AGREEMENT AND PLAN OF MERGER BY AND AMONG ALLEN SYSTEMS GROUP, INC., ASG M&A, INC., AND MOBIUS MANAGEMENT SYSTEMS, INC. Dated as of April 11, 2007 (Corrected)
EXECUTION
COPY
AGREEMENT
AND PLAN OF MERGER
BY
AND AMONG
▇▇▇▇▇
SYSTEMS GROUP, INC.,
ASG
M&A, INC.,
AND
MOBIUS
MANAGEMENT SYSTEMS, INC.
Dated
as of April 11, 2007
(Corrected)
TABLE
OF CONTENTS
Page
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RECITALS
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1
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ARTICLE
1 TERMS OF THE MERGER
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1
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1.1
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THE
MERGER.
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1
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1.2
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TIME
AND PLACE OF CLOSING .
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2
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1.3
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EFFECTIVE
TIME.
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2
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ARTICLE
2 EFFECTS OF THE MERGER
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2 | ||
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2.1
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CERTIFICATE
OF INCORPORATION.
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2
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2.2
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BYLAWS.
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2
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2.3
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DIRECTORS
AND OFFICERS OF THE SURVIVING CORPORATION
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2
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ARTICLE
3 MANNER OF CONVERTING SECURITIES
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2 | ||
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3.1
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CONVERSION
OF CAPITAL STOCK.
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2
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3.2
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CANCELLATION
OF TREASURY STOCK AND PARENT-OWNED STOCK
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3
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3.3
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ADJUSTMENTS
TO MERGER CONSIDERATION
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3
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3.4
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DERIVATIVE
SECURITIES
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3
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3.5
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DISSENTING
COMMON STOCK.
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4
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3.6
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EXCHANGE
OF CERTIFICATES
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4
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3.7
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SUBSEQUENT
ACTIONS
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6
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ARTICLE
4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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7 | ||
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4.1
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ORGANIZATION,
STANDING, AND POWER.
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7
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4.2
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AUTHORITY;
NO CONFLICT.
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7
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4.3
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CAPITALIZATION.
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8
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4.4
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SUBSIDIARIES
AND AFFILIATES.
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9
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4.5
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BOARD
APPROVALS.
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9
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4.6
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REQUIRED
VOTE.
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9
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4.7
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COMPANY
SEC DOCUMENTS.
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10
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4.8
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FINANCIAL
STATEMENTS.
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10
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4.9
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ABSENCE
OF CERTAIN CHANGES OR EVENTS.
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11
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4.10
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NO
UNDISCLOSED LIABILITIES.
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11
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4.11
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LITIGATION.
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12
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4.12
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EMPLOYEE
BENEFIT PLANS; ERISA.
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12
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4.13
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TAXES.
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14
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4.14
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INTELLECTUAL
PROPERTY.
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15
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4.15
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REAL
AND PERSONAL PROPERTY AND CONDITION OF ASSETS.
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18
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4.16
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INSURANCE.
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18
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4.17
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ENVIRONMENTAL
MATTERS.
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18
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4.18
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COMPLIANCE
WITH LAWS; NO VIOLATIONS.
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19
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4.19
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LABOR
MATTERS.
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19
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4.20
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CERTAIN
AGREEMENTS
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20
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4.21
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[INTENTIONALLY
OMITTED].
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21
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4.22
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[INTENTIONALLY
OMITTED].
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21
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4.23
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CERTAIN
BUSINESS PRACTICES.
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21
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4.24
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RELATED
PARTY TRANSACTIONS.
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21
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4.25
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PROXY
STATEMENT.
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21
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4.26
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TAKEOVER
STATUTES.
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22
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4.27
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OPINION
OF FINANCIAL ADVISOR.
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22
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4.28
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BROKERS.
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22
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ARTICLE
5 REPRESENTATIONS AND WARRANTIES OF PARENT AND
PURCHASER
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22 | ||
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5.1
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ORGANIZATION.
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22
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5.2
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AUTHORIZATION;
NO CONFLICT.
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23
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5.3
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INFORMATION
IN THE PROXY STATEMENT
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23
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5.4
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BROKERS.
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23
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5.5
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FINANCING.
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24
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5.6
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LITIGATION.
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24
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5.7
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NOT
AN INTERESTED STOCKHOLDER.
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24
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5.8
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OWNERSHIP
OF COMPANY STOCK
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24
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ARTICLE
6 CONDUCT OF BUSINESS PENDING THE MERGER
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24 |
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6.1
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INTERIM
OPERATIONS OF THE COMPANY.
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24
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6.2
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NO
SOLICITATION.
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27
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6.3
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SEC
REPORTS.
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29
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ARTICLE
7 ADDITIONAL AGREEMENTS
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29
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7.1
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AGREEMENTS
AS TO EFFORTS TO CONSUMMATE; CONSENTS AND APPROVALS.
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29
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7.2
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NOTIFICATION
OF CERTAIN MATTERS; CURRENT INFORMATION.
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30
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7.3
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ACCESS.
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30
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7.4
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CONFIDENTIALITY.
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31
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7.5
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[INTENTIONALLY
OMITTED].
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31
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7.6
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PUBLICITY.
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31
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7.7
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INSURANCE
AND INDEMNIFICATION.
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31
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7.8
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THIRD
PARTY STANDSTILL AGREEMENTS.
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32
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7.9
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STATE
TAKEOVER LAWS.
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33
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7.10
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STOCKHOLDER
SOLICITATION AND APPROVALS.
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33
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7.11
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EMPLOYEE
BENEFITS.
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33
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7.12
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STOCKHOLDER
LITIGATION.
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35
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7.13.
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FIRPTA
CERTIFICATE.
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35
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ARTICLE
8 CONDITIONS
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35
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8.1
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CONDITIONS
TO EACH PARTY’S OBLIGATIONS TO EFFECT THE MERGER.
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35
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8.2
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CONDITIONS
TO OBLIGATIONS OF PARENT AND PURCHASER TO EFFECT THE
MERGER.
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36
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8.3
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CONDITIONS
TO OBLIGATIONS OF THE COMPANY TO EFFECT THE MERGER.
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37
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ARTICLE
9 TERMINATION
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37 | ||
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9.1
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TERMINATION.
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37
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9.2
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EFFECT
OF TERMINATION.
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38
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ARTICLE10
GENERAL PROVISIONS
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40 | ||
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10.1
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DEFINITIONS.
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40
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10.2
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FEES
AND EXPENSES.
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45
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10.3
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ENTIRE
AGREEMENT; NO OTHER REPRESENTATIONS; NO THIRD PARTY
BENEFICIARIES.
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45
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10.4
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AMENDMENT
AND MODIFICATION.
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45
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10.5
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WAIVERS.
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45
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10.6
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NO
ASSIGNMENT.
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46
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10.7
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NOTICES.
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46
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10.8
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GOVERNING
LAW; JURISDICTION.
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47
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10.9
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SPECIFIC
PERFORMANCE.
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47
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10.10
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WAIVER
OF JURY TRIAL.
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47
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10.11
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COUNTERPARTS.
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47
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10.12
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CAPTIONS.
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47
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10.13
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COMPANY
DISCLOSURE SCHEDULE
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47
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Exhibit A Voting
Letter Agreement
AGREEMENT
AND PLAN OF MERGER
This
Agreement
and Plan of Merger
(this
“Agreement”)
dated
as of April 11, 2007, is entered into by and among ▇▇▇▇▇
Systems Group, Inc.
(the
“Parent”),
a
Delaware corporation, ASG
M&A, Inc.
(the
“Purchaser”),
a
Delaware corporation and wholly-owned subsidiary of the Parent, and Mobius
Management Systems, Inc.,
(the
“Company”),
a
Delaware corporation. Certain capitalized terms used in this Agreement are
defined in Section 10.1 of this Agreement.
RECITALS
WHEREAS,
the
respective boards of directors of the Company, the Parent and the Purchaser
have
deemed it advisable and in the best interests of their respective corporations
and stockholders to approve the acquisition of the Company by the Parent upon
the terms and conditions set forth herein;
WHEREAS,
the
respective boards of directors of the Parent, the Purchaser, and the Company
have approved this Agreement and the Merger (as defined in Section 1.1 hereof)
in accordance with the General Corporation Law of the State of Delaware
(“DGCL”),
and
upon the terms and subject to the conditions set forth herein;
WHEREAS,
the
board of directors of the Company has approved this Agreement and has determined
that the consideration to be paid for each share of the issued and outstanding
common stock, $0.0001 par value per share, of the Company (“Common
Stock”)
in the
Merger is fair to the holders thereof and has resolved to recommend that such
holders adopt
this Agreement upon
the
terms and subject to the conditions set forth herein; and
WHEREAS,
the
Parent and the Purchaser have required as a condition and an inducement to
their
willingness to enter into this Agreement that concurrently with the execution
and delivery of this Agreement and incurring the obligations set forth herein,
that certain stockholders of the Company enter into, and such stockholders
contemporaneously with the execution of this Agreement have entered into, a
Voting Letter Agreement in substantially the form attached hereto as Exhibit
A
(“Voting
Agreement”)
pursuant to which such stockholders have agreed, among other things, (i) to
vote
the shares of Common Stock held by them in favor of the adoption of this
Agreement and, under certain circumstances, to grant the Parent their proxy
to
vote such shares, and (ii) not to transfer, sell, hypothecate, or otherwise
dispose of their beneficial ownership of, or their ability to vote, the Common
Stock held by them as of the date hereof or which they may acquire
hereafter.
NOW,
THEREFORE,
in
consideration of the foregoing, and of the mutual representations, warranties,
covenants, and agreements herein contained, the parties hereto hereby agree
as
follows:
ARTICLE
1
Terms
of Merger
1.1 The
Merger. Subject
to the terms and conditions of this Agreement, at the Effective Time, the
Company and the Purchaser
shall
consummate a merger (“Merger”)
pursuant to which (i) the Purchaser shall be merged with and into the Company
in
accordance with the provisions of the DGCL and the separate corporate existence
of the Purchaser shall thereupon cease, (ii) the Company shall be the successor
or surviving corporation in the Merger and shall continue to be governed by
the
Laws of the State of Delaware,
and
(iii) the separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by
the
Merger. The corporation surviving the Merger is sometimes hereinafter referred
to as the “Surviving
Corporation.”
The
Merger will be
1
consummated
pursuant to the terms of this Agreement, which has been approved by
the
respective boards
of
directors of the Parent, the Purchaser, and the Company. From and after the
Effective Time, the Merger shall have the effects set forth in the
DGCL.
1.2 Time
and Place of Closing. The
closing (the
“Closing”)
of the
Merger and the other transactions contemplated hereby (collectively, the
“Transactions”)
will
take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, P.A., Corporate Center Three,
▇▇▇▇
▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. local time on a
date
that is not later than the second Business Day following the satisfaction or
waiver of all of the conditions set forth in Article 8 (other than delivery
of
items to be delivered at the Closing and other than satisfaction of those
conditions that by their nature are to be satisfied at Closing, it being
understood that the occurrence of the Closing shall remain subject to the
delivery of such items and the satisfaction or waiver of such conditions at
Closing) (such date, the “Closing
Date”).
1.3 Effective
Time. On
the
Closing Date, the Company and the Purchaser shall jointly prepare and cause
to
be filed with the Secretary of State of the State of Delaware as provided by
the
DGCL an appropriate Certificate of Merger (the “Certificate
of Merger”).
The
Merger and the other Transactions
shall
become effective on the date and time at which the Certificate of Merger has
been duly filed with the Secretary of State of the State of Delaware in
accordance with the DGCL (the “Effective
Time”).
ARTICLE
2
Effects
of the Merger
2.1 Certificate
of Incorporation. At
the
Effective Time, the certificate of incorporation of the Company shall be
restated and amended to read in its entirety as the certificate of incorporation
of the Purchaser, as in effect immediately prior to the Effective Time, except
that the name of the Surviving Corporation shall remain “Mobius Management
Systems, Inc.” and the provisions of the certificate of incorporation of the
Purchaser relating to the incorporator of the Purchaser shall be omitted, and
as
so restated and amended shall be the certificate of incorporation of the
Surviving Corporation, until thereafter amended as provided by applicable Law
and such certificate of incorporation.
2.2 Bylaws.
The
bylaws of the Purchaser, as in effect immediately prior to the Effective Time,
shall be the bylaws of the Surviving Corporation, except as to the name of
the
Surviving Corporation, which shall be “Mobius Management Systems, Inc.,” until
thereafter amended as provided by applicable Law, the certificate of
incorporation of the Surviving Corporation, and such bylaws.
2.3 Directors
an Officers of the Surviving Corporation. The
directors of the Purchaser immediately prior to the Effective Time shall, from
and after the Effective Time, be the directors of the Surviving Corporation,
and
the officers of the Purchaser immediately prior to the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving Corporation,
in each case until their respective successors shall have been duly elected,
designated or qualified, or until their earlier death, resignation or removal
in
accordance with the Surviving Corporation’s certificate of incorporation and
bylaws.
ARTICLE
3
Manner
of Converting Securities
3.1 Conversion
of Capital Stock. Subject
to the provisions of this Article 3, at the Effective Time, by virtue of the
Merger and without any action on the part of the holders of the shares of
Common
2
Stock
or
the
holders of shares of common stock, $0.01 par value per share, of the Purchaser
(“Purchaser
Common Stock”):
(a) Purchaser
Common Stock.
Each
share of the Purchaser Common Stock issued
and outstanding immediately prior to the Effective Time shall
be
converted automatically into and become one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation. Each
certificate evidencing ownership of the Purchaser Common Stock immediately
prior
to the Effective Time shall, as of the Effective Time, evidence ownership of
such shares of the Surviving Corporation.
(b) Parent
Common Stock.
Each
issued and outstanding share of common stock, no par value per share, of the
Parent will remain issued and outstanding.
(c) Conversion
of Common Stock. Each
outstanding share (including
any Restricted Shares) of
Common
Stock (other than shares of Common Stock to be cancelled in accordance with
Section 3.2 and other than Dissenting Common Stock) shall cease to be
outstanding and shall be converted automatically into, and represent the right
to receive the Merger Consideration, payable to the holder thereof in cash,
without interest. From and after the Effective Time, all such shares of Common
Stock shall no longer remain outstanding and shall automatically be cancelled
and retired, and each holder of a certificate representing any such shares
of
Common Stock shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration therefor upon the surrender of such
certificate in accordance with Section 3.6,
without
interest thereon.
3.2 Cancellation
of Treasury Stock and Parent-Owned Stock. All
shares of Common Stock that are owned by the Company as treasury stock and
any
shares of Common Stock owned by the Parent, the Purchaser or any other
wholly-owned Subsidiary of the Parent shall be cancelled and retired, and no
consideration shall be delivered in exchange therefor.
3.3 Adjustments
to Merger Consideration.
If,
between the date of this Agreement and the Effective Time, the Company changes
the number of shares of Common Stock issued and outstanding prior to the
Effective Time as the result of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into Common
Stock), reclassification, reorganization, recapitalization or other like change
with respect to Common Stock (each, an “Adjustment”),
the
Merger Consideration shall
be
adjusted accordingly, without duplication, to provide the holders of shares
of
Common Stock with the same economic effect as contemplated by this Agreement
prior to such Adjustment.
3.4 Derivative
Securities.
(a) The
Board
of Directors of the Company shall take all actions necessary to cause, at the
Effective Time, each outstanding option, stock equivalent right or other right
to acquire shares of Common Stock (an “Option”
or
“Options”)
granted under the Option Plans whether or not then exercisable or vested,
except
as
set forth on Section 3.4(a) of the Company Disclosure Schedule,
to be
100% exercisable and vested and to be cancelled and, in consideration of such
cancellation, at the Effective Time the Parent shall, or shall cause the
Surviving Corporation to, pay to such holders of Options, an amount in respect
thereof equal to the product of (x) the excess, if any, of the Merger
Consideration over the exercise price of each such Option and (y) the number
of
shares of Common Stock subject to such Option (such payment, if any, to be
net
of applicable withholding and excise taxes). As of the Effective Time, all
Option Plans and any agreement or plan relating to Options shall terminate
and
all rights under any provision of any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect to the
capital stock of the Company or any Company Subsidiary, including
3
the
RSUs,
shall be cancelled. The Company shall use its commercially
reasonable
efforts
to effectuate the foregoing, including, but not limited to, obtaining all
consents necessary to cash out and cancel all Options and as are necessary
to
ensure that, after the Effective Time, no Person shall have any right under
any
of the Option Plans, or any other plan, program or arrangement with respect
to
equity securities of the Surviving Corporation or any subsidiary thereof.
(b) (i)
Immediately
prior to the Effective Time, each restricted stock unit (“RSU”)
issued
by the Company under its Option Plans that
is
outstanding as of the date of this Agreement, whether or not vested and subject
to conversion into Common Stock under its Option Plans, shall be converted
automatically into one share of Common Stock and shall be entitled only to
receive the Merger Consideration,
and
(ii) each restricted share of Common Stock issued by the Company pursuant to
any
applicable restricted stock award agreement of the Company and subject to any
vesting, repurchase or other lapse restrictions thereunder (each, a
“Restricted
Share”)
that is
outstanding as of the date of this Agreement, whether or not vested or subject
to repurchase, shall automatically vest and become free of such restrictions
and
right of repurchase as of the Effective Time and shall, as of the Effective
Time, be cancelled and converted into the right to receive the Merger
Consideration.
(c) The
Board
of Directors of the Company shall take all action necessary to cause (i) any
“Offering Periods” (as defined in the 1998 Employee Stock Purchase Plan, as
amended (the “ESPP”))
then
in progress to be shortened by setting a new “Exercise Date” (as defined in the
ESPP) as of a date prior to the Effective Time, and any Offering Periods then
in
progress shall end on such new Exercise Date, and (ii) the termination of the
ESPP effective as of a time following such new Exercise Date but at or prior
to
the Effective Time of the Merger, as may be requested by the
Parent.
3.5 Dissenting
Common Stock.
(a) Notwithstanding
anything in this Agreement to the contrary, Common Stock outstanding immediately
prior to the Effective Time which is held by a holder who has not voted in
favor
of the Merger or consented thereto in writing and who has complied with Section
262 of the DGCL (“Dissenting
Common Stock”)
shall
not be converted into the right to receive the Merger Consideration, unless
such
holder fails to perfect or withdraws or otherwise loses its right to appraisal.
A holder of Dissenting Common Stock shall be entitled to receive payment of
the
appraised value of the Common Stock held by it in accordance with
Section 262 of the DGCL, unless, after the Effective Time, such holder
fails to perfect or withdraws or loses its right to appraisal, in which case
such Common Stock shall be converted into and represent only the right to
receive the Merger Consideration, without interest thereon, upon surrender
of
the Certificate or Certificates representing such Common Stock pursuant to
Section 3.6.
