EXHIBIT (d)(1)
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
by and among
THE SAGE GROUP PLC
ISAIAH ACQUISITION CORP.
and
INTERACT COMMERCE CORPORATION
dated
March 27, 2001
Index of Defined Terms
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Defined Term Section No.
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Acquisition Agreement.................................................... 5.3(d)
Acquisition Proposal..................................................... 5.1
Admission................................................................ 6.12(b)
Agreement........................................................ Introduction
Appointment Date......................................................... 5.2
Assignee................................................................. 9.10
Assumed Options.......................................................... 2.4(a)
Audit.................................................................... 3.13(b)
Average Premium.......................................................... 6.8(b)
Balance Sheet Date....................................................... 3.9
Benefit Plans............................................................ 3.12(a)
Business Partner Option Plan............................................. 2.4(a)
Business Partner Stock Options........................................... 2.4(a)
Certificate of Merger.................................................... 1.5
Certificates............................................................. 2.2(b)
Closing.................................................................. 1.6
Closing Date............................................................. 1.6
Code..................................................................... 3.12(b)
Common Stock............................................................. 3.3(a)
Commonly Controlled Entity............................................... 3.12(b)
Company.......................................................... Introduction
Company Agreements....................................................... 3.7
Company Board of Directors.......................................... Recitals
Company Disclosure Schedule...................................... Article III
Company Computer Software................................................ 3.17(e)
Company Material Adverse Change.......................................... 3.1(a)
Company Material Adverse Effect.......................................... 3.1(a)
Company SEC Documents.................................................... 3.8
Company Subsidiary....................................................... 3.2(a)
Confidentiality Agreement................................................ 5.3(b)
Contest.................................................................. 8.3(b)
D&O Insurance............................................................ 6.8(b)
DGCL................................................................ Recitals
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Defined Term Section No.
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Director Option Plan..................................................... 2.4
Director Options......................................................... 2.4
Dissenting Shares........................................................ 2.3(a)
Effective Time........................................................... 1.5
Employee Option.......................................................... 2.4
Employee Option Plans.................................................... 2.4
Encumbrances............................................................. 3.3(a)
Environmental Claims..................................................... 3.21
Environmental Laws....................................................... 3.21
ERISA.................................................................... 3.12(b)
ERISA Affiliates......................................................... 6.14
ESPP..................................................................... 2.4(b)
Exchange Act............................................................. 1.1(a)
Financial Statements..................................................... 3.8
Foothill Agreement....................................................... 5.2(h)
Foreign Plans............................................................ 3.12(k)
GAAP..................................................................... 3.8
Governmental Entity...................................................... 3.7
HSR Act.................................................................. 3.7
Indemnified Party........................................................ 6.8(a)
Independent Directors.................................................... 1.3(b)
Initial Expiration Date.................................................. 1.1(a)
Intellectual Property.................................................... 3.17(a)
IP Licenses.............................................................. 3.17(b)
Licensed Products........................................................ 3.28
Materials of Environmental Concern....................................... 3.21
Merger................................................................... 1.4(a)
Merger Agreement................................................ Introduction
Merger Consideration..................................................... 2.1(c)
Minimum Condition........................................................ 1.1(a)
Net Exercise............................................................. 3.3(b)
New Shares............................................................... 6.12(b)
Offer................................................................ Recitals
Offer Documents.......................................................... 1.1(b)
Offer Price.......................................................... Recitals
Offer to Purchase........................................................ 1.1(a)
Option Plans............................................................. 2.4(a)
Options.................................................................. 2.4(a)
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Defined Term Section No.
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Parachute Gross-Up Payment............................................... 3.12(g)
Parent............................................................... Recitals
Paying Agent............................................................. 2.2(a)
Pension Plans............................................................ 3.12(b)
Permitted Encumbrances................................................... 3.9(d)
Person................................................................... 3.3(a)
Xxxxx Xxxxxxx............................................................ 3.24
Possible Withholding Taxes............................................... 8.3(a)
Preferred Stock.......................................................... 3.2(a)
Proxy Statement.......................................................... 1.9(a)(ii)
Purchaser........................................................... Recitals
Purchaser Common Stock................................................... 2.1
Real Property............................................................ 3.15(a)
Regulation M-A........................................................... 1.1(b)
Representatives.......................................................... 5.3(a)
Schedule 14D-9........................................................... 1.2(a)
Schedule TO.............................................................. 1.1(b)
SEC...................................................................... 1.1(b)
Securities Act........................................................... 3.8
Shareholder......................................................... Recitals
Shareholder Agreement............................................... Recitals
Shares.............................................................. Recitals
Special Meeting.......................................................... 1.9(a)(i)
Sprint Warrant........................................................... 2.4(a)
Stock Option Agreement.............................................. Recitals
Subsidiary............................................................... 3.2(a)
Superior Proposal........................................................ 5.3(b)
Surviving Corporation.................................................... 1.4(a)
Symantec................................................................. 3.1
Symantec License......................................................... 3.30
Tax...................................................................... 3.13(b)
Tax Authority............................................................ 3.13(b)
Tax Returns.............................................................. 3.13(b)
Taxes.................................................................... 3.13(b)
Termination Fee.......................................................... 8.2(b)
Transactions............................................................. 3.4
Voting Debt.............................................................. 3.3(a)
Warrant.................................................................. 3.3(b)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter referred to as this
"Agreement" or the "Merger Agreement"), dated March 27, 2001, by and among The
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Sage Group plc, a company organized under the laws of England ("Parent"), Isaiah
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Acquisition Corp., a Delaware corporation and an indirect, wholly-owned
subsidiary of Parent (the "Purchaser"), and Interact Commerce Corporation, a
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Delaware corporation (the "Company").
