EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
BAAN COMPANY N.V.
GREEN SOFTWARE ACQUISITION CORPORATION
AND
AURUM SOFTWARE, INC.
DATED AS OF MAY 13, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER................................................... 2
1.1 The Merger................................................... 2
1.2 Effective Time; Closing...................................... 2
1.3 Effect of the Merger......................................... 2
1.4 Certificate of Incorporation; Bylaws......................... 2
1.5 Directors and Officers....................................... 2
1.6 Effect on Capital Stock...................................... 3
1.7 Unvested Aurum Common Stock.................................. 4
1.8 Surrender of Certificates.................................... 4
1.9 No Further Ownership Rights in Aurum Common Stock............ 6
1.10 Lost, Stolen or Destroyed Certificates....................... 6
1.11 Tax and Accounting Consequences.............................. 6
1.12 Taking of Necessary Action; Further Action................... 6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF AURUM..................... 7
2.1 Organization of Aurum........................................ 7
2.2 Aurum Capital Structure...................................... 8
2.3 Obligations With Respect to Capital Stock.................... 8
2.4 Authority.................................................... 9
2.5 SEC Filings; Aurum Financial Statements...................... 10
2.6 Absence of Certain Changes or Events......................... 11
2.7 Tax.......................................................... 11
2.8 Title to Properties; Absence of Liens and Encumbrances....... 12
2.9 Intellectual Property........................................ 12
2.10 Compliance; Permits; Restrictions............................ 14
2.11 Litigation................................................... 14
2.12 Brokers' and Finders' Fees................................... 14
2.13 Employee Benefit Plans....................................... 15
2.14 Employees; Labor Matters..................................... 15
2.15 Environmental Matters........................................ 15
2.16 Agreements, Contracts and Commitments........................ 16
2.17 Pooling of Interests......................................... 17
2.18 Statements; Proxy Statement/Prospectus....................... 17
2.19 Board Approval............................................... 18
2.20 Fairness Opinion............................................. 18
2.21 Section 203 of the Delaware General Corporation Law Not
Applicable................................................... 18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BAAN AND MERGER SUB...... 18
3.1 Organization of Baan and Merger Sub.......................... 18
3.2 Baan and Merger Sub Capital Structure........................ 19
3.3 Authority.................................................... 19
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3.4 SEC Filings; Baan Financial Statements....................... 20
3.5 Absence of Certain Changes or Events......................... 21
3.6 Statements; Proxy Statement/Prospectus....................... 21
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME......................... 21
4.1 Conduct of Business by Aurum and Baan........................ 21
4.2 Certain Actions by Aurum..................................... 21
4.3 Baan Acquisitions............................................ 23
4.4 No HSR Violation............................................. 24
ARTICLE V ADDITIONAL AGREEMENTS........................................ 24
5.1 Proxy Statement/Prospectus; Registration Statement; Other
Filings; Board Recommendations............................... 24
5.2 Meeting of Stockholders...................................... 25
5.3 Confidentiality; Access to Information....................... 25
5.4 No Solicitation.............................................. 25
5.5 Public Disclosure............................................ 27
5.6 Legal Requirements........................................... 27
5.7 Third Party Consents......................................... 27
5.8 Notification of Certain Matters.............................. 27
5.9 Best Efforts and Further Assurances.......................... 28
5.10 Stock Options and Employee Stock Purchase Plan............... 28
5.11 Form S-8..................................................... 29
5.12 Indemnification.............................................. 29
5.13 NMS and Amsterdam Exchanges Listing.......................... 30
5.14 Aurum Affiliate Agreement.................................... 30
5.15 Regulatory Filings; Reasonable Efforts....................... 30
5.16 Tax-Free Reorganization...................................... 30
5.17 Aurum Rights Plan............................................ 30
5.18 Comfort Letter............................................... 31
5.19 Employee Benefit Schedules................................... 31
5.20 Employee Matters............................................. 31
ARTICLE VI CONDITIONS TO THE MERGER.................................... 32
6.1 Conditions to Obligations of Each Party to Effect the Merger. 32
6.2 Additional Conditions to Obligations of Aurum................ 32
6.3 Additional Conditions to the Obligations of Baan and Merger
Sub.......................................................... 33
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.......................... 34
7.1 Termination.................................................. 34
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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7.2 Notice of Termination; Effect of Termination................. 35
7.3 Fees and Expenses............................................ 36
7.4 Amendment.................................................... 36
7.5 Extension; Waiver............................................ 36
ARTICLE VIII GENERAL PROVISIONS........................................ 36
8.1 Non-Survival of Representations and Warranties............... 36
8.2 Notices...................................................... 37
8.3 Interpretation; Knowledge.................................... 38
8.4 Counterparts................................................. 38
8.5 Entire Agreement; Third Party Beneficiaries.................. 38
8.6 Severability................................................. 39
8.7 Other Remedies; Specific Performance......................... 39
8.8 Governing Law................................................ 39
8.9 Rules of Construction........................................ 39
8.10 Assignment................................................... 39
8.11 WAIVER OF JURY TRIAL......................................... 40
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INDEX OF EXHIBITS
Exhibit A Form of Aurum Software Voting Agreement
Exhibit B Form of Aurum Software Stock Option Agreement
Exhibit C Form of Aurum Software Affiliate Agreement
Exhibit D-1 Form of Employment Agreement
Exhibit D-2 Form of Non-Competition Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is made and
entered into as of May 13, 1997, among Baan Company, N.V. a corporation
organized under the laws of The Netherlands ("BAAN"), Green Software Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of Baan
("MERGER SUB"), and Aurum Software, Inc., a Delaware corporation ("AURUM").
RECITALS
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A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below), Baan and Aurum intend to enter into a business
combination transaction.
B. The Board of Directors of Aurum has unanimously (i) determined that
the Merger (as defined in Section 1.1) is consistent with and in furtherance of
the long-term business strategy of Aurum and fair to, and in the best interests
of, Aurum and its stockholders, (ii) approved this Agreement, the Merger and the
other transactions contemplated by this Agreement and (iii) determined to
recommend that the stockholders of Aurum adopt and approve this Agreement and
approve the Merger.
C. Concurrently with the execution of this Agreement, and as a condition
and inducement to Baan's willingness to enter into this Agreement, certain
affiliates of Aurum specified on Schedule I to the form of Voting Agreement
attached hereto as Exhibit A shall enter into Voting Agreements in substantially
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such form (the "AURUM VOTING AGREEMENTS").
D. Concurrently with the execution of this Agreement, and as a condition
and inducement to Baan's willingness to enter into this Agreement, Aurum shall
execute and deliver a Stock Option Agreement in favor of Baan in substantially
the form attached hereto as Exhibit B (the "AURUM STOCK OPTION AGREEMENT"). The
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Board of Directors of Aurum has approved the Aurum Stock Option Agreement.
E. Concurrently with the execution of this Agreement, and as a condition
and inducement to Baan's willingness to enter into this Agreement, certain
officers of Aurum shall execute and deliver Employment and Non-Competition
Agreements in favor of Aurum following the Merger.
F. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "CODE").
G. It is also intended by the parties hereto that the Merger shall
qualify for accounting treatment as a pooling of interests.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
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subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the Delaware General Corporation Law ("Delaware Law"),
Merger Sub shall be merged with and into Aurum (the "MERGER"), the separate
corporate existence of Merger Sub shall cease and Aurum shall continue as the
surviving corporation. Aurum as the surviving corporation after the Merger is
hereinafter sometimes referred to as the "SURVIVING CORPORATION."
1.2 Effective Time; Closing. Subject to the provisions of this Agreement,
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the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the relevant provisions of Delaware Law (the "CERTIFICATE OF
MERGER") (the time of such filing (or such later time as may be agreed in
writing by the parties and specified in the Certificate of Merger) being the
"EFFECTIVE TIME") as soon as practicable on or after the Closing Date (as herein
defined). Unless the context otherwise requires, the term "AGREEMENT" as used
herein refers collectively to this Agreement and Plan of Reorganization and the
Certificate of Merger. The closing of the Merger (the "CLOSING") shall take
place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional
Corporation, at a time and date to be specified by the parties, which shall be
no later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location as
the parties hereto agree in writing (the "CLOSING DATE").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
--------------------
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of Aurum and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Aurum and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
1.4 Certificate of Incorporation; Bylaws.
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(a) At the Effective Time, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation of the
Surviving Corporation; provided, however, that at the Effective Time the
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Certificate of Incorporation of the Surviving Corporation shall be amended so
that the name of the Surviving Corporation shall be the name of Aurum prior to
the Merger.
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.
1.5 Directors and Officers. The initial directors of the Surviving
----------------------
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly
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elected or appointed and qualified. The initial officers of the Surviving
Corporation shall be the officers of Aurum immediately prior to the Effective
Time, until their respective successors are duly appointed.
1.6 Effect on Capital Stock. At the Effective Time, by virtue of the
-----------------------
Merger and without any action on the part of Merger Sub, Aurum or the holders of
any of the following securities:
(a) Transfer of Aurum Common Stock. (i) Each share of Common Stock,
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$.001 par value, of Aurum (the "AURUM COMMON STOCK") issued and outstanding
immediately prior to the Effective Time, (other than any shares of Aurum Common
Stock to be transferred to Baan pursuant to Section 1.6(b)) will be
automatically assigned and transferred to Baan at the Effective Time without any
further action required on the part of Aurum or the individual shareholders of
Aurum or Baan, and in exchange therefor the holders of such shares of Aurum
Common Stock will be entitled to receive (subject to Sections 1.6(e) and (f)) a
number of Baan Common Shares (the "BAAN COMMON SHARES") equal to the Exchange
Ratio (as defined herein) upon surrender of the certificate representing such
share of Aurum Common Stock in the manner provided in Section 1.8. The
"EXCHANGE RATIO" is equal to a fraction the numerator of which is $21.00
(appropriately adjusted for any Aurum Recapitalization, as defined herein) and
the denominator of which is $59.00 (appropriately adjusted for any Baan
Recapitalization, as defined herein), subject to adjustment as provided in
paragraphs (ii), (iii) and (iv) below. Notwithstanding any failure of any
holder of Aurum Common Stock to surrender the certificate representing such
shares for exchange in the manner provided in Section 1.8, immediately following
the Effective Time Aurum shall be entitled to effect a transfer to Baan, on the
books, records and stock ledger of Aurum, of all shares of Common Stock of Aurum
issued and outstanding immediately prior to the Effective Time, and in
connection therewith to cancel on such books, records and ledger all
certificates theretofore representing such shares and to issue a new certificate
or certificates therefor in the name of and to Baan.
(ii) Notwithstanding the foregoing, if the average closing price per
share of the Baan Common Shares on the Nasdaq National Market over the ten
consecutive trading days ending on the trading day immediately preceding the
Closing Date (the "BAAN STOCK VALUE") is less than $50.00 and more than $40.00
per share (in each case, as appropriately adjusted for any Baan
Recapitalization) the Exchange Ratio shall be equal to the product of (i) a
fraction, the numerator of which is $21.00 (appropriately adjusted for any Aurum
Recapitalization) and the denominator of which is $59.00 (appropriately adjusted
for any Baan Recapitalization) and (ii) a fraction, the numerator of which is
$50.00 (appropriately adjusted for any Baan Recapitalization) and the
denominator of which shall be the Baan Stock Value.
(iii) Further notwithstanding the foregoing, if the Baan Stock Value
(calculated with reference to the scheduled Closing Date) is $40.00 or less per
share (appropriately adjusted for any Baan Recapitalization), the Exchange Ratio
shall be equal to 0.4449152542 (appropriately adjusted for any Aurum
Recapitalization or Baan Recapitalization).
(iv) A "AURUM RECAPITALIZATION" shall mean any stock split, reverse
stock split, stock dividend (including any dividend or distribution of
securities convertible into Aurum Common Stock), reorganization,
recapitalization or other like change with respect to Aurum Common Stock
occurring after the date hereof and prior to the Effective Time. A "BAAN
RECAPITALIZATION" shall mean any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible
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into Baan Common Shares), reorganization, recapitalization or other like change
with respect to Baan Common Shares occurring after the date hereof and prior to
the Effective Time.
(b) Transfer of Baan-Owned Stock. Each share of Aurum Common Stock
----------------------------
held by Aurum or owned by Merger Sub, Baan or any direct or indirect wholly
owned subsidiary of Aurum or of Baan immediately prior to the Effective Time
shall be transferred to Baan.
(c) Stock Options. At the Effective Time, all options to purchase
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Aurum Common Stock then outstanding under Aurum's 1995 Stock Option Plan, and
1996 Director Stock Option Plan (collectively, the "AURUM STOCK OPTION PLANS")
shall be assumed by Baan in accordance with Section 5.10 hereof or at Baan's
discretion otherwise substituted in a manner consistent with applicable laws.
At the Effective Time, in accordance with the terms of Aurum's Employee Stock
Purchase Plan (the "Aurum Employee Stock Purchase Plan"), all rights to purchase
shares of Aurum Common Stock under the Aurum Employee Stock Purchase Plan shall
be treated as set forth in Section 18 of the Aurum Employee Stock Purchase Plan.
(d) Capital Stock of Merger Sub. Pursuant to the Merger, each share
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of Common Stock, $0.001, of Merger Sub (the "MERGER SUB COMMON STOCK") issued
and outstanding immediately prior to the Effective Time shall be converted into
and exchanged for one validly issued, fully paid and nonassessable share of
Common Stock of the Surviving Corporation. Each stock certificate of Merger Sub
evidencing ownership of any such shares shall continue to evidence ownership of
such shares of capital stock of the Surviving Corporation.
(e) Fractional Shares. No fraction of a share of Baan Common Shares
-----------------
will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Aurum Common Stock who would otherwise be entitled to a fraction of a
share of Baan Common Shares (after aggregating all fractional shares of Baan
Common Shares to be received by such holder) shall receive from Baan an amount
of cash (rounded to the nearest whole cent) equal to the product of (i) such
fraction, multiplied by (ii) the average closing price of one share of Baan
Common Shares for the five (5) most recent days that Baan Common Shares has
traded ending on the trading day immediately prior to the Effective Time, as
reported on the Nasdaq National Market.
1.7 Unvested Aurum Common Stock. To the extent that shares of Aurum
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Common Stock issued prior to the Merger are subject to vesting arrangements
under which shares that are unvested as of a date of termination of employment
would be subject to repurchase by Aurum, Baan shall issue Baan Common Shares,
which upon issuance, will be subject to equivalent contractual vesting and
repurchase provisions on the same schedules and subject to the same terms,
shares to be repurchased and the repurchase price thereof shall be adjusted as
provided in Section 1.6(c).
1.8 Surrender of Certificates.
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(a) Exchange Agent. Prior to the Effective Time, Baan shall select a
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bank or trust company in New York with assets of not less than $500 million to
act as the exchange agent (the "EXCHANGE AGENT") in the Merger.
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(b) Baan to Provide Common Stock. Promptly after the Effective Time,
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Baan shall make available to the Exchange Agent for the benefit of the Aurum
shareholders the aggregate number of Baan Common Shares issuable pursuant to
Section 1.6 in exchange for outstanding shares of Aurum Common Stock, and cash
in an amount sufficient for payment in lieu of fractional shares pursuant to
Section 1.6(f) and any dividends or distributions to which holders of shares of
Aurum Common Stock may be entitled pursuant to Section 1.8(d).
(c) Exchange Procedures. Promptly after the Effective Time, Baan
-------------------
shall cause the Exchange Agent to mail to each holder of record (as of the
Effective Time) of a certificate or certificates (the "CERTIFICATES"), which
immediately prior to the Effective Time represented outstanding shares of Aurum
Common Stock which, pursuant to the Merger, were exchanged for Baan Common
Shares pursuant to Section 1.6, cash in lieu of any fractional shares pursuant
to Section 1.6(f) and any dividends or other distributions pursuant to Section
1.8(d), (i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in such form and
have such other provisions as Baan may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing shares of Baan Common Shares, cash in lieu of any
fractional shares pursuant to Section 1.6(f) and any dividends or other
distributions pursuant to Section 1.8(d). Upon surrender of Certificates for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Baan, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, the holders of
such Certificates shall be entitled to receive in exchange therefor certificates
representing the number of whole shares of Baan Common Shares, payment in lieu
of fractional shares which such holders have the right to receive pursuant to
Section 1.6(f) and any dividends or distributions payable pursuant to Section
1.8(d), and the Certificates so surrendered shall forthwith be transferred to
Baan. Until so surrendered, each outstanding Certificate that, prior to the
Effective Time, represented shares of Aurum Common Stock, will be deemed from
and after the Effective Time, for all corporate purposes to represent solely (i)
the right to receive upon the surrender thereof the number of full shares of
Baan Common Shares for which such shares of Aurum Common Stock shall have been
so exchanged and (ii) the right to receive an amount in cash in lieu of the
issuance of any fractional shares in accordance with Section 1.6(f) and any
dividends or distributions payable pursuant to Section 1.8(d).
(d) Distributions With Respect to Unexchanged Shares. No dividends or
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other distributions declared or made after the date of this Agreement with
respect to Baan Common Shares with a record date after the Effective Time will
be paid to the holders of any unsurrendered Certificate with respect to the
shares of Baan Common Shares represented thereby until the holder of record of
such Certificate shall surrender such Certificate pursuant to Section 1.8(c).
Subject to applicable law, following surrender of any such Certificate, the
Exchange Agent shall deliver to the record holder thereof, without interest, a
certificate representing whole shares of Baan Common Shares issued in exchange
therefor along with payment in lieu of fractional shares pursuant to Section
1.6(f) hereof and the amount of any such dividends or other distributions with a
record date after the Effective Time payable with respect to each whole share of
Baan Common Shares represented by such Certificate.
