section 8.1(f) to the extent that the Company shall
have breached Section 4.21(a) or Section 7.6(e)(ii) hereof, but only if but for
such breach the condition set forth in this Section 8.1(f) could have been
satisfied (and provided that (A) if such breach is curable the Company shall
have the opportunity, for up to 10 calendar days following satisfaction or
waiver of all other conditions to the Company's obligations to effect the Merger
(and during such period this Section 8.1(f) condition shall remain in effect as
a condition to the Company's obligation to effect the Merger), to cure such
breach and thereby continue this condition in effect as a condition to the
Company's obligation to effect the Merger and (B) if such breach is not curable,
or shall not have been cured at the end of such 10-day period, this Section
8.1(f) condition shall cease to be in effect as a condition to the Company's
obligation to effect the Merger); and (ii) the obligations of the Acquiror
Companies to effect the Merger hereby shall not be subject to the condition set
forth in this Section 8.1(f) to the extent that either of the Acquiror Companies
shall have breached Section 5.10(a) or Section 7.6(e)(i) hereof, but only if but
for such breach the condition set forth in this Section 8.1(f) could have been
satisfied (and provided that (A) if such breach is curable Acquiror shall have
the opportunity, for up to 10 calendar days following satisfaction or waiver of
all other conditions to Acquiror's obligations to effect the Merger (and during
such period this Section 8.1(f) condition shall remain in effect as a condition
to Acquiror's obligation to effect the Merger), to cure such breach and thereby
continue this Section 8.1(f) condition in effect as a condition to Acquiror's
obligation to effect the Merger and (B) if such breach is not curable, or shall
not have been cured at the end of such 10-day period, this Section 8.1(f)
condition shall cease to be in effect as a condition to Acquiror's obligation to
effect the Merger).
Section 8.2 Additional Conditions to Obligations of the Acquiror
Companies . The obligations of the Acquiror Companies to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
at or prior to the Effective Time of the following additional conditions, any or
all of which may be waived by the Acquiror Companies, in whole or in part, to
the extent permitted by applicable Law:
(a) Representations and Warranties.
(i) Each of the representations and warranties of the
Company contained in this Agreement shall be true and correct as of the date
hereof and at and as of the Closing Date as if made at and as of such time,
except that, to the extent such representations and warranties address matters
only as of a particular date, such representations and warranties shall, to such
extent, be true and correct at and as of such particular date as if made at and
as of such particular date; provided that if any of such representations and
warranties shall not be true and correct as aforesaid, then the condition
contained in this Section 8.2(a)(i) (but not the condition contained in Section
8.2(a)(ii)) shall nevertheless be deemed satisfied if the cumulative effect of
all inaccuracies of such representations and breaches of such warranties shall
not be or have a Material Adverse Effect on the Company. The Acquiror Companies
shall have received a certificate of an executive officer of the Company, dated
the date of the Effective Time, to such effect.
(ii) The representations and warranties of the Company
contained in Section 4.20 shall be true and correct as of the date hereof and at
and as of the Closing Date as if made at and as of such time, except that to the
extent such representations and warranties address matters only as of a
particular date, such representations and warranties shall, to such extent, be
true and correct at and as of such particular date as if made at and as of such
particular date; provided that if any of such representations and warranties
shall not be true and correct as aforesaid, then the condition contained in this
Section 8.2(a)(ii) shall nevertheless be deemed satisfied if the cumulative
effect of all inaccuracies of such representations and breaches of such
warranties shall not be or have a Material Adverse Effect on any Business
Segment.
(b) Agreements and Covenants. The Company shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it at or prior to the
Closing. The Acquiror Companies shall have received a certificate of an
executive officer of the Company, dated the Closing Date, to such effect.
(c) Third Party Consents. All Change of Control Consents of
third parties required in order for a Change of Control Effect not to occur
under any contract, note, bond, mortgage, indenture, license, agreement or other
instrument to which the Company or any of its Subsidiaries is a party or by
which it is bound and which is material to any Business Segment shall have been
obtained, except where the failure to obtain such Change of Control Consents,
either individually or in the aggregate, shall not have or be a Material Adverse
Effect on the Company.