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WHEREAS, the Board of Directors of each of Parent, the Purchaser and
the Company has approved, and deems it advisable and in the best interests of
its respective stockholders to consummate, the acquisition of the Company by
Parent upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser make a
cash tender offer (the "Offer") to acquire all shares of the issued and
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outstanding common stock, par value $0.001, of the Company (the "Shares"), for
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$12.00 per share, net to the seller in cash (such price, or any such higher
price per Share as may be paid in the Offer, referred to herein as the "Offer
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Price");
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WHEREAS, also in furtherance of such acquisition, the Board of
Directors of each of Parent, Purchaser and the Company has approved this
Agreement and the Merger (as defined in Section 1.4) following the Offer in
accordance with the General Corporation Law of the State of Delaware (the
"DGCL") and upon the terms and subject to the conditions set forth herein;
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WHEREAS, the Board of Directors of the Company (the "Company Board of
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Directors") has determined that the consideration to be paid for each Share in
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the Offer and the Merger is fair to the holders of such Shares and has resolved
to recommend that the holders of such Shares accept the Offer and approve this
Agreement and each of the Transactions (as defined in Section 3.4) upon the
terms and subject to the conditions set forth herein;
WHEREAS, as a condition and further inducement to Parent and the
Purchaser to enter into this Agreement and incur the obligations set forth
herein, certain stockholders of the Company (each, a "Shareholder") concurrently
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herewith are entering into a Shareholder Agreement (each, a "Shareholder
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Agreement"), dated as of the date hereof, with Parent and the Purchaser, in the
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form attached hereto as Exhibit A, pursuant to which each such Shareholder has
agreed, among other things,
to tender his Shares in the Offer, to grant to Parent the right to purchase his
Shares upon payment by Parent of the Offer Price, and to grant Parent a proxy
with respect to the voting of such Shares in favor of the Merger upon the terms
and subject to the conditions set forth therein;
WHEREAS, as a condition and further inducement to Parent and the
Purchaser to enter into this Agreement and incur the obligations set forth
herein, concurrently with the execution and delivery of this Agreement, the
Purchaser and the Company are entering into a Stock Option Agreement in the form
of Exhibit B hereto (the "Stock Option Agreement"), pursuant to which, among
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other things, the Company has granted Parent an option to purchase certain
newly-issued shares of Common Stock (as hereinafter defined), subject to certain
conditions; and
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
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ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer. (a) Provided that this Agreement shall not have
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been terminated in accordance with Section 8.1 and none of the events set forth
in Annex I hereto shall have occurred and be continuing, as promptly as
practicable, and, in any event, within seven (7) days of the date hereof, the
Purchaser shall commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) the Offer to purchase at
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the Offer Price. The obligations of the Purchaser to accept for payment and to
pay for any Shares validly tendered on or prior to the expiration of the Offer
and not withdrawn shall be subject only to (i) there being validly tendered and
not withdrawn prior to the expiration of the Offer that number of Shares which,
together with the Shares then beneficially owned by Parent or the Purchaser
(without giving effect to shares issuable pursuant to the Stock Option
Agreement), represents at least a majority of the Shares outstanding on a fully-
diluted basis (the "Minimum Condition") and (ii) the other conditions set forth
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in Annex I hereto. Subject to the prior satisfaction or waiver by Parent or the
Purchaser of the Minimum Condition and the other conditions of the Offer set
forth in Annex I hereto, the Purchaser shall consummate the Offer in accordance
with its terms and accept for payment and pay for all Shares tendered pursuant
to the Offer as soon as Purchaser is legally permitted to do so under applicable
law. The obligations of the Purchaser to commence the Offer and accept for
payment and pay for any Shares validly tendered on or prior to the expiration of
the Offer and not withdrawn shall be subject only to the Minimum Condition and
the other conditions set forth in Annex I hereto. The Offer shall be made by
means of an offer to purchase (the "Offer to Purchase") that contains the terms
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set forth in this Agreement, the Minimum Condition and the other conditions set
forth in Annex I hereto. The Purchaser shall not amend or waive the Minimum
Condition and shall not decrease the Offer Price, change the form of
consideration payable in the Offer, decrease the number of Shares sought in the
Offer, impose additional conditions to the Offer, extend the offer beyond the
date that is twenty (20) business days after commencement of the Offer (the
"Initial Expiration Date"), except as set forth below, or amend any other
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condition of the Offer in any manner adverse to the holders of the Shares
without the prior written consent of the Company (such consent to be authorized
by the Company Board of Directors or a duly authorized committee thereof). So
long as this Agreement is in effect and the Minimum Condition or any other
conditions to the Offer set forth in Annex I have not been satisfied or waived,
Purchaser may, without the consent of the Company, extend the expiration date of
the Offer for one or more periods of up to ten additional business
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days each (but in no event shall Purchaser be permitted to extend the expiration
date of the Offer beyond the sixtieth business day after the date of this
Agreement). So long as this Agreement is in effect and the Minimum Condition and
the other conditions to the Offer set forth in Annex I have been satisfied or
waived and such conditions shall not apply to any extension pursuant to this
sentence, Purchaser may, without the consent of the Company, extend the Offer in
accordance with Rule 14d-11 under the Exchange Act Notwithstanding the
foregoing, Purchaser may, without the consent of the Company, extend the Offer
for any period required by any rule, regulation, interpretation or position of
the SEC or the staff thereof applicable to the Offer. Subject to the terms and
conditions of the Offer and this Agreement, Purchaser shall accept for payment
and pay for, in accordance with the terms of the Offer, all Shares validly
tendered and not withdrawn pursuant to the Offer promptly after the expiration
of the Offer (subject to the provisions of Rule 14d-11 under the Exchange Act,
to the extent applicable). In addition, the Purchaser may increase the Offer
Price and extend the Offer to the extent required by law in connection with such
increase, in each case in its sole discretion and without Company's consent.
(b) As soon as practicable on the date the Offer is commenced, Parent
and the Purchaser shall file with the United States Securities and Exchange
Commission (the "SEC"), pursuant to Regulation M-A under the Exchange Act
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("Regulation M-A"), a Tender Offer Statement on Schedule TO with respect to the
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Offer (together with all amendments, supplements and exhibits thereto, the
"Schedule TO"). The Schedule TO shall include the summary term sheet required
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under Regulation M-A and, as exhibits, the Offer to Purchase and a form of
letter of transmittal and summary advertisement (collectively, together with any
amendments and supplements thereto, the "Offer Documents"). Parent and the
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Purchaser agree to take all steps necessary to cause the Offer Documents to be
filed with the SEC and disseminated to holders of Shares, in each case as and to
the extent required by applicable federal securities laws. Parent and the
Purchaser agree to take all steps necessary to (i) ensure that the Offer
Documents will comply in all material respects with the provisions of the
Exchange Act, the rules and regulations thereunder and other applicable federal
securities laws and, (ii) that the Offer Documents shall not contain any untrue
statement of material fact or omit to state any material fact required to be
stated therein or necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading, except that no
representation is made by Parent or Purchaser with respect to information
furnished by the Company expressly for inclusion in the Offer Documents. Parent
and the Purchaser, on the one hand, and the Company, on the other hand, agree to
promptly correct any information provided by it for use in the Offer Documents
if and to the extent that it shall have become false or misleading in any
material respect
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or as otherwise required by law. The Purchaser further agrees to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its counsel
shall be given a reasonable opportunity to review the Schedule TO before it is
filed with the SEC. In addition, Parent and the Purchaser agree to provide the
Company and its counsel in writing with any comments, whether written or oral,
that Parent, the Purchaser or their counsel may receive from time to time from
the SEC or its staff with respect to the Offer Documents promptly after Parent's
or the Purchaser's, as the case may be, receipt of such comments, and any
written or oral responses thereto.
Section 1.2 Company Actions. (a) As soon as practicable after the
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commencement of the Offer, the Company shall, in a manner that complies with
Rule 14d-9 under the Exchange Act, file with the SEC a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments, supplements and exhibits thereto, the "Schedule 14D-9") which shall,
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subject to the provisions of Section 5.3(c), contain the recommendation referred
to in clause (iii) of Section 3.5. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9 to be filed with the SEC and disseminated
to holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company, on the one hand, and Parent and the
Purchaser, on the other hand, agree to promptly correct any information provided
by it for use in the Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect or as otherwise required by
law. The Company agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and disseminated to holders of the
Shares, in each case as and to the extent required by applicable federal
securities laws. Parent, the Purchaser and their counsel shall be given the
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company agrees to provide Parent, the Purchaser and their counsel
in writing with any comments, whether written or oral, that the Company or its
counsel may receive from time to time from the SEC or its staff with respect to
the Schedule 14D-9 promptly after the Company's receipt of such comments, and
any written or oral responses thereto.
(b) In connection with the Offer, the Company shall promptly furnish
or cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date, and shall
promptly furnish the Purchaser with such information and assistance (including,
but not limited to, lists of holders of the Shares, updated periodically, and
their addresses, mailing labels and
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lists of security positions) as the Purchaser or its agent may reasonably
request for the purpose of communicating the Offer to the record and beneficial
holders of the Shares. Except for such steps as are necessary to disseminate the
Offer Documents, Parent and the Purchaser shall hold in confidence the
information contained in any of such labels and lists and the additional
information referred to in the preceding sentence, shall use such information
only in connection with the Offer, and, if this Agreement is terminated, will
deliver or cause to be delivered to the Company all copies of such information
then in its possession or the possession of its agents or representatives.