(e) Transfers of Ownership. If Certificates for shares of Baan Common
----------------------
Shares are to be issued in a name other than that in which the Certificate
surrendered in exchange therefor is
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registered, it will be a condition of the issuance thereof that the Certificate
so surrendered will be properly endorsed and otherwise in proper form for
transfer and that the persons requesting such exchange will have paid to Baan or
any agent designated by it any transfer or other taxes required by reason of the
issuance of certificates for shares of Baan Common Shares in any name other than
that of the registered holder of the Certificate so surrendered, or established
to the satisfaction of Baan or any agent designated by it that such tax has been
paid or is not payable.
(f) No Liability. Notwithstanding anything to the contrary in this
------------
Section 1.8, neither the Exchange Agent, Baan, the Surviving Corporation nor any
party hereto shall be liable to a holder of shares of Baan Common Shares or
Aurum Common Stock for any amount properly paid to a public official pursuant to
any applicable abandoned property, escheat or similar law.
1.9 No Further Ownership Rights in Aurum Common Stock. All shares of
-------------------------------------------------
Baan Common Shares to be issued pursuant to the Merger in exchange of shares of
Aurum Common Stock in accordance with the terms hereof (including any cash paid
in respect thereof pursuant to Section 1.6(f) and 1.8(d)) shall be deemed to
have been issued in full satisfaction of all rights pertaining to such shares of
Aurum Common Stock, and there shall be no further registration of transfers on
the records of the Surviving Corporation of shares of Aurum Common Stock which
were outstanding immediately prior to the Effective Time. If after the Effective
Time Certificates are presented to the Surviving Corporation for any reason,
they shall be transferred to Baan.
1.10 Lost, Stolen or Destroyed Certificates. In the event any certificate
--------------------------------------
evidencing shares of Aurum Common Stock shall have been lost, stolen or
destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or
destroyed certificate, upon the making of an affidavit of that fact by the
holder thereof, such shares of Baan Common Shares, cash for fractional shares,
if any, as may be required pursuant to Section 1.6(f) and any dividends or
distributions payable pursuant to Section 1.8(d); provided, however, that Baan
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may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed Certificate to deliver a
bond in such sum as it may reasonably direct as indemnity against any claim that
may be made against Baan, Aurum or the Exchange Agent with respect to the
Certificate alleged to have been lost, stolen or destroyed.
1.11 Tax and Accounting Consequences.
-------------------------------
(a) It is intended by the parties hereto that the Merger shall
constitute a reorganization within the meaning of Section 368 of the Code. The
parties hereto adopt this Agreement as a "plan of reorganization" within the
meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations.
(b) It is intended by the parties hereto that the Merger shall qualify
for accounting treatment as a pooling of interests.
1.12 Taking of Necessary Action; Further Action. If, at any time after
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the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Aurum and Merger Sub, the officers and directors of Aurum and
Merger Sub are fully
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authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF AURUM
Aurum represents and warrants to Baan and Merger Sub, subject to the
exceptions specifically disclosed in writing in the disclosure letter
(referencing specific representations) supplied by Aurum to Baan dated as of the
date hereof and certified by a duly authorized officer of Aurum (the "AURUM
SCHEDULES"), as follows:
2.1 Organization of Aurum.
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(a) Aurum and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; has the corporate power and authority to own,
lease and operate its assets and property and to carry on its business as now
being conducted and as proposed to be conducted; and is duly qualified or
licensed to do business and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
activities makes such qualification or licensing necessary, except where the
failure to be so qualified would not have a Material Adverse Effect (as defined
below) on Aurum.
(b) Aurum has delivered to Baan a true and complete list of all of
Aurum's subsidiaries, indicating the jurisdiction of incorporation of each
subsidiary and Aurum's equity interest therein. All of the outstanding shares
of capital stock of each subsidiary of Aurum is owned by Aurum, and no third
party has any option, warrant or other right to acquire any shares of capital
stock of any such subsidiary.
(c) Aurum has delivered or made available to Baan a true and correct
copy of the Certificate of Incorporation and Bylaws of Aurum and similar
governing instruments of each of its subsidiaries, each as amended to date, and
each such instrument is in full force and effect. Neither Aurum nor any of its
subsidiaries is in violation of any of the provisions of its Certificate of
Incorporation or Bylaws or equivalent governing instruments.
(d) When used in connection with Aurum, the term "MATERIAL ADVERSE
EFFECT" means, for purposes of this Agreement, any change, event or effect that
is or reasonably likely could be materially adverse to the current or continuing
business, assets (including intangible assets), financial condition or results
of operations of Aurum and its subsidiaries taken as a whole; provided, however,
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that, from and after the date of the public announcement of this Agreement, the
cancellation, termination or nonrenewal of arrangements with Aurum by suppliers,
distributors or customers of Aurum or the loss of key employees (other than
those key employees who have entered into signed employment agreements with Baan
as of the date of this Agreement or pursuant to Section 6.3(d)), or the
termination of negotiations or delays in ordering by prospective customers of
Aurum, and in each such case the resultant financial effects shall not be taken
into account in determining whether there shall have occurred a
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"Material Adverse Effect" on or with respect to Aurum and its subsidiaries taken
as a whole to the extent (but only to the extent) such supplier, distributor,
customer, prospective customer or employee circumstances may reasonably be
attributed to the adverse reaction by suppliers, distributors, customers or
employees to the transactions contemplated by this Agreement (including the
adverse or potentially adverse impact on suppliers, distributors, customers,
prospective customers or employees that may result from uncertainties that may
be perceived as a result of such transactions).
2.2 Aurum Capital Structure. The authorized capital stock of Aurum
-----------------------
consists of 25,000,000 shares of Common Stock, $.001 par value, of which there
were approximately 11,665,801 shares issued and outstanding as of May 12, 1997
and 5,000,000 shares of Preferred Stock, $.001 par value, of which no shares are
issued or outstanding. All outstanding shares of Aurum Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of Aurum or any agreement or document to which Aurum is a party or by which it
is bound. All outstanding shares of Aurum Common Stock were issued in
compliance with all applicable federal and state securities laws, except any
noncompliance which would not have a Material Adverse Effect on Aurum. As of
April 30, 1997, Aurum had reserved an aggregate of 1,432,821 shares of Aurum
Common Stock, net of exercises, for issuance to employees, consultants and non-
employee directors pursuant to the Aurum Stock Option Plans. Aurum will update
the Aurum Schedules to reflect outstanding shares and options as of the
Effective Time. As of April 30, 1997, there were options outstanding to
purchase an aggregate of 1,314,663 shares of Common Stock, issued to employees,
consultants and non-employee directors pursuant to the Aurum Stock Option Plans.
Since April 30, 1997, all option grants have been made consistent with past
practices and in accordance with the Aurum Stock Option Plan and Aurum's option
grant guidelines. Aurum will update the Aurum Schedules to reflect outstanding
shares and options as of the Effective Time. All shares of Aurum Common Stock
subject to issuance as aforesaid, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable, would be duly
authorized, validly issued, fully paid and nonassessable. The Aurum Schedules
list as of April 30, 1997, the name of the holder of such option, the exercise
price of such option, the number of shares as to which such option will have
vested at such date, the vesting schedule for such option and whether the
exercisability of such option will be accelerated in any way by the transactions
contemplated by this Agreement, and indicate the extent of acceleration, if any.
As of April 30, 1997, there were 136 participants in the Aurum 1996 Employee
Stock Purchase Plan.
2.3 Obligations With Respect to Capital Stock. Except as set forth in
-----------------------------------------
Section 2.2, there are no equity securities, partnership interests or similar
ownership interests of any class of Aurum, or any securities exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. Except for securities Aurum owns, directly or indirectly through
one or more subsidiaries, there are no equity securities, partnership interests
or similar ownership interests of any class of any subsidiary of Aurum, or any
security exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests, issued,
reserved for issuance or outstanding. Except as set forth in Section 2.2, there
are no options, warrants, equity securities, partnership interests or similar
ownership interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which Aurum or any of its subsidiaries is a party
or by which it is bound obligating Aurum or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem
or otherwise acquire, or
-8-
cause the repurchase, redemption or acquisition, of any shares of capital stock,
partnership interests or similar ownership interests of Aurum or any of its
subsidiaries or obligating Aurum or any of its subsidiaries to grant, extend,
accelerate the vesting of or enter into any such option, warrant, equity
security, call, right, commitment or agreement. There are no registration rights
and, to the knowledge of Aurum, with the exception of the Aurum Voting
Agreements to be entered into hereunder, there are no voting trusts, proxies or
other agreements or understandings with respect to any equity security of any
class of Aurum or with respect to any equity security, partnership interest or
similar ownership interest of any class of any of its subsidiaries. Stockholders
of Aurum are not entitled to dissenters rights under applicable state law.
2.4 Authority.
---------
(a) Aurum has all requisite corporate power and authority to enter
into this Agreement and the Aurum Stock Option Agreement and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby, and
the execution and delivery of the Aurum Stock Option Agreement and the
consummation of the transactions contemplated thereby, have been duly authorized
by all necessary corporate action on the part of Aurum, subject only to the
approval and adoption of this Agreement and the approval of the Merger by
Aurum's stockholders and the filing and recordation of the Certificate of Merger
pursuant to Delaware Law. A vote of the holders of at least a majority of the
outstanding shares of the Aurum Common Stock is necessary and sufficient for
Aurum's stockholders to approve and adopt this Agreement and approve the Merger.
This Agreement and the Aurum Stock Option Agreement have been duly executed and
delivered by Aurum and, assuming the due authorization, execution and delivery
by Baan and, if applicable, Merger Sub, constitute valid and binding obligations
of Aurum, enforceable in accordance with their respective terms, except as
enforceability may be limited by bankruptcy and other similar laws and general
principles of equity. The execution and delivery of this Agreement and the
Aurum Stock Option Agreement by Aurum do not, and the performance of this
Agreement and the Aurum Stock Option Agreement by Aurum will not, (i) conflict
with or violate the Certificate of Incorporation or Bylaws of Aurum or the
equivalent organizational documents of any of its subsidiaries, (ii) subject to
obtaining the approval and adoption of this Agreement and the approval of the
Merger by Aurum's stockholders as contemplated by Section 5.2 and compliance
with the requirements set forth in Section 2.4(b) below, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to Aurum
or any of its subsidiaries or by which its or any of their respective properties
is bound or affected, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or impair Aurum's rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Aurum or any of its
subsidiaries pursuant to, any material note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Aurum or any of its subsidiaries is a party or by which
Aurum or any of its subsidiaries or its or any of their respective properties
are bound or affected, except with respect to clause (iii) for any such
conflicts, violations, defaults or other occurrences that would not have a
Material Adverse Effect on Aurum. The Aurum Schedules list all material
consents, waivers and approvals under any of Aurum's or any of its subsidiaries'
agreements, contracts, licenses or leases required to be obtained in connection
with the consummation of the transactions contemplated hereby.
-9-
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission or
other governmental authority or instrumentality, foreign or domestic
("GOVERNMENTAL ENTITY"), is required by or with respect to Aurum in connection
with the execution and delivery of this Agreement and the Aurum Stock Option
Agreement or the consummation of the Merger, except for (i) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which
Aurum is qualified to do business, (ii) the filing of the Proxy Statement (as
defined in Section 2.19) with the Securities and Exchange Commission ("SEC") in
accordance with the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") and any clearance thereof by the SEC, (iii) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal, foreign state securities (or related) laws
and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), and the securities or antitrust laws of any foreign country, and
(iv) such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not be material to Aurum or Baan or have a
material adverse effect on the ability of the parties to consummate the Merger.
2.5 SEC Filings; Aurum Financial Statements.
---------------------------------------
(a) Aurum has filed all forms, reports and documents required to be
filed with the SEC since October 28, 1996 and has made available to Baan such
forms, reports and documents in the form filed with the SEC. All such required
forms, reports and documents (including those that Aurum may file subsequent to
the date hereof) are referred to herein as the "AURUM SEC REPORTS." As of their
respective dates, or in the case of registrations statements, as of their
effective dates, the Aurum SEC Reports (i) were prepared in accordance with and
complied with the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Aurum SEC Reports and (ii)
did not at the time they were filed or, in the case of registrations statements,
become effective (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of Aurum's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Aurum SEC Reports (the "AURUM
FINANCIALS"), including any Aurum SEC Report filed after the date hereof until
the Closing, (x) complied as to form in all material respects with the published
rules and regulations of the SEC with respect thereto, (y) was prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto) and (z) fairly presented the consolidated financial position
of Aurum and its subsidiaries as at the respective dates thereof and the
consolidated results of Aurum's operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments. The balance sheet of Aurum
contained in Aurum SEC Reports as of December 31, 1996 is hereinafter referred
to as the "AURUM BALANCE SHEET." Neither Aurum nor any of its subsidiaries has
any liabilities (absolute, accrued, contingent or otherwise) of a nature
required to be disclosed on a balance sheet or
-10-
in the related notes to the consolidated financial statements prepared in
accordance with GAAP which are, individually or in the aggregate, material to
the business, results of operations or financial condition of Aurum and its
subsidiaries taken as a whole, except liabilities (i) provided for in the Aurum
Balance Sheet or the Aurum Financials and the footnotes thereto, or (ii)
incurred since the date of the Aurum Balance Sheet in the ordinary course of
business consistent with past practices and in an aggregate amount not in excess
of $5,000,000.
(c) Aurum has heretofore furnished to Baan a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Aurum with the SEC pursuant to
the Securities Act or the Exchange Act.
2.6 Absence of Certain Changes or Events. Since the date of the Aurum
------------------------------------
Balance Sheet, Aurum has conducted its business in the ordinary course
consistent with past practice and there has not occurred: (i) any Material
Adverse Effect to Aurum; (ii) any acquisition, sale or transfer of any material
asset of Aurum or any of its subsidiaries other than in the ordinary course of
business and consistent with past practice; (iii) any material change in
accounting methods or practices (including any change in depreciation or
amortization policies or rates) by Aurum or any material revaluation by Aurum of
any of its or any of its subsidiaries' assets, except as required by concurrent
changes in GAAP; (iv) any declaration, setting aside, or payment of a dividend
or other distribution with respect to the shares of Aurum, or any direct or
indirect redemption, purchase or other acquisition by Aurum of any of its shares
of capital stock, except for the repurchase at cost of unvested shares held by
Aurum employees on the termination of their employment; (v) any material
contract entered into by Aurum or any of its subsidiaries, other than in the
ordinary course of business and as provided to Baan, or any material amendment
or termination of, or default under, any material contract to which Aurum or any
of its subsidiaries is a party or by which it is bound which would result in a
Material Adverse Effect on Aurum; or (vi) any negotiation or agreement by Aurum
or any of its subsidiaries to do any of the things described in the preceding
clauses (i) through (v) (other than negotiations with Baan and its
representatives regarding the transactions contemplated by this Agreement).
2.7 Taxes.
-----
Aurum and each of its subsidiaries, and any consolidated, combined,
unitary or aggregate group for Tax (as defined below) purposes of which Aurum or
any of its subsidiaries is or has been a member, has timely filed all Returns
(as defined below) required to be filed by it (other than those that are not,
individually or in the aggregate, material), has paid all Taxes shown thereon to
be due and has provided adequate accruals in all material respects in accordance
with GAAP in its financial statements for any Taxes that have not been paid,
whether or not shown as being due on any returns. In addition, (i) no material
claim for unpaid Taxes has become a lien against the property of Aurum or any of
its subsidiaries or is being asserted against Aurum or any of its subsidiaries,
(ii) no audit of any Tax Return of Aurum or any of its subsidiaries is being
conducted by a Tax authority (A) as of the date of this Agreement and (B) which,
as of the Closing Date, has had and could reasonably be expected to have a
Material Adverse Effect on Aurum and its subsidiaries, (iii) no extension of the
statute of limitations on the assessment of any Taxes has been granted by Aurum
or any of its subsidiaries and is currently in effect (A) as of the date of this
Agreement and (B) which, as of the Closing Date, has had and could reasonably
-11-
be expected to have a Material Adverse Effect on Aurum and its subsidiaries and
(iv) there is no agreement, contract or arrangement to which Aurum or any of its
subsidiaries is a party that may result in the payment of any amount that would
not be deductible pursuant to Sections 280G, 162 or 404 of the Code. As used
herein, "TAXES" shall mean all taxes of any kind, including, without limitation,
those on or measured by or referred to as income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value added, property or windfall profits
taxes, customs, duties or similar fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any governmental authority, domestic or foreign.
As used herein, "RETURN" shall mean any return, report or statement required to
be filed with any governmental authority with respect to Taxes.
2.8 Title to Properties; Absence of Liens and Encumbrances.
------------------------------------------------------
(a) The Aurum Schedules list the real property owned by Aurum. The
Aurum Schedules list each real property lease with annual lease payments of
$100,000 or more to which Aurum is a party and each amendment thereto. All such
current leases are in full force and effect, are valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing default or event of default (or event which with notice or
lapse of time, or both, would constitute a default) that would give rise to a
claim in an amount greater than $100,000.
(b) Aurum has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in its
business, free and clear of any liens, pledges, charges, claims, security
interests or other encumbrances of any sort ("LIENS"), except as reflected in
the Aurum Financials, the Aurum SEC Reports or in the Aurum Schedules and
except for liens for taxes not yet due and payable or liens imposed by law and
incurred in the ordinary course of business for obligations not yet due to
carriers, warehousemen, laborers, materials men and the like and such
imperfections of title and encumbrances, if any, which are not material in
character, amount or extent, and which do not materially detract from the value,
or materially interfere with the present use, of the property subject thereto or
affected thereby.
2.9 Intellectual Property.
---------------------
(a) Aurum (including, for all purposes under this Section 2.9, all of
Aurum's subsidiaries) owns, or has a valid and perpetual license under, all
patents, trademarks, trade names, service marks, copyrights, any applications
for all of the foregoing, trade secrets and know-how that are required for the
conduct of business of Aurum (including, without limitation, the development,
production and marketing of Aurum's products) as currently conducted (the "AURUM
IP RIGHTS"), with sufficient rights for the conduct of Aurum's business as
currently conducted.