(d) Tax Opinion. Acquiror shall have received the opinion of
its tax counsel, Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, dated as of the
Closing Date, to the effect that the Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Code; provided, however, that if
such firm does not render such opinion, this condition shall nonetheless be
deemed satisfied if such opinion, dated as of the Closing Date, is rendered to
Acquiror by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, tax
counsel to the Company. The issuance of such opinion shall be conditioned on the
receipt by such tax counsel rendering such opinion of representation letters
from each of Acquiror, Newco and the Company, in each case, in form and
substance reasonably satisfactory to such tax counsel. The specific provisions
of each such representation letter shall be in form and substance reasonably
satisfactory to such tax counsel rendering such opinion, and each such
representation letter shall be dated on or before the date of such opinion and
shall not have been withdrawn or modified in any material respect.
(e) Affiliate Agreements. Each of the parties identified by
the Company as being an Affiliate of the Company shall have delivered to
Acquiror an executed Affiliate Agreement, in the form attached hereto as Annex
C, which shall be in full force and effect.
(f) Rights Plan. The provisions of the Company Rights
Agreement and the Rights shall not apply to Acquiror or any of its Affiliates,
individually or taken together, as a result of this Agreement, the Option
Agreement, the Voting Agreement or the transactions contemplated hereby or
thereby, or to the Merger, and all Company Rights issued thereunder shall,
immediately prior to the Effective Time, be canceled, void and of no further
force or effect.
Section 8.3 Additional Conditions to Obligations of the Company . The
obligations of the Company to effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Effective Time of the following additional conditions, any or all of which may
be waived by the Company, in whole or in part, to the extent permitted by
applicable Law:
(a) Representations and Warranties. Each of the
representations and warranties of the Acquiror Companies contained in this
Agreement shall be true and correct as of the date hereof and at and as of the
Closing Date as if made at and as of such time, except that to the extent such
representations and warranties address matters only as of a particular date,
such representations and warranties shall, to such extent, be true and correct
as of the date hereof and at and as of such particular date as if made at and as
of such particular date; provided that if any of such representations and
warranties shall not be true and correct as aforesaid, then this condition shall
nevertheless be deemed satisfied if the cumulative effect of all inaccuracies of
such representations and breaches of such warranties shall not be or have a
Material Adverse Effect on Acquiror. The Company shall have received a
certificate of an executive officer of each of the Acquiror Companies, dated the
date of the Effective Time, to such effect.
(b) Agreements and Covenants. The Acquiror Companies shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them at
or prior to the Closing. The Company shall have received a certificate of an
executive officer of each of the Acquiror Companies, dated the Closing Date, to
such effect.
(c) Tax Opinion. The Company shall have received the opinion
of its tax counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation,
dated as of the Closing Date, to the effect that the Merger will qualify as a
reorganization within the meaning of Section 368(a) of the Code; provided,
however, that if such firm does not render such opinion, this condition shall
nonetheless be deemed satisfied if such opinion, dated as of the Closing Date,
is rendered to the Company by Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, tax
counsel to Acquiror. The issuance of such opinion shall be conditioned on the
receipt by such tax counsel rendering such opinion of representation letters
from each of Acquiror, Newco and the Company, in each case, in form and
substance reasonably satisfactory to such tax counsel. The specific provisions
of each such representation letter shall be in form and substance reasonably
satisfactory to such tax counsel rendering such opinion, and each such
representation letter shall be dated on or before the date of such opinion and
shall not have been withdrawn or modified in any material respect.