Section 1.3 Directors. (a) Promptly upon the purchase of and payment
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for any Shares by Parent or the Purchaser which represents at least a majority
of the outstanding Shares (on a fully-diluted basis, without giving effect to
shares issuable pursuant to the Stock Option Agreement), Parent shall be
entitled to elect or designate such number of directors, rounded up to the next
whole number, on the Company Board of Directors as is equal to the product of
the total number of directors on the Company Board of Directors (giving effect
to the directors elected or designated by Parent pursuant to this sentence)
multiplied by the percentage that the aggregate number of Shares beneficially
owned by the Purchaser, Parent and any of their affiliates bears to the total
number of Shares then outstanding (on a fully diluted basis without giving
effect to shares issuable pursuant to the Stock Option Agreement), provided,
however, that in the event the Purchaser accepts Shares for payment and the
Minimum Condition is not satisfied, Parent shall not be entitled to designate
more than two (2) directors. The Company shall, upon Parent's request, use its
reasonable efforts either to promptly increase the size of the Company Board of
Directors, including by amending the Bylaws of the Company if necessary so as to
increase the size of the Company Board of Directors, or promptly secure the
resignations of such number of its incumbent directors, or both, as is necessary
to enable Parent's designees to be so elected or designated to the Company's
Board of Directors, and shall use its reasonable efforts to cause Parent's
designees to be so elected or designated at such time. At such time, the Company
shall, upon Parent's request, also cause persons elected or designated by Parent
to constitute the same percentage (rounded up to the next whole number) as is on
the Company Board of Directors of (i) each committee of the Company Board of
Directors, (ii) each board of directors (or similar body) of each Company
Subsidiary (as defined in Section 3.2), and (iii) each committee (or similar
body) of each such board, in each case only to the extent permitted by
applicable law or the rules of any stock exchange on which the Company Common
Stock is listed. The Company's obligations under this Section 1.3(a) shall be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. The Company shall promptly upon execution of this
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Agreement take all actions required pursuant to such Section 14(f) and Rule 14f-
1 in order to fulfill its obligations under this Section 1.3(a), including, but
not limited to, mailing to stockholders (together with the Schedule 14D-9) the
information required by Section 14(f) and Rule 14f-1 as is necessary to enable
Parent's designees to be elected or designated to the Company Board of
Directors. Parent or the Purchaser shall supply the Company in writing and be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates to the extent required by Section
14(f) and Rule 14f-1. The provisions of this Section 1.3(a) are in addition to
and shall not limit any rights that any of the Purchaser, Parent or any of their
respective affiliates may have as a holder or beneficial owner of Shares as a
matter of law with respect to the election of directors or otherwise.
(b) In the event that Parent's designees are elected or designated to
the Company Board of Directors, then, until the Effective Time, the Company
shall cause the Company Board of Directors to have at least three directors who
are directors on the date hereof (the "Independent Directors"), provided,
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however, that if any Independent Director is unable to serve due to death or
disability, the remaining Independent Director(s) shall be entitled to elect or
designate another person (or persons) who serves as a director on the date
hereof to fill such vacancy, and such person (or persons) shall be deemed to be
an Independent Director for purposes of this Agreement. If no Independent
Director then remains, the other directors shall designate three persons who are
directors on the date hereof (or, in the event there shall be less than three
directors available to fill such vacancies as a result of such persons' deaths,
disabilities or refusals to serve, such smaller number of persons who are
directors on the date hereof) to fill such vacancies and such persons shall be
deemed Independent Directors for purposes of this Agreement. Notwithstanding
anything in this Agreement to the contrary, if Parent's designees constitute a
majority of the Company Board of Directors after the acceptance for payment of
Shares pursuant to the Offer and prior to the Effective Time, then the
affirmative vote of a majority of the Independent Directors shall be required to
(i) amend or terminate this Agreement by the Company, (ii) exercise or waive any
of the Company's rights, benefits or remedies hereunder, if such action would
materially and adversely affect holders of Shares other than Parent or
Purchaser, (iii) amend the Certificate of Incorporation or Bylaws of the Company
if such action would materially and adversely affect holders of Shares other
than Parent or Purchaser, or (iv) take any other action of the Company Board of
Directors under or in connection with this Agreement if such action would
materially and adversely affect holders of Shares other than Parent or
Purchaser; provided, however, that if there shall be no Independent Directors as
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a result of such persons' deaths, disabilities or refusal to
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serve, then such actions may be effected by majority vote of the entire Company
Board of Directors.
Section 1.4 The Merger. (a) Subject to the terms and conditions of
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this Agreement, at the Effective Time (as defined in Section 1.5), the Company
and the Purchaser shall consummate a merger (the "Merger") pursuant to which (i)
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the Purchaser shall be merged with and into the Company 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
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Corporation." The Merger shall have the effects set forth in the DGCL.
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(b) The Certificate of Incorporation of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation, except as to the name of the
Surviving Corporation, until thereafter amended as provided by law and such
Certificate of Incorporation.
(c) 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, until thereafter amended as provided by
law, the Certificate of Incorporation of the Surviving Corporation and such
Bylaws.
Section 1.5 Effective Time. Parent, the Purchaser and the Company
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shall cause an appropriate Certificate of Merger (the "Certificate of Merger")
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to be executed and filed on the Closing Date (as defined in Section 1.6) (or on
such other date as Parent and the Company may agree) with the Secretary of State
of the State of Delaware as provided in the DGCL. The Merger shall become
effective on the date on which the Certificate of Merger has been duly filed
with the Secretary of State of the State of Delaware or such time as is agreed
upon by the parties and specified in the Certificate of Merger, such time
hereinafter referred to as the "Effective Time."
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Section 1.6 Closing. The closing of the Merger (the "Closing") will
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take place at 9:00 a.m., Pacific Standard Time, on a date to be specified by the
parties, such date to be no later than the second business day after
satisfaction or waiver of all of the conditions set forth in Article VII (the
"Closing Date"), at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 525
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University Avenue, Palo
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Xxxx, Xxxxxxxxxx 00000, unless another date or place is agreed to in writing by
the parties hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. The
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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 Company 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.
Section 1.8 Subsequent Actions. If at any time after the Effective
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Time the Surviving Corporation shall determine, in its sole discretion, or shall
be advised, that any deeds, bills of sale, assignments, assurances or any other
actions or things 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 execute and deliver, in the name and on behalf of either the
Company or the Purchaser, all such deeds, bills of sale, instruments of
conveyance, assignments and assurances and to take and do, in the name and on
behalf of each of such corporations or otherwise, all such other actions and
things as may be necessary or desirable to vest, perfect or confirm any and 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.
Section 1.9 Stockholders' Meeting. (a) If required by applicable
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law in order to consummate the Merger, the Company, acting through the Company
Board of Directors, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as reasonably
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practicable following the acceptance for payment and purchase of Shares by
the Purchaser pursuant to the Offer for the purpose of considering and
taking action upon 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
9
reasonable efforts to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and,
after consultation with 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 (the "Proxy Statement")
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to be mailed to its stockholders;
(iii) include in the Proxy Statement the recommendation of the
Company 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 its reasonable efforts to solicit from holders of
Shares proxies in favor of the Merger and take all other action reasonably
necessary or advisable to secure the approval of stockholders required by
the DGCL and any other applicable law to effect the Merger; provided that
the obligations set forth in clauses (iii) and (iv) of this Section 1.9(a)
shall be subject to Section 5.3(c).