(b) The
Company shall give the Parent (i) prompt notice of any written demands for
appraisal of any Common Stock received by the Company pursuant to Section 262
of
DGCL, withdrawals of such demands, and any other instruments served pursuant
to
the DGCL and received by the Company relating to rights of appraisal and
(ii) the opportunity to participate in the conduct of all negotiations and
proceedings with respect to demands for appraisal under the DGCL. Except with
the prior written consent of the Parent, the Company shall not voluntarily
make
any payment with respect to any demands for appraisal or settle or offer to
settle any such demands for appraisal.
3.6 Exchange
of Certificates.
(a) Paying
Agent. Prior
to
the Effective Time, the Parent shall designate a national bank or trust company
(which shall be reasonably acceptable to the Company) to act as agent for the
holders of shares of Common Stock in connection with the Merger
(the “Paying
Agent”)
and to
receive
4
the
funds
to which holders of shares of Common shall become entitled pursuant to Section
3.1(c). At or prior to the Effective Time, the Parent or the Purchaser shall
deposit or cause to be deposited with the Paying Agent, for exchange, in
accordance with this Section 3.6, and
payment, in accordance with Section 3.4, an
amount
of cash sufficient to make payment of the aggregate Merger Consideration (other
than that for Dissenting Common Stock) and
payments relating to Options and RSUs pursuant
to this Agreement (such deposited Merger Consideration and payments relating
to
Options and RSUs pursuant to this Agreement referred to herein as the
“Exchange
Fund”).
In
the event that a holder of Dissenting Common Stock effectively withdraws
its
dissenters rights under the DGCL following the Effective Time, such holder
of
Dissenting Common Stock shall properly surrender its Certificate(s) and
following such surrender : (i) all of such shares of Dissenting Common Stock
shall be cancelled and (ii) such holder of the Dissenting Common Stock
surrendered shall receive payment therefor from the Purchaser or the Parent
in
an amount equal to the Merger Consideration per share of Dissenting Common
Stock
so cancelled. Notwithstanding the foregoing, such funds shall be invested by
the
Paying Agent as directed
by the
Parent or the Surviving Corporation, in its sole discretion, pending payment
thereof by the Paying Agent to the holders of the Common Stock; provided,
that
such investments shall be in obligations of or guaranteed by the United States
of America, in commercial paper obligations rated A-1 or P-1 or better by
▇▇▇▇▇’▇ Investors Service, Inc. or Standard & Poor’s Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker’s acceptances of commercial banks with capital exceeding $1 billion
(based on the most recent financial statements of such bank which are then
publicly available). Earnings from such investments shall be the sole and
exclusive property of the Parent and the Surviving Corporation, and no part
of
such earnings shall accrue to the benefit of holders of Common
Stock.
(b) Exchange
Procedures.
Promptly
after the Effective Time,
but in
no event more than five (5) Business Days,
the
Parent shall cause the Paying Agent to mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented issued and outstanding shares of Common Stock (the “Certificates”)
whose
shares were converted pursuant to Section 3.1 into the right to receive the
Merger Consideration (i) a letter of transmittal in customary form,
mutually agreed to by the Company and the Parent (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall
pass, only upon delivery of the Certificates to the Paying Agent) and
(ii) instructions for effecting the surrender of the Certificates in
exchange for payment of the Merger Consideration. After the Effective Time,
upon
surrender of a Certificate for cancellation to the Paying Agent or to such
other
agent or agents as may be appointed by the Parent, together with such
transmittal materials, properly and duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration for each share of Common Stock formerly represented by such
Certificate or Certificates, and the Certificate or Certificates so surrendered
shall forthwith be cancelled, and the holder of such Certificate shall be paid
promptly in exchange therefor cash in an amount equal to the Merger
Consideration that such holder has the right to receive pursuant to the
provisions hereof. If payment of the Merger Consideration is to be made to
a
Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition precedent of payment that (x) the
Certificate so surrendered shall be properly endorsed or shall be otherwise
in
proper form for transfer and (y) the Person requesting such payment shall
have paid any transfer and other taxes required by reason of the payment of
the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid or is not required
to
be paid. Until surrendered as contemplated by this Section 3.6(b), neither
the Parent nor the Purchaser shall be obligated to deliver the Merger
Consideration to the holder of shares of Common Stock and, after the Effective
Time, each Certificate shall be deemed after the Effective Time to represent
only the right to receive the Merger Consideration, without interest
thereon.
(c) Lost,
Stolen, or Destroyed Certificates.
If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit (in a form reasonably satisfactory to the Purchaser) of
5
that
fact
by the Person claiming such Certificate to be lost, stolen or destroyed, the
Paying Agent will issue, in each case, in exchange for such affidavit, the
appropriate amount of Merger Consideration deliverable in respect thereof as
determined in accordance with Section 3.1; provided that the Person to whom
the
Merger Consideration is paid shall, as a condition precedent to the payment
thereof, upon the request of the Purchaser, the Parent, or Surviving
Corporation, indemnify the Surviving Corporation and the Parent in a manner
reasonably satisfactory to them (by the posting by such Person of such bond
and
security as the Surviving Corporation and the Parent my reasonably request)
against any claim that may be made against the Surviving Corporation and the
Parent with respect to the Certificate claimed to have been lost, stolen or
destroyed.
(d) Transfer
Books; No Further Ownership Rights in Capital Stock.
At the
Effective Time, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of shares of
Common Stock on the records of the Company. From and after the Effective Time,
the holders of Certificates evidencing ownership of shares of Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of Common Stock, except as otherwise provided
for herein or by applicable Law. If, after the Effective Time, Certificates
are
presented to the Surviving Corporation for any reason, they shall be cancelled
and exchanged as provided in this Article 3.
(e) Termination
of Fund; No Liability.
Subject
to applicable Law, any portion of the Exchange Fund (including the proceeds
of
any investments thereof) which had been made available to the Paying Agent
pursuant to Section 3.6 of this Agreement that remain unclaimed by the
former stockholders of the Company for one year after the Effective Time shall
be paid to the Parent. Any former stockholders of the Company who have not
theretofore complied with this Article 3 shall thereafter look only to the
Parent (subject to abandoned property, escheat or other similar laws) for
payment of the Merger Consideration, without any interest thereon. Any other
provision of this Agreement notwithstanding, none of the Parent, the Purchaser,
the Company, the Surviving Corporation, or the Paying Agent shall be liable
to a
holder of the Common Stock for any amount paid or property delivered in good
faith to a public official pursuant to any abandoned property, escheat, or
similar Law. Any amounts remaining unclaimed by any holder of Common Stock
immediately prior to the time when such amounts would otherwise escheat to
or
become the property of a federal, state, or local government authority or court
or administrative or regulatory agency, shall, to the extent permitted by Law,
become the property of the Parent, free and clear of all claims or interest
of
any Person previously entitled thereto.
(f) Withholding
Taxes. Each
of
the Surviving Corporation, the Paying Agent, and the Parent shall be entitled
to
deduct and withhold from the Merger Consideration otherwise payable hereunder
to
any Person such amounts as it is required to deduct and withhold pursuant to
any
applicable Tax Laws. To the extent such amounts are deducted, withheld, and
paid
to the appropriate Governmental Entity, such deducted and withheld amounts
shall
be treated for all purposes of this Agreement as having been paid to such
Person.
3.7 Subsequent
Actions. If
at any
time after the Effective Time, the Surviving Corporation shall determine that
any actions are necessary or desirable to vest, perfect or confirm of record
or
otherwise in the Surviving Corporation its right, title or interest in, to
or
under any of the rights, properties or assets of either of the Company or the
Purchaser acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger or otherwise to carry out this Agreement,
then the officers and directors of the Surviving Corporation shall be authorized
to take all such actions as may be necessary or desirable to vest all right,
title or interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Agreement.
6
ARTICLE
4
Representations
and Warranties of the Company
Except
as
(a) disclosed in Company SEC Documents filed within 12 months prior to the
date
of this Agreement or (b) set forth in the disclosure schedule, dated as of
the
date of this Agreement, that has been delivered by the Company to the Parent
and
the Purchaser prior to the execution and delivery of this Agreement (the
“Company
Disclosure Schedule”),
the
Company hereby represents and warrants to the Parent and the Purchaser as
follows:
4.1 Organization,
Standing, and Power.
The
Company is a corporation duly incorporated, validly existing, and in good
standing under the Laws of the State of Delaware, and has the requisite
corporate authority to own and operate its properties and to carry on its
business as they are now being operated and carried on. The Company is duly
qualified or licensed to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its business makes such qualification necessary,
except where the failure to be so qualified or licensed and in good standing
would not, individually or in the aggregate, have a Material Adverse Effect
on
the Company. The Company made available to the Parent complete and correct
copies of the Company’s certificate of incorporation (“Certificate
of Incorporation”)
and
bylaws (“Bylaws”),
and
such Certificate of Incorporation and Bylaws are in full force and
effect.
4.2 Authority;
No Conflict.
(a) The
Company has the requisite corporate power and authority to execute and deliver
this Agreement and, subject to the requisite approval of this Agreement by
the
holders of the issued and outstanding Common Stock with respect to the Merger,
to consummate the Transactions, and to perform its obligations under this
Agreement. The execution, delivery, and performance by the Company of this
Agreement, and the consummation of the Transactions, including the Merger,
have
been duly authorized by all necessary corporate action in respect thereof on
the
part of the Company, subject in the case of the consummation of the Merger
to
the requisite adoption
of the
Agreement
by the
holders of the outstanding shares of Common Stock. Except for the approval
of
this Agreement and adoption of the Merger by the requisite holders of the issued
and outstanding shares of Common Stock,
no
other corporate action is required on the part of the Company to authorize
the
consummation of the Transactions. This Agreement has been duly executed and
delivered by the Company and, assuming due and valid authorization, execution,
and delivery hereof by the Parent and the Purchaser, this Agreement is a valid
and binding obligation of the Company enforceable against it in accordance
with
their respective terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting creditors’ rights
generally and except that the availability of the equitable remedy of specific
performance and injunctive relief is subject to the discretion of the court
before which any proceedings may
be
brought (the “Bankruptcy
and Equity Exceptions”)).
(b) Neither
the execution and delivery by the Company of this Agreement, or the consummation
by the Company of the Transactions, nor compliance by the Company with any
of
the terms or provisions herein, will: (i) conflict with or violate any
provision of its Certificate of Incorporation or Bylaws, (ii) violate,
conflict with, or result in a breach of any term, condition, or provision of,
or
constitute a default (with or without notice or the lapse of time, or both)
under, or give rise to any right of termination, cancellation, or acceleration
of any obligation or the loss of a benefit under, or require a consent pursuant
to, or result in the creation of any Lien upon any material assets or properties
of the Company or any Company Subsidiary pursuant to, any of the terms,
provisions, or conditions of any loan or credit agreement, note, bond, mortgage,
indenture, deed of trust, license, agreement, contract, lease, Permit,
concession, plan, or other instrument or obligation to which the
7
Company
or any Company Subsidiary is a party or by which any of their respective assets
or properties may be bound or affected, (iii) require any notice, registration,
declaration, or filing by the Company with, or Permit, authorization, approval,
or consent of, or exemption or waivers by, or any action by any court,
governmental, regulatory or administrative agency, commission, authority,
instrumentality, or other public body, domestic or foreign (a “Governmental
Entity”)
or any
other Person other than (A) in connection or compliance with the provisions
of
applicable state corporate and securities Laws, the United States federal
securities Laws, the HSR Act and any other applicable Antitrust Law, and rules
of Nasdaq, and (B) the filing of the Certificate of Merger (Sections
4.2(b)(iii)(A) and (B), collectively, the “Regulatory
Filings”),
or
(iv) conflict with or violate any judgment, order, writ, Injunction, decree,
or
Law applicable to the Company or any Company Subsidiary or any of their assets
or properties; except in the case of clauses (ii) through (iv) of this Section
4.2(b), as would not have, individually or in the aggregate, a Material Adverse
Effect on the Company.
4.3 Capitalization.
(a) The
authorized capital stock of the Company consists of 40,000,000 shares of Common
Stock. As of the date of this Agreement, (i) 25,039,621 shares of Common
Stock are issued, 19,685,398 shares of Common Stock are outstanding, 5,354,223
shares of Common Stock are held as treasury shares, and 13,425 Restricted Shares
are outstanding, and (ii) a sufficient number of shares of Common Stock were
reserved for issuance pursuant to the Option Plans and the ESPP. All of the
outstanding shares of the Company’s capital stock are, and all shares of Common
Stock which may be issued pursuant to the exercise of outstanding Options will
be, when issued in accordance with the respective terms and conditions specified
in the instruments pursuant to which they are issuable, duly authorized, validly
issued, fully paid and non-assessable and not subject to or issued in violation
of, any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right. There is no indebtedness having general
voting rights (or convertible into securities having such rights) (“Voting
Debt”)
of the
Company or any Company Subsidiary issued and outstanding. Except for Options
to
purchase 2,967,365 shares of Common Stock and 2,100 RSUs or as set forth in
Section 4.3(a) of the Company Disclosure Schedule, (i) there are no
existing options, warrants, calls, preemptive rights, subscriptions or other
rights, agreements, arrangements or commitments of any kind relating to the
issued or unissued capital stock of the Company or any Company Subsidiary
obligating the Company or any Company Subsidiary to issue, transfer or sell
or
cause to be issued, transferred or sold any shares of capital stock or Voting
Debt of, or other equity interest in, the Company or any Company Subsidiary
or
securities convertible into or exchangeable for such shares or equity interests,
or obligating the Company or any Company Subsidiary to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment, (ii) there are no outstanding agreements,
arrangements, undertakings, or commitments of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any Common Stock or the
capital stock of the Company or any Company Subsidiary or any Affiliate of
the
Company, and (iii) there are no outstanding contractual obligations to provide
funds to make any investment (in the form of a loan, capital contribution or
otherwise) in any Company Subsidiary or any other entity. Neither the Company
nor any Company Subsidiary has outstanding or authorized any phantom stock
or
any stock appreciation, profit participation or similar rights. No shares of
Common Stock are owned by any Company Subsidiary.
(b) The
Company has filed with the SEC complete and correct copies of each of the Option
Plans and the ESPP, including all amendments thereto. Section 4.3(a) of the
Company Disclosure Schedule sets forth, a complete and correct list of all
outstanding Options to purchase capital stock of the Company, including with
respect to each such Option, the number of shares of Common Stock issuable
thereunder, the name of the holder, the grant date, the exercise price per
share, the vesting schedule (including any portion that would become vested
as a
result of the Transactions) and the expiration date of each such Option, and
whether the Option is an “incentive stock option” under Section 422 of the
Code
8
or
a
non-qualified option. All Options granted under the Option Plans have been
granted pursuant to option award agreements in substantially the forms made
available by the Company to the Parent. All Options may, by their terms, be
treated in accordance with Section 3.4 of this Agreement.
(c) There
are
no voting trusts or other agreements or understandings to which the Company
or
any Company Subsidiary is a party with respect to the voting of the capital
stock of the Company or any of the Company Subsidiaries and there are no
registration rights agreements relating to any equity or debt securities of
the
Company or any Company Subsidiary. All of the Common Stock and Options have
been
issued in compliance with all applicable federal and state securities Laws,
except as would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
4.4 Subsidiaries
and Affiliates.
(a) Section
4.4(a) of the Company Disclosure Schedule sets forth, as of the date hereof,
the
name, the jurisdiction of incorporation or organization, and the authorized
and
outstanding capital of each Company Subsidiary. Other than with respect to
the
Company Subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other equity securities of any Person or have any direct or
indirect equity interest in any business other than publicly-traded securities
constituting less than two percent of the outstanding equity of the issuing
entity. All of the outstanding capital stock or other equity or ownership
interests of each Company Subsidiary is owned directly by the Company or a
Company Subsidiary free and clear of all material Liens
(other
than Permitted Liens),
preemptive rights, and of any other material limitation or restriction, and
is
validly issued, fully paid and nonassessable, and there are no outstanding
options, rights or agreements of any kind relating to the issuance, sale or
transfer, or voting of, any capital stock of any such Company Subsidiary to
any
Person except the Company or another Company Subsidiary.
(b) Each
Company Subsidiary (i) is duly organized, validly existing and in good
standing under the Laws of its jurisdiction of incorporation or organization,
(ii) has the requisite corporate power and authority to own and operate its
properties and carry on its business as it is now being conducted and carried
on, and (iii) is duly qualified or licensed to do business as a foreign
Person and is in good standing in each jurisdiction where the character of
the
property owned or leased by it or the nature of its business makes such
qualification or license is necessary, except where the failure to be so
qualified or licensed and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. The Company has made
available to the Parent complete and correct copies of the certificate of
incorporation and bylaws (or similar organizational documents) of each Company
Subsidiary as currently in effect.
4.5 Board
Approvals. The
Company’s board of directors, at a meeting duly called and held, has unanimously
(a) determined that this Agreement and the Transactions, including the Merger,
are advisable and fair to and in the best interests of the Company and its
stockholders, (b) duly and validly approved and taken all corporate action
required to be taken by the Company’s board of directors to authorize the
consummation of the Transaction, and (c) resolved to recommend that the
stockholders of the Company adopt
this Agreement.
None of
the aforesaid actions by the Company’s board of directors has been amended,
rescinded or modified as of the date hereof.
4.6 Required
Vote.
Assuming
the accuracy of the representations and representations set forth in Section
5.7
hereof, the affirmative vote of the holders of a majority of the shares of
Common Stock outstanding as of the record date for the meeting of the Company’s
stockholders to vote to adopt this Agreement is the only vote of the holders
of
any class or series of the Company’s capital stock necessary to approve the
Merger and adopt this Agreement (“Company
Stockholder Approval”).
The
Company has been advised that certain directors, executive officers and certain
significant stockholders of
9
the
Company identified on Annex I to this Agreement intend to vote in favor of
the
approval and adoption of this Agreement at the Special Meeting and have executed
a Voting Agreement in substantially the form as set forth in Exhibit A to
this Agreement.
4.7 Company
SEC Documents.