ARTICLE IX
TERMINATION, AMENDMENT AND EXPENSES
Section 9.1 Termination . This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this Agreement
and the Merger by the stockholders of the Company:
(a) by mutual consent of Acquiror and the Company;
(b) by Acquiror, upon a material breach of any covenant or
agreement on the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company hereunder shall be or become untrue or
inaccurate, in any case such that the conditions set forth in Section 8.2(a) or
Section 8.2(b) would not be satisfied (a "Terminating Company Breach"); provided
that, if such Terminating Company Breach is curable by the Company through the
exercise of its reasonable efforts, and the Company continues to exercise such
reasonable efforts, Acquiror may not terminate this Agreement under this Section
9.1(b) if such Terminating Company Breach has been cured prior to June 30, 1999;
(c) by the Company, upon material breach of any covenant or
agreement on the part of the Acquiror Companies set forth in this Agreement, or
if any representation or warranty of the Acquiror Companies shall be or become
untrue or inaccurate, in any case such that the conditions set forth in Section
8.3(a) or Section 8.3(b) would not be satisfied (a "Terminating Acquiror
Breach"); provided that, if such Terminating Acquiror Breach is curable by the
Acquiror Companies through the exercise of their reasonable efforts, and the
Acquiror Companies continue to exercise such reasonable efforts, the Company may
not terminate this Agreement under this Section 9.1(c) if such Terminating
Acquiror Breach has been cured prior to June 30, 1999;
(d) by either Acquiror or the Company, if there shall be any
Order of a Court or Governmental Authority having jurisdiction over a party
hereto which is final and nonappealable permanently enjoining, restraining or
prohibiting the consummation of the Merger, unless the party relying on such
Order has not complied with its obligations under Section 7.5;
(e) by either Acquiror or the Company, if the Merger shall not
have been consummated before June 30, 1999 (the "Termination Date"); provided,
however, that the right to terminate this Agreement under this Section 9.1(e)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been a cause of, or resulted in, the failure of the
Effective Time to occur on or before the Termination Date;
(f) by either Acquiror or the Company, if this Agreement shall
fail to receive the requisite vote for approval and adoption by the stockholders
of the Company at the Company Stockholders' Meeting;
(g) by Acquiror (i) if the Board of Directors of the Company
fails to recommend approval and adoption of this Agreement and the Merger by the
stockholders of the Company or withdraws or modifies (or publicly announces an
intention to withdraw or modify) in any adverse manner its approval or
recommendation of this Agreement or the Merger; (ii) if the Board of Directors
of the Company makes any public recommendation with respect to any Acquisition
Proposal other than a recommendation to reject such Acquisition Proposal; (iii)
if the Company takes any action prohibited by Section 7.1; (iv) if the Company
breaches in any material respect the Option Agreement; or (v) if the Board of
Directors of the Company resolves to take any of the actions specified above.
The right of any party hereto to terminate this Agreement pursuant to
this Section 9.1 will remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
Section 9.2 Effect of Termination .
(a) Except as provided in this Section 9.2, in the event of
the termination of this Agreement pursuant to Section 9.1, this Agreement will
forthwith become void, and there will be no liability on the part of the
Acquiror Companies or the Company or any of their respective officers or
directors to the other and all rights and obligations of any party hereto will
cease, except that nothing herein will relieve any party from liability for any
breach, prior to termination of this Agreement in accordance with its terms, of
any representation, warranty, covenant or agreement contained in this Agreement.
(b) If this Agreement is terminated (i) by Acquiror pursuant
to Section 9.1(g) or (ii) by Acquiror or Company pursuant to Section 9.1(f)
hereof because of the failure to obtain the required approval from the Company
stockholders and, in the case of termination pursuant to this clause (ii), if
(A) at or prior to the Company Stockholders' Meeting an Acquisition Proposal
shall have been publicly announced or disclosed (whether or not such offer,
proposal, announcement or agreement shall have been rejected or shall have been
withdrawn prior to the time of such termination or of the Company Stockholders'
Meeting) and (B)(1) a third party or "group" (within the meaning of Rule 13d-5
under the Exchange Act), directly or indirectly, acquires Company Common Stock
which results in such third party or "group" having beneficial ownership of 35%
or more of the then outstanding Company Common Stock (excluding an underwriter
who acquires such beneficial ownership pursuant to a bonafide underwritten
offering) or (2) a sale, transfer or license (having a similar effect as a sale
or transfer) of 35% or more of the fair market value of the assets of the
Company is consummated with a third party or "group" (within the meaning of Rule
13d-5 under the Exchange Act), other than in the ordinary course of business, or
(3) a definitive agreement with respect to any transaction referred to in (1) or
(2) is executed by the Company or any of its Subsidiaries, in the case of (1),
(2) or (3), within 6 months following termination of the Agreement pursuant to
this clause (ii), then, in the case of clause (i), the Company shall pay to
Acquiror by wire transfer of same day funds promptly but not later than two
Business Days after the date of such termination a termination fee of $100
million (the "Termination Fee"), and, in the case of clause (ii), the Company
shall pay the Termination Fee to Acquiror by wire transfer of same day funds
promptly but not later than two Business Days after satisfaction of all
conditions to the payment thereof set forth in clause (ii).
Section 9.3 Amendment . This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the stockholders of the Company, no amendment may be made which
would reduce the amount or change the type of consideration into which each
share of Company Common Stock will be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
Section 9.4 Waiver . At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension or
waiver will be valid only if set forth in an instrument in writing signed by the
party or parties to be bound thereby. For purposes of this Section 9.4, Acquiror
Companies will be deemed to be one party.