(b) Parent agrees to vote, or cause to be voted, all of the Shares
then owned by it, the Purchaser or any of its other subsidiaries and affiliates
in favor of the approval of the Merger and the adoption of this Agreement.
Section 1.10 Merger Without Meeting of Stockholders. Notwith-standing
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Section 1.9, in the event that Parent, the Purchaser or any other subsidiary of
Parent shall acquire at least 90% of the outstanding shares of each class of
capital stock of the Company, pursuant to the Offer or otherwise, the parties
hereto agree, subject to Article VII, to take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of stockholders of the Company, in accordance
with Section 253 of the DGCL.
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ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
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virtue of the Merger and without any action on the part of the holders of any
Shares or common stock, par value $.01 per share, of the Purchaser (the
"Purchaser Common Stock"):
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(a) Purchaser Common Stock. Each issued and outstanding share of
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Purchaser Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. All Shares
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that are owned by the Company as treasury stock and any Shares owned by Parent,
the Purchaser or any other wholly-owned Subsidiary of Parent shall be cancelled
and retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor.
(c) Conversion of Shares. Each issued and outstanding Share (other
--------------------
than Shares to be cancelled in accordance with Section 2.1(b) and other than
Dissenting Shares (as defined in Section 2.3)) shall be converted into the right
to receive the Offer Price, payable to the holder thereof in cash, without
interest (the "Merger Consideration"). From and after the Effective Time, all
--------------------
such Shares shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each holder of a certificate
representing any such Shares 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 2.2, without interest
thereon.
Section 2.2 Exchange of Certificates. (a) Paying Agent. Parent shall
------------------------ ------------
designate a bank or trust company to act as agent for the holders of Shares in
connection with the Merger (the "Paying Agent") and to receive the funds to
------------
which holders of Shares shall become entitled pursuant to Section 2.1(c). Prior
to the Effective Time, Parent or the Purchaser shall deposit, or cause to be
deposited, with the Paying Agent the aggregate Merger Consideration. For
purposes of determining the amount of Merger Consideration to be so deposited,
Parent and the Purchaser shall assume that no stockholder of the Company will
perfect any right to appraisal of his, her or its Shares. Such funds shall be
invested by the Paying Agent as directed by Parent or the Surviving Corporation,
in its sole discretion, pending
11
payment thereof by the Paying Agent to the holders of the Shares. Earnings from
such investments shall be the sole and exclusive property of Parent and the
Surviving Corporation, and no part of such earnings shall accrue to the benefit
of holders of Shares.
(b) Exchange Procedures. Promptly after the Effective Time (and in any
-------------------
event within five (5) business days), the Paying Agent shall mail to each holder
of record of a certificate or certificates, which immediately prior to the
Effective Time represented outstanding Shares (the "Certificates"), whose shares
------------
were converted pursuant to Section 2.1 into the right to receive the Merger
Consideration (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as Parent may reasonably specify) and (ii)
instructions for effecting the surrender of the Certificates in exchange for
payment of the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration for each Share formerly represented by such Certificate
and the Certificate so surrendered shall forthwith be cancelled. 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
2.2, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.2, without interest thereon.
(c) Transfer Books; No Further Ownership Rights in Shares. 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 on the
records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided for herein or by applicable law. If, after the
Effective Time, Certificates are
12
presented to the Surviving Corporation for any reason, they shall be cancelled
and exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time following six
---------------------------------
months after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) made available to the Paying Agent and not
disbursed (or for which disbursement is pending subject only to the Paying
Agent's routine administrative procedures) to holders of Certificates, and
thereafter such holders shall be entitled to look only to the Surviving
Corporation (subject to abandoned property, escheat or other similar laws) only
as general creditors thereof with respect to the Merger Consideration payable
upon due surrender of their Certificates, without any interest thereon.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section 2.3 Dissenting Shares. (a) Notwithstanding anything in this
-----------------
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time and 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 Shares") shall not be converted into a right to receive the Merger
-----------------
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses his or her right to appraisal. A holder of Dissenting Shares shall be
entitled to receive payment of the appraised value of such Shares held by him or
her in accordance with Section 262 of the DGCL, unless, after the Effective
Time, such holder fails to perfect or withdraws or loses his or her right to
appraisal, in which case such Shares 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 Shares pursuant
to Section 2.2.
(b) The Company shall give Parent (i) prompt notice of any written
demands for appraisal of any Shares, attempted 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 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.
13
Section 2.4 Company Option Plans.
--------------------
(a) Effective as of the Effective Time, each outstanding employee
stock option, stock equivalent right or right to acquire Shares (each, an
"Employee Option") granted under the Company's 1996 Equity Incentive Plan (the
---------------
"Employee Option Plan"), each outstanding non-employee director option to
--------------------
purchase Shares ("Director Options") granted under the 1999 Non-employee
----------------
Director Stock Option Plan (the "Director Option Plan") and each outstanding
--------------------
business partner option to purchase Shares ("Business Partner Stock Options",
------------------------------
and collectively with the Employee Options and the Director Options, "Options")
-------
granted under the 1998 Business Partner Stock Option Plan (the "Business Partner
----------------
Option Plan," and collectively with the Employee Option Plan and the Director
-----------
Option Plan, the "Option Plans"), whether or not then exercisable or vested,
------------
shall be (a) deemed to be 100% vested and exercisable on the date which is
thirty days prior to a Change of Control (as defined in the Company's standard
form of option award agreement attached as an exhibit to Section 3.3(b) of the
Company Disclosure Schedule), and (b) immediately prior to the Effective Time,
cancelled and, in consideration of such cancellation, 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 Offer
Price over the exercise price of each such Option and (y) the number of Shares
subject thereto (such payment, if any, to be net of applicable withholding and
excise taxes). As of the Effective Time, the Option Plans 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 of the
capital stock of the Company or any Company Subsidiary (as defined in Section
3.2) shall be cancelled. The Company shall use its best efforts to effectuate
the foregoing, including, but not limited to, obtaining all consents necessary
to cash out and cancel all Options necessary to ensure that, after the Effective
Time, except for the warrant to Sprint Spectrum, Inc., dated August 4, 2000 (the
"Sprint Warrant"), no Person shall have any right under the Option Plans or any
--------------
other plan, program or arrangement with respect to equity securities of the
Surviving Corporation or any Subsidiary thereof.
(b) Effective as of the Effective Time, any Purchase Periods (as
defined in the Company's 1999 Employee Stock Purchase Plan (the "ESPP"), then in
----
progress shall be shortened setting a New Exercise Date as of immediately prior
to the Effective Time, and any Offering Periods (as defined in the ESPP) then in
progress shall end on such New Exercise Date. The Company's Board of Directors
14
shall notify each participant in writing, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for the participant's option
has been changed to the New Exercise Date and that (i) the participant's option
shall be exercised automatically on the New Exercise Date, unless prior to such
date the participant has withdrawn from the Offering Period as provided in
Section 10 of the ESPP, and (ii) immediately prior to the Effective Time, Shares
acquired on such exercise will be cancelled and, in consideration of such
cancellation, Parent shall, or shall cause the Surviving Corporation to, pay to
such participants, an amount in respect thereof equal to the product of (x) the
excess, if any, of the Offer Price over the purchase price per Share in such
Purchase Periods and (y) the number of Shares acquired by each participant (such
payment, if any, to be net of applicable withholding and excise taxes). As of
the Effective Time, the ESPP shall terminate.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as set forth in the schedule of exceptions to the Company's
representations and warranties set forth herein, delivered to Parent prior to
the execution of this Agreement (the "Company Disclosure Schedule"), the Company
---------------------------
represents and warrants to Parent and the Purchaser as set forth below. Each
exception set forth in the Company Disclosure Schedule is identified by
reference to, or has been grouped under a heading referring to, a specific
individual section of this Agreement and relates only to such section.