(a) The
Company has (i)
made
available to the Parent complete and correct copies of the
Company’s annual reports on Form 10-K for its fiscal years ended June 30, 2006,
2005 and 2004, and
(ii)
timely filed (A)
its
quarterly reports on Form 10-Q for its fiscal quarters ended December 31, 2006
and September 30, 2006, (B)
its
proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company since June 30, 2005,
and
(C)
all
reports, schedules, forms, filings, registration statements and other documents
(including all exhibits, post-effective amendments and supplements thereto)
required to be filed or submitted by it, including
all reports filed
by
it
on Form
8-K with the SEC,
since
June 30, 2005 (the documents referred to in this Section 4.7(a), together with
all information incorporated by reference therein in accordance with applicable
SEC regulations, are collectively referred to in this Agreement as the
“Company
SEC Documents”).
(b) As
of
their respective filing dates or effective dates, as appropriate, each of the
Company SEC Documents complied in all material respects with the applicable
requirements of the Securities Act of
1933,
as amended (the “Securities
Act”),
or
the
Securities
Exchange
Act
of 1934,
as amended (“Exchange
Act”),
as the
case may be, and the rules and regulations promulgated thereunder. No Company
SEC Document, as of its filing date or effective date, as appropriate, contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading (except to the extent
corrected, amended, revised, or superceded by a Company SEC Document filed
prior
to the date of this Agreement). The Company has made available to the Parent
copies of all comment letters received by the Company from the SEC since January
1, 2005 relating to the Company SEC Documents, together with all written
responses of the Company thereto. There are no outstanding or unresolved
comments in any such comment letters received by the Company from the SEC.
As of
the date of this Agreement, to the Knowledge of the Company, none of the Company
SEC Documents is the subject of any ongoing review by the SEC. None of the
Company Subsidiaries is required to file
or
submit any
forms, reports, or other documents with the SEC.
4.8 Financial
Statements.
(a) The
Financial Statements, including in each case, any related notes: (i) comply,
as
of their respective dates of filing with the SEC, in all material respects,
with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, (ii) were prepared in accordance with United
States generally accepted accounting principles (“GAAP”)
(except that unaudited financial statements may not contain footnotes and are
subject to normal and recurring year-end adjustments) applied on a consistent
basis during the period involved (or except as may be stated in the notes
thereto) and (iii) fairly present, in all material respects (except as may
be
stated in the notes thereto), the consolidated financial position at the date
thereof and the consolidated results of operations and cash flows (and changes
in financial position, if any) of the Company and its consolidated Subsidiaries
for the periods referred to therein, subject, with respect to interim unaudited
financial statements, to normal and recurring year-end adjustments that are
not
reasonably likely to be material in amount.
(b) The
Company maintains disclosure controls and procedures required by Rule 13a-15
or
15d-15 under the Exchange Act. Such disclosure controls and procedures are
effective to
10
ensure
that all material information concerning the Company is made known on a timely
basis to the individuals responsible for the preparation of the Company’s
filings with the SEC and other public disclosure documents.
(c) Except
as
disclosed in the Company SEC Documents or in the Company Disclosure Schedule,
since June 30, 2004, neither the Company nor any Company Subsidiary has received
any written notification from its independent auditors, any Governmental Entity
or any other Person of a “material weakness” in the Company’s internal controls.
For purposes of this Agreement, the term “material
weakness”
shall
have the meaning assigned to such term in the Statements of Auditing Standards
60, as in effect on the date hereof.
(d) The
audit
committee of the Company’s board of directors includes an Audit Committee
Financial Expert, as defined by Item 401(h)(2) of Regulation S-K.
(e) The
Company has adopted a code of ethics, as defined by Item 406(b) of Regulation
S-K, for senior financial officers, applicable to its principal financial
officer, comptroller or principal accounting officer, or Persons performing
similar functions. The Company has promptly disclosed any change in or waiver
of
the Company’s code of ethics with respect to any such Persons, as required by
Section 406(b) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended. To the Knowledge
of the Company, there have been no violations of any provisions of the Company’s
code of ethics by any such Persons.
4.9 Absence
of Certain Changes or Events. Since
December 31, 2006 (the “Balance
Sheet Date”):
(i)
the Company and the Company Subsidiaries have conducted their respective
businesses in all material respects only in the ordinary course of business,
(ii) there has not been any damage, destruction, or other casualty loss
(whether or not covered by insurance) or any action, circumstance, event,
change, development, or occurrence which in any case has had, individually
or in
the aggregate, a Material Adverse Effect on the Company, and (iii) neither
the
Company nor any Company Subsidiary has taken any action, or failed to take
any
action which action or failure, if taken after the date hereof, would have
required the consent of the Parent under Section 6.1, except as would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
4.10 No
Undisclosed Liabilities. Except
(a)
for Taxes (which are addressed in Section 4.13 hereof), (b) as disclosed in
the
Financial Statements (or in the footnotes thereto) or otherwise in the Company
SEC Documents,
and (c)
for liabilities and obligations (i) incurred in the ordinary course of business
between the Balance
Sheet Date and the date of this Agreement, (ii)
arising under this Agreement or in connection with the Transactions (including,
without limitation, liabilities relating
to
any
legal, investment banking, or other professional advisory fees and
expenses (in the case of the fees and expenses of the Company Financial Advisor,
pursuant to the Company’s engagement letter with the Company Financial Advisor
in effect as of the date hereof and a copy of which has been made available
to
the Parent) incurred
by the Company or any of the Company Subsidiaries),
(iii)
as
disclosed in Section 4.10 of the Company’s Disclosure Schedule, and (iv)
relating to for the performance of obligations of the Company or any of the
Company Subsidiaries pursuant to the express terms of any contract or agreement
to which the Company or any such Company Subsidiary is a party as of the date
hereof, neither
the Company nor any Company Subsidiary has (x) any liabilities required by
GAAP
to be reflected on a consolidated balance sheet or any notes to the consolidated
financial statements of the Company and the Company Subsidiaries that,
individually or in the aggregate, would have a Material Adverse Effect on the
Company, or (y) any material
off-balance
sheet financing transactions, arrangements, obligations (including contingent
obligations) or other relationships with entities or others (“Off-Balance
Sheet Financing Transactions”)
which
are not included in the Company’s consolidated financial statements
that
would
have a current or future effect on the financial condition, changes in financial
condition, result of
11
operations,
cash flows, liquidity, capital expenditures, capital resources or significant
components of the Company’s revenues or expenses.
4.11 Litigation.
Except
to the extent set forth in Section 4.11 of the Company Disclosure Schedule
or
otherwise as
would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company:
(a)
there is no suit, claim, action, proceeding, including, without limitation,
arbitration proceeding or alternative dispute resolution proceeding, or
investigation instituted or pending (and of which the Company has been notified)
or, to the Knowledge of the Company, threatened against, affecting or naming
as
a party thereto the Company or any Company Subsidiary, or against their
respective businesses or assets, and (b) there are no material outstanding
judgments, orders, writs, Injunctions, awards, or decrees of any Governmental
Entity or arbitrator against the Company, any Company Subsidiary, any of their
respective material properties, assets, or businesses, or, to the Knowledge
of
the Company, any of the current or former directors or officers (in their
capacities as such) of the Company or any Company Subsidiary whom the Company
or
any Company Subsidiary has agreed to indemnify (that would give rise to the
obligation of the Company to indemnify such Person).
4.12 Employee
Benefit Plans; ERISA.
(a) Section
4.12(a) of the Company Disclosure Schedule contains a true and complete list
of
each (collectively, the “Plans”):
(i)
deferred compensation and each incentive compensation, equity compensation
plan
(including each of the option Plans), “welfare” plan, fund or program within the
meaning of section 3(1) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”),
(ii)
“pension” plan, fund or program (within the meaning of section 3(2) of ERISA),
(iii) employment, termination or severance agreement, and (iv) other employee
benefit plan or fund, and each other material employee program, agreement or
arrangement; in each case, that is sponsored, maintained or contributed to
or
required to be contributed to by the Company or by any Company Subsidiary,
for
the benefit of any current employee or former employee of the Company or any
Company Subsidiary.
(b) With
respect to each Plan, the Company has heretofore delivered or made available
to
the Parent true and complete copies of the Plan and any amendments thereto
(or
if the Plan is not a written Plan, a description thereof), any summary plan
description, related trust or other funding vehicle, the most recent Form 5500,
to the extent applicable, and the most recent determination letter received
from
the Internal Revenue Service with respect to each Plan intended to qualify
under
Section 401 of the Code. Notwithstanding the foregoing, any Plan included as
an
exhibit in any filing made with the SEC need not be listed on Section 4.12(a)
of
the Company Disclosure Schedule and need not be delivered or otherwise made
available to the Parent or the Purchaser under this Section
4.12(a).
(c) The
Company does not maintain or contribute to any Plan that is subject to Title
IV
or Section 302 of ERISA.
(d) Each
Plan
conforms in all material respects with and has been operated and administered
in
all material respects in compliance with its terms and applicable law, including
but not limited to ERISA and the Code.
(e) Each
Plan
intended to be “qualified” within the meaning of Section 401(a) of the Code has
received a favorable determination or opinion letter from the Internal Revenue
Service, and to the Company’s Knowledge, there are no circumstances likely to
result in revocation of any such favorable determination letter or the loss
of
the qualification of any such Plan under Section 401(a) of the
Code.
12
(f) No
Plan
provides material medical, surgical, hospitalization, death or similar benefits
(whether or not insured) for employees or former employees of the Company or
any
Company Subsidiary for periods extending beyond their retirement or other
termination of service, other than (i) coverage mandated by applicable law,
(ii)
death benefits under any “pension plan,” or (iii) benefits the full cost of
which is borne by the current or former employee (or his or her
beneficiary).
(g) Neither
the execution of this Agreement nor the consummation of the Transactions will,
either alone or in combination with another event, (i) entitle any current
or
former employee or officer of the Company or any ERISA Affiliate to severance
pay, unemployment compensation or any other payment, or (ii) accelerate the
time
of payment or vesting, or increase the amount of compensation due any such
employee or officer.
(h) No
amounts payable (individually or collectively and whether in cash, capital
stock
of the Company or other property) under any of the Plans or any other contract,
agreement, or arrangement with respect to which the Company or any Company
Subsidiary may have any liability would fail to be deductible for federal income
tax purposes pursuant to Sections 162(m) or Section 280G of the Code. To the
Knowledge of the Company, there are no current challenges to such deductibility
that have been asserted pursuant to Section 162(a) of the Code.
(i) There
are
no pending, or, to the Knowledge of the Company, threatened or anticipated
claims by or on behalf of any Plan, by any employee or beneficiary covered
under
any such Plan, or otherwise involving any such Plan (other than routine claims
for benefits).
(j) Except
as
would not, individually or in the aggregate, have a Material Adverse Effect
on
the Company and its Subsidiaries taken as a whole, with respect to all of the
Plans which are subject to Laws other than those of the United States, (a)
such
Plans are in compliance with any applicable Laws, including relevant Tax Laws,
and the requirements of any agreement or trust deed under which they are
established, (b) all employer and employee contributions to each such Plan
required by Law or by the terms of such plan have been made, or, if applicable,
accrued, in accordance with normal accounting practices, and (c) the fair market
value of the assets of each funded plan, the liability of each insurer for
any
plan funded through insurance or the book reserve established for any plan,
together with any accrued contributions, is sufficient to procure or provide
for
the accrued benefit obligations, as of the Effective Time, with respect to
all
current and former participants in such plan.
(k) None
of
the Company, any Company Subsidiary, any ERISA Affiliate, any of the Plans,
any
trust created thereunder, or to the Knowledge of the Company, any trustee or
administrator thereof has engaged in a transaction or has taken or failed to
take any action in connection with which the Company, any Company Subsidiary
or
any ERISA Affiliate could be subject to any material liability for either a
civil penalty assessed pursuant to Section 409 or Section 502(i) of ERISA or
a
tax imposed pursuant to Sections 4975, 4976 or 4980B of the Code.
(l) None
of
the Company, any Company Subsidiary, or any ERISA Affiliate is a party to any
written agreement or memorandum of understanding with the Department of Labor,
or the Centers for Medicare and Medicaid Services.
(m) To
the
Knowledge of the Company, no written representations or communications with
respect to the participation, eligibility for benefits, vesting, benefit
accrual, or coverage under any Plan have been made to employees, directors,
or
agents (or any of their representatives or beneficiaries) of the Company or
any
Company Subsidiary which are not substantially in accordance with the terms
and
conditions of the Plans.
13
(n) The
Company and each Company Subsidiary have made or properly accrued for all
payments due from them to date with respect to the Plans.
(o) No
“leased employee,” as that term is defined in Section 414(n) of the Code,
performs services for the Company or any ERISA Affiliate. The Company and each
Company Subsidiary have at all times been in material compliance with applicable
Law regarding the classification of employees and independent
contractors.
4.13 Taxes.
Except
as
set forth in Section 4.13 of the Company Disclosure Schedule:
(a) The
Company and all Company Subsidiaries (x) have timely filed (or there have been
filed on their behalf) all material
Tax
Returns required to be filed by them, and all such Tax Returns are true, correct
and complete in all material respects,
and (y)
have duly and timely paid in full (or there has been paid on their
behalf)
all
material Taxes that have become due and payable, except for
Taxes
that are being contested in good faith and
for
which adequate reserves have been established in
the
Financial Statements
in
accordance with GAAP.
(b) There
are
no material Liens for Taxes upon any property or assets of the Company or any
Company Subsidiary, except for Liens for Taxes not yet due or for Taxes that
are
being contested in good faith and for which adequate reserves have been
established on the Financial Statements in accordance with GAAP.
(c) To
the
Knowledge of the Company, (i) no federal, state, local or foreign Audits (as
hereinafter defined) are pending with regard to any Taxes or Tax Return of
the
Company or any Company Subsidiary, (ii) no Audit of the Company’s federal income
Tax filings for the last four taxable years has been conducted by the Internal
Revenue Service, and (iii) no Audit of the Company’s federal income Tax filings
for the last four taxable years is threatened.
(d) None
of
the Company or any Company Subsidiary has granted any request, agreement,
consent or waiver to extend the statutory period of limitations applicable
to
the assessment of any Tax with respect to any Tax Return of the Company or
any
Company Subsidiary.
(e) Neither
the Company nor any Company Subsidiary is a party to any written or oral
contract, agreement or arrangement providing for the allocation,
indemnification, or sharing of Taxes (except
for customary agreements to indemnify lenders or security holders in respect
of
Taxes).
(f) Neither
the Company nor any Company Subsidiary has been a member of any “affiliated
group” (as defined in Section 1504(a) of the Code) other than the affiliated
group of which the
Company
is the “parent” and no Company Subsidiary is subject to Treasury Regulation
Section 1.1502-6 (or any similar provision under foreign, state, or local
Law)
for any
period other than in connection with the affiliated group of which the Company
is the “parent.”
(g) All
Taxes
for which the Company or any Company Subsidiary is required by Law to withhold
or to collect for payment have been duly withheld and collected, and have been
paid to the proper Governmental Entity or are being withheld by the Company
or
such Company Subsidiary, except for such failures which are not, individually
or
in the aggregate, material in amount. The
Company and each Company Subsidiary is in material compliance with, and its
records contain all material
information
and documents (including properly completed Internal Revenue Service Form W-9)
necessary to comply with, all material applicable
information reporting,
Tax
withholding
and
backup withholding (within the meaning of Section 3406 of the Code)
requirements under federal, state, and local Tax Laws.
14
(h) The
Company is not and has not been a “United States real property holding
corporation” (as defined in Section 897(c)(2) of the Code) during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code, and the shares of
Common Stock are “regularly traded on an established securities market” for
purposes of Section 1445(b)(6) of the Code and treasury regulation Section
1.1445-2(c)(2).
4.14 Intellectual
Property.
(a) To
the
Knowledge of the Company, the Company is the sole and exclusive owner of all
Patents, Copyrights, Trademarks, Internet Domain Names, Know-how (each of such
terms are hereinafter defined) and all goodwill associated therewith (all of
the
foregoing referred to collectively herein as the “Company
Intellectual Property”)
free
and clear of all Liens (other than Permitted Liens).
(i) Section
4.14(a)(i) of the Company Disclosure Schedule sets forth a complete and accurate
list of all registered and applied for United States and foreign trademarks,
service marks, trade names, designs, logos, slogans and names owned by the
Company and material to the Company’s business or used in conjunction with the
Owned Software (as hereinafter defined) (all of the foregoing referred to
collectively herein as the “Trademarks”).
(ii) Section
4.14 (a)(ii) of the Company Disclosure Schedule sets forth a complete and
accurate list of all United States and foreign issued patents, patent
applications, patent registrations, letters patent owned by the Company or
otherwise used in conjunction with the Owned Software (all of the foregoing
referred to collectively herein as the “Patents”).
(iii) Section
4.14 (a)(iii) of the Company Disclosure Schedule sets forth a complete and
accurate list of all United States and foreign copyright applications and
copyright registrations and the moral rights owned by the Company or otherwise
used in conjunction with the Owned Software (all of the foregoing referred
to
collectively herein as the “Copyrights”).
(iv) Section
4.14(a)(iv) of the Company Disclosure Schedule sets forth a complete and
accurate list of all United States and foreign Internet domain name applications
and registrations owned by the Company and material to the Company’s business or
otherwise used in conjunction with the Owned Software (all of the foregoing
referred to collectively herein as the “Internet
Domain Names”).
(v) Except
for those agreements identified in Section 4.14(a)(v) of the Company’s
Disclosure Schedule,
to the
Knowledge of the Company,
no
technologies,
trade-secrets, designs, improvements, formulae, manufacturing methods,
practices, processes, technical data, product development data, research data,
specifications and other methods and know-how (whether or not patentable or
otherwise registerable, whether or not a secret and whether or not reduced
to
writing) owned by the Company and material to the Company’s business or
otherwise used in conjunction with the Owned Software (all
of
the foregoing referred to collectively herein as the “Know-how”)
has
been disclosed or is authorized to be disclosed to any third party other than
pursuant to any agreement that limits the use or disclosure of such Know-how
without the Company’s prior written consent.
(b) With
respect to the applications listed in Section 4.14(a)(i) through Section
4.14(a)(iv) of the Company Disclosure Schedule, to the Knowledge of the Company:
(i) each application has been prosecuted in material compliance with all
applicable rules, policies and procedures of the relevant agencies and
government offices, (ii) there are no claims of prior use or other third-party
claims relevant to any such application that would render any material claim
thereunder unregistereable or (iii)
15
for
the
Patents, there is no prior art relevant to any such application that would
render any material claim thereunder unpatentable or any material claim in
any
issued patent based thereon invalid.
