EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
by and between
BLAZE SOFTWARE, INC.
and
BROKAT AKTIENGESELLSCHAFT
June 19, 2000
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TABLE OF CONTENTS
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RECITALS..................................................................................... 1
ARTICLE I THE MERGER...................................................................... 2
Section 1.1 The Merger................................................................ 2
Section 1.2 Effective Time............................................................ 2
Section 1.3 Closing................................................................... 3
Section 1.4 Effects of the Merger..................................................... 3
Section 1.5 The Certificate of Incorporation.......................................... 3
Section 1.6 The By-Laws............................................................... 3
Section 1.7 Directors of Surviving Corporation........................................ 3
Section 1.8 Officers of Surviving Corporation......................................... 3
ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES................. 4
Section 2.1 Conversion of Capital Stock............................................... 4
Section 2.2 Exchange of Certificates.................................................. 5
Section 2.3 No Appraisal Rights....................................................... 9
Section 2.4 Adjustments to Prevent Dilution........................................... 9
Section 2.5 Withholding Rights........................................................ 9
Section 2.6 Treatment of Stock Options/Restricted Stock............................... 9
Section 2.7 Treatment of Warrants..................................................... 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................... 12
Section 3.1 Organization and Qualification; Subsidiaries.............................. 12
Section 3.2 Certificate of Incorporation and By-Laws.................................. 12
Section 3.3 Capitalization............................................................ 12
Section 3.4 Authority................................................................. 14
Section 3.5 No Conflict............................................................... 15
Section 3.6 Required Filings and Consents............................................. 15
Section 3.7 Permits; Compliance with Law.............................................. 16
Section 3.8 SEC Filings; Financial Statements......................................... 16
Section 3.9 Absence of Certain Changes or Events...................................... 18
Section 3.10 Employee Benefit Plans; Employee Relations................................ 19
Section 3.11 Accounting and Tax Matters................................................ 21
Section 3.12 Contracts; Debt Instruments............................................... 21
Section 3.13 Litigation................................................................ 22
Section 3.14 Environmental Matters..................................................... 22
Section 3.15 Intellectual Property..................................................... 23
Section 3.16 Taxes..................................................................... 26
Section 3.17 Non-Competition Agreements................................................ 26
Section 3.18 Agreements with Regulatory Agencies....................................... 26
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Section 3.19 Opinion of Financial Advisor.............................................. 27
Section 3.20 Brokers................................................................... 27
Section 3.21 Certain Statutes.......................................................... 27
Section 3.22 Information............................................................... 27
Section 3.23 Vote Required............................................................. 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT...................................... 28
Section 4.1 Organization and Qualification; Subsidiaries.............................. 28
Section 4.2 Charter Documents......................................................... 29
Section 4.3 Capitalization............................................................ 29
Section 4.4 Authority................................................................. 30
Section 4.5 No Conflict............................................................... 30
Section 4.6 Required Filings and Consents ............................................ 31
Section 4.7 Financial Statements...................................................... 32
Section 4.8 Absence of Certain Changes or Events...................................... 32
Section 4.9 Accounting and Tax Matters................................................ 34
Section 4.10 Litigation................................................................ 34
Section 4.11 Intellectual Property..................................................... 34
Section 4.12 Taxes..................................................................... 34
Section 4.13 Brokers................................................................... 34
Section 4.14 Information............................................................... 35
ARTICLE V COVENANTS.......................................................................... 35
Section 5.1 Conduct of Business of the Company........................................ 35
Section 5.2 Certain Interim Operations of the Parent.................................. 38
Section 5.3 Notification of Certain Matters........................................... 39
Section 5.4 Proxy Statement........................................................... 39
Section 5.5 Company Stockholders...................................................... 41
Section 5.6 Access to Information; Confidentiality.................................... 41
Section 5.7 No Solicitation........................................................... 42
Section 5.8 Employee Benefits Matters................................................. 44
Section 5.9 Directors' and Officers' Indemnification and Insurance.................... 45
Section 5.10 Letters of Accountants.................................................... 46
Section 5.11 Commercially Reasonable Efforts........................................... 46
Section 5.12 Consents; Filings; Further Action ........................................ 46
Section 5.13 Plan of Reorganization.................................................... 48
Section 5.14 Public Announcements...................................................... 48
Section 5.15 Stock Exchange Listings and De-Listings................................... 48
Section 5.16 Expenses.................................................................. 48
Section 5.17 Takeover Statutes; Exon-▇▇▇▇▇▇............................................ 49
Section 5.18 Dividends................................................................. 49
Section 5.19 Control of the Company's Operations....................................... 49
Section 5.20 Certain Obligations of the Parent......................................... 49
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ARTICLE VI CONDITIONS........................................................................ 50
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger................ 50
Section 6.2 Conditions to Obligations of the Parent................................... 50
Section 6.3 Conditions to Obligation of the Company................................... 52
ARTICLE VII TERMINATION...................................................................... 53
Section 7.1 Termination............................................................... 53
Section 7.2 Effect of Termination..................................................... 54
Section 7.3 Expenses Following Certain Termination Events............................. 54
ARTICLE VIII MISCELLANEOUS................................................................... 56
Section 8.1 Certain Definitions....................................................... 56
Section 8.2 Survival.................................................................. 57
Section 8.3 Counterparts.............................................................. 57
Section 8.4 GOVERNING LAW; WAIVER OF JURY TRIAL....................................... 57
Section 8.5 Notices................................................................... 58
Section 8.6 Entire Agreement.......................................................... 59
Section 8.7 No Third Party Beneficiaries.............................................. 59
Section 8.8 Amendment................................................................. 59
Section 8.9 Waiver.................................................................... 59
Section 8.10 Obligations of the Parent and of the Company.............................. 59
Section 8.11 Severability.............................................................. 59
Section 8.12 Interpretation............................................................ 60
Section 8.13 Assignment................................................................ 60
Section 8.14 Specific Performance...................................................... 60
Section 8.15 Submission to Jurisdiction; Waivers; Consent to Service of Process........ 60
EXHIBITS
Exhibit A Company Voting Agreements
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated June 19, 2000,
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by and between BLAZE SOFTWARE, INC., a Delaware corporation (the "Company"), and
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BROKAT AKTIENGESELLSCHAFT, a German corporation which is in the process of
changing its name from BROKAT Infosystems Aktiengesellschaft (the "Parent").
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RECITALS
(a) The management board (Vorstand) of the Parent and the board of
directors of the Company have determined that the merger of Merger Sub with and
into the Company on the terms and subject to the conditions set forth on this
Agreement (the "Merger"), with the Company surviving as a wholly owned
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subsidiary of the Parent, is advisable and that it is in the best interests of
their respective corporations and stockholders to combine the respective
businesses of the Parent and the Company, and consequently have approved the
merger of Merger Sub with and into the Company (the "Merger") and have approved
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and adopted the Merger and this Agreement, in accordance with the General
Corporation Law of the State of Delaware (the "DGCL") and the laws of Germany.
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(b) Concurrently with the execution of this Agreement, as a condition
to the willingness of the Parent to enter into this Agreement, (i) certain
holders (the "Principal Stockholders") of the Company's common stock, par value
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$0.0001 per share ("Company Common Stock"), are entering into one or more
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stockholders' agreements, dated as of the date hereof, with the Parent and the
Company, copies of which are attached to this Agreement as Exhibit A (the
"Company Voting Agreements").
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(c) For federal income tax purposes it is intended that the Merger
shall qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the rules and
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regulations promulgated under the Code.
(d) Certain terms used in this Agreement which are not capitalized
have the meanings specified in Section 8.1.
NOW, THEREFORE, the parties to this Agreement, intending to be legally
bound by this Agreement, agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger.
(a) As promptly as practicable following the date hereof, the
Parent and the Company shall appoint a United States bank or trust company or
other independent financial institution in the United States (the "Exchange
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Agent") to act as exchange agent for the Share Exchange (as defined in Section
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2.2 (a)(ii) hereof) and the delivery of the Merger Consideration (as defined in
Section 2.1(c) hereof). Following such appointment, the Exchange Agent (as agent
for the Parent) shall cause to be incorporated pursuant to the DGCL a
corporation which shall be a constituent company in the Merger ("Merger Sub")
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and which shall not transact any business other than participating in the Merger
as described herein. To accommodate the transactions described in this Article I
and Article II, the Exchange Agent shall hold all the issued and outstanding
shares of common stock, par value $0.01 per share, of the Merger Sub (the
"Merger Sub Common Stock") as agent for the Parent; at and following the
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Effective Time, the Exchange Agent shall receive and hold the Merger
Consideration and the Exchange Fund solely as agent for the Company's
shareholders. The Parent and the Company shall enter into an exchange agent
agreement with the Exchange Agent in form and substance reasonably satisfactory
to the Parent and the Company, which agreement shall set forth the duties,
responsibilities and obligations of the Exchange Agent consistent with the terms
of this Agreement.
(b) Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, in accordance with the DGCL, Merger Sub
shall be merged with and into the Company in accordance with this Agreement and
the separate corporate existence of Merger Sub shall cease. The Company shall be
the surviving corporation in the Merger (sometimes referred to as the "Surviving
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Corporation") and shall continue to be governed by the laws of the State of
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Delaware, and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger.
Section 1.2 Effective Time. As soon as practicable following the
satisfaction or, if permissible, waiver of the conditions set forth in Article
VI but in no event later than the third business day following such satisfaction
or waiver (unless another date is agreed to by each of the parties in writing),
the Company, Merger Sub and the Parent will cause a Certificate of Merger (the
"Certificate of Merger") to be signed, acknowledged and delivered for filing
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with the Secretary of State of the State of Delaware as provided in Section 251
of the DGCL. The Merger shall become effective at the time when a Certificate
of Merger has been duly filed with the Secretary of State of the State of
Delaware or such other subsequent date or time as shall be agreed upon by the
parties
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and set forth in the Certificate of Merger and in accordance with
the DGCL (the "Effective Time").
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Section 1.3 Closing. Subject to the satisfaction or waiver of all of
the conditions to closing contained in Article VI hereof, the closing of the
Merger (the"Closing") shall take place (a) at the offices of Paul, Weiss,
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Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New York at 12:00 (noon, New York time)
on the third business day after the day on which the last to be fulfilled or
waived of such conditions (other than those conditions that by their nature are
to be satisfied at the Closing, but subject to the fulfillment or waiver of
those conditions) shall be satisfied or waived in accordance with this Agreement
or (b) at such other place and time or on such other date as the Company and the
Parent may agree in writing (the "Closing Date").
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Section 1.4 Effects of the Merger. The Merger shall have the effects
set forth in the DGCL, including Section 259 of the DGCL, and in accordance
therewith, at the Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and Merger Sub
shall become the debts, liabilities and duties of the Surviving Corporation.
Section 1.5 The Certificate of Incorporation. The certificate of
incorporation of Merger Sub in effect immediately prior to the Effective Time
shall, from and after the Effective Time, be the certificate of incorporation of
the Surviving Corporation until duly amended as provided therein or by
applicable law; provided, however, that at the Effective Time, the certificate
of incorporation of the Surviving Corporation shall be amended so that the name
of the Surviving Corporation shall be "Blaze Software, Inc."
Section 1.6 The By-Laws. The by-laws of Merger Sub in effect
immediately prior to the Effective Time shall, from and after the Effective
Time, be the by-laws of the Surviving Corporation until duly amended as provided
therein or by applicable law.
Section 1.7 Directors of Surviving Corporation. The directors of
Merger Sub at the Effective Time shall, from and after the Effective Time, be
the directors of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Certificate of Incorporation and by-laws of the
Surviving Corporation.
Section 1.8 Officers of Surviving Corporation. The officers of the
Company at the Effective Time shall, from and after the Effective Time, be the
officers of the Surviving Corporation until their successors have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the certificate of incorporation and by-laws of the
Surviving Corporation.
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ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
capital stock of the Company:
(a) Capital Stock of Merger Sub. Each share of Merger Sub Common
Stock issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable share
of common stock, par value $0.0001 per share, of the Surviving Corporation
("Surviving Corporation Common Stock").
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(b) Cancellation of Treasury Stock and Parent-Owned Stock. All
shares of Company Common Stock that are owned by the Company as treasury stock
or by the Parent, Merger Sub or any Parent Subsidiary issued and outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder of any such shares, no longer be
outstanding, shall be canceled and retired without payment of any consideration
therefor and shall cease to exist; provided, however, that all shares of Company
Common Stock that are owned by any trust established pursuant to Section 2.6
hereof shall remain issued and outstanding and the holders thereof shall be
entitled to the Merger Consideration.
(c) Exchange Ratio. Each share of the common stock, par value
$0.0001 per share, of the Company (the "Company Common Stock") issued and
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outstanding immediately prior to the Effective Time (other than shares of
Company Common Stock that are owned by the Company as treasury stock or by the
Parent or any Parent Subsidiary) shall be converted into the right to receive
(the "Exchange Ratio") 0.3652 American Depositary Shares of the Parent ("Parent
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ADSs"), each representing 0.5 shares (stuckaktien) of the Parent ("Parent Common
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Stock"), subject to adjustment as provided in Section 2.4 and subject to cash in
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lieu of fractional Parent ADSs, if any, pursuant to Section 2.2(f)
(collectively, the "Merger Consideration"). At the Effective Time, all shares of
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Company Common Stock shall no longer be outstanding, shall be canceled and
retired and shall cease to exist, and each certificate (a "Certificate")
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formerly representing any Shares of Company Common Stock (other than shares of
Company Common Stock owned by the Company or by the Parent, Merger Sub or any
Parent Subsidiary) shall thereafter represent only the right to receive the
Merger Consideration and any distribution or dividend under Section 2.2(c) in
each case without interest.
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Section 2.2 Exchange of Certificates.
(a) The Share Exchange. Consistent with the terms of this
Agreement, as soon as practicable following the signing of this Agreement and in
no event later than five business days following the Effective Time (unless
otherwise agreed to by each of the parties in writing):
(i) the Parent shall issue the Parent Common Stock
underlying the Parent ADSs to be issued on behalf of the Parent in connection
with the Merger and cause American Depositary Receipts ("ADRs") representing
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Parent ADSs representing such Parent Common Stock (such Parent ADSs, together
with any dividends or distributions with respect thereto to which the holders of
Certificates may be entitled pursuant to Section 2.2(c) and with the proceeds
held in the Exchange Trust, being hereinafter referred to as the "Exchange
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Fund") to be delivered to the Exchange Agent, for the benefit of the holders of
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Certificates, for exchange in accordance with this Article II, through the
Exchange Agent, issuable pursuant to Section 2.1(c) in exchange for outstanding
shares of Company Common Stock; and
(ii) the Exchange Agent shall contribute, on behalf of the former
stockholders of the Company, all of the issued and outstanding shares of
Surviving Corporation Common Stock to the Parent as a contribution in kind (the
"Share Exchange").
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Subject to Section 5.20, the Share Exchange shall be effected in
accordance with Sections 52, 203, 185 et seq. (including in particular Section
187) of the German Stock Corporation Law (Aktiengesetz), in each case to the
extent each such provision may be applicable, by registering the increase of the
Parent stated share capital by contribution-in-kind (the "Share Capital
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Increase") with the commercial register (Handelsregister) for the Parent. At
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the Effective Time, the obligation of the parties to effect the Share Exchange
shall be unconditional.
(b) Exchange Procedures. Promptly after the Effective Time, and in
no event later than five business days thereafter (unless otherwise agreed to by
each of the parties in writing), the Surviving Corporation shall cause the
Exchange Agent to mail to each holder of record of a Certificate (other than the
Company, the Parent, Merger Sub or any Parent Subsidiary) (i) a letter of
transmittal specifying that delivery shall be effected, and that risk of loss
and title to the Certificates shall pass, only upon proper delivery of the
Certificates (or affidavits of loss in lieu of Certificates) to the Exchange
Agent, in a form and with other customary provisions reasonably specified by the
Parent and the Company, and (ii) instructions for surrendering the Certificates
to the Exchange Agent in exchange for (A) an ADR representing the number of
whole Parent ADSs pursuant to Section 2.2(f), (B) cash in lieu of any fractional
Parent ADSs, and (C) any unpaid dividends and other distributions (if any)
pursuant to Section 2.2(c). Upon surrender of a Certificate for cancellation to
the Exchange Agent together with such
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letter of transmittal, duly executed, the holder of that Certificate shall
be entitled to receive in exchange (1) an ADR representing that number of whole
Parent ADSs that the holder is entitled to receive under this Article II, (2) a
check in the amount (after giving effect to any required tax withholding) of (x)
any cash in lieu of fractional Parent ADSs plus (y) any unpaid dividends (other
than stock dividends) and any other dividends or other distributions that such
holder has the right to receive under the provisions of this Article II (if
any), and the Certificate so surrendered shall immediately be canceled. No
interest will be paid or accrued on any amount payable upon due surrender of the
Certificates. In the event of a transfer of ownership of shares of Company
Common Stock that is not registered in the transfer records of the Company, an
ADR representing the proper number of Parent ADSs, together with a check for any
cash to be paid upon the surrender of the Certificate and any other dividends or
distributions (if any) in respect of those shares, may be issued or paid to such
a transferee if the Certificate formerly representing such Shares of Company
Common Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect the transfer and to evidence that any applicable
stock transfer taxes have been paid. If any ADRs for shares of Parent ADSs is to
be issued in a name other than that in which the surrendered Certificate is
registered, it shall be a condition of such exchange that the person requesting
such exchange shall pay any transfer or other taxes required by reason of the
issuance of certificates for shares of Parent Common Stock in a name other than
that of the registered holder of the surrendered Certificate, or shall establish
to the satisfaction of the Parent or the Exchange Agent that such tax has been
paid or is not applicable.