(b) Schedule 2.9(b) of the Aurum Schedules sets forth a complete list
of all patents, registered copyrights, registered trademarks, trade names and
service marks and any applications for all of the foregoing, included in Aurum
IP Rights, and specifies, where applicable, the jurisdictions in which each such
Aurum IP Right has been issued or registered or in which an application for such
issuance and registration has been filed, including the respective registration
or application numbers and the names of all registered owners. Schedule 2.9(b)
of Aurum Schedules sets forth the list of all material licenses,
-12-
sublicenses and other agreements to which Aurum is a party (with subsidiaries
clearly identified) and pursuant to which Aurum or any other person is licensed
or otherwise has rights under any Aurum IP Right (excluding object code licenses
granted by Aurum to end-users in the ordinary course of business that permit use
of software products without a right to modify, distribute or sublicense the
same ("END-USER LICENSES") and excluding standard licenses granted to Aurum by
software vendors covering software which is broadly distributed by such
licensors). The execution and delivery of this Agreement by Aurum, and the
consummation of the transactions contemplated hereby, will neither cause Aurum
to be in material violation or default under any such license, sublicense or
other agreement, nor entitle any other party to any such license, sublicense or
agreement to terminate or modify such license, sublicense or agreement. Except
as set forth in Schedule 2.9(a) or 2.9(b) of the Aurum Schedules, Aurum (i) is
the sole and exclusive owner of, with all right, title and interest in and to
(free and clear of any liens or encumbrances), Aurum IP Rights, or (ii) is a
licensee under or otherwise possesses legally enforceable rights under the Aurum
IP Rights under valid and binding agreements listed in Schedule 2.9(b) of the
Aurum Schedules or excluded therefrom as permitted by this Section 2.9.
(c) No claims against Aurum, or to Aurum's knowledge, its licensors or
licensees with respect to Aurum IP Rights have been asserted or are, to Aurum's
knowledge, threatened by any person, nor to Aurum's knowledge, are there any
valid grounds for any claims, (i) to the effect that the manufacture, sale, use,
offer for sale, importation, reproduction, distribution or preparation of
derivative works of any of the products of Aurum infringes on any copyright,
patent issued at least 60 days prior to the date hereof, trademark, service
▇▇▇▇, trade secret or other proprietary right, (ii) against the manufacture,
sale, use, offer for sale, importation, reproduction, distribution or
preparation of derivative works by Aurum of any computer software programs and
applications and tangible or intangible proprietary information or material used
in Aurum's business as currently conducted or as currently proposed to be
conducted by Aurum, or (iii) challenging the ownership by Aurum, or the validity
or effectiveness of any, of Aurum IP Rights. To Aurum's knowledge, there is no
material unauthorized use, infringement or misappropriation under any Aurum IP
Rights by any third party, including any employee or former employee of Aurum.
To the knowledge of Aurum, no Aurum IP Right or product of Aurum is subject to
any outstanding decree, order, judgment, or stipulation restricting in any
manner the licensing thereof by or to Aurum. It is Aurum's policy to have each
employee, consultant or contractor of Aurum execute a proprietary information
and confidentiality agreement substantially in the form of Aurum's standard
forms of such agreement, and substantially all of Aurum's employees, consultants
and contractors have executed such an agreement. All computer software included
in Aurum's products (i) has been either created by employees of Aurum within the
scope of their employment or otherwise on a work-for-hire basis or by
consultants or contractors who have created such software themselves and have
assigned all right, title and interest they have in such software to Aurum or
(ii) is licensed to Aurum pursuant to valid and binding agreements.
(d) Aurum has taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all Aurum IP Rights and the intellectual property rights of third
parties entrusted to them.
-13-
2.10 Compliance; Permits; Restrictions.
---------------------------------
(a) Except as disclosed in the Aurum SEC Reports filed prior to the
date hereof, neither Aurum nor any of its subsidiaries is, in any material
respect, in conflict with, or in default or violation of (i) to the knowledge of
Aurum, any law, rule, regulation, order, judgment or decree applicable to Aurum
or any of its subsidiaries or by which Aurum or any of its subsidiaries or any
of their respective properties is bound or affected, or (ii) any material note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Aurum or any of its
subsidiaries is a party or by which Aurum or any of its subsidiaries or its or
any of their respective properties is bound or affected. Except as disclosed in
the Aurum SEC Reports filed prior to the date hereof, to the knowledge of Aurum,
no investigation or review by any Governmental Entity is pending or threatened
against Aurum or any of its subsidiaries, nor has any Governmental Entity
indicated an intention to conduct the same, which investigation or review is
reasonably likely to have a Material Adverse Effect on Aurum. There is no
material agreement, judgment, injunction, order or decree binding upon Aurum or
any of its subsidiaries which has or could reasonably be expected to have the
effect of prohibiting or materially impairing any business practice of Aurum or
any of its subsidiaries, any acquisition of material property by Aurum or any of
its subsidiaries or the conduct of business by Aurum as currently conducted.
(b) Aurum and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities that are material
to the operation of the business of Aurum (collectively, the "AURUM PERMITS").
Aurum and its subsidiaries are in compliance in all material respects with the
terms of the Aurum Permits.
2.11 Litigation. Except as disclosed in the Aurum SEC Reports filed prior
----------
to the date hereof, there is no action, suit, proceeding, claim, arbitration or
investigation pending, or as to which Aurum or any of its subsidiaries has
received any notice of assertion nor, to Aurum's knowledge, is there a
threatened action, suit, proceeding, claim, arbitration or investigation against
Aurum or any of its subsidiaries which is reasonably likely to have a Material
Adverse Effect on Aurum. Aurum is not aware of any basis for any action, suit,
proceeding, claim, arbitration or proceeding of the type described in the
preceding sentence, and Aurum has no knowledge of any unasserted claim, the
assertion of which is likely, and which, if asserted, will seek damages, an
injunction or other legal, equitable, monetary or nonmonetary relief, which
claim individually or collectively with other such unasserted claims if granted
would have a Material Adverse Effect on Aurum. To Aurum's knowledge, no
Governmental Entity has at any time challenged or questioned in writing the
legal right of Aurum to develop, offer or sell any of its products in the
present manner or style thereof.
2.12 Brokers' and Finders' Fees. Except for fees payable to ▇▇▇▇▇ &
--------------------------
Company pursuant to an engagement letter dated May 6, 1997, a copy of which has
been provided to Baan, Aurum has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
-14-
2.13 Employee Benefit Plans.
----------------------
(a) With respect to each material employee benefit plan, program,
arrangement and contract (including, without limitation, any "employee benefit
plan" as defined in Section 3(3) of ERISA) maintained or contributed to by Aurum
or any trade or business which is under common control with Aurum within the
meaning of Section 414 of the Code (the "AURUM EMPLOYEE PLANS"), Aurum has made
available or will make available by May 31, 1997 to Baan a true and complete
copy of, to the extent applicable, (i) such Aurum Employee Plan, (ii) the most
recent annual report (Form 5500), (iii) each trust agreement related to such
Aurum Employee Plan, (iv) the most recent summary plan description for each
Aurum Employee Plan for which such a description is required, (v) the most
recent actuarial report relating to any Aurum Employee Plan subject to Title IV
of ERISA and (vi) the most recent IRS determination letter issued with respect
to any Aurum Employee Plan.
(b) Each Aurum Employee Plan which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination from the IRS
covering the provisions of the Tax Reform Act of 1986 stating that such Aurum
Employee Plan is so qualified and nothing has occurred since the date of such
letter that could reasonably be expected to affect the qualified status of such
plan. Each Aurum Employee Plan has been operated in all material respects in
accordance with its terms and the requirements of applicable law. Neither Aurum
nor any ERISA Affiliate of Aurum has incurred or is reasonably expected to incur
any material liability under Title IV of ERISA in connection with any Aurum
Employee Plan.
2.14 Employees; Labor Matters. Between January 1, 1996 and the date of this
------------------------
Agreement, to Aurum's knowledge, no employee of Aurum (i) has violated any
employment contract, patent disclosure agreement or non competition agreement
between such employee and any former employer of such employee due to such
employee being employed by Aurum and disclosing to Aurum trade secrets or
proprietary information of such employer or (ii) has given notice to Aurum, nor
is Aurum otherwise aware that any employee intends to terminate his or her
employment with Aurum except for terminations of a nature and number that are
consistent with Aurum's prior experience. To Aurum's knowledge, there are no
activities or proceedings of any labor union to organize any employees of Aurum
or any of its subsidiaries and there are no strikes, or material slowdowns, work
stoppages or lockouts, or threats thereof by or with respect to any employees of
Aurum or any of its subsidiaries. Aurum is not, and has never been, a party to
any collective bargaining agreement. Aurum and its subsidiaries are, and since
January 1, 1996, Aurum and its subsidiaries have been in compliance in all
material respects with all applicable laws regarding employment practices, terms
and conditions of employment, and wages and hours (including, without
limitation, ERISA, WARN or any similar state or local law).
2.15 Environmental Matters.
---------------------
(a) Hazardous Material. Except as would not reasonably be likely to
------------------
result in a material liability to Aurum, no underground storage tanks and no
amount of any substance that has been designated by any Governmental Entity or
by applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCBs, asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the
-15-
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, (a "HAZARDOUS MATERIAL"), but excluding
office and janitorial supplies, are present, as a result of the actions of Aurum
or any of its subsidiaries or, to Aurum's knowledge, as a result of any actions
of any third party or otherwise, in, on or under any property, including the
land and the improvements, ground water and surface water thereof, that Aurum or
any of its subsidiaries has at any time owned, operated, occupied or leased.
(b) Hazardous Materials Activities. Except as would not reasonably be
------------------------------
likely to result in a material liability to Aurum, neither Aurum nor any of its
subsidiaries has transported, stored, used, manufactured, disposed of, released
or exposed its employees or others to Hazardous Materials in violation of any
law in effect on or before the Closing Date, nor has Aurum or any of its
subsidiaries disposed of, transported, sold, used, released, exposed its
employees or others to or manufactured any product containing a Hazardous
Material (collectively "HAZARDOUS MATERIALS ACTIVITIES") in violation of any
rule, regulation, treaty or statute promulgated by any Governmental Entity in
effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity.
(c) Permits. Aurum and its subsidiaries currently hold all
-------
environmental approvals, permits, licenses, clearances and consents (the "AURUM
ENVIRONMENTAL PERMITS") necessary for the conduct of Aurum's and its
subsidiaries' Hazardous Material Activities and other businesses of Aurum and
its subsidiaries as such activities and businesses are currently being
conducted.
(d) Environmental Liabilities. No material action, proceeding,
-------------------------
revocation proceeding, amendment procedure, writ, injunction or claim is
pending, or to Aurum's knowledge, threatened concerning any Aurum Environmental
Permit, Hazardous Material or any Hazardous Materials Activity of Aurum or any
of its subsidiaries. Aurum is not aware of any fact or circumstance which could
involve Aurum or any of its subsidiaries in any material environmental
litigation or impose upon Aurum any material environmental liability.
2.16 Agreements, Contracts and Commitments. Except as set forth in the
-------------------------------------
Aurum Schedules, neither Aurum nor any of its subsidiaries is a party to or is
bound by:
(a) any employment or consulting agreement, contract or commitment
with any officer or director level employee or member of Aurum's Board of
Directors, other than those that are terminable by Aurum or any of its
subsidiaries on no more than thirty days notice without liability or financial
obligation, except to the extent general principles of wrongful termination law
may limit Aurum's or any of its subsidiaries' ability to terminate employees at
will;
(b) any agreement or plan, including without limitation any stock
option plan, stock appreciation right plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement;
-16-
(c) any agreement of indemnification or guaranty not entered into in
the ordinary course of business other than indemnification agreements between
Aurum or any of its subsidiaries and any of its officers or directors;
(d) any agreement, contract or commitment containing any covenant
limiting the freedom of Aurum or any of its subsidiaries to engage in any line
of business or compete with any person or granting any exclusive distribution
rights;
(e) any agreement, contract or commitment currently in force relating
to the disposition or acquisition of assets not in the ordinary course of
business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise;
(f) any material joint marketing or development agreement;
(g) any agreement, contract or commitment currently in force to
provide or receive source code for any product, service or technology; or
(h) any agreement, contract or commitment currently in force to
license any third party to manufacture or reproduce any Aurum product, service
or technology except as a distributor in the normal course of business.
Neither Aurum nor any of its subsidiaries, nor to Aurum's knowledge any
other party to a Aurum Contract (as defined below), has breached, violated or
defaulted under, or received notice that it has breached violated or defaulted
under, any of the material terms or conditions of any of the agreements,
contracts or commitments to which Aurum or any of its subsidiaries is a party or
by which it is bound of the type described in clauses (a) through (h) above (any
such agreement, contract or commitment, a "AURUM CONTRACT") in such a manner as
would permit any other party to cancel or terminate any such Aurum Contract, or
would permit any other party to seek damages, which would be reasonably likely
to cause a Material Adverse Effect on Aurum.
2.17 Pooling of Interests. To the knowledge of Aurum, based on
--------------------
consultation with its independent accountants, neither Aurum nor any of its
directors, officers, affiliates or stockholders has taken any action which would
preclude Baan's ability to account for the Merger as a pooling of interests.
2.18 Statements; Proxy Statement/Prospectus. The information supplied by
--------------------------------------
Aurum for inclusion in the Registration Statement (as defined in Section 3.4(b))
shall not at the time the Registration Statement becomes effective under the
Securities Act 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 not, in light of the circumstances under which they were
made, misleading. The information supplied by Aurum for inclusion in the proxy
statement/prospectus to be sent to the stockholders of Aurum in connection with
the meeting of Aurum's stockholders to consider the approval and adoption of
this Agreement and the approval of the Merger (the "AURUM 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 Aurum's stockholders, at the time of the Aurum
Stockholders' Meeting or at the Effective Time, contain any untrue statement of
a material fact or omit
-17-
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not false or misleading; or omit to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the Aurum Stockholders' Meeting which has become
false or misleading. The Proxy Statement will comply as to form in all material
respects with the provisions of the Exchange Act and the rules and regulations
thereunder. If at any time prior to the Effective Time any event relating to
Aurum or any of its affiliates, officers or directors should be discovered by
Aurum which should be set forth in an amendment to the Registration Statement or
a supplement to the Proxy Statement, Aurum shall promptly inform Baan.
Notwithstanding the foregoing, Aurum makes no representation or warranty with
respect to any information supplied by Baan or Merger Sub which is contained in
any of the foregoing documents.
2.19 Board Approval. The Board of Directors of Aurum has, as of the date
--------------
of this Agreement, unanimously determined (i) that the Merger is fair to, and in
the best interests of Aurum and its stockholders, and (ii) to recommend that the
stockholders of Aurum approve and adopt this Agreement and approve the Merger.
2.20 Fairness Opinion. Aurum's Board of Directors has received a written
----------------
opinion from ▇▇▇▇▇ & Company dated as of the date of the Agreement, to the
effect that as of such date, the Exchange Ratio is fair to Aurum's stockholders
from a financial point of view and has delivered to Baan a copy of such opinion.
2.21 Section 203 of the Delaware General Corporation Law Not Applicable.
------------------------------------------------------------------
The Board of Directors of Aurum has taken all actions so that the restrictions
contained in Section 203 of the Delaware General Corporation Law applicable to a
"business combination" (as defined in such Section 203) will not apply to the
execution, delivery or performance of this Agreement or the Stock Option
Agreement or to the consummation of the Merger or the other transactions
contemplated by this Agreement or the Stock Option Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BAAN AND MERGER SUB
Baan and Merger Sub represent and warrant to Aurum, subject to the
exceptions specifically disclosed in writing in the disclosure letter
(indicating the relevant Section of this Agreement) supplied by Baan to Aurum
dated as of the date hereof and certified by a duly authorized officer of Baan
(the "BAAN SCHEDULES"), as follows:
3.1 Organization of Baan and Merger Sub.
-----------------------------------
(a) Each of Baan and Merger Sub is a corporation duly organized,
validly existing and in good standing, or its equivalent if any, under the laws
of the jurisdiction of its incorporation; has the corporate power and authority
to own, lease and operate its assets and property and to carry on its business
as now being conducted and as proposed to be conducted; and is duly qualified or
licensed to
-18-
do business and is in good standing in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary, except where the failure to be
so qualified would not have a Material Adverse Effect (as defined below) on
Baan.
(b) Baan has delivered or made available to Aurum a true and correct
copy of the constitutive documents of Baan and Merger Sub, each as amended to
date, and each such instrument is in full force and effect. Baan is not in
violation of any of the provisions of its constitutive documents.
(c) When used in connection with Baan, the term "MATERIAL ADVERSE
EFFECT" means, for purposes of this Agreement, any change, event or effect that
is materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of Baan and its subsidiaries taken
as a whole.
3.2 Baan and Merger Sub Capital Structure.
-------------------------------------
(a) The authorized capital stock of Baan consists of 350,000,000
Common Shares, of which approximately 90,885,678 shares were issued and
outstanding as of March 31, 1997. The authorized capital stock of Merger Sub
consists of 100 shares of Common Stock, $.01 par value, all of which, as of the
date hereof, are issued and outstanding and are held by Baan. Merger Sub was
formed on May 7, 1997, for the purpose of consummating a merger and has no
material assets or liabilities except as necessary for such purpose. All
outstanding Baan Common Shares are duly authorized, validly issued, fully paid
and nonassessable and have not been issued in violation of any preemptive or
other statutory right of shareholders.
(b) The shares of Baan Common Shares to be issued pursuant to the
Merger, when issued in accordance with the terms and provisions of this
Agreement, will be duly authorized, validly issued, fully paid and non-
assessable and will not be subject to any preemptive or other statutory right of
shareholders and will be issued in compliance with applicable U.S. federal and
state and Netherlands securities laws.
3.3 Authority.
---------
(a) Each of Baan and Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Baan and Merger Sub, subject
only to the filing and recordation of the Certificate of Merger pursuant to
Delaware Law. This Agreement has been duly executed and delivered by each of
Baan and Merger Sub and, assuming the due authorization, execution and delivery
by Aurum, constitutes the valid and binding obligation of Baan and Merger Sub,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws and general principles of equity.