(c) The
Company has taken all steps that are reasonably necessary to protect, maintain
and enforce the Company Intellectual Property, except as would not, individually
or in the aggregate, have a Material Adverse Effect on the Company. The Company
currently is listed in the records of the appropriate federal, state or foreign
agency as the sole owner of record for each application and registration
relating to the Company Intellectual Property. The Company Intellectual Property
listed on Section 4.14(a) of the Company Disclosure Schedule is, to the
Knowledge of the Company, valid and subsisting and has not been cancelled,
expired or abandoned. Except as set forth on Section 4.14(c) of the Company
Disclosure Schedule, to the Knowledge of the Company, there is no pending,
existing, or threatened, opposition, interference, cancellation proceeding
or
other legal or governmental proceeding before any court or registration
authority (aside from normal prosecution proceedings not involving any third
party and not involving the validity or enforceability of the Company
Intellectual Property) in any jurisdiction involving any of the Company
Intellectual Property.
(d) The
Company has provided in Section 4.14(d) of the Company Disclosure Schedule
a
true and correct list of all of the software owned or licensed by the Company,
other than commercially available “off-the-shelf” software, and material to the
business of the Company (the “Company
Software”)
and
therein has identified which Company Software is owned, licensed, leased, or
otherwise used, as the case may be. The Company Software listed on Section
4.14
(d) of the Company Disclosure Schedule is owned by the Company or used under
rights granted to the Company pursuant to a written agreement, license or lease
from a third party.
(i) The
use
of the Company Software owned by the Company (including without limitation
the
source code, binary executable code, object code, compilers, assemblers and
algorithms therein) (the “Owned
Software”)
does
not, to the Knowledge of the Company, violate the rights of any third party.
To
the Knowledge of the Company, the Company is the sole and exclusive owner of
and
has the valid right to use, sell, license, maintain, support, upgrade and
provide services for all of the material Owned Software free and clear of all
Liens (other than Permitted Liens).
(ii) Except
as
set forth in Section 4.14(d)(ii) of the Company Disclosure Schedule, to the
Knowledge of the Company, no source code for any Owned Software has been
delivered or licensed to any escrow agent or any other Person who is not, as
of
the date of this Agreement, a person acting as an employee (currently or in
the
past) of the Company or a subcontractor or consultant of the Company. Except
as
set forth in Section 4.14(d)(ii) of the Company Disclosure Schedule, to the
Knowledge of the Company, the Company has no duty or obligation (whether
present, contingent, or otherwise) to deliver, license or make available the
source code for any Owned Software to any escrow agent or other Person who
is
not, as of the date of this Agreement, or was not a Person acting as an employee
of the Company or a subcontractor or consultant of the Company. No event has
occurred, and no circumstances or conditions exist, as of the date of this
Agreement, that (with or without notice or lapse of time) will, or would
reasonably be expected to, result in the delivery, license, or disclosure of
any
source code for any Owned Software to any Person who is not as of the date
of
this Agreement acting as an employee of the Company or a subcontractor or
consultant of the Company.
(iii) To
the
Knowledge of the Company, no Owned Software is subject to any “copyleft” or
other obligation or condition (including any obligation of condition under
any
“open source” license such as the GNU Public License, Lesser GNU Public License,
or Mozilla Public License) that: (y) could require, or could condition the
use
or distribution of such Software on, the disclosure, licensing or distribution
of any source code for any portion of such Software or (z) could
otherwise
16
impose
any limitation, restriction or condition on the right or ability of the Company
to use or distribute any Company Software.
(e) The
Company has made available to the Parent copies of all written agreements
(including, without limitation, covenants not to ▇▇▇ and settlement agreements)
granting any right to use any Company Intellectual Property or Company Software
in which (i) the Company or any Company Subsidiary is the licensor or licensee,
(ii) annual payments required thereunder exceed $10,000, and (iii) the parties
thereto continue to have any obligations, duties or liabilities thereunder
(the
“Licenses”).
The
Licenses are, to the Knowledge of the Company, valid and binding obligations,
enforceable against each such party in accordance with their terms, there are
no
material breaches or defaults under any License by the Company or by any other
party thereto, and there exists no event or condition which does or will result
in a violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default by the Company or any other party thereto, under
any
such License. The Company has not licensed or sublicensed any of its material
rights in or assigned or entered into settlement agreements with respect to,
any
Company Intellectual Property or Company Software other than pursuant to the
Licenses. Except as set forth in Section 4.14(e) of the Company Disclosure
Schedule and except as would not, individually or in the aggregate have a
Material Adverse Effect on the Company, no royalties, honoraria or other fees
are payable, and no right or forbearance is owed, by the Company to any third
parties for the use of or right to use any Company Intellectual Property or
Company Software, other than as set forth the Licenses. True and complete copies
of all Licenses have been made available to the Parent. Except as set forth
in
Section 4.14(e) of the Company Disclosure Schedule, there are no agreements
granting any third party any right of exclusivity in any of the Owned Software
or Company Intellectual Property.
(f) To
the
Knowledge of the Company, the Company’s employees and its consultants and
contractors engaged to develop Company Intellectual Property and Owned Software
have signed confidentiality agreements in favor of the Company as reasonably
may
be necessary to protect, maintain and enforce the Company Intellectual Property
and Owned Software except as would not, individually or in the aggregate, have
a
Material Adverse Effect on the Company.
(g) Except
as
set forth in Section 4.14(g) of the Company Disclosure Schedule, the Company
Intellectual Property and Owned Software were not developed under a grant from
any Governmental Entity or other source.
(h) To
the
Knowledge of the Company, and except as set forth in Section 4.14(h) of the
Company Disclosure Schedule, the conduct of the business of the Company does
not
infringe upon any intellectual property of any third party and no third party
is
infringing upon any Company Intellectual Property or Owned Software; no such
claims have been made against a third party by the Company. There are no related
claims or suits pending nor threatened and the Company has not received any
written notice of a third party claim or suit: (i) alleging that the Company’s
activities or the conduct of its businesses infringes upon or constitutes the
unauthorized use of the intellectual property of any third party or (ii)
challenging the ownership, use, validity or enforceability of the Company
Intellectual Property or Owned Software.
(i) Other
than the Licenses, to the Knowledge of the Company, there are no settlements,
consents, judgments, Injunctions, or orders or other agreements which restrict
the Company’s rights to use any Company Intellectual Property or Owned Software
or which restrict the business of the Company in order to accommodate a third
party’s intellectual property rights.
(j) Except
as
set forth in Section 4.14(j) of the Company Disclosure Schedule, the
consummation of the Transactions will not result in the loss or impairment
of
the Company's right to own or use any Company Intellectual Property or, to
the
Knowledge of the Company, the Company Software,
17
nor
will
it require, to the Knowledge of the Company, the Consent of any Governmental
Entity or third party in respect thereto (other than filings with United States
and foreign intellectual property agencies and any other Governmental
Entities).
4.15 Real
and Personal Property and Condition of Assets.
(a) None
of
the Company or any of the Company Subsidiaries owns any real property. Section
4.15(a) of the Company Disclosure Schedule lists all real property interests
leased by the Company or any Company Subsidiary. The Company and the Company
Subsidiaries have good and valid leasehold interests in all of their respective
properties and assets, real and personal, free and clear of all Liens (other
than Permitted Liens). Substantially all of the equipment and other assets
regularly used in the business of the Company or any Company Subsidiary are
in
good and serviceable condition, reasonable wear and tear excepted.
(b) All
buildings and all fixtures, equipment, and other assets and properties which
are
material or necessary to the business of the Company or any Company Subsidiary
held under leases or subleases by any of them are held under valid instruments
enforceable in accordance within their respective terms and each such instrument
is in full force and effect. Each of the Company and the Company Subsidiaries
has complied in all material respects with the terms of all leases to which
it
is a party, and each of the Company and the Company Subsidiaries enjoys peaceful
and undisturbed possession under all such leases.
4.16 Insurance.
Each
material insurance policy and fidelity bond covering the assets, business,
equipment, properties, operations, employees, officers or directors of the
Company and the Company Subsidiaries have been made available to the Parent
prior to the date of this Agreement and are in full force and effect and, with
respect to all policies, all premiums payable with respect to all periods up
to
and including the Effective Time have been, or will be prior to the Effective
Time, fully paid.
4.17 Environmental
Matters. Except
as
disclosed in Section 4.17 of the Company Disclosure Schedule, and as would
not
have, individually or in the aggregate, a Material Adverse Effect on the
Company:
(a) The
Company, the Company Subsidiaries, and their respective current and previously
owned or operated Participation Facilities, and its Loan Properties are, and
have been, in compliance in all material respects with all applicable
Environmental Laws.
(b) There
is
no suit, claim, action, or proceeding pending or, to the Knowledge of the
Company, threatened before any Governmental Entity or other forum in which
the
Company, or any current or previously owned or operated Participation Facility
or Loan Property has been or, to the Knowledge of the Company with respect
to
threatened proceedings, may be named as a defendant or a potentially responsible
party (i) for alleged noncompliance (including by any predecessor) with any
Environmental Law, or (ii) relating to the release into the environment of
any
Hazardous Material in violation of applicable Law, whether or not occurring
at,
on, under, or involving a site owned, leased, or operated by the Company, or
any
of its Participation Facilities or Loan Properties (or the Company in respect
of
any Participation Facility or Loan Property). Except as disclosed in
Section 4.17 of the Company Disclosure Schedule, no written notice,
notification, demand, request for information, citation, summons, or order
has
been received, no complaint has been filed, no penalty has been assessed, and
to
the Knowledge of the Company no investigation or review is pending or is
threatened by any Governmental Entity relating to or arising out of any
Environmental Law.
18
(c) To
the
Knowledge of the Company, there have been no releases of Hazardous Material
in
violation of any Environmental Law, in, on, under, or affecting any current
or
previously owned or leased real properties of the Company or any Company
Subsidiary, or any Participation Facility or any Loan Property of the Company
or
any Company Subsidiary, except where such release does not and would not be,
individually or in the aggregate, materially adverse to the Company, any Company
Subsidiary, or the Surviving Corporation.
4.18 Compliance
with Laws; No Violations.
Except
for Taxes, which are governed by Section 4.13:
(a) The
Company and each Company Subsidiary hold all permits, licenses, variances,
certificates, filings, franchises, notices, rights, and Consents, of and from
all Governmental Entities (collectively, “Permits”)
which
are necessary for them to own, lease, and operate their assets and properties
and to lawfully carry on their business as now conducted, except
as
would not, individually or in the aggregate, have a Material Adverse Effect
on
the Company.
The
Company does not have any Knowledge that (i) any of the Permits held by the
Company or any Company Subsidiary will not be renewable by the Surviving
Corporation following the Merger or (ii) such Permits will not otherwise be
renewable in the ordinary course after the Effective Time.
(b) Neither
the Company nor any Company Subsidiary is in conflict with, or in default under,
or in violation of (i) their respective articles or certificate of
incorporation, as the case may be, bylaws, or comparable organizational
documents, or (ii) except as would not, individually or in the aggregate, have
a
Material Adverse Effect on the Company, any Law, order, judgment, writ,
Injunction, decree or material Permit applicable to the Company, a Company
Subsidiary or by which the material assets or properties of the Company or
any
Company Subsidiary are bound or affected, and no claim is pending or, to the
Knowledge of the Company, threatened with respect to such matters.
(c) Since
June 30, 2005, neither the Company nor any Company Subsidiary has received
any
written or, to their Knowledge, oral notification or communication from any
Governmental Entity: (i) asserting that the Company or a Company Subsidiary
is
not in compliance, in all material respects, with any Laws, orders, judgments,
writs, Injunctions, decrees or material Permit which such Governmental Entity
enforces, or (ii) threatening to terminate, revoke, cancel, or reform any
material Permit, in any case, except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
4.19 Labor
Matters.
Except
as disclosed in Section 4.19 of the Company Disclosure Schedule, neither the
Company nor any Company Subsidiary: (a) is a party to, or bound by, any
collective bargaining agreement, contract, or other agreement or understanding
with any labor union or labor organization, or (b) has been joined as a party
in
any action, suit, claim or proceeding asserting that the Company or any Company
Subsidiary, or any predecessor, has committed an unfair labor practice (within
the meaning of the National Labor Relations Act or comparable state Law) or
seeking to compel the Company or any Company Subsidiary to bargain with any
labor organization as to wages or conditions of employment. There is no strike,
work stoppage, or other labor dispute involving the Company or any Company
Subsidiary pending or, to the Knowledge of the Company, threatened, other than
routine disputes with individual employees or former employees which routine
disputes are not material. To the Knowledge of the Company, there is no activity
involving employees seeking to certify a collective bargaining unit or engaging
in any other organizing activity. There are no material employment related
disputes,
arbitrations, actions, suits, claims, or proceedings pending, or to the
Knowledge of the Company, threatened.
19
4.20 Certain
Agreements. Except
as
set forth in Section 4.20 of the Company Disclosure Schedule, neither the
Company and nor any Company Subsidiary is a party to or subject to:
(a) any
agreement relating to bank debt, obligations for borrowed money or guarantees
thereof, interest rate swaps or hedging arrangements, sale and leaseback
transactions, or other similar financing transactions;
(b) any
employment, severance, change in control, consulting or other similar agreement
with any executive officer or other employee of the Company or member of the
Company Board earning an annual base salary or other compensation in excess
of
$250,000, other than those that are terminable by the Company or any of the
Company Subsidiaries on no more than 30 days’ notice without material liability
or financial obligation to the Company or any of the Company
Subsidiaries;
(c) any
contract or agreement that contains any provisions prohibiting or restricting
the Company or any Company Subsidiary, in any material respect, from competing
or freely engaging anywhere in the world in any line of business or with any
Person or in any area or engaging in any activity or business (including with
respect to the development, manufacture, marketing or distribution of their
respective products or services), or pursuant to which any benefit or right
is
required to be given or lost as a result of so competing or engaging, or which
would have any such effect on the Parent or any of its Affiliates after the
consummation of the Merger;
(d) any
contract or agreement that (i) grants any rights of first refusal, rights of
first negotiation or similar rights with respect to any material product,
service or intellectual property, or (ii) contains any provision that requires
the purchase of all or a portion of the Company’s or any Company Subsidiaries’
material requirements from a given third party, or any other similar provision;
(e) any
mortgage, pledge, conditional sales contract, security agreement, option, or
any
other similar agreement with respect to any interest of the Company or any
Company Subsidiary in personal property;
(f) any
stock
purchase, stock option, stock bonus, stock ownership, profit sharing, group
insurance, severance pay, pension, retirement, savings or other indenture,
change of control, welfare, or employee plan or material agreement providing
benefits to any current or former employees, officers, or directors of the
Company or any Company Subsidiary (including the Option Plans and the
ESPP);
(g) any
agreement to acquire equipment or commitment to make capital expenditures by
the
Company or any Company Subsidiary of $100,000 or more;
(h) any
agreement for the sale of any material properties or assets or for the grant
of
any preferential right to purchase any such material properties or assets,
other
than in the ordinary course of business;
(i) other
than agreements made in the ordinary course of business, any agreement requiring
the Company or any Company Subsidiary to indemnify any current or former
officer, director, employee or agent;
(j) any
partnership or joint venture agreement pursuant to which will or may require
future payments or performance by the Company or any of the Company Subsidiaries
in excess of $250,000 (other than those payments required under the terms and
conditions of existing Licenses);
20
(k) other
than the Voting Agreement, any voting or other agreement governing how any
shares of capital stock of the Company or any Company Subsidiary shall be voted;
(l) other
than in the ordinary course of business or in connection with escrow agreements
or arrangements entered into with customers, any agreement or contract pursuant
to which the Company or any Company Subsidiary has disclosed or is obligated
to
disclose the source code of any Company Software to any third
party;
(m) except
as
filed as an exhibit to a Company SEC Document, any contract which is deemed
to
be a material contract (as such term is defined in Item 601(b)(10) of
Regulation S-K promulgated by the SEC) with respect to the Company and the
Company Subsidiaries; and
(n) any
contract which would prevent or materially impede or delay the consummation
of
the Transactions or performance under the Voting Agreements.
Each
of
the agreements referenced in Section 4.20 of the Company Disclosure Schedule,
together with any documents filed in a Company SEC Document as a material
contract, shall be referred to herein as “Company
Material Contracts”.
Neither the Company nor any Company Subsidiary is in material breach or
violation of, or is in default under any Company Material Contract, nor, to
the
Knowledge of the Company, are any other parties to such agreements in default,
and no act or omission has occurred which, with notice or lapse of time or
both,
would constitute a breach or default under any term or provision of any such
contract or agreement, except where any such breach, violation or default would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company. True and complete copies of all Company Material Contracts have been
made available to the Parent. Each Company Material Contract is valid, legally
binding, enforceable (subject to the Bankruptcy and Equity Exception) and,
to
the Knowledge of the Company, is in full force and effect.
4.21 [Intentionally
Omitted].
4.22 [Intentionally
Omitted].
4.23 Certain
Business Practices. Neither
the Company or any Company Subsidiary nor, to the Knowledge of the Company,
any
director, officer, agent or employee of the Company or any of its Subsidiaries
has: (a) used any funds for unlawful contributions, gifts, entertainment or
other unlawful expenses relating to political activity regarding the business
of
the Company or a Subsidiary, (b) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or (c) made any other unlawful payment, gift,
contribution, or benefit.
4.24 Related
Party Transactions. Other
than as disclosed in a Company SEC Documents or in the Company Disclosure
Schedule, since July 1, 2006, neither the Company nor any Company Subsidiary
has
been a party to any transaction or agreement with any Affiliate of the Company
(other than a Company Subsidiary), stockholder, director, or executive officer
of the Company that would be or will be required to be disclosed under Item
404
of Regulation S-K promulgated under the Securities Act. Neither the Company
nor
any Company Subsidiary has any loans to any of its respective directors or
officers which loans are outstanding.
4.25 Proxy
Statement. The
Proxy
Statement to be used by the Company to solicit any required approval of its
stockholders as contemplated by this Agreement, will not, on the date the Proxy
Statement (or any amendment or supplement thereto) is first mailed to
stockholders of the Company, contain any untrue statement of a material fact,
or
omit to state a material fact required to be stated therein
21
which
is
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading and will not, at the time of the
Special Meeting to be held pursuant to Section 7.10 hereof, including any
adjournments thereof, omit to state any material fact necessary to correct
any
statement in an earlier communication with respect to the solicitation of
proxies for the Special Meeting which shall have become false or misleading
in
any material respect. The Proxy Statement will, when filed with the SEC, comply
as to form in all material respects with the provisions of the applicable
federal securities Laws and the rules and regulations thereunder.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to statements made or incorporated by reference in, or information
omitted from, any of the foregoing documents based on information provided
by or
on behalf of the Parent or the Purchaser in writing to the Company specifically
for inclusion or incorporation by reference therein.