Section 3.1 Organization. (a) The Company is a corporation duly
------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has full corporate power
and authority and all necessary governmental licenses, authorizations, permits,
consents and approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power, authority, or
governmental licenses, authorizations, permits, consents or approvals would not,
individually or in the aggregate, have a Company Material Adverse Effect. As
used in this Agreement, "Company Material Adverse Change" or "Company Material
------------------------------- ----------------
Adverse Effect" means any change, event or effect, as the case may be, that is
--------------
materially adverse to the business, operations, properties (including intangible
properties), condition (financial or otherwise), results of operations, assets
or liabilities of the Company or the Company Subsidiaries, taken as a whole,
other than (i) changes or effects which are or result from occurrences
15
relating to the economy in general or such entity's industry in general and not
specifically relating to such entity, (ii) changes or effects which result from
the loss of customers or delay or cancellation or cessation of orders for the
Company's products directly attributable to the announcement of this Agreement
or stockholder litigation brought or threatened against the Company or any
member of its Board of Directors in respect to this Agreement, the Offer or the
Merger, (iii) the financial condition and results of operations of the Company
set forth on Section 3.1(a) of the Company Disclosure Schedule, or (iv) solely
as a result of the decline in the market price of the Shares, or (v) adverse
changes, events or effects set forth or described in the Company's annual report
on Form 10-K for the period ending December 31, 2000, and includes (i) the
Company's ability to consummate each of the Transactions and (ii) any
termination, amendment (other than amendments entered into with the prior
written consent of Parent), material violation, breach or default (or the
occurrence of any condition or event that could reasonably be expected to give
rise to any of the foregoing) by any party to, or any diminution of the
Company's rights under, the Symantec License (as defined below), including, but
not limited to, any violation by the Company of any payment obligations under
the Symantec License or any other violation by the Company that would give rise
to a right of Symantec to terminate the Symantec License.
(b) The Company is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section 3.2 Subsidiaries and Affiliates. (a) Section 3.2(a) of the
---------------------------
Company Disclosure Schedule sets forth the name, jurisdiction of incorporation
and authorized and outstanding capital of each Company Subsidiary and the
jurisdictions in which each Company Subsidiary is qualified to do business.
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
corporation or have any direct or indirect equity or ownership interest in any
business other than publicly-traded securities constituting less than five
percent of the outstanding equity of the issuing entity. All of the outstanding
capital stock of each Company Subsidiary is owned directly or indirectly by the
Company free and clear of all liens, charges, security interests, options,
claims, mortgages, pledges, or other encumbrances and restrictions of any nature
whatsoever ("Encumbrances"), and is validly issued, fully paid and
------------
nonassessable, and there are no outstanding options, rights or agreements of any
kind
16
relating to the issuance, sale or transfer of any capital stock or other
equity securities of any such Company Subsidiary to any person except the
Company. As used in this Agreement, the term "Company Subsidiary" means each
------------------
Person which is a Subsidiary of the Company. As used in this Agreement, the term
"Subsidiary" means with respect to any party, any corporation, partnership or
----------
other organization, 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 others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries or (ii) such party or any other Subsidiary of such party is a
general partner (excluding any such partnership where such party or any
Subsidiary of such party does not have a majority of the voting interest in such
partnership). As used in this Agreement, the term "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.
(b) Each Company Subsidiary (i) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, (ii) has full corporate power and authority to carry on its
business as it is now being conducted and to own the properties and assets it
now owns, and (iii) is duly qualified or licensed to do business as a foreign
corporation in good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or license necessary, except where the failure to be so duly
qualified or licensed and in good standing would not individually or in the
aggregate reasonably be expected to have a Company Material Adverse Effect.
Each such jurisdiction is listed in Section 3.2(b) of the Company Disclosure
Schedule, and, except as disclosed on Section 3.2(b) of the Company Disclosure
Schedule, such jurisdictions are the only jurisdictions in which the properties
owned, leased or operated by each Company Subsidiary or the nature of the
business conducted by it makes such qualification or license necessary. The
Company has heretofore delivered to Parent complete and correct copies of the
Certificate of Incorporation and Bylaws of the Company and each Company
Subsidiary, as is presently in effect.
Section 3.3 Capitalization. (a) The authorized capital stock of the
--------------
Company consists of (i) 50,000,000 shares of common stock, $0.001 par value per
share (the "Common Stock") and (ii) 20,000,000 shares of preferred stock (the
------------
"Preferred Stock"). As of March 22, 2001, 20,362,688 shares of Common Stock
---------------
17
were issued and outstanding. Since March 22, 2001, the Company has not issued
any shares of Common Stock other than upon the exercise of Options. As of the
date hereof, (i) no shares of Preferred Stock are issued and outstanding, (ii)
no Shares are issued and held in the treasury of the Company, and (iii) a total
of 2,438,914 shares are reserved for issuance under the Warrants (as defined in
Section 3.3(b)). All of the outstanding shares of the Company's capital stock
are, and all Shares which may be issued pursuant to the exercise of outstanding
Options will be, when issued in accordance with the terms thereof, duly
authorized, validly issued, fully paid and non-assessable. There are no bonds,
debentures, notes or other 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 as disclosed in this
Section 3.3 or as set forth in Section 3.3(a) of the Company Disclosure Schedule
or pursuant to the Stock Option Agreement, (i) there are no shares of capital
stock of the Company authorized, issued or outstanding, (ii) there are no
existing options, warrants, calls, pre-emptive 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, and (iii) there are no outstanding contractual
obligations of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any Shares or the capital stock of the Company or any Company
Subsidiary or any affiliate of the Company or 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.
(b) Section 3.3(b) of the Company Disclosure Schedule sets forth all
existing Warrants (each, a "Warrant") to purchase capital stock of the Company,
-------
and with respect to each such warrant, the number of shares issuable, and the
purchase price payable therefor upon the exercise of each such warrant. The
terms of each Warrant, except for the Sprint Warrant, provide that, on or prior
to the effective time, pursuant to the terms thereof and without any action by
the Company, Parent, Purchaser or the holder thereof, as a result of the
Transactions or the Merger, such warrant shall be converted solely into either
(i) the right to receive the Merger Consideration payable in respect of the
shares issuable upon the exercise of such Warrant, less the exercise price
thereof, or (ii) the right to receive an amount in cash equal to (x) the product
of the Merger Consideration multiplied by the number of
18
shares issuable upon the exercise of such Warrant, less (y) the aggregate amount
payable upon the full exercise of such warrant (a "Net Exercise") provided that
------------
the terms of such Warrant allow for a Net Exercise or other equivalent
procedure. In the event that any Warrant provides that, as of the Effective
Time, only a portion of such Warrant is exercisable, whether by payment of cash
or Net Exercise, then the terms of each such warrant provides that, as of the
Effective Time, the unexercisable portion of such Warrant shall be cancelled.