The execution and delivery of this Agreement by each of Baan and Merger Sub does
not, and the performance of this Agreement by each of Baan and Merger Sub will
not, (i) conflict with or violate the Articles of Association of Baan or the
Certificate of Incorporation or Bylaws of Merger Sub, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree
-19-
applicable to Baan or Merger Sub or by which any of their respective properties
is bound or affected or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or impair Baan's rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Baan or Merger Sub pursuant
to, any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Baan or
Merger Sub is a party or by which Baan or Merger Sub or any of their respective
properties are bound or affected.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Baan or Merger Sub in connection with the execution and delivery of
this Agreement or the consummation of the Merger, except for (i) the filing of a
Form F-4 Registration Statement (the "REGISTRATION STATEMENT") with the SEC in
accordance with the Securities Act and the declaration of effectiveness of such
Registration Statement by the SEC, (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware, (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws and the HSR
Act and the securities or antitrust laws of any foreign country (including, for
the avoidance of doubt, the rules and regulations of the Amsterdam Exchanges
N.V.), and (iv) such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not be material to Baan or
Aurum or have a material adverse effect on the ability of the parties to
consummate the Merger.
3.4 SEC Filings; Baan Financial Statements.
--------------------------------------
(a) Baan has filed all forms, reports and documents required to be
filed with the SEC since January 1, 1996, and has made available to Aurum such
forms, reports and documents in the form filed with the SEC. All such required
forms, reports and documents (including those that Baan may file subsequent to
the date hereof) are referred to herein as the "BAAN SEC REPORTS." As of their
respective dates, the Baan SEC Reports (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Baan SEC
Reports, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. None of Baan' subsidiaries is required to file any forms,
reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in Baan SEC Reports (the "BAAN
FINANCIALS"), including any Baan SEC Reports filed after the date hereof until
the Closing, (x) complied as to form in all material respects with the published
rules and regulations of the SEC with respect thereto, (y) was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto or, in the case of
unaudited interim financial statements, as may be permitted by the SEC on Form
10-Q under the Exchange Act) and (z) fairly presented the consolidated financial
position of Baan and its subsidiaries as at the respective dates thereof and the
consolidated results of Baan'
-20-
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring year-
end adjustments. The balance sheet of Baan contained in Baan SEC Reports as of
March 31, 1997 is hereinafter referred to as the "BAAN BALANCE SHEET."
3.5 Absence of Certain Changes or Events. Since the date of the Baan
------------------------------------
Balance Sheet through the date of this Agreement, there has not been any
Material Adverse Effect on Baan.
3.6 Statements; Proxy Statement/Prospectus. The information supplied by
--------------------------------------
Baan for inclusion in the Registration Statement shall not at the time the
Registration Statement becomes effective under the Securities Act, 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 not
misleading. The information supplied by Baan for inclusion in the Proxy
Statement shall not, on the date the Proxy Statement is first mailed to Aurum's
stockholders, at the time of the Aurum Stockholders' Meeting or at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they 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 for the Aurum Stockholders' Meeting which has become false or
misleading. If at any time prior to the Effective Time, any event relating to
Baan or any of its affiliates, officers or directors should be discovered by
Baan which should be set forth in an amendment to the Registration Statement or
a supplement to the Proxy Statement, Baan shall promptly inform Aurum.
Notwithstanding the foregoing, Baan makes no representation or warranty with
respect to any information supplied by Aurum which is contained in any of the
foregoing documents.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Aurum and Baan. During the period from the
-------------------------------------
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms or the Effective Time, Aurum (which for the
purposes of this Article 4 shall include Aurum and each of its subsidiaries) and
Baan agree, except (i) as otherwise contemplated by this Agreement, or (ii) to
the extent that the other party shall otherwise consent in writing, to carry on
its business in the usual, regular and ordinary course, in substantially the
same manner as heretofore conducted, to pay its debts and taxes when due subject
to good faith disputes over such debts or taxes, to pay or perform other
material obligations when due, and use its commercially reasonable efforts
consistent with past practices and policies to preserve intact its present
business organization, keep available the services of its present officers and
employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings. Baan agrees to cause its material subsidiaries to act in accordance
with the foregoing provisions.
4.2 Certain Actions by Aurum. In addition notwithstanding Section 4.1
------------------------
above, without the prior consent of Baan, Aurum shall not do any of the
following, nor shall Aurum permit its subsidiaries to do any of the following:
-21-
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant or director stock plans or authorize cash
payments in exchange for any options granted under any of such plans;
(b) Grant any severance or termination pay to any officer or employee
except payments in amounts consistent with policies and past practices or
pursuant to written agreements outstanding, or policies existing, on the date
hereof and as previously disclosed in writing to Baan, or adopt any new
severance plan;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights to the Aurum IP Rights (other
than in the ordinary course of business and in the best interests of Aurum), or
enter into grants of future patent rights, other than licenses in the ordinary
course of business and consistent with past practice;
(d) Declare or pay any dividends on or make any other distributions
(whether in cash, stock, equity securities or property) in respect of any
capital stock or split, combine or reclassify any capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or in
substitution for any capital stock;
(e) Repurchase or otherwise acquire, directly or indirectly, any
shares of capital stock, or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
repurchase any such shares, warrants, options or convertible securities, except
for the repurchase at cost of unvested shares held by Aurum employees on the
termination of their employment;
(f) Issue, deliver, sell, authorize or propose the issuance, delivery
or sale of, any shares of capital stock or any securities convertible into
shares of capital stock, or subscriptions, rights, warrants or options to
acquire any shares of capital stock or any securities convertible into shares of
capital stock, or enter into other agreements or commitments of any character
obligating it to issue any such shares or convertible securities, other than the
issuance of (i) shares of Aurum Common Stock pursuant to the exercise of stock
options therefor outstanding as of the date of this Agreement or granted
pursuant to clause (iv), (ii) shares of Aurum Common Stock issuable to
participants in the Aurum Employee Stock Purchase Plan, consistent with past
practice, and the terms thereof, (iii) shares of the Aurum Common Stock issuable
pursuant to the Aurum Stock Option Agreement, and (iv) options to purchase Aurum
Common Stock granted at fair market value, consistent with past practices and in
accordance with the Aurum Stock Option Plans and Aurum's option grant
guidelines;
(g) Cause, permit or propose any amendments to any charter document or
Bylaw (or similar governing instruments of any subsidiaries);
-22-
(h) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a material portion of the assets of, or
by any other manner, any business or any corporation, partnership interest,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets which are material, individually or in
the aggregate, to the business of Aurum or enter into any material joint
ventures, strategic partnerships or alliances;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of Aurum, except in the ordinary course of business consistent with
past practice;
(j) Incur any indebtedness for borrowed money (other than ordinary
course trade payables or pursuant to existing credit facilities in the ordinary
course of business) or guarantee any such indebtedness or issue or sell any debt
securities or warrants or rights to acquire debt securities of Aurum or
guarantee any debt securities of others;
(k) Adopt or amend any employee benefit or employee stock purchase or
employee option plan, or enter into any employment contract, pay any special
bonus or special remuneration to any director or employee other than in the
ordinary course of business consistent with past practice, or increase the
salaries or wage rates of its officers or employees other than in the ordinary
course of business, consistent with past practice;
(l) Pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
any such payment, discharge or satisfaction in the ordinary course of business;
(m) Make any grant of exclusive rights to any third party;
(n) Enter into any material partnership arrangements, joint
development agreements or strategic alliances, agreements to create standards or
agreements with "Standards" bodies;
(o) Take any action that would be reasonably likely to interfere with
Baan's ability to account for the Merger as a pooling of interests whether or
not otherwise permitted by the provisions of this Article IV; or
(p) Agree in writing or otherwise to take any of the actions described
in Article 4 (a) through (o) above.
For purposes of the provisions of this Section 4.2, the prior consent of Baan
shall be deemed to have been received if, prior to the taking of any of the
foregoing actions, such action shall have been discussed with ▇▇▇▇ ▇▇▇▇▇▇▇,
Baan's Executive Vice President, and she shall have received such additional
information as she may have reasonably requested and, after such discussion and
receipt of any such additional information, she shall have not objected to the
taking of the proposed action.
4.3 Baan Acquisitions. During the period from the date of this Agreement
-----------------
and until the earlier of the termination of this Agreement pursuant to its terms
or the Effective Time, Baan shall not acquire
-23-
or agree to acquire by merging or consolidating with, or by purchasing any
equity interest in or a material portion of the assets of, any direct competitor
of Aurum in the United States if such acquisition would have a reasonable
likelihood of preventing or materially delaying the consummation of the
transactions contemplated hereby or would result in a Material Adverse Effect on
Aurum or Baan.
4.4 No HSR Violation. During the period from the date of this Agreement
----------------
and until the earlier of the termination of this Agreement pursuant to its terms
or the Effective Time, neither party is required to take any action pursuant to
Article IV that would cause a violation of HSR.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Proxy Statement/Prospectus; Registration Statement; Other Filings;
------------------------------------------------------------------
Board Recommendations.
---------------------
(a) As promptly as practicable after the execution of this Agreement,
Aurum and Baan will prepare and file with the SEC the Proxy Statement, and Baan
will prepare and file with the SEC the Registration Statement in which the Proxy
Statement will be included as a prospectus. Each of Aurum and Baan will respond
to any comments of the SEC, will use its respective reasonable best efforts to
have the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing and will cause the Proxy Statement to
be mailed to the Aurum stockholders at the earliest practicable time. As
promptly as practicable after the date of this Agreement, Aurum and Baan will
prepare and file any other filings required under the Exchange Act, the
Securities Act or any other U.S. federal, U.S. State or non-U.S. laws relating
to the Merger and the transactions contemplated by this Agreement (the "OTHER
FILINGS"). Each of Aurum and Baan will notify the other promptly upon the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff or any other government officials for amendments or supplements to
the Registration Statement, the Proxy Statement or any Other Filing or for
additional information and will supply the other with copies of all
correspondence between such party or any of its representatives, on the one
hand, and the SEC, or its staff or any other government officials, on the other
hand, with respect to the Registration Statement, the Proxy Statement, the
Merger or any Other Filing. The Proxy Statement, the Registration Statement and
the Other Filings will comply in all material respects with all applicable
requirements of law and the rules and regulations promulgated thereunder.
Whenever any event occurs which is required to be set forth in an amendment or
supplement to the Proxy Statement, the Registration Statement or any Other
Filing, Aurum or Baan, as the case may be, will promptly inform the other of
such occurrence and cooperate in filing with the SEC or its staff or any other
government officials, and/or mailing to stockholders of Aurum, such amendment or
supplement.
(b) Subject to the provisions of Section 5.4(b), the Proxy Statement
will include the recommendation of the Board of Directors of Aurum in favor of
adoption and approval of this Agreement and approval of the Merger (except that
the Board of Directors of Aurum may withdraw, modify or refrain from making such
recommendation to the extent that the Board determines, in good faith, after
consultation with outside legal counsel, that compliance with the Board's
fiduciary duties under applicable law would require it to do so).
-24-
5.2 Meeting of Stockholders. Promptly after the date hereof, Aurum will
-----------------------
take all action necessary in accordance with the Delaware General Corporation
Law and its Certificate of Incorporation and Bylaws to convene the Aurum
Stockholders' Meeting to be held as promptly as practicable, and in any event
(to the extent permissible under applicable law) within 45 days after the
declaration of effectiveness of the Registration Statement, for the purpose of
voting upon this Agreement and the Merger. Subject to the provisions of Section
5.4(b), Aurum will use its reasonable best efforts to solicit from its
stockholders proxies in favor of the adoption and approval of this Agreement and
the approval of the Merger and will take all other action necessary or advisable
to secure the vote or consent of its stockholders required by the rules of the
National Association of Securities Dealers, Inc. or Delaware Law to obtain such
approvals.
5.3 Confidentiality; Access to Information.
--------------------------------------
(a) The parties acknowledge that Aurum and Baan have previously
executed a Confidential Disclosure Agreement, dated as of May 8, 1997 (the
"CONFIDENTIALITY AGREEMENT"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms.
(b) Access to Information. Each of Aurum and Baan will afford the
---------------------
other party and its accountants, counsel and other representatives reasonable
access during normal business hours to the properties, books, records and
personnel of such party during the period prior to the Effective Time to obtain
all information concerning the business, including the status of product
development efforts, properties, results of operations and personnel of such
party, as the other party may reasonably request. No information or knowledge
obtained in any investigation pursuant to this Section 5.3 will affect or be
deemed to modify any representation or warranty contained herein or the
conditions to the obligations of the parties to consummate the Merger.
5.4 No Solicitation.
---------------
(a) Subject to the provisions of Section 5.4(b), from and after the
date of this Agreement until the earlier of the Effective Time or termination of
this Agreement pursuant to its terms, Aurum and its subsidiaries will not, and
will instruct their respective directors, officers, employees, representatives,
investment bankers, agents and affiliates not to, directly or indirectly, (i)
solicit or knowingly encourage submission of, any Acquisition Proposal (as
defined below) by any person, entity or group (other than Baan and its
affiliates, agents and representatives), or (ii) participate in any discussions
or negotiations with, or disclose any non-public information concerning Aurum or
any of its subsidiaries to, or afford any access to the properties, books or
records of Aurum or any of its subsidiaries to, or otherwise assist or
facilitate, or enter into any agreement or understanding with, any person,
entity or group (other than Baan and its affiliates, agents and
representatives), in connection with any Acquisition Proposal with respect to
Aurum. For the purposes of this Agreement, an "ACQUISITION PROPOSAL" means any
proposal or offer relating to (i) any merger, consolidation, sale or license of
substantial assets or similar transactions involving Aurum or any of its
subsidiaries (other than sales or licenses of assets or inventory in the
ordinary course of business or as permitted under the terms of this Agreement),
(ii) sale by Aurum of any shares of capital stock of Aurum (including without
limitation by way of a tender offer or an exchange offer) except as may be
permitted pursuant to Article 4, (iii) the acquisition by any person of
beneficial ownership or a right to acquire beneficial ownership of, or the
-25-
formation of any "group" (as defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) which beneficially owns, or has the right
to acquire beneficial ownership of, 10% or more of the then outstanding shares
of capital stock of Aurum (except for acquisitions for passive investment
purposes of not more than 15% of the then outstanding shares of capital stock of
Aurum only in circumstances where the person or group qualifies for and files a
Schedule 13G with respect thereto and does not become obligated to file a
Schedule 13D); or (iv) any public announcement of a proposal, plan or intention
to do any of the foregoing or any agreement to engage in any of the foregoing.
Aurum will immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing. Aurum will (i) notify Baan as promptly as practicable if it receives
any proposal or written inquiry or written request for information in connection
with an Acquisition Proposal or potential Acquisition Proposal and (ii) as
promptly as practicable notify Baan of the significant terms and conditions of
any such Acquisition Proposal. In addition, subject to the other provisions of
this Section 5.4, from and after the date of this Agreement until the earlier of
the Effective Time and termination of this Agreement pursuant to its terms,
Aurum and its subsidiaries will not, and will instruct their respective
directors, officers, employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, make or authorize any public
statement, recommendation or solicitation in support of any Acquisition Proposal
made by any person, entity or group (other than Baan); provided, however, that
-------- -------
nothing herein shall prohibit Aurum's Board of Directors from taking and
disclosing to Aurum's stockholders a position with respect to a tender offer
pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act.
(b) Notwithstanding the provisions of paragraph (a) above, prior to
the Effective Time, Aurum may, to the extent the Board of Directors of Aurum
determines, in good faith, after consultation with outside legal counsel, that
the Board's fiduciary duties under applicable law require it to do so,
participate in discussions or negotiations with, and, subject to the
requirements of paragraph (c), below, furnish information to any person, entity
or group after such person, entity or group has delivered to Aurum in writing,
an unsolicited bona fide Acquisition Proposal which the Board of Directors of
Aurum in its good faith reasonable judgment determines, after consultation with
its independent legal and financial advisors, would result in a transaction more
favorable than the Merger to the stockholders of Aurum (a "AURUM ALTERNATIVE
PROPOSAL"). In addition, notwithstanding the provisions of paragraph (a) above,
in connection with a possible Acquisition Proposal, Aurum may refer any third
party to this Section 5.4 or make a copy of this Section 5.4 available to a
third party. In the event Aurum receives a Aurum Alternative Proposal, nothing
contained in this Agreement (but subject to the terms hereof) will prevent the
Board of Directors of Aurum from recommending such Aurum Alternative Proposal to
its Stockholders, if the Board determines, in good faith, after consultation
with outside legal counsel, that such action is required by its fiduciary duties
under applicable law; in such case, the Board of Directors of Aurum may
withdraw, modify or refrain from making its recommendation set forth in Section
5.1(b), and, to the extent it does so, Aurum may refrain from soliciting proxies
to secure the vote of its stockholders as may be required by Section 5.2;
provided, however, that Aurum shall (i) provide at least forty-eight (48) hours
-------- -------
prior notice of any Aurum Board meeting at which it is reasonably expected to
contemplate a Alternative Proposal and (ii) not recommend to its stockholders a
Aurum Alternative Proposal for a period of not less than 5 business days after
Baan's receipt of a copy of such Aurum Alternative Proposal (or a description
of the significant terms and conditions thereof, if not in writing); and
provided further, that nothing contained in this Section shall limit Aurum's
-------- -------
obligation to hold and convene the Aurum Stockholders' Meeting (regardless of
whether the recommendation of
-26-
the Board of Directors of Aurum shall have been withdrawn, modified or not yet
made) or to provide the Aurum stockholders with material information relating to
such meeting.
(c) Notwithstanding anything to the contrary in this Section 5.4,
Aurum will not provide any non-public information to a third party unless: (i)
Aurum provides such non-public information pursuant to a nondisclosure agreement
with terms regarding the protection of confidential information at least as
restrictive as such terms in the Confidentiality Agreement; (ii) such non-public
information has been previously delivered to Baan and (iii) Aurum advises Baan
in writing of such disclosure, including the party to whom disclosed.