4.26 Takeover
Statutes. Assuming
the accuracy of the representations and warranties set forth in Section 5.7
hereof, the board of directors of the Company has taken all actions necessary
to
exempt the this Agreement, the Merger, and all other Transactions, including
the
Voting Agreements, from Section 203 of DGCL.
4.27 Opinion
of Financial Advisor. The
Company's board of directors has received an opinion of the Company Financial
Advisor, dated as of the date that the Company’s board of directors approved
this Agreement and the Transactions, to the effect that, as of such date, and
subject to the qualifications and limitations set forth therein, the
consideration to be received in the Merger by the holders of the Common Stock
is
fair to the holders of the Common Stock from a financial point of
view.
4.28 Brokers. No
broker, investment banker, financial advisor or other Person, other than the
Company Financial Advisor, is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission in connection with the Transactions
based upon arrangements made by or on behalf of the Company.
ARTICLE
5
Representations
and Warranties of Parent and Purchaser
The
Purchaser and the Parent jointly and severally represent and warrant to the
Company as follows:
5.1 Organization.
(a) Each
of
the Parent and the Purchaser is a corporation incorporated, validly existing
and
in good standing under the Laws of the jurisdiction of its respective
incorporation, and each has all requisite corporate power and authority to
own
and operate its properties and to carry on its business as is now being operated
and carried on. Each of the Parent and the Purchaser is duly qualified or
licensed to do business as a foreign corporation and is in good standing in
each
jurisdiction where the character of the property owned or leased by it or the
nature of its business makes such qualification necessary, except where the
failure to be so qualified or licensed and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect on the Parent
or the Purchaser, as the case may be.
(b) The
Purchaser was formed solely for the purpose of engaging in the Transactions,
has
engaged in no other business activities, and has conducted its operations as
contemplated by this Agreement. The Purchaser is, and immediately prior to
the
Effective Time will be, a wholly-owned subsidiary of the Parent, and the
Purchaser has no Subsidiaries.
22
5.2 Authorization; No
Conflict.
(a) Each
of
the Parent and the Purchaser has the requisite corporate power and authority
to
execute and deliver this Agreement and the
Voting Agreement and to
consummate the Transactions
and the transactions
contemplated by the
Voting
Agreement, and to perform its obligations under this Agreement
and the
Voting Agreement.
The
execution, delivery and performance by the Parent and the Purchaser of this
Agreement and the Voting
Agreement and the consummation
of the Transactions
and the
transactions contemplated by the Voting Agreement
have
been duly authorized by all necessary corporate action in respect thereof on
the
part of each of the Parent and the Purchaser, and by the Parent as the sole
stockholder of the Purchaser, and no other corporate action is required on
the
part of the Parent or the Purchaser to authorize the execution and delivery
by
the Parent and the Purchaser of this Agreement and the Voting
Agreement and the consummation
by them of the Transactions
and the
transactions contemplated by the Voting Agreement.
This
Agreement and
the
Voting Agreement have
been
duly executed and delivered by the Parent and the Purchaser and, assuming valid
authorization, execution and delivery hereof and
thereof by
the
Company
(and, in
the case of the Voting Agreement, by the other parties thereto),
this
Agreement and
the
Voting Agreement constitute the
valid
and binding obligations
of each
of the Parent and the Purchaser enforceable against each of them in accordance
with their
respective
terms
(subject to the Bankruptcy and Equity Exception).
(b) Neither
the execution and delivery of this Agreement or
the
Voting Agreement by
the
Parent or the Purchaser, nor the consummation by the Parent or the Purchaser
of
the Transactions
or the
transactions contemplated by the Voting Agreement,
or
compliance by the Parent or the Purchaser with any of the terms or provisions
herein
or
therein,
will:
(i) conflict with or violate any provision of the certificate of incorporation
or bylaws of either the Parent or the Purchaser, (ii) violate, conflict with
or
result in a breach of any terms, conditions or provisions of, or constitute
a
default (with or without notice or the lapse of time, or both) under, or give
rise to any right of termination, cancellation, or acceleration of any
obligation or the loss of any benefit under, or require a consent pursuant
any
of the terms, provisions, or conditions of any material loan or credit
agreement, note, bond, mortgage, indenture, deed of trust, license, agreement,
contract, lease, Permit, concession, franchise, plan or other instrument or
obligation to which the Parent or the Purchaser is a party or by which any
of
their respective assets or properties is bound, (iii) require any filing by
the
Parent or the Purchaser with, or Permit, or Consent of, any Governmental Entity
other than the Regulatory Filings, or (iv) conflict with or violate any
judgment, order, writ, Injunction,
decree,
or Law applicable to the Parent, or any of its properties or assets; except
in
the case of clause (ii), (iii) or (iv) for such violations, breaches or defaults
which would not, individually or in the aggregate, impair the ability of each
of
the Parent or the Purchaser to perform its obligations under this Agreement,
as
the case may be, or prevent or materially delay the consummation of any of
the
Transactions.
5.3 Information
in the Proxy Statement.
None of
the information supplied by the Parent or the Purchaser in writing expressly
for
inclusion or incorporation by reference in the Proxy Statement (or any amendment
thereof or supplement thereto), if necessary, will at the date mailed to
stockholders of the Company and at the time of the Special Meeting, contain
any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they are made, not
misleading.
5.4 Brokers.
No
broker, investment banker, financial advisor or other Person, other than Halyard
Capital Advisors, LLC, is entitled to any broker’s, finder’s, financial
advisor’s or other similar fee or commission in connection with the Transactions
based upon arrangements made by or on behalf of the Parent or the
Purchaser.
23
5.5 Financing.
The
Purchaser has delivered to the Company a true and complete copy of the
commitment letter from the Parent’s lender to provide the necessary financing
for the Transactions, and the Parent is not aware of any reasons why such
financing will not be available at the Effective Time. Irrespective of any
such
commitment letter or the terms thereof, at the Effective Time, the Parent and
the Purchaser shall have sufficient cash, available lines of credit, or other
sources of immediately available funds to enable the Purchaser to pay the
aggregate Merger Consideration.
5.6 Litigation.
There
is
no suit, claim, action, proceeding, including, without limitation, arbitration
proceeding or alternative dispute resolution proceeding, or investigation
instituted or pending or, to the Knowledge of the Parent, threatened against,
affecting or naming as a party thereto the Parent or the Purchaser, or against
their respective businesses or assets that, individually or in the aggregate,
are or would materially impede, delay, or impair the consummation of the
Transactions.
5.7 Not
an Interested Stockholder.
Neither
the Parent nor the Purchaser nor any of their respective Affiliates is an
“interested stockholder” (as such term is defined in Section 203 of the DGCL) of
the Company.
5.8 Ownership
of Company Stock. Neither
the Parent nor the Purchaser nor any of their respective Affiliates beneficially
owns any shares of Company Stock.
ARTICLE
6
Conduct
of Business Pending the Merger
6.1 Interim
Operations of the Company.
During
the period from the date of this Agreement until
the
earlier of termination of this Agreement or the Effective Time,
unless
the prior written consent of the Parent shall have been obtained (which consent
shall not be unreasonably withheld, conditioned, or delayed), and except (i)
as
expressly contemplated or permitted by this Agreement or (ii) is required by
applicable Law (including any compliance by the Company’s directors with their
fiduciary duties), the Company covenants and agrees that:
(a) the
business of the Company and the Company Subsidiaries shall be conducted only
in
the ordinary course of business, and each of the Company and the Company
Subsidiaries shall use its commercially reasonable efforts to maintain and
preserve intact its present business organization, assets, properties and all
material insurance of the type described in Section 4.16 hereof and maintain
its
rights and franchises and maintain good relations with customers, suppliers,
employees, contractors, distributors and others having business dealings with
it;
(b) neither
the Company nor any Company Subsidiary shall, directly or indirectly, (i) amend
their respective certificates or articles of incorporation or bylaws or similar
organizational documents; or (ii) split, combine or reclassify the outstanding
Common Stock or any outstanding capital stock of the Company or any Company
Subsidiary;
(c) neither
the Company nor any Company Subsidiary shall: (i) declare, set aside or pay
any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock (other than dividends and distributions by a direct or
indirect wholly-owned Company Subsidiary to its parent);
(ii) except upon the exercise of the Options or upon the exercise of any other
rights to purchase Common Stock outstanding on the date hereof (including,
the
rights granted under the ESPP through the date of this Agreement), issue, sell,
transfer, pledge, dispose of or encumber any shares of, or securities
convertible into or exchangeable for, or options, warrants or rights of any
kind
to acquire, any shares of capital stock of the Company or any Company
Subsidiaries (including treasury shares); (iii) transfer,
24
lease,
license, sell, mortgage, pledge, dispose of, or encumber any of its material
assets, or incur or modify any material indebtedness or other liability, other
than in the ordinary course of business; or (iv) redeem, purchase or otherwise
acquire any shares of its capital stock, or enter into any transaction or
instrument which includes a right to acquire such shares except (A) from holders
of Options in full or partial payment of the exercise price payable by such
holder upon exercise of Options to the extent required or permitted under an
Option Plan, or (B) from former employees, directors, and consultants pursuant
to agreements providing for the repurchase of their shares at the original
issue
price in connection with the termination of their services to the Company or
any
Company Subsidiary;
(d) except
as
required to comply with applicable Law or agreements, plans or arrangements
existing on the date hereof or permitted to be entered into pursuant to the
terms of this Agreement, including without limitation, Section 7.11(f) hereof,
neither the Company nor any Company Subsidiary shall (i) change the
compensation or benefits payable or to become payable to any of its directors,
officers or employees (other than increases in wages to employees who are not
directors or Affiliates in the ordinary course of business, but in any event
not
to exceed $300,000 in the aggregate), (ii) enter into or amend any
employment, severance, consulting, termination, pension, profit-sharing, bonus,
extra compensation, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, severance pay, retirement
or
other employee benefit plan, agreement or arrangement, or any employment or
consulting agreement (except for new hire employees and promotions in the
ordinary course of business whose annual salary does not exceed $150,000) or
make loans to any directors, officers, employees, or Affiliates of the Company
or any Company Subsidiary or change its existing borrowing or lending
arrangements for or on behalf of any of such Persons pursuant to an employee
benefit plan or otherwise, other than such actions taken in the ordinary course
of business; provided,
however,
that,
in the event that the Merger has not been consummated by the close of business
on July 31, 2007, the Company shall be permitted to implement new “management by
objective” plans with or for its employees consistent with past practice except
that such plans (A) shall be in effect only for the quarter ending on September
30, 2007, as opposed to a full year, and (B) shall be designed such that the
expected benefits shall not exceed the benefits provided by such plans in the
same quarter of the prior fiscal year when considered in the
aggregate;
(e) neither
the Company nor any Company Subsidiary shall
pay or
arrange for payment of any pension, retirement allowance or other employee
benefit to any officer, director, employee or Affiliate or pay or make any
arrangement for payment to any officers, directors, employees or Affiliates
of
the Company of any amount relating to unused vacation days, except for
payments, arrangements
for
payments
and accruals made in the ordinary course of business, pursuant to benefits
or
other such plans in effect as of the date hereof as enforced consistent with
past practices or as otherwise required by applicable Law;
(f) except
in
the ordinary course of business, neither the Company nor any Company Subsidiary
will, in any material respect, modify, amend or terminate any contract or
agreement (other than contracts or agreements with customers) providing for
aggregate payments by or to the Company of $250,000 or more, or waive, release
or assign any material rights or claims under any of such contracts or
agreements;
(g) neither
the Company nor any Company Subsidiary shall: (i) incur, become liable for,
agree to become liable for, or assume (x) any long-term indebtedness or any
short-term indebtedness (which
shall not include trade payables) or (y) any Off-Balance Sheet Financing
Transactions; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations
of
any other Person, other than in the ordinary course of business; (iii) make
any
loans, advances or capital contributions to, or investments in, any other Person
(including, without limitation by purchase of stock or securities, contributions
to capital, asset transfers, or purchase of any
25
assets
or
property, any Person (other than to or from a Company Subsidiary or which are
immaterial in amount and other than investments in short term money market
instruments or commercial paper, or otherwise as set forth on Section
6.1(g)(iii) of the Company Disclosure Schedule);
or
(iv) acquire (by merger, consolidation or acquisition of stock or assets) any
Person or division thereof or any equity interest therein or otherwise acquire
direct or indirect control of any Person;
(h) subject
to any duty imposed by Law, neither the Company nor any Company Subsidiary
shall
enter into or modify any collective bargaining agreement or any successor
collective bargaining agreement to any collective bargaining agreement other
than in the ordinary course of business;
(i) the
Company and each Company Subsidiary shall timely and properly file, or timely
and properly file requests for extensions to file, all federal, state, local
and
foreign Tax Returns which are required to be filed, and pay or make provision
for the payment of all Taxes owed by them;
(j) neither
the Company nor any Company Subsidiary will (i) materially change any of the
accounting methods used by it except for such changes required by GAAP or (ii)
except to the extent occurring in the ordinary course of business, make any
Tax
election or change any Tax election already made, adopt any Tax accounting
method, change any Tax accounting method, enter into any closing agreement
or
settle any material claim or material assessment relating to Taxes or consent
to
any material claim or assessment relating to Taxes or any waiver of the statute
of limitations for any such claim or assessment;
(k) subject
to Section 6.1(o) hereof, neither the Company nor any Company Subsidiary will
pay, discharge or satisfy any claims, liabilities or obligations (whether
absolute, accrued, contingent or otherwise) in excess of $250,000, other than
the payment, discharge or satisfaction of any such claims, liabilities or
obligations, in the ordinary course of business, or claims, liabilities or
obligations reflected or reserved against in, or contemplated by, the
consolidated financial statements (or the notes thereto) of the
Company;
(l) neither
the Company nor any Company Subsidiary will adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Company or any Company Subsidiary (other than
the
Merger);
(m) neither
the Company nor any Company Subsidiary shall make any capital expenditure in
excess of $250,000;
(n) neither
the Company nor any Company Subsidiary shall sell, pledge, assign, lease,
license, mortgage or otherwise encumber or subject to any Lien (other than
a
Permitted Liens) or otherwise dispose of any of its material properties or
assets (including the Company Intellectual Property), except for sales, leases,
licenses or encumbrances of its properties or assets in the ordinary course
of
business and Liens for Taxes not yet due and payable; provided,
however,
that
notwithstanding the foregoing, in no event shall the Company or any Company
Subsidiary transfer, assign, or otherwise dispose of a License installment
receivable under any contract, arrangement, or understanding whether now
existing or existing hereafter;
(o) Other
than in the ordinary course of business, commence any action, suit, proceeding,
or litigation other than in the ordinary course of business or settle any
action, suit, proceeding, or litigation involving any liability of the Company
for money damages exceeding $100,000 or restrictions upon the operations of
the
Company or any Company Subsidiary; and
26
(p) neither
the Company nor any Company Subsidiary will enter into any agreement, contract,
commitment or arrangement to do any of the foregoing.
Notwithstanding
the foregoing, the parties shall cooperate and establish procedures and
limitations to ensure that the Company would not be required to take any action
as a result of the Transactions that would reasonably be expected
to contravene any applicable Law (including, without limitation, the HSR
Act).
6.2 No
Solicitation.
(a) The
Company agrees that it shall immediately cease and cause to be terminated all
existing discussions, negotiations
and
communications with any Persons with respect to any Acquisition Proposal. From
and after the date of this Agreement and until the earlier of termination of
this Agreement or the Effective Time, the Company shall not and shall not
authorize or permit its officers,
directors, employees, investment
bankers, attorneys, accountants or other agents (collectively, “Representatives”) to
directly
or indirectly:
(i) initiate,
solicit or knowingly encourage, or take any action to facilitate the making
of,
any offer or proposal which constitutes or which would be reasonably likely
to
lead to any third-party Acquisition Proposal; or
(ii) enter
into any agreement with respect to any Acquisition Proposal;
or
(iii) in
the
event of an unsolicited Acquisition Proposal, engage in negotiations or
discussions
with, or
provide any information or data to, any Person (other than Parent or any of
its
Affiliates or representatives) relating to an Acquisition Proposal.
The
Company shall promptly, and in any event within two (2) Business Days, notify
the Parent if any inquiries or proposals are received by, any information is
requested from, or any negotiations or discussions are sought to be initiated
or
continued with the Company or its Representatives, in each case, in connection
with an Acquisition Proposal (an “Acquisition
Proposal Interest”).
Such
notice shall identify the Person indicating such Acquisition Proposal Interest
and the material terms and conditions of any such Acquisition Proposal.
Notwithstanding
the foregoing, nothing contained in this Section 6.2(a) shall prohibit the
Company or its board of directors from taking (and disclosing to the Company’s
stockholders) any position with respect to a tender or exchange offer by a
third
party in compliance with Rules 14d-9 or 14e-2 under the Exchange Act or making
such other disclosures to the Company’s stockholders if, in the good faith
judgment of the board of directors of the Company, after consultation with
outside legal counsel, such disclosure is necessary for the board of directors
of the Company to comply with its fiduciary duties.
As
used
in this Agreement, “Acquisition
Proposal” means
any
proposal or offer relating to any transaction or series of related transactions
(other than the Transactions) involving any (A) acquisition or purchase from
the
Company by any Person or “group” (as defined under Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder, referred to herein
as
a “Group”)
of
more
than a 25% interest in the total outstanding voting securities of the Company
or
any Company Subsidiary, or (B) exchange or tender offer involving the
Company which, if consummated, would result in any Person beneficially owning
25% or more of any class of outstanding voting securities of the Company, or
(C)
merger, consolidation, business combination or similar transaction involving
the
Company, or (D) any sale, lease (other than in the ordinary course of business),
exchange, transfer,
27
license
(other than in the ordinary course of business), acquisition or disposition
of
more than 25% of the business or assets of the Company, or (E) any dissolution
or liquidation of the Company, or (F) any other transaction similar to the
foregoing with respect to the Company or any Company Subsidiary.
(b) Notwithstanding
Section 6.2(a) hereof, prior to receipt of the approval of the stockholders
of
the Company to this Agreement and the Merger, the Company may furnish, pursuant
to a confidentiality agreement with terms no less favorable to the Company
than
those contained in the Confidentiality Agreement (subject to applicable Law,
including without limitation the fiduciary obligations of the board of directors
of the Company), information concerning its business, properties or assets
and
such other information as it deems relevant to any Person
making
an
Acquisition Proposal that did not result from a breach of this Agreement and
that the board of directors of the Company determines in good faith (after
consultation with outside counsel and its financial advisors) could be
reasonably expected to lead to a Superior Proposal, and may negotiate and
participate in discussions and negotiations with such Person concerning such
Acquisition Proposal if in the good faith opinion of the board of directors
of
the Company, after consultation with outside legal counsel to the Company,
it is
determined that providing such information or access or engaging in such
discussions or negotiations is in the best interests of the Company and its
stockholders and necessary in order for the board of directors of the Company
to
discharge its fiduciary duties to the Company’s stockholders under applicable
Law. The
Company shall notify the Parent of such determination relating to a potential
Superior Proposal and shall promptly provide to the Parent any material
non-public information regarding the Company provided to any other party, which
was not previously provided to the Parent.