After the Effective Time, no Warrant will remain or purport to remain
outstanding and convertible into cash, property or securities of any of Parent,
Purchaser or the Surviving Corporation
(c) As of March 9, 2001, the Company had outstanding Options granted
under the Option Plans to purchase 4,534,550 shares of Common Stock. Since March
9, 2001, the Company has not granted any Options, either under the Option Plans
or otherwise. As of March 9, 2001, the Company had (w) outstanding Options to
purchase 4,782 shares of Common Stock granted to former employees of Opis
Corporation, (x) outstanding Options granted under the Employee Option Plan to
purchase 4,379,674 shares of Common Stock, (y) outstanding Options granted under
the Business Partner Option Plan to purchase 29,780 shares of Common Stock, and
(z) outstanding Options granted under the Director Option Plan to purchase
120,314 shares of Common Stock. All of such options have been granted to
employees, directors, business partners, advisors or consultants of the Company
in the ordinary course of business consistent with past practice. Since January
26, 2001, the Company has not granted any Options to officers or directors of
the Company. Section 3.3(c) of the Company Disclosure Schedule sets forth a
complete list of outstanding options under the Option Plans outstanding as of
March 9, 2001, showing the date of grant, whether or not such Option is an
incentive stock option or a non-qualified stock option, the exercise price of
each Option, and the number of shares of Common Stock issuable upon exercise of
each Option. All options granted under the Option Plans have been granted
pursuant to option award agreements in the substantially the form attached as an
exhibit to Section 3.3(c) of the Company Disclosure Schedule.
(d) 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.
(e) Each outstanding Share, Option and Warrant has been issued or
granted in a transaction that has been registered under the Securities Act or
that has qualified for an exemption from the registration requirements of the
Securities
19
Act and the qualification requirements of any applicable state securities laws.
The issuance of Shares upon exercise of each Option or Warrant has been or will
be registered under the Securities Act or exempt from the registration
requirements of the Securities Act and the qualification requirements of any
applicable state securities laws.
Section 3.4 Authorization; Validity of Agreement; Company Action.
----------------------------------------------------
The Company has full corporate power and authority to execute and deliver this
Agreement and the Stock Option Agreement, and has the full corporate power and
authority to perform the transactions provided for or contemplated by this
Agreement, the Stock Option Agreement and the Shareholder Agreements, including,
but not limited to, the Offer and the Merger (collectively, the "Transactions").
------------
The execution, delivery and performance by the Company of this Agreement and the
Stock Option Agreement, and the consummation by it of the Transactions, have
been duly and validly authorized by the Company Board of Directors and, no other
corporate action on the part of the Company is necessary (other than, with
respect to the Merger, the approval and adoption of the Merger and this
Agreement by holders of a majority of the Shares) to authorize the execution and
delivery by the Company of this Agreement and the Stock Option Agreement, and
the consummation by it of the Transactions. Each of this Agreement and the Stock
Option Agreement has been duly executed and delivered by the Company and,
assuming due and valid authorization, execution and delivery hereof by Parent
and the Purchaser, is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 3.5 Board Approvals. The Company Board of Directors, at a
---------------
meeting duly called and held, has unanimously (i) determined that each of the
Agreement, the Stock Option Agreement, the Offer and the Merger are fair to and
in the best interests of the stockholders of the Company, (ii) duly and validly
approved and taken all corporate action required to be taken by the Company
Board of Directors to authorize the consummation of the Transactions, and (iii)
resolved to recommend that the stockholders of the Company accept the Offer,
tender their Shares to the Purchaser pursuant to the Offer, and approve and
adopt this Agreement and the Merger, and none of the aforesaid actions by the
Company Board of Directors has been amended, rescinded or modified. The action
taken by the
20
Company Board of Directors constitutes approval of the Transactions (including
each of the Offer and the Merger) by the Company Board of Directors under
Section 203 of the DGCL, and no other state takeover statute is applicable to
the Transactions.
Section 3.6 Required Vote. The affirmative vote of the holders of a
-------------
majority of the outstanding Shares is the only vote of the holders of any class
or series of the Company's capital stock necessary to approve the Merger. No
vote of any class or series of the Company's capital stock is necessary to
approve any of the Transactions other than the Merger.
Section 3.7 Consents and Approvals; No Violations. Except as set forth
-------------------------------------
in Section 3.7 of the Company Disclosure Schedule, none of the execution,
delivery or performance of this Agreement and the Stock Option Agreement by the
Company, the consummation by the Company of the Transactions or compliance by
the Company with any of the provisions of this Agreement or the Stock Option
Agreement will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation, the Bylaws or similar organizational documents of
the Company or any Company Subsidiary, state securities or blue sky laws or the
DGCL, (ii) require any filing by the Company with, or permit, authorization,
consent or approval of, any court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency,
foreign or domestic (a "Governmental Entity") (except for (A) compliance with
-------------------
any applicable requirements of the Exchange Act, (B) any filings as may be
required under the DGCL in connection with the Merger, (C) filings, permits,
authorizations, consents and approvals as may be required under the Xxxx-Xxxxx-
Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and any
-------
comparable provisions under any applicable pre-merger notification laws or
regulations of foreign jurisdictions, (D) the filing with the SEC and the Nasdaq
Stock Market, Inc. of (1) the Schedule 14D-9, (2) a Proxy Statement if
stockholder approval is required by law and (3) such reports under Section 13(a)
of the Exchange Act as may be required in connection with this Agreement and the
Transactions, or (E) such filings and approvals as may be required by any
applicable state securities, blue sky or takeover laws), (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, lien, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which any of them or any of their respective
properties or assets may be bound and which provides for the payment to or from
the Company in
21
excess of $250,000 annually or $1,000,000 in the aggregate (the "Company
-------
Agreements") or (iv) violate any order, writ, injunction, decree, statute, rule
----------
or regulation applicable to the Company, any Company Subsidiary or any of their
respective properties or assets, except in the case of clauses (ii), (iii) or
(iv) where (x) any failure to obtain such permits, authorizations, consents or
approvals, (y) any failure to make such filings, or (z) any such violations,
breaches or defaults would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
Section 3.8 Company SEC Documents and Financial Statements. The
----------------------------------------------
Company has filed with the SEC all forms, reports, schedules, statements and
other documents required by it to be filed since March 31, 1999 under the
Exchange Act or the Securities Act of 1933, as amended (the "Securities Act")
--------------
(as such documents have been amended since the time of their filing,
collectively, the "Company SEC Documents"). As of their respective dates, or if
---------------------
amended, as of the date of the last such amendment, the Company SEC Documents
(a) did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. None of
the Company Subsidiaries is required to file any forms, reports or other
documents with the SEC. All of the audited financial statements and unaudited
consolidated interim financial statements of the Company included in the Company
SEC Documents (collectively, the "Financial Statements") (i) have been prepared
--------------------
from, are in accordance with, and accurately reflect the books and records of
the Company and its consolidated Subsidiaries, (ii) comply in all material
respects with applicable accounting requirements and, as to the SEC Documents,
with the published rules and regulations of the SEC with respect thereto, (iii)
have been prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis during the periods
----
involved (except as may be indicated in the notes thereto and except, in the
case of the unaudited interim statements, as may be permitted under Form 10-Q of
the Exchange Act) and (iv) fairly present the consolidated financial position
and the consolidated results of operations and cash flows (subject, in the case
of unaudited interim financial statements, to normal year-end adjustments) of
the Company and its consolidated Subsidiaries as of the times and for the
periods referred to therein.