(c) Distributions with Respect to Unexchanged Company Common
Stock. Whenever a dividend or other distribution is declared by the Parent in
respect of Parent Common Stock and the record date for that dividend or other
distribution is at or after the Effective Time, that declaration shall include
dividends or other distributions in respect of all ADSs issuable under this
Agreement. No dividends or other distributions in respect of the Parent ADSs
shall be paid to any holder of any unsurrendered Certificate until that
Certificate is surrendered for exchange in accordance with this Article II.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be issued or paid to the holder of the ADRs
representing whole shares of Parent ADSs issued in exchange therefor, without
interest, (i) at the time of such surrender, the dividends or other
distributions with a record date at or after the Effective Time and a payment
date on or prior to the date of issuance of such whole Parent ADSs and not
previously paid, and (ii) at the appropriate payment date, the dividends or
other distributions payable with respect to such whole shares of Parent Common
Stock with a record date at or after the Effective Time but with a payment date
subsequent to surrender. For purposes of dividends or other distributions in
respect of Parent ADSs, all Parent ADSs to be issued pursuant to the Merger
shall be deemed issued and outstanding as of the Effective Time.
(d) No Further Ownership Rights in Company Common Stock. Until
surrendered as contemplated by this Section 2.2, each Certificate shall be
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deemed at any time after the Effective Time to represent only the right to
receive the ADR representing Parent ADSs and cash in lieu of any fractional
Parent ADSs, as contemplated by this Section 2.2. All Parent ADSs, together with
any cash paid under Section 2.2(c) or Section 2.2(f) issued upon the surrender
for or exchange of Certificates in accordance with the terms of this Agreement,
shall be deemed to have been issued in full satisfaction of all rights
pertaining to the shares of Company Common Stock formerly represented by such
Certificates.
(e) No Further Transfers. After the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers on the records of the Company of the shares of Company
Common Stock that were outstanding immediately prior to the Effective Time.
(f) Fractional Shares.
(i) No ADRs representing fractional Parent ADSs shall be
issued upon the surrender for exchange of Certificates, and such fractional
interest will not entitle its owner to receive dividends or to any other rights
of a holder of Parent ADSs. Notwithstanding any other provision of this
Agreement, each holder of shares of Company Common Stock exchanged pursuant to
the Merger who would otherwise have been entitled to receive a fraction of a
Parent ADS (after taking into account all Certificates delivered by such holder)
shall receive from the Exchange Agent, in accordance with the provisions of this
Article II, a cash payment in lieu of such fractional Parent ADS, as applicable,
representing such holder's proportionate interest, if any, in the net proceeds
from the sale by the Exchange Agent in one or more transactions (which sale
transactions shall be made at such times, in such manner and on such terms as
the Exchange Agent shall determine in its reasonable discretion) on behalf of
all such holders of the aggregate of the fractional Parent ADSs, as applicable,
which would otherwise have been issued (the "Excess Parent ADSs"). The sale of
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the Excess Parent ADSs by the Exchange Agent shall be executed on the Nasdaq
National Market, at such time the Parent ADSs are quoted on the Nasdaq National
Market, and shall be executed in round lots to the extent practicable. Until the
net proceeds of such sale or sales have been distributed to the holders of
Certificates, the Exchange Agent will hold such proceeds in trust (the "Exchange
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Trust") for the holders of Certificates. All commissions, transfer taxes and
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other out-of-pocket transaction costs, including the expenses and compensation
of the Exchange Agent, incurred in connection with this sale of the Excess
Parent ADSs shall be paid by the Parent. As soon as practicable after the
determination of the amount of cash, if any, to be paid to holders of
Certificates in lieu of any fractional shares of Parent ADSs, the Exchange Agent
shall make available such amounts to such holders of Certificates without
interest. The Exchange Agent shall determine the portion of such net proceeds to
which each holder of shares of Company Common Stock shall be entitled, if any,
by multiplying the amount of the aggregate net proceeds by a fraction the
numerator of which is the amount of the fractional share interest to which such
holder of shares of Company Common Stock is entitled (after taking into account
all shares of Company
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Common Stock then held by such holder) and the denominator of which is the
aggregate amount of fractional interests to which all holders of Certificates
representing shares of Company Common Stock are entitled.
(ii) Notwithstanding the provisions of subsection (i) of this
Section 2.2(f), the Parent may elect, at its option exercised prior to the
Effective Time and in lieu of the issuance and sale of Excess Parent ADSs and
the making of the payments contemplated in such subsection, to pay to the
Exchange Agent an amount in cash sufficient for the Exchange Agent to pay each
holder of shares of Company Common Stock an amount in cash equal to the product
obtained by multiplying (A) the fractional interest to which such holder would
otherwise be entitled (after taking into account all shares of Company Common
Stock held at the Effective Time by such holder) by (B) the closing price for a
share of Parent ADSs on the Nasdaq National Market (or, if there is not yet a
closing price for Parent ADSs on such market, the closing price for the Parent
Common Stock underlying such Parent ADS on the Neuer Market (as defined in
Section 4.6)) on the first business day immediately following the Effective Time
and, in such case, all references in this Agreement to the cash proceeds of the
sale of the Excess Shares and similar references shall be deemed to mean and
refer to the payments calculated as set forth in this Section 2.2(f)(ii).
(g) Termination of Exchange Fund. Any Parent ADSs and any portion
of the Exchange Fund or of dividends or other distributions with respect to the
Parent ADSs deposited by the Parent with the Exchange Agent (including the
proceeds of any investments of those funds) that remains unclaimed by the former
stockholders of the Company within one year after the Effective Time shall be
delivered by the Exchange Agent to a depositary bank deposited by the Parent,
upon demand, whereupon such depositary bank shall hold the Exchange Fund on
behalf of holders of unsurrendered Certificates, and any former stockholders of
the Company who have not theretofore complied with this Article II shall
thereafter look only to such depositary bank for payment of their claim for
Merger Consideration and any dividends and other distributions issuable or
payable pursuant to Section 2.1 and Section 2.2(c) upon due surrender of their
Certificates (or affidavits of loss in lieu of Certificates), in each case,
without any interest and the Parent shall cause the depositary bank to satisfy
such claim. Notwithstanding the foregoing, none of the Parent, the Surviving
Corporation, the Exchange Agent, the depositary bank or any other person shall
be liable to any former holder of shares of Company Common Stock for any amount
properly delivered to a public official under applicable abandoned property,
escheat or similar laws.
(h) Lost, Stolen or Destroyed Certificates. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and the posting by such person of a bond in the form
customarily required by the Parent as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate
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the Parent ADSs, any unpaid dividends or other distributions and any cash
payment in lieu of a fractional share in respect of that Certificate issuable or
payable under this Article II upon due surrender thereof and deliverable in
respect of the shares of Company Common Stock represented by such Certificate
under this Agreement, in each case, without interest.
(i) No Liability. None of the Parent, the Surviving Corporation
or the Exchange Agent shall be liable to any person in respect of any Parent
ADSs, any dividends or distributions with respect to Parent ADSs or any cash
from the Exchange Fund, in each case properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
Section 2.3 No Appraisal Rights. In accordance with Section 262(b)(1)
of the DGCL, no appraisal rights shall be available to holders of shares of
Company Common Stock in connection with the Merger.
Section 2.4 Adjustments to Prevent Dilution. In the event that prior
to the Effective Time there is a change in the number of shares of Company
Common Stock or shares of Parent Common Stock or securities convertible or
exchangeable into or exercisable for shares of Company Common Stock or shares of
Parent Common Stock issued and outstanding as a result of a distribution,
reclassification, stock split (including a reverse stock split), stock dividend
or distribution or other similar transaction, the Exchange Ratio shall be
equitably adjusted to eliminate the effects of that event.
Section 2.5 Withholding Rights. Each of the Exchange Agent and Parent
shall be entitled to deduct and withhold from any amounts otherwise payable
pursuant to this Agreement to any holder of a Certificate such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Code, or any provisions of Law (as defined in Section 3.5(a)(ii) hereof). To
the extent that amounts are so withheld by the Exchange Agent or the Parent, as
the case may be, such withheld amounts shall be treated for purposes of this
Agreement as having been paid to the holder of a Certificate in respect to which
such deduction and withholding was made by the Exchange Agent or Parent, as the
case may be.
Section 2.6 Treatment of Stock Options/Restricted Stock.
(a) On June 14, 2000, the Company established a trust, which
trust was funded by the Company promptly after its establishment with shares of
the Company Common Stock in order to satisfy the obligations of the Company
under the outstanding Company Stock Options and the outstanding Company Warrants
(as defined in Section 2.7(a)) (the "Trust"). Prior to the Effective Time, the
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Company shall issue and deliver to the Trust such number of shares of Company
Common Stock to satisfy the obligations under all outstanding Company Stock
Options immediately prior to the Effective Time.
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(b) Each Company Stock Option granted prior to the Effective Time
and which remains outstanding immediately prior to the Effective Time shall
cease to represent a right to acquire shares of Company Common Stock and shall
be converted, at the Effective Time, into an option to acquire from the Trust,
on the same terms and conditions as were applicable under the Company Stock
Option (but taking into account any changes thereto, except for any acceleration
thereof, by reason of this Agreement or the transactions contemplated hereby as
may be provided for in the Company's Option Plans, in any award agreement or in
such option), that number of Parent ADSs determined by multiplying the number of
shares of Company Common Stock subject to such Company Stock Option by the
Exchange Ratio, rounded, if necessary, to the nearest whole Parent ADS, at a
price per share (rounded to the nearest one-hundredth of a cent) equal to the
per share exercise price specified in such Company Stock Option divided by the
Exchange Ratio; provided, however, that in the case of any Company Stock Option
to which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code, the option price, the number of shares subject to such
option and the terms and conditions of exercise of such option shall be
determined in a manner consistent with the requirements of Section 424(a) of the
Code.46
(c) At the Effective Time, each right of the Company to
repurchase shares of Company Common Stock from optionees pursuant to the
Company's Option Plans ("Repurchase Right") shall be assigned to the Trust, and
----------------
shall apply to the Parent ADSs received in exchange for the shares of Company
Common Stock pursuant to Section 2.2 hereof, on the same terms and conditions as
were applicable under the Company's Option Plans (but taking into account any
changes thereto, except for any acceleration thereof, by reason of this
Agreement or the transactions contemplated hereby as may be provided for in the
Company's Option Plans, in any award agreement or in such option). Prior to the
Effective Time, the Company shall obtain from holders of the shares of Company
Common Stock subject to Repurchase Rights (such shares being referred to as
"Company Restricted Stock" waivers (as may be reasonably requested by the Parent
------------------------
and in the form reasonably satisfactory to the Parent) waiving any and all
rights to accelerate the vesting of the shares of Company Common Stock.
(d) Prior to the Effective Time, the Company shall (i) cause the
plan administrator of each of the Company's Option Plans to determine that the
adjustments pursuant to this Section 2.6 are sufficient to not cause any vesting
in connection with the Merger, and (ii) deliver to the holders of Company Stock
Options and Company Restricted Stock appropriate notices setting forth such
holders' rights (including that (A) such Company Stock Options or Company
Restricted Stock have not accelerated in connection with the Merger, and (B) the
Trust shall satisfy the obligations under the Company Stock Options) and the
agreements evidencing the grants of such Company Stock Options shall continue in
effect on the same terms and conditions (subject to the adjustments required by
this Section 2.6).
10
(e) No later than 15 business days following the Effective Time,
the Parent shall file a registration statement on Form S-8 (or any successor or
other appropriate forms), with respect to the Parent ADSs subject to such
Company Stock Options or shares of Company Restricted Stock and shall use
commercially reasonable efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
Company Stock Options or shares of Company Restricted Stock remain outstanding.
Section 2.7 Treatment of Warrants.
(a) Each warrant to purchase shares of Company Common Stock
("Company Warrant") granted prior to the Effective Time and which remains
---------------
outstanding immediately prior to the Effective Time shall cease to represent a
right to acquire shares of Company Common Stock and shall be converted, at the
Effective Time, into a warrant to acquire from the Trust, on the same terms and
conditions as were applicable under the Company Warrants, that number of shares
of Parent ADSs determined by multiplying the number of shares of Company Common
Stock subject to such Company Warrant by the Exchange Ratio, rounded, if
necessary, to the nearest whole Parent ADS, at a price per share (rounded to the
nearest one-hundredth of a cent) equal to the per share exercise price specified
in such Company Warrant divided by the Exchange Ratio. As soon as practicable
after the Effective Time, the Parent shall deliver to the holders of Company
Warrants appropriate notices setting forth such holders' rights and the
agreements evidencing the grants of such Company Warrants shall continue in
effect on the same terms and conditions.
(b) Prior to the Effective Time, the Company shall deliver to the
holders of Company Warrants appropriate notices setting forth such holders'
rights (including that the Trust shall satisfy the obligations under the Company
Warrants) and the agreements evidencing the grants of such Company Warrants
shall continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 2.7).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent, subject to
such exceptions or qualifications to specific representations and warranties as
are disclosed in writing in the disclosure letter previously delivered by the
Company to the Parent (the "Company Disclosure Letter"), that:
-------------------------
Section 3.1 Organization and Qualification; Subsidiaries.
11
(a) Each of the Company and each subsidiary of the Company
(collectively, the "Company Subsidiaries") has been duly organized and is
--------------------
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, and has the requisite power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as it is now being conducted. Each
of the Company and each Company Subsidiary 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 business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that, individually or in the
aggregate, have no Material Adverse Effect on the Company. For purposes of this
Agreement, "Material Adverse Effect on the Company" means any state of affairs
--------------------------------------
or change that has had, or will have, a material adverse effect on the business,
assets, properties, results of operations or condition (financial or otherwise)
of the Company and the Company Subsidiaries, taken as a whole, or that has
materially impaired or will materially impair the ability of the Company to
perform its obligations under this Agreement or to consummate the Merger and the
other transactions contemplated by this Agreement, except that none of the
following shall be deemed in themselves to constitute a Material Adverse Effect
on the Company: (i) any change in the market price or trading volume of the
Company Common Stock after the date hereof, (ii) any change in general economic
conditions, (iii) any adverse change affecting the e-commerce industry
generally, and (iv) transaction costs, taxes, accounting changes, integration
costs and other effects that result directly from the announcement or
consummation of the transactions contemplated by this Agreement.
(b) Section 3.1(b) of the Company Disclosure Letter sets forth a
complete and correct list of all of the Company Subsidiaries, their jurisdiction
of organization and the ownership or other interest therein of the Company and
of each other Company Subsidiary. Neither the Company nor any Company Subsidiary
holds any interest in any person other than the Company Subsidiaries so listed.
Section 3.2 Certificate of Incorporation and By-Laws. The copies of
the Company's certificate of incorporation and by-laws, each as amended through
the date of this Agreement that are filed as exhibits to the Company's
registration statement on Form S-1 (Registration No. 333-94549) are complete and
correct copies of those documents. Such certificate of incorporation and by-laws
and all comparable organizational documents of the Company Subsidiaries are in
full force and effect. The Company is not in violation of any of the provisions
of such certificate of incorporation or by-laws.
Section 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of (i)
200,000,000 shares of Company Common Stock and (ii) 10,000,000 shares of
12
undesignated preferred stock, $0.0001 par value (the "Company Preferred Stock").
-----------------------
As of May 31, 2000 (i) 22,624,834 shares of Company Common Stock were issued and
outstanding (of which 680,891 shares were subject to repurchase rights/options
and shall be deemed to be Company Restricted Stock for purposes of this
Agreement and treated pursuant to Section 2.6 hereof), all of which were validly
issued and are fully paid, non-assessable and not subject to preemptive rights,
(ii) no shares of Company Common Stock were held in the treasury of the Company
or by the Company Subsidiaries, (iii) 4,719,424 shares of Company Common Stock
were reserved for issuance upon exercise of outstanding Company Stock Options,
(iv) an additional 813,059 shares of Company Common Stock were reserved for
grants of additional Company Stock Options pursuant to the Company's 1996 Stock
Option Plan and 2000 Stock Option Plan, (v) 750,000 shares of Company Common
Stock were reserved for issuance pursuant to the Company's 2000 Employee Stock
Purchase Plan, and (vi) 1,005 shares of Company Common Stock were reserved for
issuance upon the exercise of outstanding Warrants. Except as set forth above,
as of May 31, 2000, no shares of capital stock or other voting securities of the
Company were issued, reserved for issuance or outstanding and, since such date,
no shares of capital stock or other voting securities or options in respect
thereof have been issued except upon the exercise of the Company Stock Options
outstanding on such date.