As
used
herein, the term “Superior
Proposal”
shall
mean a bona fide, written Acquisition Proposal made by such entity or group
on
an unsolicited basis, and in the absence of any violation of this Section 6.2
by
the Company, which the board of directors determines, in good faith after
consultation with its legal and financial advisors, is (i) not subject to any
condition related to financing or, if so subject, that the board of directors
of
the Company has determined in its good faith judgment that it is reasonably
likely to be financed, (ii) reasonably likely to be consummated (taking into
account the legal aspects of the Acquisition Proposal, the Person making the
Acquisition Proposal and approvals required in connection therewith), and (iii)
more favorable (taken as a whole) than the Merger Consideration to the Company's
stockholders from a financial point of view; provided,
that a
Superior Proposal may be subject to customary conditions.
(c) Except
as
set forth in this Sections 6.2(c), neither the board of directors of the Company
nor any committee thereof shall withdraw or modify, or propose to withdraw
or
modify, in a manner adverse to the Transactions, to the Parent or to the
Purchaser, the approval or recommendation by the board of directors of the
Company of this Agreement or the Merger, (ii) approve or recommend or propose
to
approve or recommend, any Acquisition Proposal, or (iii) enter into any
agreement with respect to any Acquisition Proposal.
Notwithstanding
the foregoing, prior to the earlier of the termination of this Agreement or
the
Effective Time, the board of directors of the Company may (subject to the terms
of this and the following sentence) withhold, withdraw or modify its approval
or
recommendation of this Agreement and the Merger, approve or recommend a Superior
Proposal, or enter into an agreement with respect to a Superior Proposal, in
each case at any time after the third Business Day following the Company’s
delivery
to the Parent of a notice of its determination that an Acquisition Proposal
constitutes a Superior Proposal (a “Superior
Proposal Notice”);
provided,
however,
that
the Company shall not terminate this Agreement and enter into an agreement
with
respect to a Superior Proposal unless (i)
prior
to any such termination the Company has provided the Parent with a Superior
Proposal Notice with respect to such Superior Proposal as aforesaid, (ii) within
a period of three Business Days following the delivery of the Superior Proposal
Notice, the Parent does not propose to amend this Agreement or enter into
an
28
alternative
transaction, in either case which the board of directors of the Company
determines in its good faith judgment in consultation with its legal and
financial advisors to be as favorable to the Company’s stockholders, from a
financial point of view, as such Superior Proposal, and (iii) at least three
full Business Days after the Company has provided the Superior Proposal Notice,
the Company delivers to the Parent a written notice of termination of this
Agreement pursuant to this Section 6.2(c) and payment of the Termination Fee
in
accordance with Section 9.2 of this Agreement.
6.3 SEC
Reports.
The
Company shall file in a timely manner all reports, forms, filings, registration
statements, and other documents (including, but not limited to, all exhibits,
post-effective amendments and supplements thereto) required to be filed by
it
under the Exchange Act (including,
but not limited to, any applicable reports on Form 8-K) between the date of
this
Agreement and the Effective Date. If financial statements are contained in
any
reports filed with the SEC, such financial statements will present fairly,
in
all material respects, the consolidated financial position of the entity filing
such statements as of the dates indicated and the consolidated results of
operations, changes in stockholders’ equity, and cash flows for the periods
then-ended in accordance with GAAP (subject in the case of interim financial
statements to normal recurring year-end adjustments and except for the
permissible absence of footnote disclosure in unaudited financial statements).
As of their respective dates, such reports filed with the SEC will comply as
to
form in all material respects with the Securities Act and the Exchange Act
and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
ARTICLE
7
Additional
Agreements
7.1 Agreements
as to Efforts to Consummate; Consents and Approvals.
Subject
to the terms and conditions of this Agreement and applicable Law, each of the
parties hereto agrees to use, and cause its Subsidiaries, if any, to use, its
reasonable best efforts to take, or cause to be taken, all actions, and to
do,
or cause to be done, all things necessary, proper, or advisable under applicable
Laws to consummate and make effective the Transactions as expeditiously as
practicable after the date of this Agreement and, without limitation,
shall:
(a) prepare
and file all forms, registrations, and notices required to be filed to
consummate the Transactions and the taking of such action necessary to obtain
in
a timely manner all necessary Permits and Consents by third parties and
Governmental Entities;
(b) lift
or
rescind any judgment, order, writ, Injunction, or other decree adversely
affecting the ability of the parties to consummate the Transactions;
(c) comply
promptly with all applicable Laws and legal requirements which may be imposed
on
it with respect to this Agreement and the Transactions (which actions shall
include, without limitation, furnishing all information required under and
in
connection with approvals of or filings with any Governmental
Entity);
(d) cooperate
with and, subject to such confidentiality agreements as may be reasonably
necessary or requested, furnish information to each other or their respective
counsel in connection with any such requirements imposed upon any of them or
any
of their Subsidiaries in connection with this Agreement and the
Transactions;
29
(e) obtain
(and cooperate with each other in obtaining) any Permits or Consents from any
Governmental Entity or any other public or private third party required to
be
obtained or made by the Parent, the Purchaser, the Company or any of their
respective Subsidiaries in connection with the Transactions or the taking of
any
action contemplated thereby or by this Agreement;
(f) consult
with the other parties hereto with respect to, provide any necessary information
with respect to and, subject
to applicable Law,
provide
the other parties hereto (or their respective counsel) with copies of, all
filings made by such parties with any Governmental Entity or any other
information supplied by such party to a Governmental Entity in connection with
this Agreement and the Transactions;
(g) inform
the other parties hereto of any communication, written or oral, from any
Governmental Entity regarding the Transactions, unless prohibited by applicable
Law;
(h) if
any
party hereto or Affiliate thereof, as their Representative, receives a request
from any such Governmental Entity for additional information or documentary
material with respect to the Transactions, endeavor in good faith to make,
or
cause to be made, as promptly as practicable and after consultation with the
other party, an appropriate response in compliance with such
request;
(i) cause
to
be satisfied the conditions in Article 8 hereto; and
(j) all
other
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the Transactions.
7.2 Notification
of Certain Matters; Current Information.
(a) The
Company shall give prompt notice to the Parent and the Parent shall give prompt
notice to the Company (in each case, to the extent such party has Knowledge
thereof), of (i) the occurrence or non-occurrence of any event whose occurrence
or non-occurrence, as the case may be, would cause any condition set forth
in
Article 8 hereof to not be satisfied at any time from the date hereof
until
the
earlier of termination of this Agreement or the Effective Time,
and (ii)
any material failure of the Company, the Purchaser 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; provided,
however,
that
the delivery of any notice pursuant to this Section 7.2 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice or the representations or warranties of the parties or the conditions
to
the obligations of the parties hereto; provided,
further,
that
failure to give such notice shall not be treated as a breach for purposes of
9.1
unless the failure to give such notice results in material prejudice to the
other party.
(b) Subject
to applicable Law, the Company shall promptly notify the Parent of (i) any
material complaints, investigations or hearings (or communications indicating
that the same may be contemplated) of any Governmental Entity, or (ii) the
institution or the threat of material action, suit, claim, or proceeding
involving such party.
7.3 Access.
From the
date hereof until
the
earlier of termination of this Agreement or the Effective Time,
upon
reasonable notice and subject to applicable Law, the Company shall, and shall
cause each of the Company Subsidiaries to, afford to the officers, employees,
accountants, counsel, financing sources and other representatives of the Parent
and the Purchaser reasonable access, during normal business hours and
in
a
manner that does not disrupt or interfere with business operations
to all
of its properties, books, contracts, commitments, records, officers and
employees, and all other interests concerning it and its business, assets,
properties or condition (financial or otherwise) and, during such
30
period,
the Company shall (and shall cause each of the Company Subsidiaries to) furnish
promptly to the Parent and the Purchaser (a) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities Laws or the securities
Laws of any other jurisdiction, and (b) such other information concerning its
business, properties and personnel as the Parent or the Purchaser may reasonably
request. Notwithstanding anything contained herein to the contrary, the parties
shall cooperate and establish procedures and limitations to ensure that the
Company would not be required to permit any inspection, or to disclose any
information, that would reasonably be expected to (i) contravene any
applicable Law (including, without limitation, the HSR Act) or applicable
contract or agreement entered into prior to the date of this Agreement, or
(ii) jeopardize the attorney-client privilege or the attorney work product
doctrine.
7.4 Confidentiality.
Except
as
otherwise agreed to in writing or as otherwise required by applicable Law or
regulation (including Nasdaq and NASD rules), until the Effective Time, the
Parent and the Purchaser will be bound by, and all information received by
the
Parent or its representatives pursuant to Section 7.3 shall be subject to,
the terms of the confidentiality agreement, dated February 13, 2007, entered
into by and between the Parent and the Company (as may be amended from time
to
time, the “Confidentiality
Agreement”).
In
the event this Agreement is terminated and the Merger is not consummated, the
parties to this Agreement affirm their understanding that the terms of the
Confidentiality Agreement shall survive such termination and shall continue
in
full force and effect.
7.5 [Intentionally
Omitted]
7.6 Publicity.
The
initial press release relating to this Agreement shall be a joint press release
issued by the Company and the Parent. Thereafter, so long as this Agreement
is
in effect, neither the Company nor the Parent, nor any of their respective
Affiliates, shall issue any press release or make any other public announcement
with respect to the Merger or this Agreement without first giving notice to
and
consulting with the other party, and considering in good faith incorporating
any
reasonable comments of such other party, except that a party may, without first
consulting with the other party, issue a press release or make any other public
announcement after receiving advice from counsel that such public statement
or
announcement is required by the rules of the Nasdaq or applicable Law;
provided,
that,
such
party has attempted in good faith to consult with the other party prior to
issuing such press release or other public announcement but has been unable
to
do so in a timely manner.
7.7 Insurance
and Indemnification.
(a) For
a
period of six years after the Effective Time, the Parent shall, or shall cause
the Surviving Corporation (or any successor to the Surviving Corporation) to
indemnify, defend and hold harmless the present and former directors and
officers of the Company and of any Company Subsidiaries, and Persons who become
any of the foregoing prior to the Effective Time (each an “Indemnified
Party”)
against all losses, claims, damages, liabilities, costs, fees and expenses
(including reasonable fees and disbursements of counsel) and judgments, fines,
losses, claims, liabilities and amounts paid in settlement incurred in
connection with or arising out of any claim, action, suit, proceeding, or
investigation, whether criminal, civil, administrative or investigative, arising
out of any acts or omissions occurring at or prior to the Effective Time
(including, without limitation, the Transactions); provided,
however,
that
neither the Parent
nor the Surviving Corporation shall be required to indemnify any Indemnified
Party pursuant hereto if it shall be determined by a court of competent
jurisdiction that the Indemnified Party acted in bad faith or, with respect
to
any criminal action or proceeding, that the Indemnified Party did not have
reasonable cause to believe that its conduct was lawful, whether asserted or
claimed prior to, at or after the Effective Time, to the fullest extent
permitted under applicable Law. The Parent also shall advance expenses incurred
promptly upon (but in any event with ten days following) receipt of statements
therefor from any Indemnified Party; provided that the Person to whom such
advances are made provides an
31
undertaking
to repay such advances if it is ultimately determined by a court of competent
jurisdiction that such Person is not entitled to indemnification. The Parent
and
the Company agree that in the event any claim, action, suit, proceeding, or
investigation is asserted, commenced, or made within the six-year period
contemplated by this Section 7.7, all rights to indemnification in respect
of
any such claim, action, suit, proceeding, or investigation shall continue until
disposition of any and all such claims.
(b) The
Parent agrees that all rights to indemnification and advancement of expenses
existing in favor of, and all limitations on the personal liability of, the
present or former directors or officers of the Company or any Company Subsidiary
as provided in the Company’s Certificate of Incorporation or Bylaws, the
Certificate or Articles of
Incorporation, as the case may be, bylaws or similar documents of any of the
Company’s Subsidiaries, or any agreements as in effect as of the date hereof
with respect to matters occurring prior to the Effective Time shall survive
the
Merger and shall continue in full force and effect. The Parent agrees to cause
the Surviving Corporation to comply fully with its obligations hereunder and
thereunder.
(c)(i) The
Parent or the Surviving Corporation shall maintain the Company’s existing
officers’ and directors’ liability insurance (“D&O
Insurance”)
for a
period of not less than six years after the Effective Time; provided,
however,
that
the
Parent
may substitute therefor policies of substantially equivalent coverage and
amounts containing terms no less favorable to such former directors or officers;
provided, further, that if the existing D&O Insurance expires or is
terminated or cancelled during such period, then the
Parent
or
the Surviving Corporation shall obtain substantially similar D&O
Insurance
on terms
at least as favorable to such former directors or officers.
(ii) Notwithstanding
the provisions of Section 7.7(c)(i) above, the Company may at its option,
in lieu of complying with the provisions of Section 7.7(c)(i), purchase an
extended reporting period endorsement (the “Policy
Extension”)
under
the Company’s existing directors’ and officers’ liability insurance coverage for
the Company’s directors and officers which shall provide such directors and
officers with coverage for six years following the Effective Time, which policy
shall provide coverage amounts, terms, and conditions which are no less
favorable to the insured Persons than the directors’ and officers’ liability
insurance coverage currently maintained by the Company with respect to acts
or
omissions occurring prior to or at the Effective Time. The Parent shall take
any
and all actions necessary or advisable to maintain such Policy Extension, and
shall so maintain such Policy Extension, on the terms so purchased and shall
not
modify or amend the terms thereof in any manner.
(d) In
the
event the Parent, the Surviving Company, or any of their successors or assigns
(i) consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of the Parent
assume the obligations set forth in this Section 7.7.
(e) The
Parent shall unconditionally guarantee the timely payment of all funds owing
by,
and the timely performance of all other obligations of, the Surviving
Corporation under this Section 7.7. From and after the Effective Time, the
Parent shall, and shall cause the Surviving Corporation to, pay
all
expenses, including reasonable attorneys’ fees that may be incurred by the
Indemnified Parties in enforcing their indemnity rights and other rights
provided in this Section 7.7.
7.8 Third
Party Standstill Agreements.
During
the period from the date of this Agreement through the Effective Time, the
Company shall use its commercially reasonable efforts to enforce and shall
not
terminate, amend, modify or waive (except in accordance with the terms of the
applicable agreement) any standstill provision of any confidentiality or
standstill agreement between the Company
32
or
its Representatives and other parties entered into
prior to the date hereof, subject to applicable Law, including without
limitation the fiduciary obligations of the board of directors of the
Company.
7.9 State
Takeover Laws.
If any
state takeover statute or similar Laws becomes or is deemed to become applicable
to the Company or the Merger, then the Company’s board of directors shall,
subject to its fiduciary duties as advised of the same by its counsel, take
all
reasonable action necessary to render such statute inapplicable to the
foregoing.
7.10 Stockholder
Solicitation and Approvals.
(a) As
soon
as practicable after the execution of this Agreement, and
subject to the terms of this Agreement, including, without limitation, Section
6.2 hereof, the
Company shall:
(i)
duly
call, give notice of, convene and hold a special meeting of its stockholders
(the “Special
Meeting”),
as
promptly as practicable for the purpose of considering and taking action upon
the approval of the Merger and the adoption of this Agreement;
(ii)
prepare and file with the SEC a preliminary proxy or information statement
relating to the Merger and this Agreement and use its commercially
reasonable
efforts
to obtain and furnish the information required by the rules and regulations
of
the SEC to be included in the proxy statement and, after consultation with
the
Purchaser and the Parent, respond promptly to any comments made by the SEC
with
respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement (together with
any supplements thereto, the “Proxy
Statement”)
to be
mailed to its stockholders;
(iii) include
in the Proxy Statement the recommendation of the Company’s board of directors
that stockholders of the Company vote in favor of the approval of the Merger
and
the adoption of this Agreement; and
(iv) use
all
commercially reasonable efforts to solicit from holders of Common Stock proxies
in favor of the Merger and take all actions reasonably necessary or, in the
reasonable opinion of the Purchaser, advisable to secure the approval of
stockholders required by the DGCL, the Company’s Certificate of Incorporation,
and any other applicable law to effect the Merger.
(b) The
Parent agrees promptly to provide the Company with all information regarding
the
Parent and the Purchaser required to be included in the Proxy Statement, and
to
otherwise cooperate with the Company in the preparation of the Proxy Statement
and other necessary proxy solicitation materials of the Company with respect
to
the Merger.
7.11 Employee
Benefits.
(a) For
a
period of six months following the Effective Date of this Agreement,
the
Parent
shall provide
a
notice of termination to any employee of the Company
or a
Company Subsidiary
which
notice shall not be less than the greater of (i) that which is required by
applicable Law, (ii) two months
for U.S. employees who have less than 5 years service, (iii) three months for
U.S. employees who have more than 5 but less than 10 years service, and four
months for U.S. employees with more than 10 years service.
(b) The
Parent
agrees to cause the Company or the Surviving Corporation, as the case may be,
to
honor
all contracts and agreements of the Company or any of the Company Subsidiaries,
in accordance with their terms, which are applicable with respect to any
employee, officer, director or executive or former employee, officer, director,
or
33
executive
of the Company or of any Company Subsidiary,
including without limitation as contemplated by Section 7.11(f)
hereof.
Notwithstanding the provisions of this Section 7.11 or any other provision
of
this Agreement, the ability or right of the Company, the Surviving Company
or
any Company Subsidiary to terminate the employment of any of their respective
employees after the Closing Date shall not be limited or restricted in any
way
(subject to any rights of any such employees pursuant to any contract,
agreement, arrangement, policy, plan or commitment). Notwithstanding anything
in
this Agreement to the contrary, the Parent shall cause the Surviving Corporation
to pay all amounts earned by employees of the Company or any Company Subsidiary
under any contract, agreement, arrangement, policy, plan or commitment to all
employees who are employed by the Company on the Closing Date, and to the extent
that such payments are triggered by the Closing and set forth in Section 4.20(b)
of the Company Disclosure Schedule, these payments will be made simultaneously
with the Closing.