5.5 Public Disclosure. Baan and Aurum will consult with each other, and
-----------------
to the extent practicable, agree, before issuing any press release or otherwise
making any public statement with respect to the Merger, this Agreement or an
Acquisition Proposal and will not issue any such press release or make any such
public statement prior to such consultation, except as may be required by law or
any listing agreement with a national securities exchange or association or the
rules and regulations of the Amsterdam Exchanges N.V. The parties have agreed
to the text of the joint press release announcing the signing of this Agreement.
5.6 Legal Requirements. Each of Baan, Merger Sub and Aurum will take all
------------------
reasonable actions necessary or desirable to comply promptly with all legal
requirements which may be imposed on them with respect to the consummation of
the transactions contemplated by this Agreement (including furnishing all
information required in connection with approvals by or filings with any
Governmental Entity, and prompt resolution of any litigation prompted hereby)
and will promptly cooperate with and furnish information to any party hereto
necessary in connection with any such filings with or investigations by any
Governmental Entity, and any other such requirements imposed upon any of them or
their respective subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement. Baan will use all reasonable
efforts to take such steps as may be necessary to comply with the securities and
blue sky laws of all jurisdictions which are applicable to the issuance of Baan
Common Shares pursuant hereto. Aurum will use its commercially reasonable
efforts to assist Baan as may be necessary to comply with the securities and
blue sky laws of all jurisdictions which are applicable in connection with the
issuance of Baan Common Shares pursuant hereto.
5.7 Third Party Consents. As soon as practicable following the date
--------------------
hereof, Baan and Aurum will each use its commercially reasonable efforts to
obtain all material consents, waivers and approvals under any of its or its
subsidiaries' agreements, contracts, licenses or leases required to be obtained
in connection with the consummation of the transactions contemplated hereby.
5.8 Notification of Certain Matters. Baan and Merger Sub will give prompt
-------------------------------
notice to Aurum, and Aurum will give prompt notice to Baan, of the occurrence,
or failure to occur, of any event, which occurrence or failure to occur would be
reasonably likely to cause (a) any representation or warranty contained in this
Agreement and made by it to be untrue or inaccurate in any material respect at
any time from the date of this Agreement to the Effective Time such that the
conditions set forth in Section 6.2(a) or 6.3(a), as the case may be, would not
be satisfied as a result thereof or (b) any material failure of Baan and Merger
Sub or Aurum, as the case may be, or of any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under
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this Agreement. Notwithstanding the above, the delivery of any notice pursuant
to this section will not limit or otherwise affect the remedies available
hereunder to the party receiving such notice.
5.9 Best Efforts and Further Assurances. Subject to the respective rights
-----------------------------------
and obligations of Baan and Aurum under this Agreement, each of the parties to
this Agreement will use its reasonable best efforts to effectuate the Merger and
the other transactions contemplated hereby and to fulfill and cause to be
fulfilled the conditions to closing under this Agreement; provided that neither
Baan nor Aurum nor any subsidiary or affiliate thereof will be required to agree
to any divestiture by itself or any of its affiliates of shares of capital stock
or of any business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or to own
or exercise control of such assets, properties and stock. Subject to the
foregoing, each party hereto, at the reasonable request of another party hereto,
will 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 the transactions contemplated hereby.
5.10 Stock Options and Employee Stock Purchase Plan.
----------------------------------------------
(a) At the Effective Time, each outstanding option to purchase shares
of Aurum Common Stock (each a "AURUM STOCK OPTION") under the Aurum Stock Option
Plans, whether or not exercisable, will be assumed or substituted in a manner
consistent with applicable laws by Baan. Each Aurum Stock Option so assumed or
substituted in a manner consistent with the applicable laws by Baan under this
Agreement will continue to have, and be subject to, the same terms and
conditions set forth in the applicable Aurum Stock Option Plan immediately prior
to the Effective Time (including, without limitation, any repurchase rights),
except that (i) each Aurum Stock Option will be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Baan Common Shares equal to the product of the number of shares of Aurum Common
Stock that were issuable upon exercise of such Aurum Stock Option immediately
prior to the Effective Time multiplied by the Exchange Ratio, rounded to the
nearest whole number of Baan Common Shares and (ii) the per share exercise price
for the Baan Common Shares issuable upon exercise of such assumed Aurum Stock
Option will be equal to the quotient determined by dividing the exercise price
per share of Aurum Common Stock at which such Aurum Stock Option was exercisable
immediately prior to the Effective Time by the Exchange Ratio, rounded up to the
nearest whole cent. As soon as reasonably practicable, after the Effective
Time, Baan will issue to each holder of an outstanding Aurum Stock Option a
notice describing the foregoing assumption of such Aurum Stock Option by Baan.
(b) It is intended that Aurum Stock Options assumed by Baan shall
qualify following the Effective Time as incentive stock options as defined in
Section 422 of the Code to the extent Aurum Stock Options qualified as incentive
stock options immediately prior to the Effective Time and the provisions of this
Section 5.10 shall be applied consistent with such intent.
(c) Baan will reserve a sufficient number of Baan Common Shares for
issuance under Section 5.10(a) and under Section 1.6(c) hereof.
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(d) Subject to the foregoing provisions requiring Baan to assume each
outstanding Aurum Stock Option, it is understood and agreed that Baan shall not
be required to assume any Stock Option Plan if impracticable or legally
impossible for Baan to do so under the laws of the Netherlands.
5.11 Form S-8. Baan agrees to file a registration statement on Form S-8
--------
for the Baan Common Shares issuable with respect to assumed Aurum Stock Options
promptly after the Closing Date and no later than five days after the Closing
Date.
5.12 Indemnification.
---------------
(a) From and after the Effective Time, Baan shall cause the Surviving
Corporation to fulfill and honor in all respects the obligations of Aurum
pursuant to any indemnification agreements between Aurum and its directors and
officers existing prior to the date hereof whether or not such persons continue
in their position with the Surviving Corporation following the Effective Time.
The Certificate of Incorporation and By-laws of the Surviving Corporation will
contain provisions providing for indemnification and the limitation of liability
which are substantially equivalent to those set forth in Aurum's Certificate of
Incorporation and By-laws, which provisions will not be amended, repealed or
otherwise modified from the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who, immediately prior to the
Effective Time, were directors, officers, employees or agents of Aurum, unless
such modification is required by law.
(b) After the Effective Time, the Surviving Corporation will to the
fullest extent permitted under applicable law, indemnify and hold harmless, each
present and former director or officer of Aurum or any Aurum subsidiary
(collectively, the "INDEMNIFIED PARTIES") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal administrative or
investigative, to the extent arising out of or pertaining to any action or
omission in his or her capacity as a director or officer of Aurum or any Aurum
subsidiary arising out of or pertaining to the transactions contemplated by this
Agreement for a period of six years after the date hereof. In the event of any
such claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (a) any counsel retained for the defense of the
Indemnified Parties for any period after the Effective Time will be reasonably
satisfactory to the Indemnified Parties, (b) after the Effective Time, the
Surviving Corporation will pay the reasonable fees and expenses of such counsel
promptly after statements therefor are received, and (c) the Surviving
Corporation will cooperate in the defense of any such matter; provided, however,
that the Surviving Corporation will not be liable for any settlement effected
without its written consent (which consent will not be unreasonably withheld);
and provided, further, that, in the event that any claim or claims for
indemnification are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims will continue until the
disposition of any and all such claims. The Indemnified Parties as a group may
be defended by only one law firm (in addition to local counsel) with respect to
any single action unless there is, under applicable standards of professional
conduct, a conflict on any significant issue between the positions of any two or
more Indemnified Parties.
(c) Baan will or will cause the Surviving Corporation to maintain in
effect directors' and officers' liability insurance covering those persons who
are currently covered by Aurum's directors'
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and officers' liability insurance covering those persons who are currently
covered by Aurum's directors' and officers' liability insurance policy, to the
extent and in such amounts that Baan provides such coverage to its directors and
officers.
(d) The Surviving Corporation shall pay all expenses, including
attorneys' fees, that may be incurred by any Indemnified Parties in enforcing
the indemnity and other obligations provided for in this Section 5.12.
(e) This Section 5.12 will survive any termination of this Agreement
and the consummation of the Merger at the Effective Time, is intended to benefit
Aurum, the Surviving Corporation and the indemnified parties, and will be
binding on all successors and assigns of the Surviving Corporation.
5.13 NMS and Amsterdam Exchanges Listing. Baan agrees to authorize for
-----------------------------------
listing on the Nasdaq National Market and the Official Market of the Amsterdam
Exchanges N.V. the Baan Common Shares issuable, and those required to be
reserved for issuance, in connection with the Merger, upon official notice of
issuance.
5.14 Aurum Affiliate Agreement. Set forth on the Aurum Schedules is a list
-------------------------
of those persons who may be deemed to be, in Aurum's reasonable judgment,
affiliates of Aurum within the meaning of Rule 145 promulgated under the
Securities Act (each a "AURUM AFFILIATE"). Aurum will provide Baan with such
information and documents as Baan reasonably requests for purposes of reviewing
such list. Aurum will use its reasonable best efforts to deliver or cause to be
delivered to Baan, as promptly as practicable on or following the date hereof,
from each Aurum Affiliate an executed affiliate agreement in substantially the
form attached hereto as Exhibit C (the "AURUM AFFILIATE AGREEMENT"), each of
---------
which will be in full force and effect as of the Effective Time. Baan will be
entitled to place appropriate legends on the certificates evidencing any Baan
Common Shares to be received by a Aurum Affiliate pursuant to the terms of this
Agreement, and to issue appropriate stop transfer instructions to the transfer
agent for the Baan Common Shares, consistent with the terms of the Aurum
Affiliate Agreement.
5.15 Regulatory Filings; Reasonable Efforts. As soon as may be reasonably
--------------------------------------
practicable, Aurum and Baan each shall file with the United States Federal Trade
Commission (the "FTC") and the Antitrust Division of the United States
Department of Justice ("DOJ") Notification and Report Forms relating to the
transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by the
parties. Aurum and Baan each shall promptly (a) supply the other with any
information which may be required in order to effectuate such filings and (b)
supply any additional information which reasonably may be required by the FTC,
the DOJ or the competition or merger control authorities of any other
jurisdiction and which the parties may reasonably deem appropriate.
5.16 Tax-Free Reorganization. No party shall take any action either prior
-----------------------
to or after the Effective Time that could reasonably be expected to cause the
merger to fail to qualify as a "reorganization" under Section 368(a) of the
Code.
5.17 Aurum Rights Plan. Prior to the Effective Time, without the prior
-----------------
written consent of Baan, Aurum shall not adopt a shareholders rights plan.
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5.18 Comfort Letter. Coopers & ▇▇▇▇▇▇▇ L.L.P., certified public
--------------
accountants to Aurum, shall provide a letter reasonably acceptable to Baan,
relating to their review of the financial statements relating to Aurum contained
in or incorporated by reference in the Registration Statement.
5.19 Employee Benefit Schedules.
--------------------------
(a) On or before May 31, 1997, Aurum will provide to Baan, for
inclusion in the Aurum Schedules, an accurate and complete list of each Aurum
Employee Plan (as defined in Section 2.13) and any other plan, program, policy,
practice, contract, or agreement in effect as of the date of this Agreement
providing for compensation, severance, termination pay, performance awards,
stock or stock-related awards, fringe benefits or other employee benefits of any
kind, whether formal or informal, written or otherwise, funded or unfunded and
whether or not legally binding, which is being maintained or contributed to by
Aurum or any ERISA Affiliate (or which has been maintained or contributed to and
under which Aurum has, as of the date of this Agreement, material obligations
under) for the benefit of any current, former, or retired employee, officer, or
director of Aurum or any ERISA Affiliate.
(b) On or before May 31, 1997, Aurum will provide to Baan, for
inclusion in the Aurum Schedules, (i) correct and complete copies of all
documents embodying each Aurum Employee Plan including all amendments thereto;
(ii) the most recent annual actuarial valuations, if any, prepared for each
Aurum Employee Plan; (iii) the three most recent annual reports (Series 5500 and
all schedules thereto), if any, required under ERISA or the Code in connection
with each Aurum Employee Plan or related trust; (iv) if the Aurum Employee Plan
is funded, the most recent annual and periodic accounting of Aurum Employee Plan
assets; (v) the most recent summary plan description together with the most
recent summary of material modifications, if any, required under ERISA with
respect to each Aurum Employee Plan; (vi) all IRS determination letters and
rulings issued to Aurum relating to Aurum Employee Plans; (vii) all material
agreements and contracts relating to each Aurum Employee Plan, including but not
limited to, administration service agreements, group annuity contracts and group
insurance contracts; (viii) all material communications from Aurum to any
Employees relating to any amendments, terminations, establishments, increases or
decreases in benefits, acceleration of payments or vesting schedules or other
events with respect to any Aurum Employee Plan which would result in any
material liability to Aurum; and (ix) all registration statements and the most
recent prospectuses prepared in connection with each Aurum Employee Plan.
5.20 Employee Matters. Prior to the Effective Time, Baan and Aurum shall
----------------
mutually agree upon an integration plan relating to the Merger which shall
include, among other things, provisions relating to compensation, other equity
incentive and severance for employees of Aurum. The Surviving Corporation will
not substitute any employee's health, life or disability insurance coverage
without first obtaining a waiver by the substitute carrier of any preexisting
condition that such employee may have (but only to the extent that such
condition was not a preexisting condition under the previous health care, life
or disability coverage, as applicable).
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ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
------------------------------------------------------------
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Aurum Stockholder Approval. This Agreement shall have been
--------------------------
approved and adopted, and the Merger shall have been duly approved, by the
requisite vote under applicable law, by the stockholders of Aurum.
(b) Registration Statement Effective; Proxy Statement. The SEC shall
-------------------------------------------------
have declared the Registration Statement effective. No stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose, and no similar proceeding in
respect of the Proxy Statement, shall have been initiated or threatened in
writing by the SEC.
(c) No Order; HSR Act. No Governmental Entity shall have enacted,
-----------------
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and which has the effect of making
the Merger illegal or otherwise prohibiting consummation of the Merger. All
waiting periods, if any, under the HSR Act relating to the transactions
contemplated hereby will have expired or terminated early.
(d) Tax Opinions. Baan and Aurum shall each have received written
------------
opinions from their respective counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
Professional Corporation, and Fenwick & West LLP, in form and substance
reasonably satisfactory to them, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code and such
opinions shall not have been withdrawn; provided, however, that if the counsel
-------- -------
to either Baan or Aurum does not render such opinion, this condition shall
nonetheless be deemed to be satisfied with respect to such party if counsel to
the other party renders such opinion to such party. The parties to this
Agreement agree to make reasonable representations as requested by such counsel
for the purpose of rendering such opinions.
(e) NMS Listing. The Baan Common Shares issuable to stockholders of
-----------
Aurum pursuant to this Agreement and such other shares required to be reserved
for issuance in connection with the Merger shall have been authorized for
listing on the Nasdaq National Market upon official notice of issuance.
6.2 Additional Conditions to Obligations of Aurum. The obligation of
---------------------------------------------
Aurum to consummate and effect the Merger shall be subject to the satisfaction
at or prior to the Effective Time of each of the following conditions, any of
which may be waived, in writing, exclusively by Aurum:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Baan and Merger Sub contained in this Agreement shall be true and
correct in all material respects as of the date
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of this Agreement. In addition, the representations and warranties of Baan and
Merger Sub contained in this Agreement shall be true and correct in all material
respects on and as of the Effective Time except for changes contemplated by this
Agreement and except for those representations and warranties which address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Effective Time, except in such cases (other than the representation in
Section 3.2) where the failure to be so true and correct would not have a
Material Adverse Effect on Baan. Aurum shall have received a certificate with
respect to the foregoing signed on behalf of Baan by an authorized officer of
Baan;
(b) Agreements and Covenants. Baan and Merger Sub 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 on or prior
to the Effective Time, and Aurum shall have received a certificate to such
effect signed on behalf of Baan by an authorized officer of Baan; and
(c) Material Adverse Effect. No Material Adverse Effect with respect
-----------------------
to Baan shall have occurred since the date of this Agreement.
6.3 Additional Conditions to the Obligations of Baan and Merger Sub. The
---------------------------------------------------------------
obligations of Baan and Merger Sub to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any of which may be waived, in writing, exclusively by
Baan:
(a) Representations and Warranties. The representations and warranties
------------------------------
of Aurum contained in this Agreement shall have been true and correct in all
material respects as of the date of this Agreement. The representations and
warranties of Aurum hereunder shall be deemed not to be true and correct in all
material respects on the date of this Agreement only if the aggregate amount of
losses or damages reasonably related to, arising out of or expected to arise out
of any breach of such representations and warranties are reasonably expected to
exceed $5,000,000 (it being understood that any losses or damages as a result of
the adverse or potentially adverse impact of the transactions contemplated
hereby on the relationship between Aurum and Beologics, or any uncertainties
created with Beologics as a result of the transactions contemplated hereby,
including without limitation any resultant writeoffs, shall not be measured
against such $5,000,000 threshold). In addition, the representations and
warranties of Aurum contained in this Agreement shall be true and correct in all
material respects on and as of the Effective Time except for changes
contemplated by this Agreement and except for those representations and
warranties which address matters only as of a particular date (which shall
remain true and correct as of such particular date), with the same force and
effect as if made on and as of the Effective Time, except in such cases (other
than the representations in Sections 2.2, 2.3 and 2.20) where the failure to be
so true and correct would not have a Material Adverse Effect on Aurum. Baan
shall have received a certificate with respect to the foregoing signed on behalf
of Aurum by the Chief Executive Officer and the Chief Financial Officer of
Aurum;
(b) Agreements and Covenants. Aurum 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 on or prior to the Effective
Time, and the Baan shall have received a certificate to such effect signed on
behalf of Aurum by the President and the Chief Financial Officer of Aurum; and
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(c) Material Adverse Effect. No Material Adverse Effect with respect
-----------------------
to Aurum shall have occurred since the date of this Agreement.