(b) Between May 31, 2000 and the date of this Agreement, (i) an
aggregate of 31,500 options to purchase shares of Company Common Stock ("Company
-------
Stock Options") have been granted by the Company under the Company's 1996 Stock
-------------
Option Plan and the Company's 2000 Stock Option Plan (collectively, the
"Company's Option Plans"), and (ii) no shares of Company Common Stock vested
----------------------
pursuant to the Company's Option Plans and are not subject to any repurchase
options/rights. Except for (i) Company Stock Options to purchase an aggregate of
5,782,483 shares of Company Common Stock outstanding or available for grant to
the extent permitted under Section 5.1(b) hereof under the Company's Option
Plans, (ii) the Warrants to purchase 1,005 shares of Company Common Stock or
(iii) under agreements or arrangements described in Section 3.3(b) of the
Company Disclosure Letter, there are no options, warrants, calls, conversion
rights, stock appreciation rights, redemption rights, repurchase rights or other
rights, agreements, arrangements or commitments of any character to which the
Company is a party or by which the Company is bound relating to the issued or
unissued capital stock of the Company or any Company Subsidiary or obligating
the Company or any Company Subsidiary to issue or sell any shares of capital
stock of, other equity interests in, or securities exchangeable for or
convertible into capital stock or other equity interests in, the Company or any
Company Subsidiary. Section 3.3(b) of the Company Disclosure Letter sets forth,
as of the date of this Agreement, (x) the persons to whom Company Stock Options
have been granted and the persons who hold Company Restricted Stock, (y) the
exercise price for the Company Stock Options held by each such person and (z)
whether such Company Stock Options (or Company Restricted Stock issued upon
exercise of any Company Stock Options) are subject to vesting and, if subject to
vesting, the dates on which each of those Company
13
Stock Options (or Company Restricted Stock issued upon exercise of any Company
Stock Options) vest. None of the Company Stock Options or Company Restricted
Stock which are subject to vesting will vest as a result of the consummation of
the Merger and the transactions contemplated by this Agreement.
(c) All shares of Company Common Stock subject to issuance, upon
issuance prior to the Effective Time on the terms and conditions specified in
the instruments under which they are issuable, will be duly authorized, validly
issued, fully paid, nonassessable and will not be subject to preemptive rights.
There are no outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of Company
Common Stock or any capital stock of any Company Subsidiary. Each outstanding
share of capital stock of each Company Subsidiary is duly authorized, validly
issued, fully paid, nonassessable and not subject to preemptive rights and each
such share owned by the Company or a Company Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Company Subsidiary's
voting rights, charges and other encumbrances of any nature whatsoever
(collectively, "Liens"). There are no outstanding material contractual
-----
obligations of the Company or any Company Subsidiary to provide funds to, or
make any investment (in the form of a loan, capital contribution or otherwise)
in, any Company Subsidiary that is not wholly owned by the Company or in any
other person.
Section 3.4 Authority.
(a) The Company has all necessary corporate power and authority
to execute and deliver this Agreement and, subject to adoption of this Agreement
by the affirmative vote by a majority of the holders of the outstanding Company
Common Stock (the "Requisite Company Vote"), to perform its obligations under
----------------------
this Agreement and to consummate the Merger and the other transactions
contemplated by this Agreement to be consummated by the Company. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of such transactions have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate such
transactions, other than, with respect to the Merger, the adoption of this
Agreement by the Requisite Company Vote. This Agreement has been duly authorized
and validly executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(b) The Board of Directors of the Company (i) has unanimously
adopted the plan of merger set forth in this Agreement and approved this
Agreement and the other transactions contemplated by this Agreement and (ii) has
declared that the Merger and this Agreement and the other transactions
contemplated by this Agreement are advisable.
14
Section 3.5 No Conflict.
(a) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not:
(i) conflict with or violate any provision of the
Company's certificate of incorporation or by-laws or any comparable
organizational documents of any Company Subsidiary;
(ii) assuming that all consents, approvals, authorizations
and other actions described in Section 3.6 have been obtained and all filings
and obligations described in Section 3.6 have been made, conflict with or
violate any foreign or domestic law, statute, ordinance, rule, regulation,
order, judgment or decree ("Law") applicable to the Company or any Company
---
Subsidiary or by which any property or asset of the Company or any Company
Subsidiary is or may be bound or affected; or
(iii) result in any breach of or constitute a default (or an
event which with or without notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any
property or asset of the Company or any Company Subsidiary under any note,
bond, mortgage, indenture, contract, agreement, commitment, lease, license,
permit, franchise or other instrument or obligation (collectively, "Contracts")
---------
to which the Company or any Company Subsidiary is a party or by which any of
them or their assets or properties is or may be bound or affected, except for
any such breaches, defaults or other occurrences which, individually or in the
aggregate, have no Material Adverse Effect on the Company.
(b) Section 3.5(b) of the Company Disclosure Letter sets forth a
list of all Contracts to which the Company or any Company Subsidiaries are a
party or by which they or their assets or properties are or may be bound or
affected under which consents or waivers are or may be required prior to
consummation of the transactions contemplated by this Agreement, except for
those Contracts under which the Company's failure to obtain the required
consents or waivers, individually or in the aggregate, would not result in a
Material Adverse Effect on the Company.
Section 3.6 Required Filings and Consents. The execution and delivery
of this Agreement by the Company do not, and the performance of this Agreement
by the Company will not, require any consent, approval, authorization or permit
of, or filing with or notification to, any domestic or foreign national,
federal, state, provincial or local governmental, regulatory or administrative
authority, agency, commission, court, tribunal or arbitral body or self-
regulated entity (each, a "Governmental Entity"), except (i) for applicable
-------------------
requirements of the United States Securities Exchange Act of 1934 as amended
(together with the rules and regulations
15
promulgated thereunder, the "Exchange Act"), applicable requirements of the
------------
United States Securities Act of 1933, as amended (together with the rules and
regulations promulgated thereunder, the "Securities Act"), applicable
--------------
requirements of state securities or "blue sky" laws ("Blue Sky Laws"), the rules
-------------
and regulations of the Nasdaq National Market, applicable requirements of
Takeover Statutes, the pre-merger notification requirements of the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder (the "HSR Act"), for the filing of the
-------
Certificate of Merger as required by the DGCL and (ii) where failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, individually or in the aggregate, would have no Material Adverse
Effect on the Company.
Section 3.7 Permits; Compliance with Law. Each of the Company and the
Company Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
Company Subsidiary to own, lease and operate its properties or to carry on its
business as it is now being conducted (collectively, the "Company Permits"),
---------------
except where the failure to have, or the suspension or cancellation of, any of
the Company Permits, individually or in the aggregate, has no Material Adverse
Effect on the Company, and, as of the date of this Agreement, no suspension or
cancellation of any of the Company Permits is pending or, to the knowledge of
the Company, threatened, except where the failure to have, or the suspension or
cancellation of, any of the Company Permits, individually or in the aggregate,
has no Material Adverse Effect on the Company. Neither the Company nor any
Company Subsidiary is in conflict with, or in default or violation of, (i) any
Law applicable to the Company or any Company Subsidiary or by which any property
or asset of the Company or any Company Subsidiary is or may be bound or affected
or (ii) any Company Permits, except for any such conflicts, defaults or
violations that, individually or in the aggregate, have no Material Adverse
Effect on the Company.
Section 3.8 SEC Filings; Financial Statements.
(a) Prior to March 23, 2000, the Company was not subject to
the periodic reporting requirements of the Exchange Act or was otherwise
required to file any documents with the SEC or any national securities exchange
or quotation service or comparable Governmental Entity. The Company has filed
all forms, reports, schedules, statements and other documents (including all
exhibits, annexes, supplements and amendments to such documents) required to be
filed by it under the Exchange Act and the Securities Act since January 12, 2000
(collectively, including any such documents filed subsequent to the date of this
Agreement, the "Company SEC Reports") and the Company has made available to the
-------------------
Parent each Company SEC Report filed with the United States Securities and
Exchange Commission (the "SEC"). The Company SEC Reports, including any
financial statements or schedules included or incorporated therein by reference,
at the time they were filed, (i) complied in all material respects with the
requirements of the Exchange Act or the Securities Act or both, as the case may
be,
16
applicable to those Company SEC Reports and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated or necessary in order to make the statements made in those Company SEC
Reports, in the light of the circumstances under which they were made, not
misleading. No Company Subsidiary is subject to the periodic reporting
requirements of the Exchange Act or is otherwise required to file any documents
with the SEC or any national securities exchange or quotation service or
comparable Governmental Entity.
(b) Each of the consolidated balance sheets included in or
incorporated by reference into the Company SEC Reports (including the related
notes and schedules) fairly presented, in all material respects, the
consolidated financial position of the Company as of the dates set forth in
those consolidated balance sheets. Each of the consolidated statements of
income and of cash flows included in or incorporated by reference into the
Company SEC Reports (including any related notes and schedules) fairly
presented, in all material respects, the consolidated results of operations and
cash flows, as the case may be, of the Company and the consolidated Company
Subsidiaries for the periods set forth in those consolidated statements of
income and of cash flows (subject, in the case of unaudited quarterly
statements, to notes and normal year-end audit adjustments that will not be
material in amount or effect), in each case in conformity with United States
generally accepted accounting principles ("U.S. GAAP") (except, in the case of
---------
unaudited quarterly statements, as permitted by Form 10-Q of the SEC)
consistently applied throughout the periods indicated. All of such balance
sheets and statements complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto.
(c) The consolidated balance sheet as of March 31, 2000
provided by the Company to the Parent (including the related notes and
schedules) fairly presented, in all material respects, the consolidated
financial position of the Company as of such date. The consolidated statement of
income and of cash flows for the year ended March 31, 2000 provided by the
Company to the Parent (including the related notes and schedules) fairly
presented, in all material respects, the consolidated results of operations and
cash flows, as the case may be, of the Company and the consolidated Company
Subsidiaries for such period, in conformity with U.S. GAAP consistently applied
with previous periods. All of such balance sheets and statements comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto.
(d) Except as and to the extent set forth on the consolidated
balance sheet of the Company and the consolidated Company Subsidiaries as of
March 31, 2000 including the related notes, neither the Company nor any Company
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet or in the related notes prepared in accordance with U.S. GAAP,
except for liabilities or obligations incurred in
17
the ordinary course of business that, individually or in the aggregate, have no
Material Adverse Effect on the Company.
Section 3.9 Absence of Certain Changes or Events.
(a) Since March 31, 2000, the Company and the Company
Subsidiaries have conducted their businesses only in the ordinary course and,
since such date, there has not been any Material Adverse Effect on the Company.
(b) Except as set forth in Section 3.9(b) of the Company
Disclosure Letter, or except as disclosed in the Company SEC Reports filed with
the SEC since March 23, 2000 and which have been filed and are publicly
available prior to the date of this Agreement (the "Company Filed SEC Reports")
-------------------------
and except as permitted pursuant to Section 5.1, since March 31, 2000, there has
not been:
(i) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by it or any
Company Subsidiaries, whether or not covered by insurance, which damage,
destruction or loss, individually or in the aggregate, has a Material Adverse
Effect on the Company;
(ii) any material change by the Company in its or any
Company Subsidiary's accounting methods, principles or practices, except as
required by U.S. GAAP and disclosed in Section 3.9(b) of the Company Disclosure
Letter;
(iii) any declaration, setting aside or payment of any
dividend or distribution in respect of Shares of Company Common Stock or any
redemption, purchase or other acquisition of any of the Company's securities
other than the repurchase at cost of unvested shares held by employees of the
Company on the termination of their employment;
(iv) any increase in the compensation or benefits or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, the granting of
stock options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any executive officers of the
Company or any Company Subsidiary except as required by applicable Law other
than any increase or modification in the ordinary course of business;
(v) (A) any incurrence or assumption by the Company or
any Company Subsidiary of any indebtedness for borrowed money or (B) any
guarantee, endorsement or other incurrence or assumption of material liability
(whether directly, contingently or otherwise) by the Company or any Company
Subsidiary for the obligations of any other person (other than any wholly owned
Company Subsidiary),
18
other than indebtedness of less than U.S. $500,000 in the aggregate in the
ordinary course of business;
(vi) any creation or assumption by the Company or any
Company Subsidiary of any Lien on any material asset of the Company or any
Company Subsidiary, other than (i) in the ordinary course of business, or (ii)
Liens arising after the date of this Agreement by operation of Law or without
the Company's consent, in each case that has no Material Adverse Effect on the
Company;
(vii) any making of any loan, advance or capital
contribution to or investment in any person by the Company or any Company
Subsidiary, other than in the ordinary course of business, and not in excess of
U.S. $500,000;
(viii) (A) any contract or agreement entered into by the
Company or any Company Subsidiary on or prior to the date hereof relating to any
material acquisition or disposition of any assets or business or (B) any
modification, amendment, assignment or termination of or relinquishment by the
Company or any Company Subsidiary of any rights under any other Contract
(including any insurance policy naming it as a beneficiary or a loss payable
payee) that has, individually or in the aggregate, a Material Adverse Effect on
the Company other than transactions, commitments, contracts or agreements in the
ordinary course of business or those contemplated by this Agreement;
(ix) any adverse change in the Company's relationships
with its material customers, except for changes that, individually or in the
aggregate, have no Material Adverse Effect on the Company.
Section 3.10 Employee Benefit Plans; Employee Relations.
(a) Section 3.10(a) of the Company Disclosure Letter contains
a true and complete list of each "employee benefit plan" (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), including multiemployer plans within the meaning of ERISA section
-----
3(37) of ERISA), stock purchase, stock option, severance, employment, change-in-
control, fringe benefit, welfare benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of the Company has any present or
future right to benefits or under which the Company has any present or future
liability. All such plans, agreements, programs, policies and arrangements shall
be collectively referred to as the "Benefit Plans." Where appropriate all
-------------
references to the "Company" in this Section 3.10 shall refer to the Company and
any member of its "controlled group" within the meaning of Section 414 of the
Code.
19
(b) The Company has, with respect to each Benefit Plan, if
applicable, delivered or made available to the Parent true and complete copies
of: (i) all plan texts and agreements and related trust agreements (or other
funding vehicles); (ii) the most recent summary plan descriptions and material
employee communications; (iii) the most recent annual report (including all
schedules thereto); (iv) the most recent annual audited financial statement and
opinion; (v) if the plan is intended to qualify under Section 401(a) of the
Code, the most recent determination letter received from the Internal Revenue
Service; and (vi) all material communications with any Governmental Entity
(including the Pension Benefit Guaranty Corporation and the Internal Revenue
Service) given or received within the past three years.
(c) Except as set forth on Section 3.10(c) of the Company
Disclosure Letter, all amounts properly accrued as liabilities to or expenses of
any Benefit Plan have been properly reflected on the Company's most recent
financial statements to the extent required by U.S. GAAP. Since December 31,
1998, there has been no amendment or change in interpretation by the Company
relating to any Benefit Plan which would materially increase the cost thereof.
(d) No Benefit Plan is subject to either Section 412 of the
Code or Title IV of ERISA.
(e) Each Benefit Plan is in material compliance with all
applicable laws and regulations. Each Benefit Plan which is intended to qualify
under Section 401(a) of the Code has been issued a favorable determination,
opinion, notification or advisory letter by the Internal Revenue Service and has
not been amended in a manner, and no event has occurred since such date, which
would cause any such plan to fail to remain so qualified. Each Benefit Plan that
requires registration with a relevant Governmental Entity has been so
registered.
(f) Except as set forth on Section 3.10(f) of the Company
Disclosure Letter, there are no actions, liens, suits or Claims pending or
threatened (other than routine claims for benefits) with respect to any Benefit
Plan as to which the Company has or could reasonably be expected to have any
direct or indirect actual or contingent material liability.
(g) Each Benefit Plan which is a "group health plan" (as
defined in Section 607(1) of ERISA) is in material compliance with the
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, the Health Insurance Portability and Accountability Act and any other
applicable federal, state or local law.
(h) There are no (i) Benefit Plans maintained by the Company
pursuant to which welfare benefits are provided to current or former employees
beyond their retirement or other termination of service, other than coverage
mandated by applicable Law, the cost of which is fully paid by the current or
former employees or their
20
dependents; or (ii) unfunded Benefit Plan obligations with respect to any
employee of the Company which are not fairly reflected by reserves shown on the
Company's financial statements for March 31, 2000.
(i) The consummation of the transactions contemplated by this
Agreement will not (i) except as disclosed in Section 3.10(i) of the Company
Disclosure Letter, entitle any current or former employee of the Company to
severance pay, unemployment compensation or any similar payment, (ii) except as
disclosed in Section 3.10(i) of the Company Disclosure Letter, accelerate the
time of payment or vesting, or increase the amount of any compensation due to,
any current or former employee of the Company, or (iii) constitute or involve a
prohibited transaction (as defined in Section 406 of ERISA or Section 4975 of
the Code), constitute or involve a breach of fiduciary responsibility within the
meaning of Section 502(l) of ERISA as to which the Company has or reasonably
could be expected to have any direct or indirect actual material liability.
(j) No Benefit Plan is a "multiemployer plan" or "multiple
employer plan" within the meaning of the Code or ERISA or the regulations
promulgated thereunder.
(k) Neither the Company nor any Benefit Plan, or to the
knowledge of the Company, any "disqualified person" (as defined in Section 4975
of the Code) or any "party in interest" (as defined in Section 3(18) of ERISA),
has engaged in any non-exempt prohibited transaction (within the meaning of
Section 4975 of the Code or Section 406 of ERISA) which could reasonably be
expected to result in any material liability to the Company.
(l) None of the employees is represented by a union, and no
union organizing efforts have been conducted within the last five years or are
now being conducted. The Company does not currently have, nor to knowledge of
the Company, is there now threatened, a strike, picket, work stoppage, work
slowdown or other organized labor dispute. The Company has not as of the date
hereof incurred any liability or obligation under the Worker Adjustment and
Retraining Notification Act, as it may have been amended from time to time, or
any similar state law.