(c) Except
as
provided in this Section 7.11, nothing in this Agreement shall limit or restrict
the rights of the Parent or the Company to modify, amend, terminate or establish
employee benefit plans or arrangements, in whole or in part, at any time after
the Effective Time.
(d) Promptly
following the execution of this Agreement, the Parent and the Company shall
cooperate to communicate to employees with respect to the post-Merger employee
compensation and benefits. Without the prior approval of the Parent, the Company
shall not, during the period prior to the Effective Date, make any written
or
other communication to its employees relating to post-Merger employee
compensation or benefits in a manner designed to increase the compensation
and
benefits communicated in accordance with the prior sentence.
(e) From
and
after the Effective Time, the Parent shall, or shall cause the Surviving
Corporation and its Subsidiaries to, provide each employee of the Parent or
the
Surviving Corporation or their respective Subsidiaries who shall have been
an
employee of the Company or any Company Subsidiary immediately prior to the
Effective Time (“Continuing
Employees”),
for
so long as such Continuing Employees remain so employed, health and welfare
benefits that are no less favorable, in the aggregate, than those provided
to
similarly situated employees of the Parent and its Subsidiaries under the Parent
Employee Plans (as defined below). Following the Effective Time, the Parent
will
give each Continuing Employee full credit for prior service with the Company
or
any Company Subsidiary as if such service was service with the Parent for
purposes of (w) eligibility and vesting under any Parent Employee Plans, (x)
determination of benefit levels under any Parent Employee Plan or policy
relating solely to vacation or severance and (y) determination of “retiree”
status under any Parent Employee Plan, in each case for which the Continuing
Employee is otherwise eligible and in which the Continuing Employee is offered
participation, but except where such credit would result in a duplication of
benefits. In addition, the Parent shall waive, or cause to be waived, any
limitations on benefits relating to pre-existing conditions to the same extent
such limitations are waived under any comparable plan of the Parent and
recognize for purposes of annual deductible and out-of-pocket limits under
its
medical and dental plans, deductible and out-of-pocket expenses paid by
Continuing Employees in the calendar year in which the Effective Time occurs.
For purposes of this Agreement, the term “Parent
Employee Plan”
means
any “employee pension benefit plan” (as defined in Section 3(2) of ERISA) that
is a defined contribution plan, any “employee welfare benefit plan” (as defined
in Section 3(1) of ERISA), and any other
written plan generally made available to similarly situated employees of Parent
in the ordinary course of business by the Parent or any of its Subsidiaries
or
any entity which is a member of (A) a controlled group of corporations (as
defined in Section 414(b) of the Code), (B) a group of trades or businesses
under common control (as defined in Section 414(c) of the Code) or (C) an
affiliated service group (as defined in Section 414(m) of the Code or the
regulations under Section 414(o) of the Code), any of which includes or included
the Parent or a Subsidiary of the Parent; provided, however, that for
the
34
avoidance
of doubt, the term “Parent
Employee Plan”
shall
not include any defined benefit pension plan or any plan providing for
post-retirement medical or other welfare benefits.
(f) Simultaneously
with the Closing, and subject thereto, the Company (or the Surviving
Corporation, as applicable) shall make lump sum cash payments to the employees
of the Company identified by the Company in an aggregate amount not to exceed
$800,000.
7.12 Stockholder
Litigation.
The
parties will discuss with each other any stockholder litigation relating to
the
Transactions.
7.13. FIRPTA
Certificate. On
or
prior to the Effective Date, the Company shall deliver to the Parent a properly
executed statement certifying that the Company has not been a United States
real
property holding corporation within the meaning of Section 897(c)(2) of the
Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the
Code.
ARTICLE
8
Conditions
8.1 Conditions
to Each Party’s Obligations to Effect the Merger.
The
respective obligations of each party to effect the Merger and the other
Transactions shall be subject to the satisfaction on or prior to the Closing
Date of each of the following conditions, any and all of which may be waived
in
whole or in part by the Parent, the Purchaser and the Company, as the case
may
be, to the extent permitted by applicable Law:
(a) Stockholder
Approval.
The
Merger and this Agreement shall have been approved and adopted by the requisite
vote of the stockholders of the Company, to the extent required by the
Certificate of Incorporation, the Bylaws of the Company, and the DGCL;
provided,
however,
that no
party to this Agreement may invoke this condition if such party has not complied
with its obligations under Section 7.10 of this Agreement in any material
respect;
(b) Regulatory
Approval. Other
than the filing of the Certificate of Merger, all material Consents of, filings
and registrations with, and notifications to, all Governmental Entities required
for consummation of the Merger shall have been obtained or made and shall be
in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Governmental Entities which is necessary
to consummate the Transactions
shall be
conditioned or restricted in a manner (including requirements relating to the
raising of additional capital or the disposition of assets or properties) which
in the reasonable judgment of the board of directors of either party would
so
materially adversely impact the economic or business benefits of the
Transactions that
the
same
would
have a Material Adverse Effect on the party subject to such Consent;
and
(c) Legal
Proceedings.
No
Governmental Entity of competent jurisdiction shall have issued any injunction,
order, decree, ruling, or other legal restraint or prohibition, whether
temporary, preliminary, or permanent (an “Injunction”)
which
is in effect and has the effect of preventing the consummation of the Merger
or
any of the Transactions,
nor
shall any action or proceeding have been commenced
by any Governmental Entity and be pending for the purposes of obtaining an
Injunction.
No Law,
judgment, order, Injunction, writ, or decree shall have been enacted, entered,
promulgated, or enforced by any Governmental Entity which prohibits, restricts
or makes illegal consummation of the Merger.
35
8.2 Conditions
to Obligations of the Parent and the Purchaser to Effect the Merger.
The
obligations of the Parent and the Purchaser to perform this Agreement and to
consummate the Merger and the other Transactions are subject to the satisfaction
of the following additional conditions, unless waived by the
Parent:
(a) Representations
and Warranties.
The
representations and warranties of the Company set forth in this
Agreement,
disregarding all qualifications and exceptions contained therein
relating
to
materiality or
Material Adverse Effect or any similar standard or qualification, shall
be
true and correct in all respects
as of
the date
of the
date of this Agreement and as of the Closing Date,
as
if made at and as of such date or time, except to the extent expressly made
as
of an earlier date, in which case as of such earlier date or time, and except
where the failure of such
representations and warranties to
be
true and correct would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
(b) Performance
of Covenants and Agreements.
The
agreements and covenants of the Company to be performed or complied with
pursuant to this Agreement prior to the Effective Time shall have been duly
performed and complied with in all material respects.
(c) Consents
and Approvals.
The
Company shall have obtained any and all Consents (other than those referred
to
in Section 8.1(b) of this Agreement) required for consummation of the
Merger and the other Transactions, or for preventing any default under any
agreement, contract, other instrument or Permit to which the Company is a party,
which, if not obtained or made, is reasonably likely, individually or in the
aggregate, to
have a
Material Adverse Effect on the Company or the
Surviving Corporation after the Effective Time,
as the
case may be.
(d) Certificates.
The
Company shall have delivered to the Parent (i) a certificate, dated as of
the date of Closing, signed on its behalf by its chief executive officer and
its
chief financial officer, to the effect that the conditions of its obligations
set forth in Sections 8.2(a), 8.2(b), 8.2(c), and 8.2(e) of this Agreement
have been satisfied, and (ii) copies of all documents that the Parent may
reasonably request relating to the existence of the Company and certified copies
of resolutions or written consents duly adopted by the board of directors of
the
Company and any Company Subsidiary evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and performance of this
Agreement, and the consummation of the Transactions, all in such reasonable
detail as the Parent and its counsel may request.
(e) No
Material Adverse Effect.
Since
the date of this Agreement, there shall not have occurred any events or changes
which, individually or in the aggregate, have had or would have a Material
Adverse Effect on the Company;
(f) Options,
RSUs, Option Plans and ESSP.
All
outstanding Options and RSUs shall be cancelled or redeemed, all of the Share
Option Plans and the ESSP shall have been terminated, and all rights under
any
provision of any other plan, program or arrangement providing for the issuance
or grant of any other interest in respect to the capital stock of the Company
or
any Company Subsidiary shall have been cancelled.
(g) Opinion
of Counsel.
The
Parent shall have received a written opinion of counsel to the Company, dated
as
of the Closing, containing such opinions as may be reasonably requested by
the
Parent.
(h) Voting
Agreements.
Each
stockholder identified in Annex I shall have delivered a Voting Agreement on
the
date hereof and shall have complied with and not be in breach of,
their
36
respective
obligations under the terms of the Voting Agreement, and all of the Common
Stock
subject to a Voting Agreement shall have been voted in favor of the approval
and
adoption of this Agreement and the Merger (which vote shall not have been
revoked).
8.3 Conditions
to Obligation of the Company to Effect the Merger. The
obligations of the Company to perform this Agreement and consummate the Merger
and the other Transactions are subject to the satisfaction of the following
conditions, unless waived by the Company:
(a) Representations
and Warranties. The
representations and warranties of the Parent and the Purchaser set forth in
this
Agreement
disregarding all qualifications and exceptions contained therein relating to
materiality or Material Adverse Effect or any similar standard or
qualification,
shall be
true and correct in all respects
as
of the
date
of the
date of this Agreement and as of the Closing Date,
if
made
at and as of such date or time, except to the extent expressly made as of an
earlier date, in which case as of such earlier date or time, and except where
the failure of such
representations and warranties to
be
true and correct would not,
individually or in the aggregate, have
a
Material Adverse Effect on the Parent or the Purchaser.
(b) Performance
of Covenants and Agreements.
The
agreements and covenants of the Parent and the Purchaser to be performed or
complied with pursuant to this Agreement prior to the Effective Time shall
have
been duly performed and complied with in all respects.
(c) Consents
and Approvals.
The
Purchaser shall have obtained any and all Consents (other than those referred
to
in Section 8.1(b) of this Agreement) required for consummation of the
Merger and the other Transactions.
(d) Payment
of Consideration.
The
Parent shall have delivered to the Paying Agent the aggregate Merger
Consideration with
respect to the Common Stock and the Restricted Shares and the aggregate amount
payable with respect
to
Options and RSUs pursuant to the terms of Section 3.6 of this
Agreement.
ARTICLE
9
Termination
9.1 Termination.
Notwithstanding
any other provision of this Agreement, this Agreement may be terminated and
the
Merger abandoned at any time prior to the Effective Time by action taken or
authorized by the board of directors of the terminating party or parties,
whether before or after approval of the matters presented in connection with
the
Merger by the stockholders of the Company:
(a) by
mutual
written consent of the Parent and the Company; or
(b) by
either
the Parent or the Company: (i) in the event of an inaccuracy of any
representation or warranty of the other party contained in this Agreement which
cannot be or has not been cured within thirty (30) days after the giving of
written notice of such inaccuracy and which inaccuracy would provide the
terminating party with the ability to refuse to consummate the Merger under
applicable standard
set forth in Section 8.2(a) of this Agreement in the case of the Company
and 8.3(a) in the case of the Parent (provided that the terminating party is
not
then in material breach of any representation or warranty contained in this
Agreement under the applicable standard set forth in Section 8.2(a) of this
Agreement in the case of the Company and Section 8.3(a) in the case of the
Parent, or in material breach of any covenant or other agreement contained
in
this Agreement), or (ii) in the event of a material breach by the other party
of
the covenants, agreements, or obligations contained in this Agreement which
breach
37
cannot
be
or has not been cured within thirty (30) days after giving of written notice
to
the breaching party of such breach; or
(c) by
either
the Parent or the Company, in the event (i) any material Consent of any
Governmental Entity required for consummation of the Merger and the other
Transactions shall have been denied by a final nonappealable action of such
Governmental Entity or if such action taken by such Governmental Entity is
not
appealed within the time limit for appeal, or (ii) the stockholders of the
Company fail to vote in
favor
of adoption
of this
Agreement
as
required by applicable Law at the Special Meeting where this
Agreement is
presented to the stockholders for adoption
and
voted
upon;
or
(d) by
either
the Parent or the Company, in the event that the Merger shall not have been
consummated by September 30, 2007 (the “Outside
Termination Date”);
provided, however,
that in
the event there is issued a “second request” under the HSR Act or a similar
request or investigation is made in connection with the review by any
Governmental Entity of the Transactions under any other comparable Law of
foreign jurisdictions, such date shall be extended to November 30, 2007;
provided,
further, that
the
right to terminate this Agreement pursuant to this Section 9.1(d) shall not
be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Merger
to be
consummated by the Outside Termination Date (as may be so
extended);
(e) by
the
Parent or the Company (provided that the terminating party is not then in breach
of any representation or warranty contained in this Agreement under the
applicable standard set forth in Section 8.2(a) of this Agreement in the case
of
the Company and Section 8.3(a) in the case of the Parent or in material
breach of any covenant or other agreement contained in this Agreement) in the
event that any of the conditions precedent to the obligations of such party
to
consummate the Merger cannot be satisfied or fulfilled by the Outside
Termination Date; or
(f) By
the
Parent,
if (i)
the Company’s board of directors shall have withdrawn, modified, or changed its
recommendation to its stockholders with respect to approval of this Agreement,
or the Merger in a manner
adverse to the Transactions or to the Parent or to the Purchaser, (ii) the
Company enters into a definitive agreement or the Company’s board of directors
shall have approved or recommended any proposal other than by the Parent or
the
Purchaser in respect of an Acquisition Proposal, (iii) the Company’s board of
directors or any committee thereof resolves to take any of the actions described
in Sections 9.1(f)(i) or (ii) of this Agreement, (iv) the Company shall
have
failed to affirm its recommendation to stockholders in respect of the
Transactions within eight Business
Days
of a
request to do so by the Parent, or (v)
the
Company shall have
materially
violated
or breached any of its obligations under Section 6.2 of this Agreement;
or
(g) by
the
Company at any time prior to the receipt of the approval of the Merger by the
Company’s stockholders, pursuant to and in compliance with Section 6.2(c)
of this Agreement; provided,
however,
that
the Company makes the payment of the Termination Fee in accordance with Section
9.2(b) of this Agreement.
9.2 Effect
of Termination.
(a) In
the
event of the termination and abandonment of this Agreement as provided in
Section 9.1, this Agreement shall become void and have no effect and no party
shall have any liabilities or obligation to the other parties hereto with
respect to this Agreement, except that (i) the provisions of Section 7.4,
Article X, and this Section 9.2 shall
survive any termination and abandonment, (ii)
in the
case of Section 9.2, the provisions thereof shall be the exclusive remedies
of
the parties hereto, other than willful breach of this Agreement,
and
other than as set forth in this Section 9.2
and
(iii) nothing herein
38
shall
relieve any party from liability for any willful breach of any representation,
warranty, covenant, or agreement of such party contained in this Agreement.
(b) The
Company shall pay to the Parent a termination fee equal to Six Million Dollars
($6,000,000) (the “Termination
Fee”):
(i) if
the
Parent shall have terminated this Agreement pursuant to any of the
Sections 9.1(f)(i), 9.1(f)(ii), 9.1(f)(iii), or 9.1(f)(iv);
(ii) if
the
Parent shall have terminated this Agreement pursuant to Section
9.1(f)(v);
(iii) if
the
Parent shall have terminated this Agreement pursuant to Sections 9.1(b),
9.1(c)(ii), 9.1(d), or 9.1(e) and (A) prior to or at the time of such
termination, a third party has publicly announced an intention to make (whether
or not conditional) an Acquisition Proposal to the Company or any of its
Subsidiaries or to any of its Representatives, the consummation of which would
constitute an Acquisition Event (as defined below), and (B) within twelve (12)
months following the termination of this Agreement, an Acquisition Event with
such third party or its Affiliates is consummated or the Company enters into
a
definitive agreement with such third party or its Affiliates providing for
an
Acquisition Event;
(iv) if
the
Company shall have terminated this Agreement pursuant to Sections 9.1(g);
or
(v) if
the
Company shall have terminated this Agreement pursuant to
Sections 9.1(c)(ii) or 9.1(d) and, prior to or at the time of such
termination, (A) a third party has publicly announced an intention to make
(whether or not conditional) an Acquisition Proposal to the Company or any
of
its Subsidiaries or to any of its Representatives, the consummation of which
would constitute an Acquisition Event (as defined below), and (B) within twelve
(12) months following the termination of this Agreement, an Acquisition Event
with such third party or its Affiliates is consummated or the Company enters
into a definitive agreement with such third party or its Affiliates providing
for an Acquisition Event.
(c) The
Termination Fee shall be payable by wire transfer to such account as the Parent
may designate in writing to the Company:
(i) in
the
case of Sections 9.2(b)(i), (ii), or (iv), within two Business Days of the
termination of this Agreement; and
(ii) in
the
case of Sections 9.2(b)(iii) or (v), within two Business Days after the earlier
of the consummation of such Acquisition Event or the entry by the Company into
such definitive agreement.
(d) For
purposes of this Agreement, the term “Acquisition
Event”
shall
mean any of the following transactions (other than the
Transactions):
(i) a
merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company pursuant to which the stockholders
of the Company immediately preceding such transaction hold less than 50% of
the
aggregate equity interests in the surviving or resulting entity of such
transaction,
39
(ii) a
sale or
other disposition by the Company of assets representing in excess of 50% of
the
aggregate fair market value of the Company’s business immediately prior to such
sale, or
(iii) the
acquisition by any person or Group (including by way of a tender offer or an
exchange offer or issuance by the Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 50% of the voting power of the then outstanding shares
of capital stock of the Company.
(e) In
the
event of a termination of this Agreement by the Company pursuant to Section
9.1(b), 9.1(d), or 9.1(e) due to a breach or a default of the Parent, then
the
Parent shall pay to the Company an amount equal to Six Million Dollars
($6,000,000) by wire transfer to such account as the Company may designate
in
writing to the Parent, within two Business Days of such termination of this
Agreement,
provided,
that
nothing contained in this Section 9.2(e) or otherwise in this Agreement shall
relieve the Parent or the Purchaser from liability for breach of any
representation, warranty, covenant, or agreement of such party contained in
this
Agreement.
ARTICLE
10
General
Provisions
10.1 Definitions.
(a) Except
as
otherwise provided herein, the capitalized terms set forth below shall have
the
following meanings:
“Affiliate”
of
any
Person means (i) a Person that directly, or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
the
first-mentioned Person, and (ii) an “associate” as that term is defined in Rule
12b-2 promulgated under the Exchange Act as in effect on the date of this
Agreement.
“Antitrust
Laws”
means
the HSR Act, the ▇▇▇▇▇▇▇ Act, as amended, the ▇▇▇▇▇▇▇ Act, as amended, the
Federal Trade Commission Act, as amended, and any other U.S. federal, state
or
non-U.S. competition or antitrust Law.