(d) Employment and Noncompetition Agreements. Employment and
----------------------------------------
Noncompetition Agreements substantially in the forms attached hereto as Exhibit
D-1 and D-2 shall have been entered into by the individuals set forth on Exhibit
I thereto and such agreements shall be in full force and effect.
(e) Opinion of Accountants. Each of Baan and Aurum shall have
----------------------
received letters from each of ▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ and Coopers & ▇▇▇▇▇▇▇ L.L.P.,
each dated within two (2) business days prior to the Effective Time, regarding
those firms' concurrence with Baan's managements' and Aurum's managements'
conclusions as to the appropriateness of pooling of interest accounting for the
Merger under Accounting Principles Board Opinion No. 16, if the Merger is
consummated in accordance with this Agreement.
(f) Consents. Aurum shall have obtained all material consents,
---------
waivers and approvals required in connection with the consummation of the
transactions contemplated hereby under the agreements, contracts, licenses or
leases set forth on Schedule 6.3(f).
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Effective Time of the Merger, whether before or after approval of the Merger
by the stockholders of Aurum:
(a) by mutual written consent duly authorized by the Boards of
Directors of Baan and Aurum;
(b) by either Aurum or Baan if the Merger shall not have been
consummated by October 14, 1997 for any reason; provided, however, that (i) if
-------- -------
the failure of the Merger to occur prior to such date shall have resulted solely
from the failure to obtain any necessary governmental approval, clearance or
consent (including termination or waiver of all HSR waiting periods and
clearance of the Registration Statement by the SEC) such date for termination
shall be automatically extended to the date upon which such governmental
approval, clearance or consent is obtained (but not beyond December 13, 1997)
and (ii) the right to terminate this Agreement under this Section 7.1(b) shall
not be available to any party whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to occur on or
before such date and such action or failure to act constitutes a breach of this
Agreement;
(c) by either Aurum or Baan if a Governmental Entity shall have issued
an order, decree or ruling or taken any other action (an "ORDER"), in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger, which order, decree or ruling is final and nonappealable;
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(d) by either Aurum or Baan if the required approval of the
stockholders of Aurum contemplated by this Agreement shall not have been
obtained by reason of the failure to obtain the required vote at a meeting of
Aurum stockholders duly convened therefor or at any adjournment thereof
(provided that the right to terminate this Agreement under this Section 7.1(d)
--------
shall not be available to Aurum where the failure to obtain Aurum stockholder
approval shall have been caused by the action or failure to act of Aurum in
breach of this Agreement);
(e) by Baan, if the Board of Directors of Aurum accepts or recommends
a Aurum Alternative Proposal to the stockholders of Aurum, or if the Board of
Directors of Aurum shall have withheld, withdrawn or modified in a manner
adverse to Baan its recommendation in favor of adoption and approval of this
Agreement and approval of the Merger;
(f) by Aurum, upon a breach of any representation, warranty, covenant
or agreement on the part of Baan set forth in this Agreement, or if any
representation or warranty of Baan shall have become untrue, in either case such
that the conditions set forth in Section 6.2(a) or Section 6.2(b) would not be
satisfied as of the time of such breach or as of the time such representation or
warranty shall have become untrue, provided that if such inaccuracy in Baan's
--------
representations and warranties or breach by Baan is curable by Baan through the
exercise of its commercially reasonable efforts, then Aurum may only terminate
this Agreement under this Section 7.1(f) if the breach is not cured within ten
(10) days following the date of written notice from Aurum of such breach,
provided that Baan continues to exercise such commercially reasonable efforts to
cure such breach; or
(g) by Baan, upon a breach of any representation, warranty, covenant
or agreement on the part of Aurum set forth in this Agreement, or if any
representation or warranty of Aurum shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would not
be satisfied as of the time of such breach or as of the time such representation
or warranty shall have become untrue, provided, that if such inaccuracy in
--------
Aurum's representations and warranties or breach by Aurum is curable by Aurum
through the exercise of its commercially reasonable efforts, then Baan may only
terminate this Agreement under this Section 7.1(g) if the breach is not cured
within ten (10) days the date of written notice from Baan of such breach,
provided that Aurum continues to exercise such commercially reasonable efforts
to cure such breach.
7.2 Notice of Termination; Effect of Termination. Any termination of this
--------------------------------------------
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto.
In the event of the termination of this Agreement as provided in Section 7.1,
this Agreement shall be of no further force or effect, except (i) as set forth
in this Section 7.2, Section 7.3 and Article 8 (miscellaneous), each of which
shall survive the termination of this Agreement, and (ii) nothing herein shall
relieve any party from liability for any breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement or the Stock Option Agreement, all of
which obligations shall survive termination of this Agreement in accordance with
their terms. A party seeking to terminate this Agreement based on a Material
Adverse Effect on the other party shall have the burden of proof to demonstrate
all elements of the Material Adverse Effect, on the terms set forth herein,
shall have occurred.
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7.3 Fees and Expenses.
-----------------
(a) General. Except as set forth in this Section 7.3, all fees and
-------
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Baan and Aurum shall
-------- -------
share equally all fees and expenses, other than attorneys' and accountants fees
and expenses, incurred in relation to the printing and filing of the Proxy
Statement (including any preliminary materials related thereto) and the
Registration Statement (including financial statements and exhibits) and any
amendments or supplements thereto.
(b) Aurum Payments. In the event that this Agreement is terminated
--------------
pursuant to either Section 7.1(d), 7.1(e) or 7.1(g), Aurum shall immediately pay
to Baan (by wire transfer or cashier's check) the sum of $2,500,000; provided
--------
that such payment shall not be due if (i) in the case of termination under
Section 7.1(d), the failure to obtain the required stockholder approval is
primarily the result of a Material Adverse Effect on Baan or (ii) in the case of
termination under Section 7.1(e), Aurum accepts or recommends a Aurum
Alternative Proposal, or the Board of Directors of Aurum withholds, withdraws or
modifies its recommendation in favor of adoption and approval of this Agreement
and approval of the Merger, primarily as a result of a Material Adverse Effect
on Baan.
7.4 Amendment. Subject to applicable law, this Agreement may be amended
---------
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto.
7.5 Extension; Waiver. At any time prior to the Effective Time any party
-----------------
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. Delay in exercising any right under
this Agreement shall not constitute a waiver of such right.
ARTICLE VII
GENERAL PROVISIONS
8.1 Non-Survival of Representations and Warranties. The representations
----------------------------------------------
and warranties of Aurum, Baan and Merger Sub contained in this Agreement shall
terminate at the Effective Time, and only the covenants that by their terms
survive the Effective Time shall survive the Effective Time.
-36-
8.2 Notices. All notices and other communications hereunder shall be in
-------
writing, shall be effective when received, and shall in any event be deemed to
have been received (i) when delivered, if delivered personally or by commercial
delivery service, (ii) five (5) business days after deposit with U.S. Mail, if
mailed by registered or certified mail (return receipt requested), (iii) one (1)
business day after the business day of deposit in the United States with Federal
Express or similar overnight courier, for next day delivery (or, two (2)
business days after such deposit if deposited for second business day delivery),
if delivered by such means, or (iv) one (1) business day after delivery by
facsimile transmission with copy by U.S. Mail, if sent via facsimile plus mail
copy (with acknowledgment of complete transmission), to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) Baan Company ▇.▇.
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇
THE NETHERLANDS
Attention: General Counsel and Secretary of the Board
Telephone No.: ▇▇-▇▇▇-▇▇▇▇▇▇
Facsimile No.: ▇▇-▇▇▇-▇▇▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇
Baan U.S.A. Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
and a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
-37-
(a) if to Aurum to:
Aurum Software, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
8.3 Interpretation; Knowledge.
-------------------------
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
The words "INCLUDE," "INCLUDES" and "INCLUDING" when used herein shall be deemed
in each case to be followed by the words "without limitation." The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. When reference is made herein to "THE BUSINESS OF" an entity, such
reference shall be deemed to include the business of all direct and indirect
subsidiaries of such entity. Reference to the subsidiaries of an entity shall
be deemed to include all direct and indirect subsidiaries of such entity.
(b) As it relates to Aurum, the term "KNOWLEDGE" means, with respect
to any matter in question, that any of the Chief Executive Officer, Chief
Financial Officer, Controller or Chief Technology Officer, as have actual
knowledge of such matter; and (b) as it relates to Baan, the term "KNOWLEDGE"
means, with respect to any matter in question that any of the Chief Executive
Officer, Chief Financial Officer, General Counsel, Staff Counsel, Executive Vice
President or any manager who in the ordinary course of his duties, have
knowledge of a specific matter.
8.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
-------------------------------------------
documents and instruments and other agreements among the parties hereto as
contemplated by or referred to herein, including Aurum Schedules (a) constitute
the entire agreement among the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings, both written and oral,
-38-
among the parties with respect to the subject matter hereof, it being understood
that the Confidentiality Agreement shall continue in full force and effect until
the Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder,
except as specifically provided in Sections 1.6(c), 5.10, 5.11, 5.12 and 5.13.
8.6 Severability. In the event that any provision of this Agreement or
------------
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
------------------------------------
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof;
provided that issues involving the corporate governance of any of the parties
hereto shall be governed by their respective jurisdictions of incorporation.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction of
any state or federal court within the Northern District of California, in
connection with any matter based upon or arising out of this Agreement or the
matters contemplated herein, other than issues involving the corporate
governance of any of the parties hereto, agrees that process may be served upon
them in any manner authorized by the laws of the State of California for such
persons and waives and covenants not to assert or plead any objection which they
might otherwise have to such jurisdiction and such process.
8.9 Rules of Construction. The parties hereto agree that they have been
---------------------
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
----------
rights, interests, or obligations hereunder without the prior written approval
of the of the other party. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
-39-
8.11 WAIVER OF JURY TRIAL. EACH OF BAAN, AURUM AND MERGER SUB HEREBY
--------------------
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF BAAN, AURUM OR MERGER SUB IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
*****
-40-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized respective officers as of the date first
written above.
BAAN COMPANY N.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President, Baan
Affiliates and Marketing
GREEN SOFTWARE ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary
AURUM SOFTWARE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
**** REORGANIZATION AGREEMENT ****
EXHIBIT A
FORM OF AURUM SOFTWARE VOTING AGREEMENT
STOCKHOLDER VOTING AGREEMENT
This Stockholder Voting Agreement entered into as of May 13, 1997 (the
"Agreement") by and among Baan Company N.V., a corporation organized under the
----------
law of The Netherlands ("Acquiror"), Green Software Acquisition Corporation, a
--------
Delaware corporation and a wholly-owned subsidiary of Acquiror ("Merger Sub"),
----------
and the undersigned stockholders (the "Major Stockholders") of Aurum Software,
------------------
Inc., a Delaware corporation ("Target"). Capitalized terms not defined herein
------
have the meanings assigned to them in the Agreement and Plan of Reorganization
(the "Merger Agreement") dated the date hereof by and among Acquiror, Merger Sub
----------------
and Target.
RECITALS:
WHEREAS, pursuant to the Merger Agreement, Acquiror, Merger Sub and Target
have agreed to merge (the "Merger") Merger Sub with and into Target on the terms
------
and conditions set forth therein; and
WHEREAS, to induce Acquiror to enter into the Merger Agreement, each of the
Major Stockholders, as a principal stockholder of Target, has agreed to enter
into this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual agreements,
provisions and covenants contained in this Agreement, the parties hereby agree
as follows:
1.1. Covenants and Agreements. Each of the Major Stockholders hereby
------------------------
covenants and agrees with Acquiror and Merger Sub as follows:
1.1(a) Other Negotiations. It agrees to comply with the provisions
------------------
of Section 5.4 (Solicitation) of the Merger Agreement.
1.1(b) Agreement to Vote Shares. At every meeting of the
------------------------
stockholders of Target held on or prior to the Expiration Date (which shall mean
the earliest to occur of (i) the closing, consummation and effectiveness of the
Merger or (ii) such time as the Merger Agreement is terminated in accordance
with its terms), and at every adjournment thereof, and on every action or
approval by written consent of the stockholders of Target, unless otherwise
directed in writing by Acquiror, it shall vote all shares of Target capital
stock owned by it in favor of approval and adoption of the Merger Agreement and
the Merger and any matter that could reasonably be expected to facilitate the
Merger.
1.1(c) Agreement to Grant Proxy. It shall execute and deliver to
------------------------
Acquiror concurrently with the signing of this Agreement a valid and binding
irrevocable proxy in the form attached hereto as Exhibit A granting Acquiror (or
its designees) the authority to vote its shares of capital stock of Target in
accordance with and subject to the limitations of Section 1.1(b), which shall
expire on the Expiration Date.
1.1(d) No Proxy Solicitations. Except as required by law,
----------------------
including actions which it determines upon the written advice of legal counsel
are required pursuant to its fiduciary duties as a Director (as defined below)
under applicable law, it shall not, and will not permit any person under its
control to (i) solicit proxies or become a "participant" in a "solicitation" (as
such terms are defined in Regulation 14A under the Exchange Act) with respect to
an Acquisition Proposal; or (ii) initiate a stockholders' vote or action by
consent of Target stockholders with respect to an Acquisition Proposal.
1.1(e) Obligations as Director and/or Officer. If at any time
--------------------------------------
prior to the expiration of this Agreement, the Major Stockholder or a
representative of the Major Stockholder is a member of the Board of Directors of
Target ("Director") or an officer of Target, nothing in this Agreement shall
limit or restrict the Director or officer in acting in his capacity as a
Director or officer, as the case may be, of Target and exercising his fiduciary
duties and responsibilities, it being agreed and understood that this Agreement
shall apply to the Major Stockholder solely in its capacity as a stockholder and
shall not apply to the Director's or officer's actions, judgments or decisions
as a Director or officer of Target.
1.1(f) Cooperation. It shall cooperate fully with Target, Acquiror
-----------
and Merger Sub in furnishing any information or performing any action reasonably
requested by any such party, which information or action is necessary or
appropriate for the speedy and successful consummation of the transactions
contemplated by the Merger Agreement or is necessary or appropriate for the
corporate purposes of Acquiror and is consistent with the obligations herein.
2.1 Representations and Warranties of Major Stockholders. Each of the
----------------------------------------------------
Major Stockholders hereby represents and warrants to Acquiror and Merger Sub as
follows:
2.1(a) Existence; Authorization; Binding Agreement; Ownership of
---------------------------------------------------------
Stock. If the Major Stockholder is a corporation, partnership, limited
-----
liability company or trust, (i) it is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and (ii) the
execution, delivery and performance by the Major Stockholder of this Agreement
are within its power and authority and have been duly authorized by all
necessary action on the part of the Major Stockholder. The Agreement
constitutes a valid and binding agreement of the Major Stockholder, enforceable
against the Major Stockholder in accordance with its terms. The Major
Stockholder is the record and beneficial owner of the shares of Target Common
Stock set forth in the Affiliate Agreement, and owns all such shares free and
clear of any and all liens, pledges, charges, security interests, restrictions
or encumbrances of any kind or any rights of first refusal (other than in favor
of Target), voting trusts, proxies or other arrangements or understandings,
whether written or oral, and the Major Stockholder has the sole and exclusive
right and power to exercise all voting rights and other rights with respect to
such shares.
3.1 Survival; Termination.
---------------------
(a) All representations and warranties in this Agreement shall expire
upon the Closing. Any investigation or other examination that may have been
made or may be made at any time by or on behalf of the party to whom
representations and warranties are made shall not limit, diminish or in any way
affect the representations and warranties in this Agreement, and the parties may
rely on the representations and warranties in this Agreement regardless of any
information obtained by them by any investigation, examination or otherwise.
(b) The covenants contained in Sections 1.1(a), 1.1(b), 1.1(c), 1.1(d)
and 1.1(f), (but not any liability for any breach thereof) shall terminate on
the Expiration Date. All other covenants contained in this Agreement shall
survive the Merger.
(c) This Agreement shall terminate in all respects upon termination of
the Merger Agreement (but not any liability for any breach hereof).
-2-
3.2 Specific Performance. Each of the parties to this Agreement hereby
--------------------
acknowledges that the other party will have no adequate remedy at law if it
fails to perform any of its obligations under this Agreement. In such event,
each of the parties agrees that the other party shall have the right, in
addition to any other rights it may have (whether at law or in equity), to
specific performance of this Agreement.
3.3 Binding Effect and Assignment. This Agreement and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by either
of the parties without prior written consent of the other.
3.4 Partnership. Acquiror and Merger Sub agree that if the Major
-----------
Stockholder is a limited partnership, in no event shall the Major Stockholder's
general and limited partners be liable for any of the Major Stockholder's
obligations under this Agreement.
3.5 Entire Agreement. This Agreement and the Merger Agreement (together
----------------
with all other documents delivered pursuant thereto) constitute the entire
agreement between the parties and supersede all prior agreements and
understandings between the parties with respect to the subject matter hereof.
3.6 Amendment or Modification. This Agreement may not be modified,
-------------------------
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
3.7 No Waiver. The failure of any party hereto to enforce at any time any
---------
of the provisions of this Agreement shall in no way be construed to be a waiver
of any such provision, nor in any way to affect the validity of this Agreement
or any part hereof or the right of such party thereafter to enforce each and
every such provision. No waiver of any breach of or non-compliance with this
Agreement shall be held to be a waiver of any other or subsequent breach or non-
compliance.
3.8 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be deemed to
have been duly given when received at the addresses set forth in the Merger
Agreement, in the case of Acquiror, Merger Sub, and the books and records of
Target, in the case of the Major Stockholder, or to such other address as any
party may have furnished to the others in writing in accordance herewith, except
that notices of change of address shall only be effective upon receipt.
3.9 Law Governing. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof. Each of the parties
hereto irrevocably consents to the exclusive jurisdiction of the courts located
within the State of Delaware in connection with any matter based upon or arising
out of this Agreement or the matters contemplated herein, agrees that process
may be served upon them in any authorized manner authorized and covenants not to
assert or plead any objection which they might otherwise have to such
jurisdiction or process.