Section 3.9 Absence of Certain Changes. Except as contemplated by
--------------------------
this Agreement and except as set forth in Section 3.9 of the Company Disclosure
22
Schedule or in the Company SEC Documents filed prior to the date hereof, since
December 31, 2000 (the "Balance Sheet Date"), each of the Company and each
------------------
Company Subsidiary has conducted its respective business only in the ordinary
course of business consistent with past practice, except as would not reasonably
be expected to have a Company Material Adverse Effect. From the Balance Sheet
Date through the date of this Agreement, neither the Company nor any Company
Subsidiary has:
(a) (i) suffered any Company Material Adverse Change, or (ii) become
aware of any circumstances that would reasonably be expected to cause the
Company to suffer any Company Material Adverse Change in the foreseeable future;
(b) incurred any liabilities or obligations (absolute, accrued,
contingent or otherwise) except non-material items incurred in the ordinary
course of business consistent with past practice, none of which exceeds
$300,000;
(c) paid, discharged or satisfied any claim, liability or obligation
(whether absolute, accrued, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business consistent with
past practice, of liabilities and obligations reflected or reserved against in
the Balance Sheet or incurred in the ordinary course of business consistent with
past practice since the Balance Sheet Date;
(d) permitted or allowed any of its property or assets (real, personal
or mixed, tangible or intangible) to be subjected to any Encumbrance, except for
liens for (i) current taxes not yet due (ii) the interests of lessors under
operating leases, (iii) purchase money liens or the interests of lessors under
capital leases so long as such lien attaches only to the asset purchased or
acquired and the proceeds thereof, (iv) liens arising by operation of law in
favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business and not in connection
with the borrowing of money, (v) liens arising from deposits made in connection
with obtaining worker's compensation or other unemployment insurance, (vi) liens
or deposits to secure performance of bids, tenders, or leases incurred in the
ordinary course of business and not in connection with the borrowing of money,
(vii) liens granted as security for surety or appeal bonds in connection with
obtaining such bonds in the ordinary course of business, (viii) Encumbrances
consisting of zoning restrictions, easements or other restrictions on the use of
real property, provided that such items do not impair the use of such property
for the purposes intended, and none of which is
23
violated by existed or proposed structures or land use, (ix) statutory liens
created by any leasehold interest in property, and (x) liens set forth in
Section 3.9(d) of the Company Disclosure Schedule (collectively, "Permitted
---------
Encumbrances");
------------
(e) written down the value of any inventory (including write-downs by
reason of shrinkage or xxxx-down) or written off as uncollectible any notes or
accounts receivable, except for write-downs and write-offs in the ordinary
course of business consistent with past practice;
(f) cancelled any debts or waived any claims or rights of material
value;
(g) sold, transferred, or otherwise disposed of any of its properties
or assets (real, personal or mixed, tangible or intangible), except in the
ordinary course of business consistent with past practice;
(h) disposed of or permitted to lapse any rights to the use of any
Intellectual Property (as defined in Section 3.17), or disposed of or disclosed
(except as necessary in the conduct of its business) to any person other than
representatives of Parent any trade secret, formula, process, know-how or other
Owned Intellectual Property (as defined in Section 3.17) not theretofore a
matter of public knowledge;
(i) except in the ordinary course of business consistent with past
practice, granted any increase in the compensation or benefits of officers or
employees (including any such increase pursuant to any bonus, pension,
profitsharing or other plan, agreement or commitment) or any increase in the
compensation or benefits payable or to become payable to any officer or
employee, except in the ordinary course of business consistent with past
practice, and no such increase is required by any agreement or understanding;
(j) made any single capital expenditure or commitment in excess of
$300,000 for additions to property, plant, equipment or intangible capital
assets or made aggregate capital expenditures and commitments in excess of
$600,000 for additions to property, plant, equipment or intangible capital
assets;
(k) declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or redeemed, purchased or otherwise
acquired, directly or indirectly, any shares of capital stock or other
securities of the Company or any Company Subsidiary;
24
(l) (i) made any change in any of the accounting methods used by it
materially affecting its assets, liabilities or business, except for such
changes required by GAAP or (ii) made any Tax election or changed any Tax
election already made, adopted any Tax accounting method, changed any Tax
accounting method, entered into any closing agreement or settled any claim or
assessment relating to Taxes or consented to any claim or assessment relating to
Taxes or any waiver of the statute of limitations for any such claim or
assessment;
(m) paid, loaned or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed, tangible or
intangible) to, or entered into any agreement or arrangement with, any of its
officers or directors or any affiliate or associate of any of its officers or
directors except for directors= fees, and compensation to officers in the
ordinary course of business consistent with past practice; or
(n) agreed, whether in writing or otherwise, to take any action
described in this section.
Section 3.10 No Undisclosed Liabilities. Except (a) as disclosed
--------------------------
in the Financial Statements or the Company SEC Documents and (b) for liabilities
and obligations (i) incurred in the ordinary course of business consistent with
past practice since the Balance Sheet Date, (ii) pursuant to the terms of this
Agreement, (iii) as disclosed in Section 3.10(a) and Section 3.12 of the Company
Disclosure Schedule, (iv) as disclosed in Section 3.11 of the Company Disclosure
Schedule, or (v) as would not reasonably be expected to have a Company Material
Adverse Effect, neither the Company nor any Company Subsidiary has incurred any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise required by GAAP to be recognized or disclosed on a consolidated
balance sheet of the Company or any Company Subsidiary or in the notes thereto.
Section 3.10(b) of the Company Disclosure Schedule sets forth, as of the date
hereof, the amount of the principal and unpaid interest outstanding under each
instrument evidencing any material amount of indebtedness for borrowed money of
the Company and the Company Subsidiaries which will accelerate or become due or
result in a right of redemption or repurchase on the part of the holder of such
indebtedness (with or without due notice or lapse of time) as a result of this
Agreement or the Transactions.
Section 3.11 Litigation. Except as set forth in Section 3.11 of
----------
the Company Disclosure Schedule, there is no suit, claim, action, proceeding,
including, without limitation, arbitration proceeding or alternative dispute
resolution proceeding, or investigation pending or, to the knowledge of the
Company,
25
threatened against, affecting or naming as a party thereto the Company or any
Company Subsidiary before any Governmental Entity; and the Company's senior
management does not know of any valid basis for any such suit, claim, action or
proceeding.
Section 3.12 Employee Benefit Plans; ERISA. (a) Except as
-----------------------------
disclosed in the Company SEC Documents, or in Section 3.12(a) of the Company
Disclosure Schedule since the Balance Sheet Date through the date of this
Agreement, there has not been any adoption or amendment (or an agreement to
adopt or amend) in any material respect by the Company or any Company Subsidiary
of any employment or consulting agreement, collective bargaining agreement or
any bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
stock appreciation right or other stock-based incentive, retirement, vacation,
severance, change in control or termination pay, disability, death benefit,
hospitalization, medical or other insurance or any other plan, program,
agreement, arrangement or understanding (whether or not legally binding)
providing benefits to any current or former employee, officer, consultant or
director of the Company or any United States Company Subsidiary (collectively,
the "Benefit Plans"). Except as disclosed in the Company SEC Documents, or in
-------------
Section 3.12(a) of the Company Disclosure Schedule, there exist, as of the date
hereof, no employment, consulting, severance, termination or indemnification
agreements, arrangements or understandings between the Company or any United
States Company Subsidiary, and any current or former employee, consultant,
officer or director of the Company.