“Audit”
means
any audit, or other examination relating to Taxes by any tax authority or any
judicial or administrative proceedings relating to Taxes.
“Business
Day” means
any
day, other than Saturday, Sunday or a federal holiday, means or days on which
banks in Florida or New York are closed for business.
“COBRA”
means
“The Consolidated Omnibus Budget Reconciliation Act of 1986.”
“Code”
means
the Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.
“Company
Financial Advisor”
means
▇▇▇▇▇▇▇▇▇ Broadview, a division of ▇▇▇▇▇▇▇▇▇ & Company, Inc.
“Company
Subsidiary”
means
each Subsidiary of the Company.
40
“Consent”
means
any consent, order, approval, authorization, clearance, exemption, waiver,
ratification, or similar affirmation by any Person.
“Control”
(including the terms “controlling”, “controlled by” and “under control”,
“controlled with”, or correlative terms) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of securities, by contract,
or otherwise.
“Environmental
Laws”
means
all
Laws relating to pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface, or subsurface
strata) and which are administered, interpreted, or enforced by the United
States Environmental Protection Agency and state, local, and foreign agencies
with jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et
seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
6901 et seq., and other Laws relating to emissions, discharges, releases, or
threatened releases of any Hazardous Material, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of any Hazardous Material.
“ERISA
Affiliate” means
any
Person (whether incorporated or unincorporated) that together with the Company
would be deemed a “single employer” within the meaning of Section 414 of the
Code.
“Financial
Statements”
means
the audited consolidated financial statements and unaudited consolidated interim
financial statements of the Company included in the Company SEC
Documents.
“Hazardous
Materials”
means
(i)
any hazardous substance, hazardous material, hazardous waste, regulated
substance, or toxic substance (as those terms are defined by any applicable
Environmental Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil and (specifically shall include asbestos requiring
abatement, removal, or encapsulation pursuant to the requirements of
governmental authorities and any polychlorinated biphenyls).
“HSR
Act”
means
Section 7A of the ▇▇▇▇▇▇▇ Act, as added by Title II of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder.
“Knowledge”
of
(i)
the Company means, as of the date relating thereto, with respect to any
particular matter, the actual knowledge of any Person listed on Section 10.1(a)
to the Company Disclosure Schedule, and (ii) the Parent or the Purchaser means,
as of the date relating thereto, with respect to any particular matter, the
actual knowledge of any executive officer, the general counsel or the chairman
of the board of directors of the Parent or the Purchaser, as the case may
be.
“Law”
means
any code, law, ordinances, regulation, reporting or licensing requirement,
rule,
or statute applicable to a Person or its assets, properties, assets,
liabilities, or business, including those promulgated, interpreted, or enforced
by any Governmental Entity.
“Lien”
means,
with respect to any property or asset, any mortgage, lien, pledge, charge,
security interest, encumbrance, claim, right of first refusal, preemptive right,
community property right or other adverse claim of any kind in respect of such
property or asset.
41
“Loan
Properties”
means
any property owned, leased, or operated by the Company or any Company Subsidiary
or in which the Company or any Company Subsidiary holds a security or other
interest (including an interest in a fiduciary capacity) and, when required
by
the context, this term also includes the owner or operator of such property,
but
only with respect to such property.
“Material
Adverse Effect”
means,
when used in connection with any Person, a material adverse change or effect
on
(a) such Person’s ability to consummate the Merger and the other Transactions
without material delay or (b) the financial condition, business, properties,
assets, operations or results of operations of such Person and its Subsidiaries
on a consolidated basis, taken as a whole, excluding in each case, (i) any
changes or effects resulting from general economic, market or political
conditions, (ii) any changes or effects in the general conditions in the
Person’s industry, (iii) any changes or effects resulting from business
conditions in the United States generally, (iv) any changes or effects resulting
from actions taken in connection with this Agreement, including without
limitation, any actions or changes resulting from the public announcement or
the
pendency of the Transaction and any expenses incurred in connection therewith,
including without limitation any loss of or adverse change in the relationship
of the Company or any of the Company Subsidiaries with their respective
competitors, employees, customers, distributors, licensors, partners or
suppliers, and including actions of competitors or any delays or cancellations
of orders for products or losses of employees, (v) any acts of God, war, armed
hostilities or terrorism, (vi) any changes in the trading price or trading
volume of the capital stock of the Person, as applicable (it being understood,
however, that this clause shall not preclude any effect giving rise to or
contributing to such changes in the trading price or trading volume of such
capital stock from constituting or giving rise to a Material Adverse Effect
and
any such effect may be taken into account in determining whether a Material
Adverse Effect has occurred), (vii) conditions in the stock markets or other
capital markets or changes or effect therein, (viii) any actions taken or
omitted to be taken by the Person by or at the written request or with the
written consent of the other parties to this Agreement, and (ix) any changes
in
any applicable Law or any accounting regulations or principles. Any failure
by
the Company to meet any projections, forecasts, guidance, estimates, milestones,
budgets or published financial or operating predictions for or during any period
ending (or for which results are released) on or after the date hereof shall
not
in and of itself constitute a Material Adverse Effect with respect to the
Company;
provided,
however,
that
with respect to the
fiscal quarter of the Company ended March 31, 2007, neither the failure of
the
Company to meet such projections, forecasts, guidance, estimates, milestones,
budgets or published financial or operating predictions, nor the circumstances
giving rise to or contributing thereto, shall constitute a Material Adverse
Effect with respect to the Company or be taken into account in determining
whether a Material Adverse Effect with respect to the Company has occurred
or
shall have occurred in the future.
“Merger
Consideration”
means
a
cash
amount equal
to
$10.05 payable
for
each
share of
Common Stock,
including Restricted Shares,
outstanding at the Effective Time.
“Option
Plans”
means
the 2006 Stock Incentive Plan, the 1996 Stock Incentive Plan, and the
Non-Employee Directors’ 1998 Stock Option Plan.
“ordinary
course of business”
means
with respect to any Person, the ordinary course of business consistent in all
material respects with such Person’s past practice.
“Participation
Facilities”
means
any facility or property in which the party in question or any of its
Subsidiaries participates in the management and, where required by the context,
said term means the owner or operator of such facility or property, but only
with respect to such facility or property.
“Permitted
Liens”
means
(i) Liens disclosed on the balance sheet for the most recent Financial
Statements of the Company or described in the footnotes thereto or disclosed
on
the Company
42
Disclosure
Schedule, (ii) Liens or imperfections of title which are not, individually
or in the aggregate, material in character, amount or extent and which do not
materially detract from the value or interfere with the contemplated use of
the
assets subject thereto or affected thereby, (iii) mechanics’,
materialmen’s, carrier’s, warehousemen’s, landlord’s and similar Liens securing
obligations not yet delinquent or which are being contested in good faith by
appropriate proceedings (and for which adequate accruals or reserves have been
established on the Balance Sheet), or (iv) Liens for current Taxes not yet
due and payable or which are being contested in good faith by any appropriate
proceedings (and for which adequate accruals or reserves have been established
on the balance sheet for the most recent Financial Statements of the Company).
“Person”
means
a
natural person, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Entity or other entity or organization, whether incorporated or
unincorporated.
“SEC”
means
the Securities and Exchange Commission.
“Subsidiary”
means
with respect to any party, any corporation, partnership, limited liability
company or other organization or entity, whether incorporated or unincorporated,
of which (i) at least a majority of the securities or other interests
having by their terms ordinary voting power to elect a majority of the board
of
directors or other Persons performing similar functions with respect to such
organization is directly owned or controlled by such party or by any one or
more
of its subsidiaries, or (ii) such party or any other subsidiary of such
party is a general partner or manager of a limited liability company (excluding
any such partnership or limited liability company where such party or any
subsidiary of such party does not have a majority of the voting interest in
such
partnership or limited liability company, as the case may be).
“Taxes”
means
all
taxes, however denominated, including any interest, penalties or other additions
to tax that may become payable in respect thereof, imposed by any federal,
state,
local or foreign government or any agency or political subdivision of any such
government, which taxes shall include, without limiting the generality of the
foregoing, all income or profits taxes, payroll and employee withholding taxes,
unemployment insurance, social security taxes, sales and use taxes, ad valorem
taxes, excise taxes, franchise taxes, gross receipts taxes, business license
taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers’ compensation, other obligations of
the same or of a similar nature to any of the foregoing which the Company or
any
of its
Subsidiaries is required to pay, withhold or collect.
“Tax
Returns”
means
all
reports, estimates, declarations of estimated tax, information statements and
returns relating to, or required to be filed in connection with, any Taxes,
including information returns or reports with respect to withholding and other
payments to third parties.
(b) Each
of
the following terms shall have the meaning ascribed thereto in the Section
set
forth opposite such term:
Term Section
Acquisition
Event 9.2(d)
Acquisition
Proposal 6.2(a)
Acquisition
Proposal Interest
6.2(a)
Adjustment 3.3
Agreement Preamble
Balance
Sheet Date 4.9
43
Bankruptcy
and Equity
Exception
4.2(a)
Business
Day 1.1(a)
Bylaws 4.1
Certificate
of Incorporation
4.1
Certificate
of Merger 1.3
Certificates 3.6(b)
Closing 1.2
Closing
Date
1.2
Common
Stock Recitals
Company
Preamble
Company
SEC Documents
4.7(a)
Company
Disclosure Schedule Article 4
Company
Intellectual Property 4.14(a)
Company
Material Contract
4.20
Company
Software 4.14(d)
Company
Stockholder Approval 4.6
Confidentiality
Agreement 7.4
Continuing
Employees
7.11(e)
Copyrights
4.14(a)(iii)
DGCL
Recitals
D&O
Insurance
7.7(c)(i)
Dissenting
Common Stock
3.5(a)
Effective
Time 1.3
ERISA
4.12(a)
ESPP 3.4(c)
Exchange
Act
4.7(b)
GAAP
4.8(a)
Governmental
Entity
4.2(b)
Group
6.2(a)
Indemnified
Party
7.7(a)
Injunction
8.1(c)
Internet
Domain Names
4.14(a)(iv)
Know-how
4.14
(a)(v)
Licenses
4.14
(e)
material
weakness
4.8(c)
Merger
1.1
Merger
Consideration 3.1(c)
Off-Balance
Sheet Financing Transactions 4.10
Option(s)
3.4
Outside
Termination Date 9.1(d)
Parent
Preamble
Parent
Employee Plan 7.11(e)
Patents
4.14(a)(ii)
Paying
Agent 3.6(a)
Permits
4.18(a)
Plans 4.12(a)
Policy
Extension
7.7(c)(ii)
Proxy
Statement 7.1(a)(ii)
Purchaser
Preamble
Purchaser
Common Stock 3.1
Regulatory
Filings 4.2(b)
44
Representatives
6.2(a)
Restricted
Share
3.4(b)(ii)
RSU
3.4(b)(ii)
Securities
Act
4.7(b)
Special
Meeting 7.10(a)(i)
Superior
Proposal 6.2(b)
Superior
Proposal Notice 6.2(c)
Surviving
Corporation 1.1
Termination
Fee
9.2(b)
Trademarks 4.14(a)(i)
Transactions
1.2
Voting
Agreement Recitals
Voting
Debt 4.3(a)
(c) Any
singular term in this Agreement shall be deemed to include the plural, and
any
plural term the singular. Whenever the words “include,” “includes,” or
“including” are used in this Agreement, they shall be deemed followed by the
words “without limitation.”
10.2 Fees
and Expenses.
Except
as otherwise provided in Section 9.2(b), whether or not the Merger is
consummated, each party hereto shall bear and pay its own fees, costs and
expenses incident to preparing, entering into and carrying out this Agreement
and to consummating the Transactions.
10.3 Entire
Agreement; No Other Representations; No Third Party
Beneficiaries. Except
as
otherwise expressly provided herein, this Agreement, which includes the Company
Disclosure Schedule and the
exhibits
hereto, and the other agreements and instruments executed and delivered pursuant
to the terms of this Agreement, together with the Confidentiality Agreement,
contains the entire agreement among the parties hereto with respect to the
Transactions, and such Agreement supersedes all prior arrangements or
understandings with respect to the subject matter hereof, both written and
oral.
Nothing in this Agreement, expressed or implied, is intended to and
does
not confer
upon any Person
or the
heirs, successors, or assigns of such Person, other
than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement
and
other than the Indemnified Parties referred to in Section 7.7, who shall have
the right to enforce the provisions directly but who shall have no right to
approve any amendments, modifications or supplements to this Agreement
(including those pertaining to or affecting Section 7.7 hereof) which are
approved by the parties hereto.
Except
as
expressly stated in this Agreement, none of the parties hereto makes any
agreement, covenant or representation or warranty, express or implied, to any
other party hereto.
10.4 Amendment
and Modification.
To the
extent permitted by Law, this Agreement may be amended, modified, and
supplemented by a subsequent writing signed by each of the Company and the
Parent upon the approval of their respective board of directors; provided,
however, that the provisions hereof relating to the manner or basis in which
Common Stock will be exchanged for the Merger Consideration shall not be
amended, modified, or supplemented after the Special Meeting without any
requisite approval of the holders of the issued and outstanding Common
Stock.
10.5 Waivers.
Prior to
or at the Effective Time, each of the Company on the one hand and the Parent
and
the Purchaser on the other hand, shall have the right to waive any default
in
the performance of any term of this Agreement by the other, to waive or extend
the time for the compliance or fulfillment by the other of any and all of the
other’s obligations under this Agreement, and to waive any or all of the
conditions precedent to its obligations under this Agreement. The failure of
any
party at any time or times to require performance of any provision hereof shall
in no manner affect the right of such party at a
45
later
time to enforce the same or any other provision of this Agreement. No waiver
of
any condition or the breach of any provision contained in this Agreement in
one
or more instances shall be deemed to be or construed as a further or continuing
waiver of such condition or breach or a waiver of any other condition or the
breach of any other term of this Agreement.
10.6 No
Assignment.
None of
the parties hereto may assign any of its rights or delegate any of its
obligations under this Agreement to any other Person, and any such purported
assignment or delegation that is made without the prior written consent of
the
other parties to this Agreement shall be void and of no effect.
10.7 Notices.
All
notices or other communications given or made pursuant to this Agreement shall
be in writing and shall be (a) delivered by registered or certified mail,
return receipt requested, postage prepaid, (b) by expedited mail or package
delivery service guaranteeing next Business Day delivery, or (c) delivered
personally, by hand, to the Persons at the addresses set forth below (or at
such
other address as may be provided hereunder):
Company:
Mobius
Management Systems, Inc.
▇▇▇
▇▇▇
▇▇▇▇ ▇▇▇▇,
▇▇▇,
▇▇▇
▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive
Officer
and President
Facsimile
No.: ▇▇▇-▇▇▇-▇▇▇▇
With
a
copy to:
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
Parent:
▇▇▇▇▇
Systems Group, Inc.
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
General Counsel
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
With
a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇▇, P.A.
Corporate
Center Three at International Plaza
▇▇▇▇
▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇,
▇▇
▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone:
▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
46
Any
notice or other communications to be given or that may be given pursuant to
this
Agreement shall be deemed to have been given: (x) three calendar days after
the deposit of such notice or communication in the United States Mail,
registered or certified, return receipt requested, with proper postage affixed
thereto; (y) on the first Business Day after depositing such notice of
communication with Federal Express, Express Mail, or other expedited mail or
package delivery service guaranteeing delivery no later than the next Business
Day if next Business Day delivery service has been requested and paid for;
or
(z) upon delivery if hand delivered or telecopied to the appropriate
address and Person as provided hereinabove or to the Person to whose attention
the notice is to be given to the other parties in the manner hereinabove
provided.
10.8 Governing
Law; Jurisdiction.
(a) This
Agreement shall in all respects be governed by and construed in accordance
with
the Laws of the State of Delaware, with out regard to choice of law rules or
principles that would result in the application of the Laws of any other
jurisdiction.
(b) Any
suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the Transactions may
be
brought against any of the parties in any federal court located in the State
of
Delaware or any Delaware state court, and each of the parties hereto hereby
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and waives
any objection to venue laid therein. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within
or
without the State of Delaware. Without limiting the generality of the foregoing,
each party hereto agrees that service of process upon such party at the address
referred to in Section 10.7, together with notice of such service to such party,
shall be deemed effective service of process upon such party.
10.9 Specific
Performance.
Each
party hereto agrees that irreparable damage would occur in the event that any
of
the provisions of this Agreement was not performed in accordance with its
specific terms or was otherwise breached, and it is accordingly agreed that
the
parties shall be entitled to an Injunction or Injunctions to prevent breaches
of
this Agreement and to enforce specifically the terms and provisions hereof
in
any court of the United States or any state having jurisdiction, this being
in
addition to any other remedy to which they are entitled at law or in
equity.
10.10 Waiver
of Jury Trial. To
the
extent permitted by applicable law, the parties hereby irrevocably waive any
and
all rights to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the Transactions.
10.11 Counterparts.
This
Agreement may be executed in one or more separate counterparts, each of which,
when so executed and delivered, shall be deemed to constitute an original,
but
all of which together shall constitute one and the same instrument.
10.12 Captions.
The
captions contained in this Agreement are for reference purposes only and are
not
part of this Agreement.
10.13 Company
Disclosure Schedule.
The
Company Disclosure Schedule shall each be arranged in sections corresponding
to
the numbered sections contained in this Agreement, and the disclosure in any
section shall qualify (a) the corresponding section of this Agreement and
(b) each other section of this Agreement. The inclusion of any information
in the Company Disclosure Schedule shall not be deemed to be an admission or
acknowledgment, in and of itself, that such information is required by the
terms
hereof to be disclosed, is material, has had or would have a Material Adverse
Effect on the Company or is outside the ordinary course of business.
[Remainder
of the Page Intentionally Left Blank]
47
IN
WITNESS WHEREOF,
each of
the parties has caused this Agreement to be executed on its behalf by its
respective officer(s) thereunto duly authorized, all as of the date first
written above.
MOBIUS
MANAGEMENT SYSTEMS, INC.
By:_______________________________________
▇▇▇▇▇▇▇▇
▇▇▇▇▇,
President
and Chief Executive Officer
▇▇▇▇▇
SYSTEMS GROUP, INC.,
By:______________________________________
▇▇▇▇▇▇
▇.
▇▇▇▇▇
President
and Chief Executive Officer
ASG
M&A, INC.,
By:____________________________________
▇▇▇▇▇▇
▇.
▇▇▇▇▇
President
and Chief Executive Officer
Signature
Page to Agreement and Plan of Merger
48
Annex
I
Stockholders
Furnishing Voting Agreements
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇
49