Section 3.11 Accounting and Tax Matters. Neither the Company nor, to
the knowledge of the Company, any of its affiliates has taken or agreed to take
any action, nor is the Company aware of any agreement, plan or other
circumstance, that would prevent the Merger from constituting a transaction
qualifying as a reorganization under Section 368(a) of the Code.
Section 3.12 Contracts; Debt Instruments. Except for the Contracts
filed as exhibits to the Company's Registration Statement on Form S-1 and
subsequent Contracts disclosed in Section 3.12 of the Company Disclosure Letter
(copies of which have been made available to the Parent), there is no Contract
that is material to the business, financial condition or results of operations
of the Company and the Company
21
Subsidiaries taken as a whole. Each of the Contracts to which the Company or a
Company Subsidiary is a party or by which it or any of its properties or assets
is or may be bound or affected, constitutes a valid and legally binding
obligation of the Company or such Company Subsidiary and of the other parties
thereto, enforceable in accordance with its terms, and is in full force and
effect, except to the extent the failure to be so valid, binding or enforceable,
individually or in the aggregate, has no Material Adverse Effect on the Company.
Neither the Company nor any Company Subsidiary, nor to the Company's knowledge,
any other person, is in violation of or in default under (nor does there exist
any condition which with the passage of time or the giving of notice would cause
such a violation of or default under) any Contract to which the Company or a
Company Subsidiary is a party or by which it or any of its properties or assets
is or may be bound or affected, except for violations or defaults that,
individually or in the aggregate, have no Material Adverse Effect on the
Company. Set forth in Section 3.12 of the Company Disclosure Letter is a
description of any material changes to the amount and terms of the indebtedness
of the Company and the consolidated Company Subsidiaries as described in the
notes to the financial statements set forth in the Company's consolidated
financial statements for the year ended March 31, 2000 provided by the Company
to the Parent prior to the execution of this Agreement.
Section 3.13 Litigation. Except as disclosed in Section 3.13 of the
Company Disclosure Letter, and except as disclosed in the Company Filed SEC
Reports, there is no suit, claim, action, proceeding or investigation
(collectively, "Claims") pending or, to the knowledge of the Company, threatened
------
against the Company or any Company Subsidiary before any Governmental Entity
that, if adversely determined, individually or in the aggregate, has a Material
Adverse Effect on the Company. Neither the Company nor any Company Subsidiary
is subject to any outstanding order, writ, injunction or decree which,
individually or in the aggregate, has a Material Adverse Effect on the Company.
Section 3.14 Environmental Matters. Except as has no Material Adverse
Effect on the Company or as disclosed in the Company Filed SEC Reports:
(a) the Company and the Company Subsidiaries are and have
been in compliance with all applicable Laws relating to pollution, protection of
the environment or health and safety ("Environmental Laws");
------------------
(b) there is no claim pursuant to Environmental Laws or
principles of common law relating to pollution, protection of the environment or
health and safety (an "Environmental Claim") pending or threatened against the
-------------------
Company or any Company Subsidiary; and
(c) there is no civil, criminal or administrative judgment
or notice of violation outstanding against the Company or any Company Subsidiary
pursuant to Environment Laws or principles of common law relating to pollution,
protection of the environment or health and safety.
22
Section 3.15 Intellectual Property.
(a) For purposes of this Agreement, "Intellectual Property"
---------------------
means all of the following as they exist in any jurisdiction throughout the
world, in each case, to the extent owned by, licensed to, or otherwise used or
held for use by the Company:
(i) patents, patent applications and the inventions,
designs and improvements described and claimed therein, patentable inventions,
and other patent rights (including any divisions, continuations, continuations-
in-part, substitutions, or reissues thereof, whether or not patents are issued
on any such applications and whether or not any such applications are amended,
modified, withdrawn, or resubmitted) (collectively, "Patents");
-------
(ii) trademarks, service marks, trade dress, trade
names, brand names, Internet domain names, designs, logos, or corporate names
(including, in each case, the goodwill associated therewith), whether registered
or unregistered, and all registrations and applications for registration thereof
(collectively, "Trademarks");
----------
(iii) copyrights, including all renewals and extensions,
copyright registrations and applications for registration, and non-registered
copyrights (collectively, "Copyrights");
----------
(iv) trade secrets, confidential business information,
concepts, ideas, designs, research or development information, processes,
procedures, techniques, technical information, specifications, operating and
maintenance manuals, engineering drawings, methods, know-how, data, mask works,
discoveries, inventions, modifications, extensions, improvements, and other
proprietary rights (whether or not patentable or subject to copyright,
trademark, or trade secret protection) (collectively, "Technology");
----------
(v) computer software programs, including all source
code, object code, and documentation related thereto ("Software"); and
--------
(vi) all licenses, and sublicenses, and other
agreements or permissions related to the property described in Section 3.15(a).
(b) Disclosure.
(i) Section 3.15(b)(i) of the Company Disclosure
Letter sets forth all United States and foreign patents and patent applications,
trademark and service ▇▇▇▇ registrations and applications, Internet domain name
registrations and applications, and copyright registrations and applications
owned or licensed by the Company or any Company Subsidiary or otherwise used or
held for use by the Company or any Company Subsidiary (excluding off-the-shelf
software licensed to the Company and licenses or
23
sublicenses that are not material to the business of the Company and the Company
Subsidiaries, taken as a whole), specifying as to each item, as applicable: (A)
the nature of the item, including the title; (B) the owner of the item; (C) the
jurisdictions in which the item is issued or registered or in which an
application for issuance or registration has been filed; and (D) the issuance,
registration or application numbers and dates.
(ii) Section 3.15(b)(ii) of the Company Disclosure
Letter sets forth all licenses, sublicenses and other agreements or permissions
("IP Licenses") under which the Company or any Company Subsidiary is a licensee
-----------
or otherwise is authorized to use or practice any Intellectual Property other
than licenses of off-the-shelf software and licenses or sublicenses that are not
material to the business of the Company and the Company Subsidiaries, taken as a
whole.
(iii) Section 3.15(b)(iii) of the Company Disclosure
Letter sets forth and describes the status of any material agreements (including
licenses and sublicenses, but excluding off-the-shelf software licensed to the
Company) involving Intellectual Property currently in negotiation or proposed
("Proposed Intellectual Property Agreements") by the Company or any Company
-----------------------------------------
Subsidiary.
(c) Ownership. Except as set forth on Section 3.15(c) of
the Company Disclosure Letter, the Company owns, free and clear of all Liens,
has valid and enforceable rights in, and has the unrestricted right to use,
sell, license, transfer or assign, all Intellectual Property that is material to
the business of the Company and the Company Subsidiaries, taken as a whole.
(d) Licenses. The Company has a valid and enforceable
license to use all Intellectual Property not owned by the Company that is
material to the business of the Company and the Company Subsidiaries, taken as a
whole.
(e) Claims.
(i) No claim or action is pending or threatened and
the Company does not know of any basis for any claim that challenges the
validity, enforceability, ownership, or right to use, sell or license any
Intellectual Property, and no item of Intellectual Property is subject to any
outstanding order, ruling, decree, stipulation, charge or agreement restricting
in any manner the use or the licensing thereof, except for those claims,
actions, orders, rulings, decrees, stipulations, charges and agreements which,
individually or in the aggregate, have no Material Adverse Effect on the
Company.
(ii) The Company has not received any notice that it
has infringed upon or otherwise violated the intellectual property rights of
third parties or received any claim, charge, complaint, demand or notice
alleging any such infringement or violation, or knows of any basis for any such
claim.
24
(iii) To the knowledge of the Company, no third party is
infringing upon or otherwise violating any material Intellectual Property.
(iv) The Company's products have been marked as
required by the applicable Patent statute and the Company has given the public
notice of its Copyrights and notice of its Trademarks as required by the
applicable Trademark and Copyright statutes, in each case except to the extent
the failure to do so has no Material Adverse Effect on the Company.
(f) Administration and Enforcement. The Company has taken
all reasonable actions to maintain and protect the Intellectual Property owned
by the Company.
(g) Protection of Intellectual Property. The Company has
taken reasonable precautions to protect the secrecy, confidentiality, and value
of its trade secrets and the proprietary nature and value of the Intellectual
Property.
(h) Software. All Software that is material to the Company's
business is described in Section 3.15(h) of the Company Disclosure Letter. The
Software performs in material conformance with its documentation and may
following the Merger be used by the Surviving Corporation on identical terms and
conditions as the Company enjoyed immediately prior to the Merger.
(i) Year 2000 Compliance. All Software, hardware, databases
and embedded control systems (collectively, the "Systems") used by the Company
-------
(i) accurately process date and time data (including calculating, comparing, and
sequencing) from, into, and between the twentieth and twenty-first centuries,
the years 1999 and 2000, and leap year calculations and (ii) operate accurately
with other software and hardware that use standard date format (4 digits) for
representation of the year.
(j) Employee Breaches. To the Company's knowledge, no
employee of the Company or any of the Company Subsidiaries has transferred
Intellectual Property or confidential or proprietary information to the Company
or any of the Company Subsidiaries or to any third party in violation of any Law
or any term of any employment agreement, patent or invention disclosure
agreement or other contract or agreement relating to the relationship of such
employee with the Company or any of the Company Subsidiaries or any prior
employer.
(k) Related Parties; Etc. The Company and the Company
Subsidiaries do not use any Intellectual Property owned by any director,
officer, employee or consultant of the Company. At no time during the conception
or reduction to practice of any of the Intellectual Property owned by the
Company or any of the Company Subsidiaries was any developer, inventor or other
contributor to such Intellectual Property operating under any grants from any
Governmental Entity or subject to any employment agreement, invention
assignment, nondisclosure agreement or other Contract with any
25
person that could adversely affect the rights of the Company or any of the
Company Subsidiaries to any Intellectual Property that is material to the
business of the Company and the Company Subsidiaries, taken as a whole.
Section 3.16 Taxes. Except to the extent that failure to do so,
individually or in the aggregate, has no Material Adverse Effect on the Company,
the Company and the Company Subsidiaries have filed all Tax returns and reports
to be filed by them and have paid, or established adequate reserves for, all
Taxes required to be paid by them. Except as, individually or in the aggregate,
has no Material Adverse Effect on the Company, no deficiencies for any Taxes
have been proposed, asserted or assessed against the Company or any Company
Subsidiaries, and no requests for waivers of the time to assess any such Taxes
are pending. As used in this Agreement, "Taxes" shall mean all federal, state,
-----
local and foreign income, property, sales, excise and other taxes, tariffs or
governmental charges of any nature whatsoever.
Section 3.17 Non-Competition Agreements. Neither the Company nor any
Company Subsidiary is a party to any Contract which purports to restrict or
prohibit in any material respect the Company and the Company Subsidiaries
collectively from, directly or indirectly, engaging in any business involving
the development, marketing and offering of computer software and the provision
of related services currently engaged in by the Company, any Company Subsidiary
or any other persons affiliated with the Company. None of the Company's
officers, directors or key employees is a party to any agreement which, by
virtue of such person's relationship with the Company, restricts in any material
respect the Company or any Company Subsidiary or affiliate of either of them
from, directly or indirectly, engaging in any of the businesses described above.
Section 3.18 Agreements with Regulatory Agencies. Neither the Company
nor any of the Company Subsidiaries is subject to any cease-and-desist or other
order issued by, or is a party to any written agreement, consent agreement or
memorandum of understanding with, or is a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any board
resolutions at the request of (each, whether or not listed in Section 3.18 of
the Company Disclosure Letter, a "Company Regulatory Agreement"), any
----------------------------
Governmental Entity that restricts the conduct of its business or that in any
manner relates to its management or its business, except for any Company
Regulatory Agreements that, individually or in
the aggregate, have no Material Adverse Effect on the Company or could
reasonably be expected, following consummation of the Merger, to impair the
Parent's ability to conduct the business of the Surviving Corporation, the
Parent or any Parent Subsidiary, as presently conducted. Neither the Company nor
any Company Subsidiary has been advised by any Governmental Entity that such
Governmental Entity is considering issuing or requesting any Company Regulatory
Agreement, except for any such proposed Company Regulatory Agreements that,
individually or in the aggregate, has no Material Adverse Effect on the Company.
26
Section 3.19 Opinion of Financial Advisor. Chase Securities, Inc.
(the "Company Financial Advisor") has delivered to the Board of Directors of the
-------------------------
Company its oral opinion to the effect that, as of the date of this Agreement,
the Exchange Ratio is fair to the Company's stockholders from a financial point
of view, which opinion was or will promptly after the date of this Agreement be
confirmed in writing and accompanied by an authorization to include a copy of
such opinion in the Proxy Materials. The Company has delivered or will,
promptly after receipt of such written opinion, deliver a signed copy of that
written opinion to the Parent.
Section 3.20 Brokers. No broker, finder or investment banker other
than the Company Financial Advisor is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company. Prior to the date of this Agreement, the Company has made
available to the Parent a complete and correct copy of all agreements between
the Company and the Company Financial Advisor under which the Company Financial
Advisor would be entitled to any payment relating to the Merger or such other
transactions.
Section 3.21 Certain Statutes. The Board of Directors of the Company
has taken or will take all appropriate and necessary actions to ensure that the
restrictions on business combinations in Section 203 of the DGCL will not have
any effect on the Merger or the other transactions contemplated by this
Agreement. No "fair price," "moratorium," "control share acquisition" or other
similar state or federal anti-takeover statute or regulation (each a "Takeover
Statute") is, as of the date of this Agreement, applicable to the Merger or such
other transactions.
Section 3.22 Information. To the best of the Company's knowledge,
none of the information to be supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement or the Registration Statement
will, in the case of the Registration Statement, at the time it becomes
effective and at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated in that
Registration Statement or necessary to make the statements in that Registration
Statement not misleading, or, in the case of the Proxy Statement or any
amendments of or supplements to the Proxy Statement, at the time of the mailing
of the Proxy Statement and any amendments of or supplements to the Proxy
Statement and at the time of the Company Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated in that Proxy Statement or necessary in order to make the
statements in that Proxy Statement, in light of the circumstances under which
they are made, not misleading. The Proxy Statement (except for those portions of
the Proxy Statement that relate only to the Parent or the Parent Subsidiaries or
affiliates of the Parent) will comply as to form in all material respects with
the provisions of the Exchange Act.
Section 3.23 Vote Required. The Requisite Company Vote is the only
vote of the holders of any class or series of the Company's capital stock
necessary (under
27
the Company Charter Documents, the DGCL, other applicable Law or otherwise) to
approve this Agreement, the Merger or the other transactions contemplated by
this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PARENT
The Parent represents and warrants to the Company, subject to such
exceptions or qualifications to specific representations and warranties as are
disclosed in writing in the disclosure letter previously delivered by the Parent
to the Company (the "Parent Disclosure Letter"):
------------------------
Section 4.1 Organization and Qualification; Subsidiaries.
(a) The Parent has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted. Each of the Parent and the
subsidiaries of the Parent (each a "Parent Subsidiary") 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
business makes such qualification or licensing necessary, except for such
failures to be so qualified or licensed and in good standing that, individually
or in the aggregate, has no Material Adverse Effect on the Parent. For purposes
of this Agreement, "Material Adverse Effect on the Parent" means any state of
-------------------------------------
affairs or change that has had, or will have, a material adverse effect on the
business, assets, properties, results of operations or condition (financial or
otherwise) of the Parent and the Parent Subsidiaries, taken as a whole, or that
has materially impaired or will materially impair the ability of the Parent to
perform its obligations under this Agreement or to consummate the Merger and the
other transactions contemplated by this Agreement, except that none of the
following shall be deemed in themselves to constitute a Material Adverse Effect
on the Parent: (i) any change in the market price or trading volume of the
securities of the Parent after the date hereof, (ii) any change in general
economic conditions, (iii) any adverse change involving the e-commerce industry
generally, and (iv) transaction costs, taxes, accounting changes, integration
costs and other effects that result directly from the announcement or
consummation of the transactions contemplated by this Agreement.
(b) Section 4.1(b) of the Parent Disclosure Letter sets forth
a complete and correct list of all of the Parent Subsidiaries, their
jurisdiction of organization and the ownership or other interest therein of the
Parent and of each other Parent Subsidiary. Neither the Parent nor any Parent
Subsidiary holds any interest in any person other than the Parent Subsidiaries
so listed.
28
Section 4.2 Charter Documents. The copies of the Parent's articles
of incorporation (Satzung) and management board (Vorstand) Rules of Procedure
(Geschaftsordnung), each as amended through the date of this Agreement that have
been furnished to the Company (collectively, the "Parent Charter Documents"),
------------------------
are complete and correct copies of those documents. The Parent is not in
violation of any of the provisions of such charter documents.
Section 4.3 Capitalization.