Section 9.5 Expenses . Except as set forth in Section 9.2, all expenses
incurred by the parties hereto will be borne solely and entirely by the party
which has incurred such expenses; provided, however, that the Company and
Acquiror shall each pay fifty percent of expenses related to printing, filing
and mailing the Registration Statement and the Proxy Statement and all SEC and
other regulatory filing fees incurred in connection with the Registration
Statement and the Proxy Statement.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Interpretation.
(a) When a reference is made in this Agreement to a section or
article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary.
(b) Whenever the words "include", "includes" or "including"
are used in this Agreement they shall be deemed to be followed by the words
"without limitation."
(c) The words "hereof", "hereby", "herein" and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement,
and article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified.
(d) The plural of any defined term shall have a meaning
correlative to such defined term, and words denoting any gender shall include
all genders. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.
(e) A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all Regulations and statutory
instruments issued thereunder or pursuant thereto.
(f) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
Section 10.2 Effectiveness of Representations, Warranties and
Agreements.
(a) Except as set forth in Section 10.2(b) of this Agreement,
the representations, warranties and agreements of each party hereto will remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other party hereto, any Person controlling any such party or
any of their officers, directors, representatives or agents whether prior to or
after the execution of this Agreement.
(b) The representations and warranties in this Agreement will
terminate at the Effective Time; provided, however, this Section 10.2 (b) shall
in no way limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time or after the termination of
this Agreement pursuant to Article IX.
Section 10.3 Notices . Any notice, request, instruction or other
document to be given hereunder by any party to another party shall be in writing
and shall be deemed given when delivered personally, upon receipt of a
transmission confirmation (with a confirming copy sent by overnight courier) if
sent by facsimile or like transmission, and on the next Business Day when sent
by Federal Express, United Parcel Service, Express Mail or other reputable
overnight courier, as follows:
(a) If to either of the Acquiror Companies, to:
America Online, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Case
President & CEO
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Company, to:
Netscape Communications Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and CEO
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other persons or addresses as may be designated in writing by the
party to receive such notice. Nothing in this section shall be deemed to
constitute consent to the manner and address for service of process in
connection with any legal proceeding (including Litigation arising out of or in
connection with this Agreement), which service shall be effected as required by
applicable Law.
Section 10.4 Headings . The headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
Section 10.5 Severability . If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement will
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
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
will 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.
Section 10.6 Entire Agreement . This Agreement (not including Annexes
A, C, D, E and F, but including the Company's Disclosure Schedule and Acquiror's
Disclosure Schedule) and the Option Agreement constitute the entire agreement of
the parties, and supersede all prior agreements and undertakings (other than
that certain Confidentiality Agreement which will remain in full force and
effect until the Effective Time, at which time it will terminate), both written
and oral, among the parties, with respect to the subject matter hereof and
thereof.
Section 10.7 Assignment. This Agreement may not be assigned by
operation of Law or otherwise.
Section 10.8 Parties in Interest . This Agreement will be binding upon
and inure solely to the benefit of each party hereto, and, other than pursuant
to Section 7.10, hereof, nothing in this Agreement, express or implied, is
intended to or will confer upon any other Person any right, benefit or remedy of
any nature whatsoever under or by reason of this Agreement.
Section 10.9 Failure or Indulgence Not Waiver; Remedies Cumulative . No
failure or delay on the part of any party hereto in the exercise of any right
hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, agreement or
covenant herein, nor will any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive to,
and not exclusive of, any rights or remedies otherwise available.
Section 10.10 Governing Law . This Agreement and the agreements,
instruments and documents contemplated hereby will be governed by and construed
in accordance with the Laws of the state of Delaware (exclusive of conflicts of
law principles). Courts within the state of Delaware will have jurisdiction over
any and all disputes between the parties hereto, whether in law or equity,
arising out of or relating to this agreement and the agreements, instruments and
documents contemplated hereby. The parties consent to and agree to submit to the
jurisdiction of such Courts. Each of the parties hereby waives, and agrees not
to assert in any such dispute, to the fullest extent permitted by applicable
Law, any claim that (i) such party is not personally subject to the jurisdiction
of such Courts, (ii) such party and such party's property is immune from any
legal process issued by such Courts or (iii) any Litigation commenced in such
Courts is brought in an inconvenient forum.
Section 10.11 Counterparts . This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed will be deemed to be an original but all of which taken
together will constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
AMERICA ONLINE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Chairman
APOLLO ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Secretary
NETSCAPE COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Pres., CEO
Signature Page to Agreement and Plan of Merger