3.10 Invalidity of Provisions. Each of the provisions contained in this
------------------------
Agreement is distinct and severable and a declaration of invalidity or
unenforceability of any such provision or part thereof by a court of competent
jurisdiction shall not affect the validity or enforceability of any other
provision hereof.
3.11 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
-3-
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties on the date first above written.
ACQUIROR
By: _____________________________________________
Name:
Title:
MERGER SUB
By: _____________________________________________
Name:
Title:
MAJOR STOCKHOLDER
________________________________________________
(print name of stockholder above)
By:_____________________________________________
Name:
Title:
(if applicable)
-4-
Exhibit A
IRREVOCABLE PROXY
The undersigned stockholder of Aurum Software, Inc., a Delaware corporation
("Company"), hereby irrevocably (to the extent provided in Section 212 of the
Delaware General Corporation Law) appoints the directors on the Board of
Directors of Baan Company N.V., a corporation organized under the laws of The
Netherlands ("Baan"), and each of them individually, as the sole and exclusive
attorneys and proxies of the undersigned, with full power of substitution and
resubstitution, to the full extent of the undersigned's rights with respect to
the shares of capital stock of the Company beneficially owned by the
undersigned, which shares are listed on the final page of this Proxy (the
"Shares"), and any and all other shares or securities issued or issuable in
respect thereof on or after the date hereof, until such time as that certain
Agreement and Plan of Reorganization dated as of May 13, 1997 (the "Merger
Agreement"), among Baan, Green Software Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Baan ("Merger Sub"), and Company,
shall be terminated in accordance with its terms or the Merger (as defined in
the Merger Agreement) is effective. Upon the execution hereof, all prior
proxies given by the undersigned with respect to the Shares and any and all
other shares or securities issued or issuable in respect thereof on or after the
date hereof are hereby revoked and no subsequent proxies will be given.
This proxy is irrevocable (to the extent provided in Section 212 of the
Delaware General Corporation Law), is granted pursuant to the Stockholder Voting
Agreement dated as of May 13, 1997 between Baan, Merger Sub and the undersigned
stockholder (the "Voting Agreement"), and is granted in consideration of Baan
entering into the Merger Agreement. The attorneys and proxies named above will
be empowered at any time prior to termination of the Merger Agreement to
exercise all voting rights (including, without limitation, the power to execute
and deliver written consents with respect to the Shares) of the undersigned at
every annual, special or adjourned meeting of Company stockholders, and in every
written consent in lieu of such a meeting, or otherwise, in favor of approval of
the Merger and the Merger Agreement and any matter that could reasonably be
expected to facilitate the Merger.
The attorneys and proxies named above may only exercise this proxy to vote
the Shares subject hereto at any time prior to termination of the Merger
Agreement at every annual, special or adjourned meeting of the stockholders of
Company and in every written consent in lieu of such meeting, in favor of
approval of the Merger and the Merger Agreement and any matter that could
reasonably be expected to facilitate the Merger, and may not exercise this proxy
on any other matter. The undersigned stockholder may vote the Shares on all
other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: May 13, 1997
Signature of Stockholder: ________________________________________________
Print Name of Stockholder: _______________________________________________
Shares beneficially owned:__________________________ shares of Common Stock
-5-
EXHIBIT B
AURUM SOFTWARE STOCK OPTION AGREEMENT
[Option from Target to Acquiror]
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT dated as of May 13, 1997 (the "AGREEMENT") is
entered into by and between Aurum Software, Inc., a Delaware corporation
("TARGET"), and Baan Company N.V., a corporation incorporated in the Netherlands
("ACQUIROR"). Capitalized terms used in this Agreement but not defined herein
shall have the meanings ascribed thereto in the Merger Agreement (as defined
below).
RECITALS
--------
WHEREAS, concurrently with the execution and delivery of this Agreement,
Target, Acquiror and Green Software Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Acquiror ("SUB"), are entering into an
Agreement and Plan of Reorganization (the "MERGER AGREEMENT"), which provides
that, among other things, upon the terms and subject to the conditions thereof,
Target, Acquiror and Sub will enter into a business combination transaction (the
"MERGER"); and
WHEREAS, as a condition to Acquiror's willingness to enter into the Merger
Agreement, Acquiror has requested that Target agree, and Target has so agreed,
to grant to Acquiror an option to acquire shares of Target's Common Stock,
$0.001 par value, upon the terms and subject to the conditions set forth herein;
AGREEMENT
---------
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and in the Merger Agreement and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
1. GRANT OF OPTION
---------------
Target hereby grants to Acquiror an irrevocable option (the "OPTION")
to acquire up to a number of shares of the Common Stock, $0.001 par value, of
Target ("TARGET SHARES") equal to 19.9% of the issued and outstanding shares as
of the first date, if any, upon which an Exercise Event (as defined in Section
2(a) below) shall occur (the "OPTION SHARES"), in the manner set forth below
(i) by paying cash at a price of $21.00 per share (the "EXERCISE PRICE") and/or,
at Acquiror's election, (ii) by exchanging therefor shares of the Common Stock,
0.01 par value, of Acquiror ("ACQUIROR SHARES") at a rate (the "EXERCISE
RATIO"), for each Option Share, of a number of Acquiror Shares equal to the
Exercise Price divided by the average closing sale prices during the previous 30
trading days of Acquiror Shares on the Nasdaq National Market immediately
preceding the date of the Closing (as defined below) of the particular Option
exercise.
2. EXERCISE OF OPTION; MAXIMUM PROCEEDS
------------------------------------
(a) For all purposes of this Agreement, an "EXERCISE EVENT" shall have
occurred upon the occurrence of both: (i) the individuals or entities entering
into Voting Agreements and providing the related proxies on the date hereof
having ceased to own, in the aggregate, at least a majority of the capital stock
of the Target or (ii) any of such Voting Agreements or the related proxies
having been declared invalid or unenforceable and (x) the earlier of the
consummation of, or the record date, if any, for a meeting of Target's
stockholders with regard to an Acquisition Proposal with respect to Target with
any party other than Acquiror (or an affiliate of Acquiror) if the Board of
Directors of Target shall have withheld, withdrawn, or modified in a manner
adverse to Acquiror its recommendation in favor of adoption and approval of the
Merger Agreement and approval of the Merger (and at that time there shall not
have occurred a Material Adverse Effect on Acquiror) after receipt of and in
connection with an Acquisition Proposal with respect to Target, (y) the
commencement of a tender or exchange offer for 20% or more of any class of
Target's capital stock (and/or during any time which such a tender or exchange
offer remains open or has been consummated), or (z) pursuant to a Termination
under Section 7.1(e) or (g) of the Merger Agreement.
(b) Acquiror may deliver to Target a written notice (an "EXERCISE
NOTICE") specifying that it wishes to exercise and close a purchase of Option
Shares at any time within 30 days following the occurrence of an Exercise Event,
specifying the total number of Option Shares it wishes to acquire. Each closing
of a purchase of Option Shares (a "CLOSING") shall occur on the date and at a
time designated by the Acquiror in an Exercise Notice delivered at least five
(5) business days prior to the date of such Closing, which Closing shall be held
at the offices of counsel to Acquiror upon the occurrence of an Exercise Event
prior to the termination of the Option as may be designated by Acquiror in
writing. In the event that no Exercise Event shall occur prior to termination
of the Option, such Exercise Notice shall be void and of no further force and
effect.
(c) The Option shall terminate upon the earlier of (i) the Effective
Time and (ii) 12 months following the termination of the Merger Agreement
pursuant to Article VII thereof if an Exercise Event shall have occurred on or
prior to the date of such termination, and (iii) the date on which the Merger
Agreement is terminated pursuant to Article VII thereof if no Exercise Event
shall have occurred on or prior to such date; provided, however, that if the
-------- -------
Option is exercisable but cannot be exercised by reason of any applicable
government order or because the waiting period related to the issuance of the
Option Shares under the HSR Act shall not have expired or been terminated, then
the Option shall not terminate until the tenth business day after such
impediment to exercise shall have been removed or shall have become final and
not subject to appeal. Notwithstanding the foregoing, the Option may not be
exercised if (i) Acquiror shall have breached in any material respect any of its
covenants or agreements contained in the Merger Agreement or (ii) the
representations and warranties of Acquiror contained in the Merger Agreement
shall not have been true and correct in all material respects on and as of the
date when made.
-2-
3. CONDITIONS TO CLOSING
---------------------
The obligation of Target to issue Option Shares to Acquiror hereunder
is subject to the conditions that (a) any waiting period under the HSR Act
applicable to the issuance of the Option Shares hereunder shall have expired or
been terminated; (b) all material consents, approvals, orders or authorizations
of, or registrations, declarations or filings with, any Federal, state or local
administrative agency or commission or other Federal state or local governmental
authority or instrumentality, if any, required in connection with the issuance
of the Option Shares hereunder shall have been obtained or made, as the case may
be; and (c) no preliminary or permanent injunction or other order by any court
of competent jurisdiction prohibiting or otherwise restraining such issuance
shall be in effect. It is understood and agreed that at any time during which
Acquiror shall be entitled to deliver to Target an Exercise Notice, the parties
will use their respective best efforts to satisfy all conditions to Closing, so
that a Closing may take place as promptly as practicable, and in any event, upon
the occurrence of an Exercise Event.
4. CLOSING
-------
At any Closing, (a) Target shall deliver to Acquiror a single
certificate in definitive form representing the number of Target Shares
designated by Acquiror in its Exercise Notice, such certificate to be registered
in the name of Acquiror and to bear the legend set forth in Section 10 hereof,
against delivery of (b) payment by Acquiror to Target of the aggregate purchase
price for the Target Shares so designated and being purchased by delivery of (i)
a certified check or bank check and/or, at Acquiror's election, (ii) a single
certificate in definitive form representing the number of Acquiror Shares being
issued by Acquiror in consideration therefor (based on the Exercise Ratio), such
certificate to be registered in the name of Target and to bear the legend set
forth in Section 10 hereof.
5. REPRESENTATIONS AND WARRANTIES OF TARGET
----------------------------------------
Target represents and warrants to Acquiror that (a) Target is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder; (b) the execution and
delivery of this Agreement by Target and consummation by Target of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Target and no other corporate proceedings on the
part of Target are necessary to authorize this Agreement or any of the
transactions contemplated hereby; (c) this Agreement has been duly executed and
delivered by Target and constitutes a legal, valid and binding obligation of
Target and, assuming this Agreement constitutes a legal, valid and binding
obligation of Acquiror, is enforceable against Target in accordance with its
terms, except as enforceability may be limited by bankruptcy and other laws
affecting the rights and remedies of creditors generally and general principles
of equity; (d) except for any filings required under the HSR Act, Target has
taken all necessary corporate and other action to authorize and reserve for
issuance and to permit it to issue upon exercise of the Option, and at all times
from the date hereof until the termination of the Option will have reserved for
issuance, a sufficient number of unissued Target Shares for Acquiror to exercise
the Option in full and
-3-
will take all necessary corporate or other action to authorize and reserve for
issuance all additional Target Shares or other securities which may be issuable
pursuant to Section 9(a) upon exercise of the Option, all of which, upon their
issuance and delivery in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable; (e) upon delivery of the Target
Shares and any other securities to Acquiror upon exercise of the Option,
Acquiror will acquire such Target Shares or other securities free and clear of
all material claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever, excluding those imposed by Acquiror; (f) the
execution and delivery of this Agreement by Target do not, and the performance
of this Agreement by Target will not, (i) violate the Certificate of
Incorporation or Bylaws of Target, (ii) conflict with or violate any order
applicable to Target or any of its subsidiaries or by which they or any of their
property is bound or affected or (iii) result in any breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give rise to any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any property or assets of Target or any of its subsidiaries
pursuant to, any contract or agreement to which Target or any of its
subsidiaries is a party or by which Target or any of its subsidiaries or any of
their property is bound or affected, except, in the case of clauses (ii) and
(iii) above, for violations, conflicts, breaches, defaults, rights of
termination, amendment, acceleration or cancellation, liens or encumbrances
which would not, individually or in the aggregate, have a Material Adverse
Effect on Target; and (g) the execution and delivery of this Agreement by Target
does not, and the performance of this Agreement by Target will not, require any
consent, approval, authorization or permit of, or filing with, or notification
to, any Governmental Entity except pursuant to the HSR Act.
6. REPRESENTATIONS AND WARRANTIES OF ACQUIROR
------------------------------------------
Acquiror represents and warrants to Target that (a) Acquiror is a
corporation duly incorporated, validly existing and in good standing under the
laws of The Netherlands and has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder; (b) the execution and
delivery of this Agreement by Acquiror and the consummation by Acquiror of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Acquiror and no other corporate proceedings on
the part of Acquiror are necessary to authorize this Agreement or any of the
transactions contemplated hereby; (c) this Agreement has been duly executed and
delivered by Acquiror and constitutes a legal, valid and binding obligation of
Acquiror and, assuming this Agreement constitutes a legal, valid and binding
obligation of Target, is enforceable against Acquiror in accordance with its
terms, except as enforceability may be limited by bankruptcy and other laws
affecting the rights and remedies of creditors generally and general principles
of equity; and (d) except for any filings required under the HSR Act, Acquiror
has taken (or will in a timely manner take) all necessary corporate and other
action in connection with any exercise of the Option; (e) upon delivery of
Acquiror Shares to Target in consideration of any acquisition of Target Shares
pursuant hereto, Target will acquire such Acquiror Shares free and clear of all
material claims, liens, charges, encumbrances and security interests of any kind
or nature whatsoever, excluding those imposed by Target; (f) the execution and
delivery of this Agreement by Acquiror do not, and the performance of this
Agreement by Acquiror will not, (i) violate the Articles of Association of
Acquiror, (ii) conflict with or violate any order applicable to Acquiror or any
of its subsidiaries or by which they or any of their property is bound or
affected or (iii) result in any breach
-4-
of or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the property or assets of Acquiror or any of its
subsidiaries pursuant to, any contract or agreement to which Acquiror or any of
its subsidiaries is a party or by which Acquiror or any of its subsidiaries or
any of their property is bound or affected, except, in the case of clauses (ii)
and (iii) above, for violations, conflicts, breaches, defaults, rights of
termination, amendment, acceleration or cancellation, liens or encumbrances
which would not, individually or in the aggregate, have a Material Adverse
Effect on Acquiror; (g) the execution and delivery of this Agreement by Acquiror
does not, and the performance of this Agreement by Acquiror will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity except pursuant to the HSR Act; and (h)
any Target Shares acquired upon exercise of the Option will not be acquired by
Acquiror with a view to the public distribution thereof and Acquiror will not
sell or otherwise dispose of such shares in violation of applicable law or this
Agreement.
7. CERTAIN RIGHTS
--------------
(a) ACQUIROR PUT. If Acquiror shall have exercised the Option,
------------
Acquiror may thereafter deliver to Target a written notice (a "PUT NOTICE"), at
any time during which Acquiror may exercise the Option, specifying that it
wishes to sell (as specified in such Put Notice) all or a portion of the Option
Shares acquired as a result of such exercise at the price, and in the form, set
forth in paragraph (b) below. At any time after delivery of a Put Notice,
unless such Put Notice is withdrawn by Acquiror, the closing of the Put (the
"PUT CLOSING") shall take place at the principal offices of Target on the date
specified in the Put Notice (which shall be at least 5 days after the date of
such Put Notice).
(b) PAYMENT AND REDELIVERY OF CASH OR ACQUIROR SHARES. At the Put
--------------------------------------------------
Closing, (i) Acquiror shall surrender to Target the certificates evidencing the
Option Shares to be purchased by Target at such Put Closing and (ii) Target
shall deliver to Acquiror a proportionate amount of the aggregate consideration
paid by Acquiror in connection with any exercise of the Option. In addition,
the consideration to be paid by Target to Acquiror at any Put Closing shall be
in the form that is proportionate to the form previously paid by Acquiror to
Target. By way of example only, if (x) one third of the aggregate Option Shares
shall have been acquired for cash and two-thirds shall have been acquired for
Acquiror Shares, then (y) the consideration to be paid by Target to Acquiror at
such Put Closing shall consist of one-third cash and two-thirds Acquiror Shares.
Any cash payment required to be made by Target to Acquiror shall be paid a
certified check or bank check. In connection with any Acquiror Shares returned
to Acquiror at a Put Closing, Target shall represent and warrant that such
shares are then free and clear of all claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever, other than those imposed by
Acquiror.
(c) EFFECT OF CERTAIN ACTIONS. The amount of Option Shares and
--------------------------
Acquiror Shares delivered or required to be delivered hereunder shall reflect
appropriately the effect of any stock split, reverse stock split, stock dividend
(including any dividend or distribution of securities convertible into Acquiror
Common Shares or Target Common Stock), reorganization,
-5-
recapitalization or other like change with respect to Acquiror Common Shares or
Target Common Stock occurring after the date of Closing and prior to the date of
the Put Closing.
(d) RESTRICTIONS ON TRANSFER. Until the termination of the Option,
------------------------
Target shall not sell, transfer or otherwise dispose of any Acquiror Shares
acquired by it pursuant to this Agreement.
8. REGISTRATION RIGHTS
-------------------
(a) Following the termination of the Merger Agreement, Acquiror may by
written notice (a "REGISTRATION NOTICE") to Target request Target to register
under the Securities Act, in accordance with Target's existing Amended and
Restated Registration Rights Agreement, dated August 22, 1995 (the "REGISTRATION
---------------
RIGHTS AGREEMENT"), all or any part of the shares acquired by Acquiror pursuant
to this Agreement (the "REGISTRABLE SECURITIES") in order to permit the sale or
other disposition of such shares pursuant to a bona fide firm commitment
underwritten public offering in which the Acquiror and the underwriters shall
effect as wide a distribution of such Registrable Securities as is reasonably
practicable; provided, however, that any such Registration Notice must relate to
-------- -------
a number of shares equal to at least 2% of the outstanding shares of Common
Stock of the Target on a fully diluted basis and that any rights to require
registration hereunder shall terminate with respect to any shares that may be
sold pursuant to Rule 144(k) under the Securities Act.