(a) As of May 19, 2000, (i) 27,311,184 shares of Parent
Common Stock were issued and outstanding, all of which were validly issued and
are fully paid, nonassessable and not subject to preemptive rights, (ii) the
authorized I capital of the Parent consisted of 10,337,589 shares of Parent
Common Stock, (iii) the authorized II capital of the Parent consisted of
2,600,000 shares of Parent Common Stock, and (iv) 2,409,639 shares of Parent
Common Stock were reserved for issuance upon exercise of outstanding Parent
Stock Options. Except as set forth above, as of May 19, 2000, no shares of
capital stock or other voting securities of the Parent were issued, reserved for
issuance or outstanding and, since such date, no shares of capital stock or
other voting securities or options in respect thereof have been issued except
upon the exercise of the Parent Stock Options outstanding on such date. On May
26, 2000, the Parent's shareholders authorized the issuance of convertible bonds
in an aggregate principal amount of Euro 2,600,000 which may be used in
connection with employee participation scheme and the Parent's shareholders
resolved to create a new Contingent Capital II in the amount of Euro 2,600,000
non-par value bearer shares and authorized the management board to purchase own
shares of up to 10% of the share capital for a time period of 18 months. No
other increase of share capital has been resolved since May 19, 2000. The Parent
has sufficient authorized share capital to proceed with the Share Capital
increase as set forth in this Agreement.
(b) Between December 31, 1999 and the date of this Agreement,
no options to purchase shares of Parent Common Stock ("Parent Stock Options")
--------------------
have been granted by the Parent under the Parent's 1998 Plan or the Parent's
1999 Plan (collectively, the "Parent's Option Plans"). Except (i) Parent Stock
---------------------
Options to purchase an aggregate of 2,409,639 shares of Parent Common Stock
outstanding or available for grant under the Parent's Option Plans, or (ii)
under agreements or arrangements described in Section 4.3(b) of the Parent
Disclosure Letter, there are no options, warrants, calls, conversion rights,
stock appreciation rights, redemption rights, repurchase rights or other rights,
agreements, arrangements or commitments of any character to which the Parent is
a party or by which the Parent is bound relating to the issued or unissued
capital stock of the Parent or any Parent Subsidiary or obligating the Parent or
any Parent Subsidiary to issue or sell any shares of capital stock of, other
equity interests in, or securities exchangeable for or convertible in the
capital stock or other equity interest in the Parent or any Parent Subsidiary.
None of the Parent Stock Options which are subject to vesting will vest as a
result of the consummation of the Merger.
29
(c) Subject to Section 5.20, the shares of Parent Common
Stock that underlie the Parent ADSs to be delivered in connection with the
Merger have been duly authorized by all necessary corporate action, and when
issued in accordance with this Agreement, will be validly issued, fully paid,
nonassessable and will not be subject to preemptive rights. Each outstanding
share of capital stock of each Parent Subsidiary is duly authorized, validly
issued, fully paid, nonassessable and not subject to preemptive rights and each
such share owned by the Parent or a Parent Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Parent's or such other Parent Subsidiary's voting
rights, charges and other encumbrances or any nature whatsoever (collectively,
"Liens"), except where failure to own such shares free and clear, individually
-----
or in the aggregate, has no Material Adverse Effect on the Parent.
Section 4.4 Authority.
(a) The Parent has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to compliance with
Section 52 of the German Stock Corporation Law (Aktiengesetz), the resolutions
of the management board (Vorstand) and the supervisory board (Aufsichtsrat) of
the Parent with respect to the Share Capital Increase, the appointment of an
auditor and the preparation of an audit (valuation) report by such auditor in
connection with the Share Capital Increase and the registration of the Share
Capital Increase with the commercial register (Handelsregister) for the Parent
(the "Requisite Parent Approval"), to perform its obligations under this
-------------------------
Agreement and to consummate the Merger and the other transactions contemplated
by this Agreement to be consummated by the Parent. This Agreement has been
validly executed and delivered by the Parent, and assuming the due
authorization, execution and delivery by the other parties hereto and subject to
Section 5.20, constitutes a legal, valid and binding obligation of the Parent,
enforceable against the Parent in accordance with its terms.
Section 4.5 No Conflict.
(a) Except as set forth in Section 4.5 of the Parent
Disclosure Letter, the execution and delivery of this Agreement by the Parent do
not, and the performance of this Agreement by the Parent will not:
(i) conflict with or violate any provision of the
Parent's articles of association (Satzung) or management board (Vorstand) rules
of procedure (Geschaftsordnung) of the Parent;
(ii) assuming that all consents, approvals,
authorizations and other actions described in Section 4.6 have been obtained and
all filings and obligations described in Section 4.6 have been made, conflict
with or violate any Law applicable to the Parent or by which any property or
asset of the Parent is or may
30
be bound or affected, except for any such conflicts or violations that,
individually or in the aggregate, have no Material Adverse Effect on the Parent;
or
(iii) result in any breach of or constitute a default (or
an event which with or without notice or lapse of time or both would become a
default) under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any
property or asset of the Parent or any Parent Subsidiary under, any Contract to
which the Parent or any Parent Subsidiary is a party or by which any of them or
their assets or properties is or may be bound or affected, except for any such
breaches, defaults or other occurrences which, individually or in the aggregate,
have no Material Adverse Effect on the Parent.
(b) Section 4.5(b) of the Parent Disclosure Letter sets forth
a list of all Contracts to which the Parent or any Parent Subsidiaries are a
party or by which they or their assets or properties are or may be bound or
affected under which consents or waivers are or may be required prior to
consummation of the transactions contemplated by this Agreement, except for
those Contracts under which the Parent's failure to obtain the required consents
or waivers, individually or in the aggregate, would not result in a Material
Adverse Effect on the Parent.
Section 4.6 Required Filings and Consents. The execution and
delivery of this Agreement by the Parent do not, and the performance of this
Agreement by the Parent will not, require any consent, approval, authorization
or permit of, or filing with or notification to, any Governmental Entity except
(i) for applicable requirements of the Exchange Act, applicable requirements of
the Securities Act, applicable requirements of Blue Sky Laws, the rules and
regulations of the Nasdaq National Market, the rules and regulations of the
Neuer Markt segment of the Frankfurt Stock Exchange (the "Neuer Markt"),
-----------
applicable requirements of Takeover Statutes, the pre-merger notification
requirements of the HSR Act, the filing of the Certificate of Merger as required
by the DGCL, compliance with Section 52 of the German Stock Corporation Law
(Aktiengesetz) and the registration of the Share Capital Increase with the
commercial register (Handelsregister) for the Parent, and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, individually or in the aggregate, have no Material
Adverse Effect on the Parent. Neither the Parent nor any of the Parent
Subsidiaries is a party to, bound by, any contract or other agreement that would
prohibit or materially delay the transactions contemplated by this Agreement.
Except as set forth in Section 4.6 of the Parent Disclosure Letter, as of the
date of this Agreement, neither the Parent nor any of the Parent Subsidiaries is
in negotiations in respect of an acquisition of a business, corporation,
partnership, association or other business organization or division thereof that
would require the inclusion in the Registration Statement (as defined in Section
5.4(a)) pro forma financial information regarding such acquisition.
31
Section 4.7 Financial Statements.
(a) The Parent has provided the Company with true and
complete copies of (i) the audited consolidated balance sheet of the Parent as
of December 31, 1999, June 30, 1999 and June 30, 1998 and the related
consolidated statements of operations, cash flows and shareholders' equity for
the six month period ended December 31, 1999 and for each of the three fiscal
years ended June 30, 1999 (including all related notes and schedules thereto)
(collectively, including any such documents provided subsequent to the date of
this Agreement, the "Parent Financial Statements").
---------------------------
(b) Each of the consolidated balance sheets included in the
Parent Financial Statements (including the related notes and schedules) fairly
presented, in all material respects, the consolidated financial position of the
Parent as of the dates set forth in those consolidated balance sheets. Each of
the consolidated statements of income and of cash flows included in the Parent
Financial Statements (including any related notes and schedules) fairly
presented, in all material respects, the consolidated results of operations and
cash flows, as the case may be, of the Parent and the consolidated Parent
Subsidiaries for the periods set forth in those consolidated statements of
income and of cash flows, in each case in conformity with generally accepted
accounting principles in Germany ("German GAAP") or U.S. GAAP, as noted in the
-----------
Parent Financial Statements, consistently applied throughout the periods
indicated.
(c) Except as and to the extent set forth on the consolidated
balance sheet of the Parent and the consolidated Parent Subsidiaries as of
December 31, 1999 including the related notes, neither the Parent nor any Parent
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) that would be required to be reflected on a
balance sheet or in the related notes, except for liabilities or obligations
incurred in the ordinary course of business since December 31, 1999 that,
individually or in the aggregate, have no Material Adverse Effect on the Parent.
Section 4.8 Absence of Certain Changes or Events.
(a) Since December 31, 1999, the Parent and the Parent
Subsidiaries have conducted their businesses only in the ordinary course and,
since such date, there has not been any Material Adverse Effect on the Parent.
(b) Except as set forth in Section 4.8(b) of the Parent
Disclosure Letter and except as permitted pursuant to Section 5.2, since
December 31, 1999, there has not been:
(i) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by it or any
Parent
32
Subsidiaries, whether or not covered by insurance, which damage, destruction or
loss, individually or in the aggregate, has a Material Adverse Effect on the
Parent;
(ii) any material change by the Parent in its or any
Parent Subsidiary's accounting methods, principles or practices, except as
required by U.S. GAAP or German GAAP and disclosed in Section 4.8(b) of the
Parent Disclosure Letter;
(iii) any declaration, setting aside or payment of any
dividend or distribution in respect of Parent Shares or any redemption, purchase
or other acquisition of any of the Parent's securities;
(iv) any increase in the compensation or benefits or
establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, the granting of
stock options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any executive officers of the
Parent or any Parent Subsidiary except in the ordinary course of business or
except as required by applicable Law;
(v) (A) any incurrence or assumption by the Parent or
any Parent Subsidiary of any indebtedness for borrowed money or (B) any
guarantee, endorsement or other incurrence or assumption of material liability
(whether directly, contingently or otherwise) by the Parent or any Parent
Subsidiary for the obligations of any other person (other than any wholly owned
Parent Subsidiary), other than in the ordinary course of business;
(vi) any creation or assumption by the Parent or any
Parent Subsidiary of any Lien on any material asset of the Parent or any Parent
Subsidiary, other than (i) in the ordinary course of business, or (ii) Liens
arising after the date of this Agreement by operation of Law or without the
Parent's consent, in each case that has no Material Adverse Effect on the
Parent;
(vii) any making of any loan, advance or capital
contribution to or investment in any person by the Parent or any Parent
Subsidiary, other than in the ordinary course of business, and not in excess of
U.S.$500,000;
(viii) (A) any contract or agreement entered into by the
Parent or any Parent Subsidiary on or prior to the date hereof relating to any
material acquisition or disposition of any assets or business or (B) any
modification, amendment, assignment or termination of or relinquishment by the
Parent or any Parent Subsidiary of any rights under any other Contract
(including any insurance policy naming it as a beneficiary or a loss payable
payee) that has, individually or in the aggregate, a Material Adverse Effect on
the Parent other than transactions, commitments, contracts or agreements in the
ordinary course of business or those contemplated by this Agreement;
33
(ix) any adverse change in the Parent's relationships
with its material customers, except for changes that, individually or in the
aggregate, have no Material Adverse Effect on the Parent.
Section 4.9 Accounting and Tax Matters. Neither the Parent, nor to
the knowledge of the Parent, any of Parent's affiliates has taken or agreed to
take any action, nor is the Parent aware of any agreement, plan or other
circumstance, that (i) would prevent the Merger from constituting a transaction
qualifying as a reorganization under Section 368(a) of the Code or (ii) prevent
the exchange of shares of Parent Common Stock from meeting the requirements of
Treasury Regulation Section 1.367(a)-3(c)(1).
Section 4.10 Litigation. Except as disclosed in Section 4.10 of the
Parent Disclosure Letter, there is no Claim pending or, to the knowledge of the
Parent, threatened against the Parent or any Parent Subsidiary before any
Governmental Entity that, individually or in the aggregate, has a Material
Adverse Effect on the Parent. Neither the Parent nor any Parent Subsidiary is
subject to any outstanding order, writ, injunction or decree which, individually
or in the aggregate, has a Material Adverse Effect on the Parent.
Section 4.11 Intellectual Property. The Parent owns, or is validly
licensed or otherwise has the right to use all Intellectual Property that is
material to the conduct of the business of the Parent and the Parent
Subsidiaries, taken as a whole. To the reasonable knowledge of the Parent, as of
the date of this Agreement, no suits, actions or proceedings are pending, and no
person has threatened in a writing delivered to the Parent since January 1, 1999
to commence any suit, action or proceeding, alleging that the Parent or any
Parent Subsidiaries are infringing the rights of any person with regard to any
Intellectual Property, except for suits, actions or proceedings that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Parent. To the knowledge of the Parent, no person is infringing the
Intellectual Property rights of the Parent or any Parent Subsidiary, except for
infringements which, individually or in the aggregate, would not have a Material
Adverse Effect on the Parent.
Section 4.12 Taxes. Except to the extent that failure to do so,
individually or in the aggregate, has no Material Adverse Effect on the Parent,
the Parent and the Parent Subsidiaries have filed all Tax returns and reports to
be filed by them and have paid, or established adequate reserves for, all Taxes
required to be paid by them. Except as, individually or in the aggregate, has no
Material Adverse Effect on the Parent, no deficiencies for any Taxes have been
proposed, asserted or assessed against the Parent or any Parent Subsidiaries,
and no requests for waivers of the time to assess any such Taxes are pending.
Section 4.13 Brokers. No broker, finder or investment banker other
than the Parent Financial Advisor is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger or the other transactions
contemplated by this
34
Agreement based upon arrangements made by or on behalf of the Parent. Prior to
the date of this Agreement, the Parent has made available to the Company a
complete and correct copy of all agreements between the Parent and the Parent
Financial Advisor under which the Parent Financial Advisor would be entitled to
any payment relating to the Merger or such other transactions.
Section 4.14 Information. To the best of the Parent's knowledge, none
of the information to be supplied by the Parent for inclusion or incorporation
by reference in the Registration Statement or the Proxy Statement will, in the
case of the Registration Statement, at the time it becomes effective and at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated in that Registration Statement or
necessary to make the statements in that Registration Statement not misleading,
or, in the case of the Proxy Statement or any amendments of or supplements to
the Proxy Statement, at the time of the mailing of the Proxy Statement and any
amendments of or supplements to the Proxy Statement and at the time of the
Company Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated in that Proxy Statement or
necessary in order to make the statements in that Proxy Statement, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
(except for those portions of the Proxy Statement that relate only to the
Company or the Company Subsidiaries or affiliates of the Company) and the
Registration Statement will comply as to form in all material respects with the
provisions of the Exchange Act and the Securities Act, respectively.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business of the Company. Except as
contemplated by this Agreement or with the prior written approval of the Parent,
during the period from the date of this Agreement to the Effective Time, the
Company will, and will cause each of the Company Subsidiaries to, conduct its
operations only in the ordinary course of business and, to the extent consistent
therewith, with no less diligence and effort then would be applied in the
absence of this Agreement, will use commercially reasonable efforts to, and to
cause each Company Subsidiary to, preserve intact the business organization of
the Company and each of the Company Subsidiaries, to keep available the services
of the present officers and key employees of the Company and the Company
Subsidiaries, and to preserve the good will of customers, suppliers and all
other persons having business relationships with the Company and the Company
Subsidiaries. Without limiting the generality of the foregoing, and except as
otherwise contemplated by this Agreement or disclosed in Section 5.1 of the
Company Disclosure Letter, prior to the Effective Time, the Company will not,
and will not permit any Company Subsidiary to, without the prior written
approval of the Parent:
35
(a) except as required by applicable Law, adopt any amendment to
the certificate of incorporation or by-laws of the Company or the comparable
organizational documents of any Company Subsidiary;
(b) except for (i) issuances of capital stock of Company
Subsidiaries to the Company or a wholly owned Company Subsidiary, (ii) issuances
of options to purchase shares of Company Common Stock pursuant to the Company's
2000 Stock Option Plan effected in accordance with Section 5.8, (iii) grants of
rights pursuant to the Company's 2000 Employee Stock Purchase Plan, and (iv)
repurchases of unvested shares at cost in connection with the termination of a
relationship with any employee, consultant or director pursuant to stock option
or purchase agreement in effect on the date hereof, issue, reissue, sell or
pledge, or authorize the issuance, reissuance, sale or pledge of (x) additional
shares of capital stock or other equity securities of any class, or securities
convertible into capital stock or other equity securities or any rights,
warrants or options to acquire any such convertible securities or capital stock
or other equity securities, other than the issue of Company Common Stock, in
accordance with the terms of the instruments governing such issuance on the date
hereof, pursuant to the exercise of Company Stock Options outstanding on the
date hereof, or (y) any other securities in respect of, in lieu of, or in
substitution for, Company Common Stock outstanding on the date hereof;
(c) declare, set aside, make or pay any dividend or other
distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between the Company and any wholly owned Company Subsidiary;
(d) directly or indirectly, split, combine, subdivide,
reclassify or redeem, retire, purchase or otherwise acquire, or propose to
redeem, retire or purchase or otherwise acquire, any shares of its capital
stock, or any of its other securities;
(e) except for (A) increases in salary, wages and benefits of
officers or employees of the Company or the Company Subsidiaries or increases in
salary, wages and benefits granted to officers and employees of the Company or
the Company Subsidiaries in conjunction with new hires, promotions or other
changes in job status or increases in salary, wages and benefits to employees of
the Company or the Company Subsidiaries pursuant to collective bargaining
agreements entered into in the ordinary course of business, and (B) the
modification of the terms of the 75,000 Company Stock Options issued to certain
members of the board of directors of the Company prior to the date of this
Agreement to allow for such Company Stock Options to vest immediately but expire
by June 30, 2000, (i) increase the compensation or fringe benefits payable or to
become payable to its directors, officers or employees (whether from the Company
or any Company Subsidiaries), (ii) pay any benefit not required by any existing
plan or arrangement (including the granting of stock options, stock appreciation
rights, shares of restricted stock or performance units) or grant any severance
or termination pay to (except pursuant to existing agreements, plans or
policies), or enter into any employment or
36
severance agreement with, any director, officer or other employee of the Company
or any Company Subsidiaries or (iii) establish, adopt, enter into, amend or take
any action to accelerate rights under any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, savings, welfare, deferred compensation, employment, termination,
severance or other employee benefit plan, agreement, trust, fund, policy or
arrangement for the benefit or welfare of any directors, officers or current or
former employees, except in each case to the extent required by applicable Law;
provided, however, that nothing in this Agreement will be deemed to prohibit the
payment of benefits as they become payable or prevent the Company from
fulfilling any obligation entered into prior to the date of this Agreement;
(f) acquire, sell, lease, license, transfer, pledge, encumber,
grant or dispose of (whether by merger, consolidation, purchase, sale or
otherwise) any assets, including capital stock of Company Subsidiaries (other
than the acquisition and sale of inventory or the disposition of used or excess
equipment and the purchase of raw materials, supplies and equipment, or
licensing the Company's products, in each case in the ordinary course of
business), or enter into any material commitment or transaction outside the
ordinary course of business, other than transactions between a wholly owned
Company Subsidiary and the Company or another wholly owned Company Subsidiary;
(g) (i) incur, assume or prepay any long-term indebtedness or
incur or assume any short-term indebtedness (including, in either case, by
issuance of debt securities), (ii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person, or (iii) make any loans, advances or
capital contributions to, or investments in, any other person except for loans,
advances, capital contributions or investments between any wholly owned Company
Subsidiary and the Company or another wholly owned Company Subsidiary, except
(A) in connection with the financing of ordinary course trade payables, (B)
advances to customers in the ordinary course of business, or (C) indebtedness
between the Company and any directly or indirectly wholly owned subsidiary of
the Company; or
(h) terminate, cancel or request any material change in, or
agree to any material change in any Contract which is material to the Company
and the Company Subsidiaries taken as a whole, or enter into any Contract which
would be material to the Company and the Company Subsidiaries taken as a whole,
in each case other than in the ordinary course of business; or make or authorize
any capital expenditure, other than capital expenditures that are not, in the
aggregate, for any fiscal year, in excess of U.S.$2,000,000 for the Company and
the Company Subsidiaries taken as a whole;
(i) change the Company's accounting policies or procedures,
other than actions in the ordinary course of business and consistent with past
practice or as required pursuant to applicable Law or U.S. GAAP in the
reasonable opinion of the Company's independent certified accountants;
37
(j) waive, release, assign, settle or compromise any material
rights, claims or litigation;
(k) pay, discharge or satisfy any material claim, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)
other than in the ordinary course of business;
(l) enter into any agreement or arrangement that materially
limits or otherwise restricts the Company or any Company Subsidiary or any
successor thereto, or that would, after the Effective Time, limit or restrict
the Surviving Corporation and its affiliates (including Parent) or any successor
thereto, from engaging or competing in any line of business or in any geographic
area;
(m) make any Tax election or settle or compromise any material
federal, state, local or foreign Tax liability;
(n) authorize or enter into any formal or informal written or
other agreement or otherwise make any commitment to do any of the foregoing; or
(o) take any action with the intent to directly or indirectly
adversely affect the Merger.
Section 5.2 Certain Interim Operations of the Parent. The Parent
covenants and agrees that, except as expressly provided in this Agreement or as
disclosed in Section 5.2 of the Parent Disclosure Letter, during the term of
this Agreement, without the prior written consent of the Company, which consent
will not be unreasonably withheld or delayed, the Parent will not:
(a) adopt any amendment to the articles of incorporation
(Satzung) of the Parent in any manner that changes the fundamental attributes,
or adversely affects the value or rights, of the Parent Common Stock;
(b) declare, set aside, make or pay any dividend or other
distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between the Parent and any wholly owned Parent Subsidiary;
(c) liquidate or adopt a plan of liquidation;
(d) purchase, redeem or otherwise acquire, directly or
indirectly, any shares of capital stock of the Parent or any Parent Subsidiary
in any amount that would adversely affect the Parent's financial condition or
liquidity;
(e) authorize or enter into any formal or informal written or
other agreement or otherwise make any commitment to do any of the foregoing;
38
(f) take any action with the intent to directly or indirectly
adversely affect Merger; or
(g) change the Parent's accounting policies or procedures, other
than actions in the ordinary course of business and consistent with past
practice or as required pursuant to applicable Law or U.S. GAAP or German GAAP.
Section 5.3 Notification of Certain Matters. The Parent and the Company
shall promptly notify each other of (a) the occurrence or non-occurrence of any
fact or event which could reasonably be expected (i) to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Effective
Time, (ii) to cause any material covenant, condition or agreement hereunder not
to be complied with or satisfied in all material respects or (iii) to result in,
in the case of Parent, a Material Adverse Effect on the Parent; and, in the case
of the Company, a Material Adverse Effect on the Company, (b) any failure of the
Company or the Parent, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder in any material respect; provided, however, that no such notification
shall affect the representations or warranties of any party or the conditions to
the obligations of any party hereunder, (c) any notice or other material
communications from any Governmental Entity in connection with the transactions
contemplated by this Agreement and (d) the commencement of any suit, action or
proceeding that seeks to prevent, seeks damages in respect of, or otherwise
relates to the consummation of the transactions contemplated by this Agreement.
Section 5.4 Proxy Statement.
(a) As promptly as practicable after the execution of this
Agreement, the Parent and the Company shall jointly prepare and file with the
SEC a single document that will constitute (i) the proxy statement of the
Company relating to the special meeting of the Company's stockholders (the
"Company Stockholders Meeting") to be held to consider approval and adoption of
----------------------------
this Agreement and the Merger, (ii) the registration statement on Forms F-4 and
F-6 of the Parent (together with all amendments thereto, the "Registration
------------
Statement"), in connection with the registration under the Securities Act of the
---------
Parent ADSs (and the Parent Common Stock underlying such Parent ADSs) to be
issued to the stockholders of the Company in connection with the Merger and the
prospectus included in the Registration Statement (such single document,
together with any amendments thereof or supplements thereto, the "Proxy
-----
Statement"). Substantially contemporaneously with the filing of the Proxy
---------
Statement with the SEC, copies of the Proxy Statement shall be provided to the
Nasdaq National Market. The Parent and the Company each shall use commercially
reasonable efforts to cause the Registration Statement to become effective as
promptly as practicable, and, prior to the effective date of the Registration
Statement (the "Registration Statement Effective Date"), the Parent shall take
-------------------------------------
all or any action required under any applicable Law in connection with the
issuance of Parent ADSs pursuant to the Merger.
39
The Parent or the Company, as the case may be, shall furnish all information
concerning the Parent or the Company as the other party may reasonably request
in connection with such actions and the preparation of the Proxy Statement. As
promptly as practicable after the Registration Statement Effective Date, the
proxy statement and prospectus included in the Proxy Statement (collectively,
the "Proxy Materials") will be mailed to the stockholders of the Company. The
---------------
Parent and the Company shall cause the Proxy Statement to comply as to form and
substance in all material respects with the applicable requirements of (i) the
Exchange Act, including Sections 14(a) and 14(d) thereof and the respective
regulations promulgated thereunder, (ii) the Securities Act, (iii) the rules and
regulations of the Nasdaq National Market principal securities exchanges and
quotation services on which the common stock, (iv) the DGCL and (v) any other
applicable law.
(b) The Proxy Statement shall include the unconditional
recommendation of the Board of Directors of the Company to the stockholders of
the Company that they vote in favor of the adoption of this Agreement and the
Merger; provided, however, that the Board of Directors of the Company may, at
any time prior to the Effective Time, withdraw, modify or change any such
recommendation if the Board of Directors of the Company determines in good faith
(after consultation with the Company's counsel) that failure to so withdraw,
modify or change its recommendation would be inconsistent with its fiduciary
duties to the Company's stockholders under applicable Laws. In addition, the
Proxy Statement and the Proxy Materials will include a copy of the written
opinion of the Company Financial Advisor referred to in Section 3.19.
(c) No amendment or supplement to the Proxy Statement will be
made without the approval of each of the Parent and the Company, which approval
shall not be unreasonably withheld or delayed. Each of the Parent and the
Company will advise the other, promptly after it receives notice thereof, of the
time when the Registration Statement has become effective or any supplement or
amendment has been filed, of the issuance of any stop order, of the suspension
of the qualification of Parent Common Stock issuable in connection with the
Merger for offering or sale in any jurisdiction, or of any request by the SEC or
the Nasdaq National Market for amendment of the Proxy Statement or comments
thereon and responses thereto or requests by the SEC for additional information.
(d) The information supplied by the Company for inclusion in the
Proxy Statement shall not, at (i) the time the Registration Statement is
declared effective, (ii) the time the Proxy Materials (or any amendment of or
supplement to the Proxy Materials) is first mailed to the stockholders of
Company, (iii) the time of the Company Stockholders Meeting, and (iv) the
Effective Time, contain any untrue statement of a material fact or fail to state
any material fact required to be stated in the Proxy Statement or necessary in
order to make the statements in the Proxy Statement not misleading. If at any
time prior to the Effective Time any event or circumstance relating to the
Company or any Company Subsidiary, or their respective officers or directors,
should be discovered by the Company that should be set forth in an amendment or
a supplement to the Proxy Statement, the Company shall promptly inform the
Parent. All
40
documents that the Company is responsible for filing with the SEC in connection
with the transactions contemplated by this Agreement will comply as to form and
substance in all material respects with the applicable requirements of the DGCL,
the Securities Act and the Exchange Act.
(e) The information supplied by the Parent for inclusion in the
Proxy Statement shall not, at (i) the time the Registration Statement is
declared effective, (ii) the time the Proxy Materials (or any amendment of or
supplement to the Proxy Materials) are first mailed to the stockholders the
Company, (iii) the time of the Company Stockholders Meeting, and (iv) the
Effective Time, contain any untrue statement of a material fact or fail to state
any material fact required to be stated in the Proxy Statement or necessary in
order to make the statements in the Proxy Statement not misleading. If, at any
time prior to the Effective Time, any event or circumstance relating to the
Parent or any Parent Subsidiary, or their respective officers or directors,
should be discovered by the Parent that should be set forth in an amendment or a
supplement to the Proxy Statement, the Parent shall promptly inform the Company.
All documents that the Parent is responsible for filing in connection with the
transactions contemplated by this Agreement will comply as to form and substance
in all material aspects with the applicable requirements of the DGCL, the
Securities Act and the Exchange Act.
Section 5.5 Company Stockholders Meeting.
The Company shall call and hold the Company Stockholders Meeting as
promptly as practicable after the Registration Statement Effective Date for the
purpose of voting upon the adoption of this Agreement and the Parent and the
Company will cooperate with each other to cause the Company Stockholders Meeting
to be held as soon as practicable following the mailing of the Proxy Materials
to the stockholders of the Company. The Company shall use commercially
reasonable efforts (through its agents or otherwise) to solicit from its
stockholders proxies in favor of the adoption of this Agreement, and shall take
all other action necessary or advisable to secure Requisite Company Vote, except
to the extent that the Board of Directors of the Company determines in good
faith (after consultation with the Company's counsel) that doing so would be
inconsistent with its fiduciary duties to the Company's stockholders under
applicable Laws.
Section 5.6 Access to Information; Confidentiality.
(a) Except as required under any confidentiality agreement or
similar agreement or arrangement to which the Parent or the Company or any of
their respective subsidiaries is a party or under applicable Law or the
regulations or requirements of any securities exchange or quotation service or
other self regulatory organization with whose rules the parties are required to
comply, from the date of this Agreement to the Effective Time, the Parent and
the Company shall (and shall cause their respective subsidiaries to): (i)
provide to the other (and its officers, directors, employees, accountants,
consultants, legal counsel, financial advisors, investment bankers, agents and
41
other representatives (collectively, "Representatives")) access at reasonable
---------------
times upon prior notice to the officers, employees, agents, properties, offices
and other facilities of the other and its subsidiaries and to the books and
records thereof; and (ii) furnish promptly such information concerning the
business, properties, Contracts, assets, liabilities, personnel and other
aspects of the other party and its subsidiaries as the other party or its
Representatives may reasonably request. No investigation conducted under this
Section 5.6 shall affect or be deemed to modify any representation or warranty
made in this Agreement.
(b) The parties shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under the
Confidentiality Agreement, dated May 17, 2000 (the "Confidentiality Agreement"),
-------------------------
between the Parent and the Company with respect to the information disclosed
under this Section 5.6.
Section 5.7 No Solicitation.
(a) The Company agrees that, prior to the Effective Time, it shall
not, and shall not authorize or permit any Company Subsidiaries or any of its or
the Company Subsidiaries' Representatives, directly or indirectly, to (i)
solicit, initiate or encourage any inquiries or the making of any offer or
proposal with respect to (x) any merger, consolidation, share exchange,
recapitalization, business combination or similar transaction, (y) any sale,
lease, exchange, mortgage, transfer or other disposition, in a single
transaction or series of related transactions, of assets representing 15% or
more of the assets of the Company and the Company Subsidiaries, taken as a
whole, or (z) any sale of shares of capital stock representing, individually or
in the aggregate, 10% or more of the voting power of the Company other than to
the Company or a Company Subsidiary, including by way of a tender offer or
exchange offer by any person (other than the Company or a Company Subsidiary)
for shares of capital stock representing 5% or more of the voting power of the
Company, other than the transactions contemplated by this Agreement (any of the
foregoing inquiries, offers or proposals being referred to in this Agreement as
a "Takeover Proposal"), (ii) negotiate or otherwise engage in substantive
-----------------
discussions with any person (other than the Parent, Merger Sub or their
respective Representatives) that has submitted or proposed to submit any
Takeover Proposal, (iii) provide to any person any non-public information or
data relating to the Company or any Company Subsidiary for the purpose of
facilitating the making of any Takeover Proposal, or (iv) agree to approve or
recommend any Takeover Proposal or otherwise enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any other transactions contemplated by this Agreement;
provided, however, that if the Board of Directors of the Company determines in
good faith (after consultation with the Company's legal counsel) that failure to
do so would be inconsistent with its fiduciary duties to the Company's
stockholders under applicable Laws, the Company may, in response to any Superior
Proposal, or any Takeover Proposal that would reasonably be expected to lead to
a Superior Proposal, which proposal was not solicited by it and which did not
otherwise
42
result from a breach of this Section 5.7, and subject to providing prior written
notice of its decision to take such action to the Parent and compliance with the
other requirements of this Section 5.7, (A) furnish information with respect to
the Company and the Company Subsidiaries to any person making a Superior
Proposal pursuant to a customary confidentiality agreement (as determined in
good faith by the Company after consultation with its independent legal
counsel), (B) participate in discussions or negotiations regarding such Superior
Proposal or (C) enter into a definitive agreement providing for the
implementation of a Superior Proposal (as defined below) if the Company or the
Board of Directors is simultaneously terminating this Agreement pursuant to
Section 7.1(h).
(b) In addition to the obligations of the Company set forth in
paragraph (a) of this Section 5.7, the Company shall as promptly as is
practicable advise the Parent orally and in writing of any request for
information relating to any Takeover Proposal, the material terms and conditions
of such request or Takeover Proposal and the identity of the person making such
request or Takeover Proposal. The Company will keep the Parent informed of the
status (including amendments or proposed amendments) of any such request or
Takeover Proposal.
(c) Nothing contained in this Section 5.7 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) promulgated under the Exchange Act, or from making any other
disclosure to the Company's stockholders, that is required by applicable Law or
by the Board of Directors' fiduciary duties.
(d) The Company will immediately cease and cause to be terminated
any existing activities, discussions or negotiations by the Company or its
Representatives with any parties conducted heretofore with respect to any of the
foregoing, and will promptly inform the Representatives of the obligations
undertaken in this Section 5.7.
(e) The Board of Directors of the Company will not withdraw or
modify, or propose to withdraw or modify, in any manner adverse to the Parent,
its approval or recommendation of this Agreement or the Merger except in
connection with a Superior Proposal and then only upon or after the termination
of this Agreement pursuant to Section 7.1(h) and payment to the Parent of the
amounts referred to in Section 7.3(b).
(f) For purposes of this Agreement:
(i) "Superior Proposal" means any bona fide written
-----------------
proposal made by a third party to acquire, directly or indirectly, including
pursuant to a tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, reorganization, liquidation, dissolution or
similar transaction, for consideration to the Company's stockholders consisting
of cash and/or securities, over 50% of the shares of the Company's capital stock
then outstanding on terms which the
43
Board of Directors of the Company determines in their good faith judgment (after
consultation with the Company's financial advisors), to be more favorable to the
Company's stockholders than the Merger and for which financing, to the extent
required, is then committed or which a majority of the members of the Board of
Directors of the Company determines in their good faith judgment (after such
consultation), is likely to be obtained by such third party.