(b) The registration rights set forth in this Section 8 are subject to
the condition that Acquiror shall provide Target with such information with
respect to Acquiror's Registrable Securities, the plan for distribution thereof,
and such other information with respect to such Acquiror, in the reasonable
judgment of counsel for Target, is necessary to enable Acquiror to include in a
registration statement all material facts required to be disclosed with respect
to a registration thereunder.
(c) A registration effected under this Section 8 shall be effected at
Target's expense, except for underwriting discounts and commissions and the fees
and expenses of counsel to Acquiror, and Target shall provide to the
underwriters such documentation (including certificates, opinions of counsel and
"comfort" letters from auditors) as are customary in connection with
underwritten public offerings and as such underwriters may reasonably require.
In connection with any registration, Target shall agree to enter into an
underwriting agreement reasonably acceptable to each such party, in form and
substance customary for transactions of this type with the underwriters
participating in such offering.
(d) Indemnification
---------------
(i) Target will indemnify Acquiror, each of its directors and
officers and each person who controls Acquiror within the meaning of Section 15
of the Securities Act, and each underwriter of Target's securities, with respect
to any registration, qualification or compliance which has been effected
pursuant to this Agreement, in accordance with the terms and conditions of
Target's existing Registration Rights Agreement and Acquiror will indemnify
Target in accordance with the
-6-
terms and conditions of Target's existing Registration Rights Agreement;
provided, however that such terms and conditions may not be modified, altered,
or amended without Acquiror's consent.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION; RIGHTS PLANS
-------------------------------------------------------
(a) In the event of any change in the Target Shares by reason of stock
dividends, stock splits, reverse stock splits, mergers (other than the Merger),
recapitalizations, combinations, exchanges of shares and the like, the type and
number of shares or securities subject to the Option, the Exercise Ratio and the
Exercise Price shall be adjusted appropriately, and proper provision shall be
made in the agreements governing such transaction so that Acquiror shall
receive, upon exercise of the Option, the number and class of shares or other
securities or property that Acquiror would have received in respect of the
Target Shares if the Option had been exercised immediately prior to such event
or the record date therefor, as applicable.
(b) At any time during which the Option is exercisable, and at any
time after the Option is exercised (in whole or in part, if at all), Target
shall not adopt a stockholders rights plan (a so-called "poison pill") that
contains provisions for the distribution of rights thereunder as a result of
Acquiror being the beneficial owner of shares of the first party by virtue of
the Option being exercisable or having been exercised (or as a result of such
other party beneficially owning shares issuable in respect of any Option
Shares). It is understood, however, that following termination (if any) of the
Merger Agreement, a party may adopt a stockholders rights plan, that contains
provisions for the distribution of rights thereunder as a result of the other
party being the beneficial owner of shares of the first party in addition to
those that may be beneficially owned by virtue of the Option being exercisable
or having been exercised (or as a result of such other party beneficially owning
shares issuable in respect of any Option Shares).
10. RESTRICTIVE LEGENDS
-------------------
Each certificate representing Option Shares issued to Acquiror
hereunder, and each certificate representing Acquiror Shares delivered to Target
at a Closing, shall include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF MAY 13,
1997, A COPY OF WHICH MAY BE OBTAINED FROM ACQUIROR.
11. LISTING AND HSR FILING
----------------------
Target, upon the request of Acquiror, shall promptly file an
application to list the Target Shares to be acquired upon exercise of the Option
for quotation on the Nasdaq National
-7-
Market and shall use its best efforts to obtain approval of such listing as soon
as practicable. Promptly after the date hereof, each of the parties hereto shall
promptly file with the Federal Trade Commission and the Antitrust Division of
the United States Department of Justice all required premerger notification and
report forms and other documents and exhibits required to be filed under the HSR
Act to permit the acquisition of the Target Shares subject to the Option at the
earliest possible date.
12. BINDING EFFECT
--------------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Nothing
contained in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto and their respective successors and
permitted assigns any rights or remedies of any nature whatsoever by reason of
this Agreement. Any shares sold by a party in compliance with the provisions of
Section 8 shall, upon consummation of such sale, be free of the restrictions
imposed with respect to such shares by this Agreement and any transferee of such
shares shall not be entitled to the rights of such party. Certificates
representing shares sold in a registered public offering pursuant to Section 8
shall not be required to bear the legend set forth in Section 10.
13. SPECIFIC PERFORMANCE
--------------------
The parties recognize and agree that if for any reason any of the
provisions of this Agreement are not performed in accordance with their specific
terms or are otherwise breached, immediate and irreparable harm or injury would
be caused for which money damages would not be an adequate remedy. Accordingly,
each party agrees that in addition to other remedies the other party shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement. In the event that any action shall be brought
in equity to enforce the provisions of the Agreement, neither party will allege,
and each party hereby waives the defense, that there is an adequate remedy at
law.
-8-
14. ENTIRE AGREEMENT
----------------
This Agreement and the Merger Agreement (including the appendices
thereto) constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
15. FURTHER ASSURANCES
------------------
Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
consummate the transactions contemplated hereby.
16. VALIDITY
--------
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto shall negotiate
in good faith and shall execute and deliver an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.
17. NOTICES
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or sent via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers for
a party as shall be specified by like notice):
(a) if to Target, to:
Aurum Software, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President and Chief Executive Officer
with a copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
-9-
(b) if to Acquiror, to:
Baan Company N.V.
Baron van ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
P. O. ▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Attn: President and Chief Executive Officer
with a copy to each of:
▇▇▇▇ ▇▇▇▇▇▇▇
Managing Director
Baan USA Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
18. GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to agreements made and to be
performed entirely within such State.
19. COUNTERPARTS
------------
This Agreement may be executed in two counterparts, each of which
shall be deemed to be an original, but both of which, taken together, shall
constitute one and the same instrument.
20. EXPENSES
--------
Except as otherwise expressly provided herein or in the Merger
Agreement, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
-10-
21. AMENDMENTS; WAIVER
------------------
This Agreement may be amended by the parties hereto and the terms and
conditions hereof may be waived only by an instrument in writing signed on
behalf of each of the parties hereto, or, in the case of a waiver, by an
instrument signed on behalf of the party waiving compliance.
22. ASSIGNMENT
----------
Neither of the parties hereto may sell, transfer, assign or otherwise
dispose of any of its rights or obligations under this Agreement or the Option
created hereunder to any other person, without the express written consent of
the other party, except that the rights and obligations hereunder shall inure to
the benefit of and be binding upon any successor of a party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
ACQUIROR:
BAAN COMPANY N.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President,
Baan Affiliates and Marketing
TARGET:
AURUM SOFTWARE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
***STOCK OPTION AGREEMENT***
(Target option to Acquiror)
EXHIBIT C
FORM OF AURUM SOFTWARE AFFILIATE AGREEMENT
AURUM SOFTWARE, INC.
AFFILIATE AGREEMENT
This AFFILIATE AGREEMENT ("Agreement") dated as of May ___, 1997, is
entered into between Baan Company N.V., a corporation organized under the laws
of The Netherlands ("Baan") and the undersigned affiliate ("Affiliate") of Aurum
Software, Inc., a Delaware corporation ("Company").
WHEREAS, Baan and Company have entered into an Agreement and Plan of
Reorganization dated May 13, 1997 ("Merger Agreement") pursuant to which a
subsidiary of Baan will merge with and into Company ("Merger"), and Company will
become a subsidiary of Baan (capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Merger Agreement);
WHEREAS, pursuant to the Merger, at the Effective Time outstanding shares
of Common Stock of the Company ("Company Common Stock"), including any shares
owned by Affiliate, will be converted into the right to receive Baan Common
Shares;
WHEREAS, it is intended that the Merger will constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986 as
amended (the "Code"), and that it will be a condition to effectiveness of the
Merger that legal counsel for each of Company and Baan will have delivered
written opinions to such effect;
WHEREAS, it is further intended that the Merger will qualify for "pooling-
of-interests" accounting treatment;
WHEREAS, the execution and delivery of this Agreement by Affiliate is a
material inducement to Baan to enter into the Merger Agreement; and
WHEREAS, Affiliate has been advised that Affiliate may be deemed to be an
"affiliate" of Company, as the term "affiliate" is used (i) for purposes of
paragraphs (c) and (d) of Rule 145 of the Rules and Regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission") and
(ii) in the Commission's Accounting Series Releases 130 and 135, as amended,
although nothing contained herein shall be construed as an admission by
Affiliate that Affiliate is in fact an "affiliate" of Company.
NOW, THEREFORE, intending to be legally bound, the parties hereby agree as
follows:
1. Acknowledgments by Affiliate. Affiliate has been informed that a
----------------------------
reorganization for federal income tax purposes requires that a sufficient number
of former shareholders of the Company maintain a meaningful continuing equity
ownership interest in Baan following the Merger. Affiliate acknowledges and
understands that the representations, warranties and covenants by Affiliate set
forth herein will be relied upon by Baan, Company, and their respective
"affiliates", counsel and accountants, and that substantial losses and damages
may be incurred by these persons if Affiliate's representations, warranties or
covenants are breached. Affiliate has carefully read this Agreement and the
Merger Agreement and has had the opportunity to discuss the requirements of this
Agreement with his, her or its professional advisors, who are qualified to
advise him, her or it with regard to such matters.
2. Compliance with Rule 145 and the Securities Act.
-----------------------------------------------
(a) Affiliate has been advised that (i) the issuance of shares of Baan
Common Stock in connection with the Merger is expected to be effected pursuant
to a Registration Statement on Form F-4 to be filed to register the shares of
Baan Common Shares under the Securities Act of 1933, as amended (the "Securities
Act"), and as such will not be deemed "restricted securities" within the meaning
of Rule 144 promulgated under the Securities Act, and resale of such shares will
not be subject to any restrictions other than as set forth in Rule 145
promulgated under the Securities Act (which will not apply if such shares are
otherwise transferred pursuant to an effective registration statement under the
Securities Act or an appropriate exemption from registration), and (ii)
Affiliate may be deemed to be an "affiliate" of the Company within the meaning
of the Securities Act and, in particular, Rule 145 promulgated thereunder.
Affiliate accordingly agrees not to sell, transfer or otherwise dispose of any
Baan Common Shares issued to Affiliate in the Merger unless (i) such sale,
transfer or other disposition is made in conformity with the requirements of
Rule 145(d) promulgated under the Securities Act, or (ii) such sale, transfer or
other disposition is made pursuant to an effective registration statement under
the Securities Act or an appropriate exemption from registration, or (iii)
Affiliate delivers to Baan a written opinion of counsel, reasonably acceptable
to Baan in form and substance, that such sale, transfer or other disposition is
otherwise exempt from registration under the Securities Act.
(b) Baan will give stop transfer instructions to its transfer agent
with respect to any Baan Common Shares received by Affiliate pursuant to the
Merger and there will be placed on the certificates representing such Common
Shares, or any substitutions therefor, a legend stating in substance:
"The shares represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933, as amended (the "Securities Act") applies and may only be
transferred in conformity with Rule 145(d) or pursuant to an effective
registration statement under the Securities Act, or in accordance with
a written opinion of counsel, reasonably acceptable to the issuer in
form and substance, that such transfer is exempt from registration
under the Securities Act."
The legend set forth above shall be removed (by delivery of a substitute
certificate without such legend) and Baan shall so instruct its transfer agent,
if Affiliate delivers to Baan satisfactory written evidence that (i) the shares
have been sold in compliance with Rule 145 (in which case, the substitute
-2-
certificate will be issued in the name of the transferee), or (ii) any of the
other conditions specified in Section 2(a) hereof have been satisfied.
3. Covenants Related to Pooling of Interests. Notwithstanding any other
-----------------------------------------
provision of this Affiliate Agreement to the contrary, during the period
commencing on the date hereof, consistent with Accounting Standards Release
("ASR") No. 135, which period the parties agree will continue until such date
after the Effective Time as shall be the first market trading day following the
date Baan publishes financial results covering at least 30 days of combined
operations of Baan and Company, Affiliate will not sell, exchange, transfer,
pledge, distribute, make any gift or otherwise dispose of or grant any option,
establish any "short" or put-equivalent position with respect to or enter into
any similar transaction (through derivatives or otherwise) intended to reduce or
having the effect, directly or indirectly, of reducing his risk relative to any
shares of Company Securities (as hereinafter defined), or any rights, options or
warrants to purchase Company Securities, or Merger Securities (as hereinafter
defined) or other securities of Baan received by Affiliate in connection with
the Merger. For the purposes of this Agreement, (i) "Company Securities" shall
mean, collectively, all shares of Company Common Stock and any other securities
of the Company held by Affiliate, including all securities as to which Affiliate
has sole or shared voting or investment power, and all rights, options and
warrants to acquire shares of capital stock or other securities of Company
granted to or held by Affiliate, and (ii) "Merger Securities" shall mean,
collectively, all Baan Common Shares that are or may be issued by Baan in
connection with the Merger or the transactions contemplated by the Merger
Agreement, and any Securities that may be paid as a dividend or otherwise
distributed thereon or with respect thereto or issued or delivered in exchange
or substitution therefor or upon conversion thereof. Baan may, at its
discretion, cause a restrictive legend to the foregoing effect to be placed on
certificates representing Merger Securities issued to Affiliate in the Merger
and place a stop transfer notice consistent with the foregoing with its transfer
agent with respect to the certificates. Notwithstanding the foregoing,
Affiliate is entitled to sell or dispose of shares so long as such sale or
disposition is in accordance with ▇▇▇ ▇▇. ▇▇▇ and the "de minimis" test set
forth in Commission Staff Accounting Bulletin No. 76; provided that Shareholder
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has first obtained Baan's prior written approval of any such proposed sale or
disposition.
4. Representations, Warranties and Covenants Related to Tax Effects of
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the Merger.
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(a) Affiliate is the beneficial owner of Company Securities and did
not acquire any of the Company Securities in contemplation of the Merger;
(b) Affiliate has not engaged in a Sale (as defined below) of any
shares of Company Common Stock in contemplation of the Merger;
(c) Affiliate does not now have, and as of the Effective Time of the
Merger will not have, any current plan or intention (a "Plan") to engage in a
sale, exchange, transfer, redemption or reduction in any way of the
undersigned's risk of ownership by short sale or otherwise, or other
disposition, directly or indirectly (such actions being collectively referred to
herein as a "Sale") of more than fifty percent (50%) of the Baan Common Shares
(or other Merger Securities) (on a fully diluted basis, giving effect to all
options) to be received by Affiliate in the Merger;
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(d) If Affiliate is a partnership, then the term "Sale" as used in
paragraph (c) above shall not be deemed to include any distribution to the
undersigned's partners, provided that if any recipient of any such distribution
will receive Baan Common Shares (or other Merger Securities) having a fair
market value of 1% or more of the fair market value of all the shares of the
capital stock of Company presently outstanding, the undersigned is not aware of
any Plan on the part of such recipient to engage in a Sale of more than fifty
percent (50%) of Baan Common Shares (or other Merger Securities) (on a fully
diluted basis, giving effect to all options) to be received by such recipient in
such distribution;
(e) Affiliate is not aware of, or participating in, any Plan to engage
in a Sale or Sales of Baan Common Shares (or other Merger Securities) to be
received in the Merger such that the aggregate fair market value, as of the
Effective Time of the Merger, of the shares subject to such Sales would exceed
fifty percent (50%) of the aggregate fair market value of all shares of
outstanding capital stock of Company immediately prior to the Merger;
(f) Affiliate understands that Company, Baan and their respective
affiliates, as well as legal counsel to Company and Baan (in connection with
rendering their opinions that the Merger will be a "reorganization" within the
meaning of Section 368(a) of the Code) will be relying on (a) the truth and
accuracy of the representations contained herein and (b) Affiliate's performance
of the obligations set forth herein.
5. Miscellaneous.
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(a) The Affiliate agrees that, upon receipt of signatures representing
holders of 66 2/3% of Registrable Securities (as such term is defined in the
Registration Rights Agreement dated August 22, 1995 (as amended March 29, 1996)
among the Company and the holders of its then-outstanding shares of Preferred
Stock) and upon consummation of the Merger, such Registration Rights Agreement
shall terminate and cease to be of any effect.
(b) For the convenience of the parties hereto, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.
(c) This Agreement shall be enforceable by, and shall inure to the
benefit of and be binding upon, the parties hereto and their respective
successors and assigns. As used herein, the term "successors and assigns" shall
mean, where the context so permits, heirs, executors, administrators, trustees
and successor trustees, and personal and other representatives.
(d) This Agreement shall be governed by and construed, interpreted and
enforced in accordance with the internal laws of the State of Delaware.
(e) If a court of competent jurisdiction determines that any provision
of this Agreement is not enforceable or enforceable only if limited in time or
scope, this Agreement shall continue in full force and effect with such
provision stricken or so limited.
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(f) Counsel to the parties and each of the parties' accountants to the
Agreement shall be entitled to rely upon this Agreement as appropriate.
(g) This Agreement shall not be modified or amended, or any right
hereunder waived or any obligation excused, except by a written agreement signed
by both parties.
(h) This Affiliate Agreement shall be terminated and of no further
force and effect upon termination of the Merger Agreement pursuant to its terms.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth on the first page of this Agreement.
BAAN COMPANY N.V.
By: _____________________________________________
Title: __________________________________________
AFFILIATE
By:______________________________________________
Name of Affiliate: ______________________________
Name of Signatory (if different from name of
Affiliate): _____________________________________
Title of Signatory
(if applicable): ________________________________
Company shares beneficially owned:
_______________ shares of Common Stock
Company shares subject to outstanding options:
_______________ shares of Common Stock
***AURUM SOFTWARE, INC. AFFILIATE AGREEMENT***
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EXHIBIT D-1
FORM OF EMPLOYMENT AGREEMENT
NOT YET COMPLETED
EXHIBIT D-2
FORM OF NON-COMPETITION AGREEMENT
NOT YET COMPLETED