(ii) "Acquisition Agreement" means any letter of intent,
---------------------
agreement in principle, definitive acquisition or merger agreement or other
similar agreement, contract or commitment related to any Takeover Proposal.
Section 5.8 Employee Benefits Matters.
(a) Effective as of the Effective Time and for a one-year period
following the Effective Time, the Parent shall provide, or cause the Surviving
Corporation and its subsidiaries and successors to provide, those persons who,
at the Effective Time, were employees of the Company and its subsidiaries
("Covered Employees"), with benefits and compensation during their continuing
-----------------
employment that are substantially equivalent, in the aggregate, to the
compensation and benefits provided to such employees as of the date of this
Agreement; provided that the foregoing shall not apply to the Company's 2000
Employee Stock Purchase Plan, which shall be terminated upon or prior to the
Effective Time; provided, further, that nothing herein shall restrict the Parent
or the Surviving Corporation from terminating the employment of any such
employees in accordance with applicable laws and contractual rights, if any, of
such employees.
(b) The Parent will, or will cause the Surviving Corporation to:
(i) waive all limitations as to pre-existing conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Covered Employees under any welfare plan that such employees may be eligible
to participate in after the Effective Time; (ii) provide each such Covered
Employee with credit for any co-payment and deductibles paid prior to the
Effective Time in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time; and (iii) provide each Covered Employee
with credit for purposes of vesting and eligibility for all service with the
Company and its affiliates under each employee benefit plan, program, or
arrangement of the Parent or its affiliates in which such employees are eligible
to participate to the extent such service was credited for similar purposes
under similar plans of the Company or its subsidiaries; provided, however, that
in no event shall the Covered Employees be entitled to any credit to the extent
that it would result in a duplication of benefits with respect to the same
period of service.
(c) The Parent shall (i) cause the Surviving Corporation after the
consummation of the Offer to pay all amounts provided under all of the Company's
Benefit Plans in accordance with their terms, and (ii) honor and cause the
Surviving
44
Corporation to honor all rights, privileges and modifications to or with respect
to any Benefit Plans which become effective as a result of such change in
control in accordance with their terms, subject in each case to all rights amend
or terminate any Benefit Plan in accordance with its terms.
(d) The Parent and the Company shall jointly determine, no later
than June 30, 2000, an appropriate number of options to be granted between the
date of this Agreement and the Effective Time. The Parent and the Company shall,
in good faith, jointly identify the optionees and determine the amount and terms
of individual grants.
Section 5.9 Directors' and Officers' Indemnification and Insurance.
(a) The Parent agrees that the Certificate of Incorporation and By-
laws of the Surviving Corporation will contain provisions with respect to
exculpation and indemnification at least as favorable to employees, agents,
directors or officers of the Company and the Company Subsidiaries (the
"Indemnified Parties") as those provided in the certificate of incorporation or
-------------------
by-laws of the Company as in effect on the date hereof, which provisions will
not be amended, repealed or otherwise modified for a period of six years from
the Effective Time in any manner that would adversely affect the rights
thereunder of individuals who, immediately prior to the Effective Time, were
directors, officers, employees or agents of the Company, unless such
modification is required by law; provided, however, that in the event any claim
or claims are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until
final disposition of any and all such claims. The foregoing parties are
expressly made third party beneficiaries to the provisions of this Section 5.9.
The Parent also agrees to indemnify all Indemnified Parties to the fullest
extent permitted by applicable law with respect to all acts and omissions
arising out of such individuals' services as officers, directors, employees or
agents of the Company or any of the Company Subsidiaries or as trustees or
fiduciaries of any plan for the benefit of employees, or otherwise on behalf of,
the Company or any of the Company Subsidiaries, occurring prior to the Effective
Time, including the transactions contemplated by this Agreement. Without
limiting of the foregoing, in the event any such Indemnified Party is or becomes
involved in any capacity in any action, proceeding or investigation in
connection with any matter, including the transactions contemplated by this
Agreement, occurring prior to, and including, the Effective Time, the Parent
will pay as incurred such Indemnified Party's legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith.
(b) The Parent agrees that the Company and, at and after the
Effective Time, the Surviving Corporation shall cause to be maintained in effect
for not less than six years from the Effective Time the current policies of the
directors' and officers' liability insurance maintained by the Company; provided
that the Surviving Corporation may substitute therefor policies of at least the
same coverage containing terms and conditions which are at least as favorable
and provided that such substitution
45
shall not result in any gaps or lapses in coverage with respect to matters
occurring prior to the Effective Time; and provided, further, that the Surviving
Corporation shall not be required to pay an annual premium in excess of 175% of
the last annual premium paid by the Company prior to the date of this Agreement
and if the Surviving Corporation is unable to obtain the insurance required by
this Section 5.9(b) it shall obtain as much comparable insurance as possible for
an annual premium equal to such maximum amount.
Section 5.10 Letters of Accountants.
(a) The Company shall cause to be delivered to the Parent "comfort"
letters of PricewaterhouseCoopers LLP, the Company's independent public
accountants, dated and delivered on the Registration Statement Effective Date
and as of the Effective Time, and addressed to the Parent in form and substance
reasonably satisfactory to the Parent and reasonably customary in scope and
substance for letters delivered by independent public accountants in connection
with transactions contemplated by this Agreement.
(b) The Parent shall cause to be delivered to the Company "comfort"
letters of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the Parent's independent public accountants, dated
and delivered the Registration Statement Effective Date and as of the Effective
Time, and addressed to the Company, in form and substance reasonably
satisfactory to the Company and reasonably customary in scope and substance for
letters delivered by independent public accountants in connection with
transactions contemplated by this Agreement.
Section 5.11 Commercially Reasonable Efforts. Subject to the terms and
conditions provided in this Agreement and to applicable legal requirements, each
of the parties to this Agreement agrees to use commercially reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, and
to assist and cooperate with the other parties to this Agreement in doing, as
promptly as practicable, all things necessary, proper or advisable under
applicable laws and regulations to ensure that the conditions set forth in
Article VI are satisfied and to consummate and make effective the transactions
contemplated by this Agreement. If at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, including the execution of additional instruments, the proper
officers and directors of each party to this Agreement shall take all such
necessary or desirable action.
Section 5.12 Consents; Filings; Further Action.
(a) Upon the terms and subject to the conditions of this Agreement,
each of the parties to this Agreement shall use commercially reasonable efforts
to (i) take, or cause to be taken, all appropriate action, and do, or cause to
be done, all things necessary, proper or advisable under applicable Law or
otherwise to consummate and make effective the Merger and the other transactions
contemplated by this Agreement, (ii) obtain from Governmental Entities any
consents, licenses, permits,
46
waivers, approvals, authorizations or orders required to be obtained or made by
the Parent or the Company or any of their subsidiaries in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the Merger and the other transactions contemplated by this Agreement, (iii) make
all necessary filings, and thereafter make any other submissions either required
or deemed appropriate by each of the parties, with respect to this Agreement and
the Merger and the other transactions contemplated by this Agreement required
under (A) the Securities Act, the Exchange Act and any other applicable federal
or Blue Sky Laws, (B) the HSR Act, (C) the DGCL and the German Stock Corporation
Law (Aktiengesetz), (D) any other applicable Law and (E) the rules and
regulations of the Nasdaq National Market. The parties to this Agreement shall
cooperate and consult with each other in connection with the making of all such
filings, including by providing copies of all such documents to the nonfiling
party and its advisors prior to filing, and none of the parties will file any
such document if any of the other parties shall have reasonably objected to the
filing of such document. No party to this Agreement shall consent to any
voluntary extension of any statutory deadline or waiting period or to any
voluntary delay of the consummation of the Merger and the other transactions
contemplated by this Agreement at the behest of any Governmental Entity without
the consent and agreement of the other parties to this Agreement, which consent
shall not be unreasonably withheld or delayed.
(b) Without limiting the generality of Section 5.12(a), each party
to this Agreement shall promptly inform the others of any material communication
from the Federal Trade Commission, the Department of Justice or any other
domestic or foreign government or governmental or multinational authority
regarding any of the transactions contemplated by this Agreement. If any party
or any affiliate thereof receives a request for additional information or
documentary material from any such government or authority with respect to the
transactions contemplated by this Agreement, then such party will endeavor in
good faith to make, or cause to be made, as soon as reasonably practicable and
after consultation with the other party, an appropriate response in compliance
with such request. The Parent will advise the Company promptly in respect of any
understandings, undertakings or agreements (oral or written) which the Parent
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice or any other domestic or foreign government or governmental or
multinational authority in connection with the transactions contemplated by this
Agreement. In furtherance and not in limitation of the foregoing, the Parent
shall use commercially reasonable efforts to resolve such objections, if any, as
may be asserted with respect to the transactions contemplated by this Agreement
under any antitrust, competition or trade regulatory laws, rules or regulations
of any domestic or foreign government or governmental authority or any
multinational authority. Notwithstanding the foregoing, nothing in this Section
5.12 shall require, or be construed to require, the Parent or the Company, in
connection with the receipt of any regulatory approval, to proffer to, or agree
to (A) sell or hold separate and agree to sell, divest or to discontinue or
limit, before or after the Effective Time, any assets, businesses, or interest
in any assets or businesses of the Parent, the Company or any of their
respective affiliates (or to the consent to any sale, or agreement to sell, or
discontinuance or limitation by the Parent or the Company,
47
as the case may be, of any of its assets or businesses) or (B) agree to any
conditions relating to, or changes or restriction in, the operations of any such
asset or businesses which, in either case, could reasonably be expected to
result in a Material Adverse Effect on the Parent or a Material Adverse Effect
on the Company.
Section 5.13 Plan of Reorganization. This Agreement is intended to
constitute a "plan of reorganization" within the meaning of Section 1.368-2(g)
of the income tax regulations promulgated under the Code. From and after the
date of this Agreement and until the Effective Time, each party to this
Agreement shall use commercially reasonable efforts to cause the Merger to
qualify, and will not, without the prior written consent of the parties to this
Agreement, take any actions or cause any actions to be taken which could prevent
the Merger from qualifying, as a reorganization under the provisions of Section
368(a) of the Code. Following the Effective Time, and consistent with any such
consent, (i) none of the Surviving Corporation, the Parent or any of their
affiliates shall take any action or cause any action to be taken which would
cause the Merger to fail to so qualify as a reorganization under Section 368(a)
of the Code and (ii) the Surviving Corporation and the Parent shall comply with
the record keeping and reporting requirements of Sections 368(a) and 367 of the
Code.
Section 5.14 Public Announcements. The initial press release
concerning the Merger shall be a joint press release and, thereafter, the Parent
and Merger Sub and the Company shall consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement or any of the transactions contemplated by this Agreement and shall
not issue any such press release or make any such public statement prior to such
consultation, except to the extent required by applicable Law or the
requirements of the Nasdaq National Market and the Neuer Market, in which case
the issuing party shall use commercially reasonable efforts to consult with the
other parties before issuing any such release or making any such public
statement.
Section 5.15 Stock Exchange Listings and De-Listings. Each of the
Company and the Parent shall use commercially reasonable efforts to cause (i)
the Parent ADSs to be issued in the Merger to be approved for quotation on the
Nasdaq National Market subject to official notice of issuance, prior to the
Effective Time, and (ii) if necessary, the Parent Common Stock underlying the
Parent ADSs to be approved for listing on the Neuer Market subject to official
notice of issuance, prior to the Effective Time. The parties shall use their
commercially reasonable efforts to cause the Surviving Corporation to cause the
Company Common Stock to be de-listed from Nasdaq National Market and de-
registered under the Exchange Act as soon as practicable following the Effective
Time.
Section 5.16 Expenses. Except as otherwise provided in Section 7.3,
whether or not the Merger is consummated, all Expenses incurred in connection
with this Agreement and the Merger and the other transactions contemplated by
this Agreement shall be paid by the party incurring such Expense, except that
Expenses incurred in
48
connection with the filing fee for the Proxy Statement and printing and mailing
the Proxy Materials (other than legal, accounting, investment and banking,
expert and consultant fees and expenses) and the filing fee under the HSR Act
shall be shared equally by the Parent and the Company.
Section 5.17 Takeover Statutes; Exon-▇▇▇▇▇▇. If any Takeover Statute is or
may become applicable to the Merger or the other transactions contemplated by
this Agreement, each of the Parent and the Company and its respective board of
directors shall grant such approvals and take such actions as are necessary so
that such transactions may be consummated as promptly as practicable on the
terms contemplated by this Agreement, any necessary filings are made and
otherwise act to eliminate or minimize the effects of such statute or regulation
on such transactions. In addition, if the Parent so requests, the Parent and the
Company shall cooperate to file a notification pursuant to Section 721(a) of the
Exon-▇▇▇▇▇▇ Amendment to the Defense Production Act of 1950
Section 5.18 Dividends. The Company shall coordinate with the Parent the
declaration, setting of record dates and payment dates of dividends on Company
Common Stock so that holders of Company Common Stock do not receive dividends on
both Company Common Stock and Parent ADS received in the Merger in respect of
any calendar quarter or fail to receive a dividend on either Company Common
Stock or Parent Common Stock received in the Merger in respect of any calendar
quarter.
Section 5.19 Control of the Company's Operations. Nothing contained in
this Agreement shall give the Parent or the Company, directly or indirectly,
rights to control or direct the other party's operations prior to the Effective
Time.
Section 5.20 Certain Obligations of the Parent.
(a) Certain obligations of the Parent set forth in this Agreement,
including those obligations designed to survive the consummation of the Share
Exchange, may require additional corporate actions specified in the German Stock
Corporation Law (Aktiengesetz), including Sections 52, 203 and 185 et seq.
thereof, be taken by or with respect to the Parent. As required by law, certain
of such obligations of the Parent shall be incorporated in agreements in
connection with the contributions in kind to the Parent, which agreements shall
be entered into by the Parent and the Exchange Agent in the context of the Share
Exchange pursuant to Sections 52 and 183 et seq. of the German Stock Corporation
Law (Aktiengesetz).
(b) Effective as of the Effective Time and during the period in
which any of the Company Stock Options remain outstanding, the Parent shall not
cause the Surviving Corporation to commence a bankruptcy or insolvency
proceeding under any applicable Law.
49
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to consummate the other
transactions contemplated by this Agreement to be consummated on the Closing
Date is subject to the satisfaction or waiver at or prior to the Effective Time
of each of the following conditions:
(a) Stockholder Approval. This Agreement and consummation of the
Merger shall have been duly approved by holders of outstanding Company Common
Stock by the Requisite Company Vote, and this Agreement, the consummation of the
Merger, the Share Capital Increase (including the approvals of the Parent's
management board (Vorstand) and supervisory board (Aufsichtsrat)) and the
issuance of the Parent Common Stock underlying the Parent ADSs to be issued in
the Merger shall have been duly approved in accordance with applicable law and
the articles of association (Satzung) of the Parent;
(b) Listing. The Parent ADSs issuable to the Company's
stockholders pursuant to this Agreement shall have been authorized for quotation
on the Nasdaq National Market, upon official notice of issuance.
(c) HSR. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(d) Consents. All consents, approvals and action of any
Governmental Entity required to permit the consummation of the Merger, the Share
Capital Increase and the other transactions contemplated by this Agreement shall
have been obtained or made, free of any condition that could reasonably be
expected to result in a Material Adverse Effect on the Parent or a Material
Adverse Effect on the Company.
(e) Injunctions. No Governmental Entity of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any Law, orders,
injunction or decree (whether temporary, preliminary or permanent) that is in
effect and restrains, enjoins or otherwise prohibits consummation of the Merger,
the Share Capital Increase or the other transactions contemplated by this
Agreement.
(f) Registration Statement. The Registration Statement shall have
become effective under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement shall have been issued, and no
proceedings for that purpose shall have been initiated or be threatened by the
SEC.
Section 6.2 Conditions to Obligations of the Parent. The obligations
of the Parent to consummate the transactions contemplated by this Agreement to
be
50
consummated on the Closing Date are also subject to the satisfaction or waiver
by the Parent at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties of
the Company set forth in this Agreement that are not so qualified shall be true
and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date, as though made on and as of the Closing
Date, except to the extent the representation or warranty is expressly limited
by its terms to another date, and the Parent shall have received a certificate
(which certificate may be qualified by knowledge to the same extent as the
representations and warranties of the Company contained in this Agreement are so
qualified) signed on behalf of the Company by an executive officer of the
Company to such effect.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and the Parent shall
have received a certificate signed on behalf of the Company by an executive
officer of the Company to such effect.
(c) Material Adverse Effect. Since the date of this Agreement,
there shall have been no Material Adverse Effect on the Company.
(d) Consents Under Agreements. The Company shall have obtained
the consent, approval or waiver of each person that is not a Governmental Entity
whose consent, approval or waiver shall be required in order to consummate the
transactions contemplated by this Agreement, except those for which the failure
to obtain such consent, approval or waiver, individually or in the aggregate,
would have no Material Adverse Effect on the Company.
(e) Tax Opinion. The Parent shall have received the opinion of
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to the Parent, dated
the Closing Date, to the effect that the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of Section 368(a) of
the Code, and that each of the Parent, Merger Sub and the Company will be a
party to that reorganization within the meaning of Section 368(b) of the Code.
Each of the parties hereto agree to make such reasonable representations related
to the requirements of Sections 367 and 368 of the Code as may be requested by
counsel in connection with such opinion.
(f) Auditors' Report. The Parent shall have received an
unqualified auditors' report from the Company's independent certified auditors
on the Company's consolidated balance sheet and consolidated statement of income
and of cash flows (including the related notes and schedules) provided by the
Company to the Parent prior to the signing of this Agreement.
51
Section 6.3 Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger and consummate the other transactions
contemplated by this Agreement to be consummated on the Closing Date is also
subject to the satisfaction or waiver by the Company at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Parent set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties of
the Parent set forth in this Agreement that are not so qualified shall be true
and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date, as though made on and as of the Closing
Date, except to the extent the representation or warranty is expressly limited
by its terms to another date, and the Company shall have received a certificate
(which certificate may be qualified by knowledge to the same extent as the
representations and warranties of each of the Parent contained in this Agreement
are so qualified) signed on behalf of each of the Parent by an executive officer
of the Parent to such effect.
(b) Performance of Obligations of the Parent. The Parent
shall have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and the
Company shall have received a certificate signed on behalf of the Parent by an
executive officer of the Parent to such effect.
(c) Material Adverse Effect. Since the date of this
Agreement, there shall have been no Material Adverse Effect on the Parent.
(d) Consents Under Agreements. The Parent shall have
obtained the consent, approval or waiver of each person that is not a
Governmental Entity whose consent, approval or waiver shall be required in order
to consummate the transactions contemplated by this Agreement, except those for
which failure to obtain such consents, approval or waiver, individually or in
the aggregate, would have no Material Adverse Effect on the Parent.
(e) Tax Opinion. The Company shall have received the opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, counsel to the
Company, dated the Closing Date, to the effect that the Merger will be treated
for federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code, and that each of the Parent, Merger Sub and the
Company will be a party to that reorganization within the meaning of Section
368(b) of the Code. Each of the parties hereto agree to make such reasonable
representations related to the requirements of Sections 367 and 368 of the Code
as may be requested by counsel in connection with such opinion.
52
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, notwithstanding
any requisite approval and adoption of this Agreement, as follows:
(a) by mutual written consent of the Parent and the Company
duly authorized by their board of directors of the Company and by the management
board of the Parent;
(b) by either the Parent or the Company, if the Effective
Time shall not have occurred on or before December 31, 2000; provided, however,
that the right to terminate this Agreement under this Section 7.1(b) shall not
be available to the party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or resulted in, the failure of the
Effective Time to occur on or before such date;
(c) by either the Parent or the Company, if any order,
injunction or decree preventing the consummation of the Merger shall have been
entered by any court of competent jurisdiction or Governmental Entity and shall
have become final and nonappealable;
(d) by the Parent or the Company, if this Agreement shall
fail to receive the Requisite Company Vote at the Company Stockholders Meeting
or any adjournment or postponement thereof;
(e) by the Parent, upon a breach of any material
representation, warranty, covenant or agreement on the part of the Company set
forth in this Agreement, or if any representation or warranty of the Company
shall have become untrue, in either case such that the conditions set forth in
either of Section 6.2(a) or 6.2(c) would not be satisfied (a "Terminating
-----------
Company Breach"); provided, however, that, if such Terminating Company Breach is
--------------
curable by the Company through the exercise of commercially reasonable efforts
and for so long as the Company continues to exercise such commercially
reasonable efforts, the Parent may not terminate this Agreement under this
Section 7.1(e);
(f) by the Company, upon breach of any material
representation, warranty, covenant or agreement on the part of the Parent set
forth in this Agreement, or if any representation or warranty of the Parent
shall have become untrue, in either case such that the conditions set forth in
either of Section 6.3(a) or 6.3(c) would not be satisfied (a "Terminating Parent
------------------
Breach"); provided, however, that, if such Terminating Parent Breach is curable
------
by the Parent through commercially reasonable efforts and for so long as the
Parent continues to exercise such commercially reasonable efforts, the Company
may not terminate this Agreement under this Section 7.1(f);
53
(g) by the Parent, if (i) the Board of Directors of the
Company withdraws, modifies or changes its approval or recommendation of this
Agreement in a manner adverse to the Parent or shall have resolved to do so,
(ii) the Board of Directors of the Company shall have recommended to the
stockholders of the Company a Takeover Proposal or shall have resolved to do so,
or (iii) a tender offer or exchange offer for 10% or more of the outstanding
shares of capital stock of the Company is commenced by a person other than the
Parent and either (a) the Board of Directors of the Company recommends
acceptance of such tender offer or exchange offer by its stockholders or (b)
within ten (10) business days of such commencement the Board of Directors of the
Company shall have failed to recommend against acceptance of such tender offer
or exchange offer by its stockholders (including by taking no position with
respect to the acceptance of such tender offer or exchange offer by its
stockholders);
(h) by the Company, if the Board of Directors of the Company
shall have concluded in good faith (after consultation with the Company's
counsel) that failure to so terminate would be inconsistent with its fiduciary
duties under applicable Laws and, on or prior to such date, any person or group
(other than the Parent) shall have made a public announcement or otherwise
communicated to the Company and its stockholders with respect to a Superior
Proposal; provided, however, that the Company may not terminate this Agreement
pursuant to this Section 7.1(h) until three business days have elapsed following
delivery to the Parent of written notice of such determination of the Company
(which written notice will inform the Parent of the material terms and
conditions of the Superior Proposal); provided, further, however, that such
termination under this Section 7.1(h) shall not be effective until the Company
has made payment to the Parent of the amounts required to be paid pursuant to
Section 7.3(b).
(i) on or after July 8, 2000, by the Company, if both the
management board (Vorstand) and the supervisory board (Aufsichsrat) of the
Parent shall not have approved the Share Capital Increase.
Section 7.2 Effect of Termination. Except as provided in Section
8.2, in the event of termination of this Agreement pursuant to Section 7.1, this
Agreement shall forthwith become void, there shall be no liability under this
Agreement on the part of the Parent or the Company or any of their respective
Representatives, and all rights and obligations of each party to this Agreement
shall cease, subject to the remedies of the parties as set forth in Sections
7.3(b) and (c); provided, however, that nothing in this Agreement shall relieve
any party from liability for the breach of any of its representations and
warranties or the breach of any of its covenants or agreements set forth in this
Agreement.
Section 7.3 Expenses Following Certain Termination Events.
(a) Except as set forth in this Section 7.3, all Expenses
incurred in connection with this Agreement and the transactions contemplated by
this Agreement shall be paid in accordance with the provisions of Section 5.16.
For purposes of this
54
Agreement, "Expenses" consist of all out-of-pocket expenses (including, all fees
--------
and expenses of counsel, accountants, investment bankers, experts and
consultants to a party to this Agreement and its affiliates) incurred by a party
or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Proxy Statement or the Proxy
Materials, the solicitation of stockholder approval and all other matters
related to the closing of the transactions contemplated by this Agreement.
(b) If this Agreement (i) is terminated by the Parent pursuant
to Section 7.1(g), (ii) is terminated by the Company pursuant to Section 7.1(h)
or (iii) is terminated by the Company or the Parent pursuant to Section 7.1(d),
then, subject to the proviso below, the Company shall (x) on the date specified
in the penultimate sentence of this Section 7.3 in the case of a termination
pursuant to Section 7.1(d), or (y) simultaneously with a termination of this
Agreement in the case of a termination pursuant to Section 7.1(g) or 7.1(h), pay
to the Parent (by wire transfer of immediately available funds to an account
designated by the Parent) a termination fee of U.S.$20,000,000 plus, subject to
the last sentence of this Section 7.3, the reimbursement of all of Parent's
actual and documented out-of-pocket expenses (including all investment banking,
legal, accounting and other similar expenses) up to a maximum reimbursable
amount of U.S.$2,000,000 (the "Parent Expenses"); provided, however, that the
---------------
Company shall not be obligated to pay such fee to the Parent if this Agreement
is terminated pursuant to Section 7.1(d) unless (i) at the time of the Company
Stockholders Meeting, the Company has received a bona fide alternative
Acquisition Proposal or a third party has made or publicly announced its
intention to make a bona fide Acquisition Proposal and (ii) within 12 months
after the termination of this Agreement, the Company enters into a definitive
agreement providing for an alternative Acquisition Proposal with any third party
or an alternative Acquisition Proposal is consummated with any third party. If
a termination fee becomes payable as a result of a termination pursuant to
Section 7.1(d), then such termination fee shall be paid promptly (and in any
event within two (2) days of receipt by Company of a written notice from the
Parent) following the earlier of the execution of such definitive agreement
providing for an alternative Acquisition Proposal or the consummation of an
alternative Acquisition Proposal, as the case may be. In addition, in the event
the Parent or the Company terminates this Agreement pursuant to Section 7.1(d)
and at the time of the Company Stockholders Meeting the Company has received a
bona fide alternative Acquisition Proposal or a third party has made or publicly
announced its intention to make a bona fide Acquisition Proposal, the Company
shall promptly on demand reimburse all of the Parent Expenses and thereafter be
obligated to pay the termination fee referred to above only in the event such
fee becomes payable pursuant to this Section 7.3(b).
(c) Each of the Parent and the Company agrees that the payments
provided for in Section 7.3(b) shall be the sole and exclusive remedy of the
parties upon a termination of this Agreement pursuant to Section 7.1(d), (g) or
(h), as the case may be, and such remedy shall be limited to the payment
stipulated in Section 7.3(b).
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(d) The Company acknowledges that the agreements contained in
this Section 7.3 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Parent would not enter into
this Agreement; accordingly, if the Company fails to pay promptly the amounts
due pursuant to Section 7.3(b), and, in order to obtain such payment, the Parent
commences a suit which results in a judgment against the Company for all or a
portion of such amounts, the Company shall pay to the Parent's Expenses in
connection with such suit, together with interest on the amounts payable to the
Parent at the prime rate of Deutsche Bank in effect on the date such payment was
required to be made.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Certain Definitions. For purposes of this Agreement:
(a) The term "affiliate," as applied to any person, means any
---------
other person directly or indirectly controlling, controlled by, or under common
control with, that person. For the purposes of this definition, "control"
-------
(including, with correlative meanings, the terms "controlling," "controlled by"
----------- -------------
and "under common control with"), as applied to any person, means the
-------------------------
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise.
(b) The term "business day" means any day, other than
------------
Saturday, Sunday or a federal holiday, and shall consist of the time period from
12:01 a.m. through 12:00 midnight Eastern time. In computing any time period
under this Agreement, the date of the event which begins the running of such
time period shall be included except that if such event occurs on other than a
business day such period shall begin to run on and shall include the first
business day thereafter.
(c) The term "including" means, unless the context clearly
---------
requires otherwise, including but not limited to the things or matters named or
listed after that term.
(d) The term "knowledge," as applied to the Company or the
---------
Parent, means the knowledge of the officers of the Company or the Parent, as the
case may be.
(e) The term "person" shall include individuals,
------
corporations, limited and general partnerships, trusts, limited liability
companies, associations, joint ventures, Governmental Entities and other
entities and groups (which term shall include a "group" as such term is defined
-----
in Section 13(d)(3) of the Exchange Act).
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(f) The term "subsidiary" or "subsidiaries" means, with
---------- ------------
respect to the Parent, the Company or any other person, any entity of which the
Parent, the Company or such other person, as the case may be (either alone or
through or together with any other subsidiary), owns, directly or indirectly,
stock or other equity interests constituting more than 50% of the voting or
economic interest in such entity.
Section 8.2 Survival. The representations, warranties and agreements
in this Agreement and in any certificate delivered under this Agreement shall
terminate at the Effective Time or upon the termination of this Agreement under
Section 7.1, as the case may be, except that the agreements set forth in
Articles I and II and Sections 5.8, 5.9, 5.13 and 5.15 and this Article VIII
shall survive the Effective Time, those set forth in Sections 5.6(b), 5.16, 7.2
and 7.3 and this Article VIII shall survive termination of this Agreement and
those set forth in Section 5.14 shall survive for a period of one year after
termination of this Agreement. Each party agrees that, except for the
representations and warranties contained in this Agreement, the Company
Disclosure Letter and the Parent Disclosure Letter, no party to this Agreement
has made any other representations and warranties, and each party disclaims any
other representations and warranties, made by itself or any of its officers,
directors, employees, agents, financial and legal advisors or other
Representatives with respect to the execution and delivery of this Agreement or
the transactions contemplated by this Agreement, notwithstanding the delivery of
disclosure to any other party or any party's representatives of any
documentation or other information with respect to any one or more of the
foregoing.
Section 8.3 Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts shall together constitute the same
agreement.
Section 8.4 GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO
57
ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8.4(b).
Section 8.5 Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid, or by facsimile:
if to the Parent:
BROKAT ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇-▇▇-▇▇▇
with copies to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇.▇.▇.
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
if to the Company:
Blaze Software, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, U.S.A.
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
58
or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above.
Section 8.6 Entire Agreement. This Agreement (including any exhibits
and annexes to this Agreement), the Company Disclosure Letter and the Parent
Disclosure Letter constitute the entire agreement and supersede all other prior
agreements, understandings, representations and warranties, both written and
oral, among the parties, with respect to the subject matter of this Agreement.
Section 8.7 No Third Party Beneficiaries. Except as provided in
Section 5.9 of this Agreement is not intended to confer upon any person other
than the parties to this Agreement any rights or remedies under this Agreement.
Section 8.8 Amendment. This Agreement may be amended by the parties
to this Agreement by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided that, after the
approval of this Agreement by the stockholders of the Company, no amendment may
be made that would reduce the amount or change the type of consideration into
which each share of Company Common Stock shall be converted upon consummation of
the Merger or that is otherwise prohibited by applicable Law. This Agreement may
not be amended except by an instrument in writing signed by the parties to this
Agreement.
Section 8.9 Waiver. At any time prior to the Effective Time, any
party to this Agreement may (a) extend the time for the performance of any
obligation or other act of any other party to this Agreement, (b) waive any
inaccuracy in the representations and warranties contained in this Agreement or
in any document delivered pursuant to this Agreement, and (c) waive compliance
with any agreement or condition contained in this Agreement. Any waiver of a
condition set forth in Section 6.1, or any determination that such a condition
has been satisfied, will be effective only if made in writing by each of the
Company and the Parent and, unless otherwise specified in such writing, shall
thereafter operate as a waiver (or satisfaction) of such conditions for any and
all purposes of this Agreement. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be bound
thereby.
Section 8.10 Obligations of the Parent and of the Company. Whenever
this Agreement requires a Parent Subsidiary to take any action, that requirement
shall be deemed to include an undertaking on the part of the Parent to cause
that Parent Subsidiary to take that action. Whenever this Agreement requires a
Company Subsidiary to take any action, that requirement shall be deemed to
include an undertaking on the part of the Company to cause that Company
Subsidiary to take that action and, after the Effective Time, on the part of the
Surviving Corporation to cause that Company Subsidiary to take that action.
Section 8.11 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect
59
the validity or enforceability or the other provisions of this Agreement. If any
provision of this Agreement, or the application of that provision to any person
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted for that provision in order to carry out, so far
as may be valid and enforceable, the intent and purpose of the invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of the provision to other persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of the provision, or the
application of that provision, in any other jurisdiction.
Section 8.12 Interpretation. The table of contents and headings in
this Agreement are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of the
provisions of this Agreement. Where a reference in this Agreement is made to a
Section, exhibit or annex, that reference shall be to a Section of or exhibit or
annex to this Agreement unless otherwise indicated.
Section 8.13 Assignment. This Agreement shall not be assignable by
operation of law or otherwise, except that pursuant to Section 1.1(b) the Parent
may designate, by written notice to the Company, a Parent Subsidiary that is
wholly owned directly or indirectly by the Parent to be merged with and into the
Company in lieu of Merger Sub, in which event all references in this Agreement
to Merger Sub shall be deemed references to such Parent Subsidiary.
Section 8.14 Specific Performance. The parties to this Agreement
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 reached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement 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.
Section 8.15 Submission to Jurisdiction; Waivers; Consent to Service
of Process. Each of the Parent and the Company irrevocably agree that any legal
action or proceeding with respect to this Agreement or for recognition and
enforcement of any judgment in respect hereof brought by another party hereto or
its successors or assigns may be brought and determined in any Delaware state
court or Federal court sitting in the State of Delaware, and each of the Parent
and the Company thereby (x) irrevocably submits with regard to any such action
or proceeding for itself and in respect to its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid court in the
event any dispute arises out of this Agreement or any transaction contemplated
hereby, (y) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court and (z)
agrees that it will not bring any action relating to this Agreement or any
transaction contemplated hereby in any court
60
other than any Delaware state or Federal court sitting in the State of Delaware.
Any service of process to be made in such action or proceeding may be made by
delivery of process in accordance with the notice provisions contained in
Section 8.5. Each of the Parent and the Company hereby irrevocably waives, and
agrees not to assert, by way of motion, as a defense, counterclaim or otherwise,
in any action or proceeding with respect to this Agreement, (a) the defense of
sovereign immunity, (b) any claim that it is not personally subject to the
jurisdiction of the above-named court for any reason other than the failure to
serve process in accordance with this Section 8.15 that it or its property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (d) to the fullest extent permitted by application law the (i)
the suit, action or proceeding in any such court is brought in an inconvenient
forum, (ii) the venue of such suit, action or proceeding is improper and (iii)
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties to this Agreement as of
the date first written above.
BLAZE SOFTWARE INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
BROKAT AKTIENGESELLSCHAFT
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
62