(b) Section 3.12(b) of the Company Disclosure Schedule contains a list
and brief description of all "employee pension benefit plans" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (sometimes referred to herein as "Pension Plans"), "employee welfare
----- -------------
benefit plans" (as defined in Section 3(1) of ERISA) and all other Benefit Plans
sponsored, maintained, contributed to or required to be contributed to, by the
Company or any Company Subsidiary or any person or entity that, together with
the Company and its Subsidiaries, is treated as a single employer under Section
414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended (the
"Code") (the Company and each such other person or entity, a "Commonly
----- --------
Controlled Entity") for the benefit of any current or former employees,
-----------------
officers, consultants or directors of the Company or any Company Subsidiary.
Except as set forth in Section 3.12(b) of the Company Disclosure Schedule, the
Company has made available to Parent true, complete and correct copies of (i)
each Benefit Plan (or, in the case of any unwritten Benefit Plans, descriptions
thereof), (ii) the three most recent annual reports on Form
26
5500 filed with the Internal Revenue Service with respect to each Benefit Plan
(if any such report was required), (iii) the most recent summary plan
description for each Benefit Plan for which such summary plan description is
required (together with all Summaries of Material Modification issued with
respect thereto), (iv) each trust agreement and group annuity contract relating
to any Benefit Plan (v) the most recent actuarial valuation report with respect
to each Benefit Plan (if any such report was required) and (vi) all material
contracts and employee communications relating to each Benefit Plan. Except as
set forth in Section 3.12(b) of the Company Disclosure Schedule, each Benefit
Plan has, to the knowledge of the Company, been administered in accordance with
its material terms. Except as set forth in Section 3.12(b) of the Company
Disclosure Schedule, the Company, each of the United States Company Subsidiaries
and all the Benefit Plans are all in material compliance with applicable
provisions of ERISA, the Code and other applicable laws.
(c) Except as set forth in Section 3.12(c) of the Company Disclosure
Schedule, all Pension Plans have been the subject of determination letters from
the Internal Revenue Service to the effect that such Pension Plans are qualified
and exempt from federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, a true, complete and correct copy of each such
determination letter has been provided to Parent, and no such determination
letter has been revoked nor has any event occurred since the date of the most
recent determination letter or application therefor for each Pension Plan that
would adversely affect its qualification or materially increase its costs.
(d) Neither the Company, nor any Company Subsidiary, nor any Commonly
Controlled Entity has at any time maintained, contributed or been obligated to
contribute to any Benefit Plan that is subject to Title IV of ERISA, including
without limitation any "multiemployer plan" (as defined in Section 4001(a)(3) of
ERISA).
(e) Except as set forth in Section 3.12(e) of the Company Disclosure
Schedule, no current or former employee, officer, consultant or director of the
Company or any Company Subsidiary will be entitled to any additional
compensation or benefits or any acceleration of the time of payment or vesting
or any other enhancement of any compensation or benefits under any Benefit Plan
as a result of the Transactions or the Stock Option Agreement.
(f) Except as disclosed in Section 3.12 of the Company Disclosure
Schedule, the deduction of any amount payable pursuant to the terms of
27
the Benefit Plans will not be subject to disallowance under Section 280G
or162(m) of the Code.
(g) Except as disclosed in Section 3.12 of the Company Disclosure
Schedule, no amount that could be received (whether in cash or property or the
vesting of property) by any employee, consultant, officer or director of the
Company or any Company Subsidiary under any employment, consulting, severance or
termination agreement, other compensation arrangement or other Benefit Plan
currently in effect would be an "excess parachute payment" (as such term is
defined in Section 28OG(b)(1) of the Code). Except as disclosed in Section 3.12
of the Company Disclosure Schedule, no such person is entitled to receive any
additional payment from the Company or any Company Subsidiary, the Surviving
Corporation or any other person (a "Parachute Gross-Up Payment") in the event
--------------------------
that the excise tax of Section 4999(a) of the Code is imposed on such person.
The Company Board of Directors has not granted to any officer, director,
consultant or employee of the Company any right to receive any Parachute Gross-
Up Payment.
(h) No Benefit Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current or
former employees, officers, consultants or directors of the Company, any Company
Subsidiary or any Commonly Controlled Entity after retirement or other
termination of service, other than (i) coverage mandated by applicable law, (ii)
death, termination of service, or retirement benefits under any Pension Plan,
(iii) deferred compensation benefits accrued as liabilities on the books of the
Company, such Company Subsidiary or any Commonly Controlled Entity, (iv)
benefits, the full cost of which is borne by the current or former employee,
officer, consultant or director (or his beneficiary), (v) life insurance
benefits for which the employee, officer, consultant or director dies while in
service with the Company, or (vi) any stock options that may be exercised after
termination of employment or the consulting engagement.
(i) There are no pending or, to the Company=s knowledge, threatened or
anticipated claims by or on behalf of any Benefit Plan, by any employee or
beneficiary under any Benefit Plan or otherwise involving any Benefit Plan
(other than routine and immaterial claims for benefits).
(j) Except as set forth in Section 3.12(j) of the Company Disclosure
Schedule, either the Company nor any Company Subsidiary, any Commonly Controlled
Entity, any of the Benefit Plans, any trust created thereunder nor any trustee
or administrator thereof has engaged in a transaction or has taken or
28
failed to take any action in connection with which the Company or any Company
Subsidiary could be subject to either a civil penalty assessed pursuant to
section 409 or 502(i) or ERISA or a tax imposed pursuant to section 4975, 4976,
or 4980B of the Code.
(k) With respect to each Benefit Plan that is subject to the laws or
applicable customs or rules of relevant jurisdictions other than the United
States, each such Benefit Plan has been administered at all times and in all
material respects in accordance with its terms except as would not reasonably be
expected to have a Company Material Adverse Effect.
Section 3.13 Taxes. (a) Except as set forth in Section 3.13 of
-----
the Company Disclosure Schedule:
(i) the Company and all Company Subsidiaries (x) have duly
filed (or there have been filed on their behalf) with the appropriate Tax
Authorities all material Tax Returns (as hereinafter defined) required to
be filed by them, and such Tax Returns are true, correct and complete in
all material respects, and (y) have duly paid in full (or there has been
paid on their behalf), or have established reserves (in accordance with
GAAP) as reflected on the Financial Statements, all material Taxes that are
due and payable;
(ii) there are no material liens for Taxes upon any property or
assets of the Company or any Company Subsidiary thereof, except for liens
for Taxes not yet due or for which adequate reserves have been established
in accordance with GAAP;
(iii) no material Federal, state, local or foreign Audits are
pending with regard to any material Taxes or material Tax Returns of the
Company or any Company Subsidiary and to the best knowledge of the Company
and the Company Subsidiaries no such Audit is threatened;
(iv) the Federal income Tax Returns of the Company and the
Company Subsidiaries have been examined by the applicable Tax Authorities
(or the applicable statutes of limitation for the assessment of Taxes for
such periods have expired) for all periods through and including December
31, 1997, and as of the date hereof no material adjustments have been
asserted as a result of such examinations which have not been (x) resolved
and fully paid, or (y) reserved on the Financial Statements in accordance
with GAAP;
29
(v) neither the Company nor any Company Subsidiary is a party to
any agreement providing for the allocation, indemnification, or sharing of
Taxes, and
(vi) 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 Company is the "parent" and
is not subject to Treas. Reg. 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."
(b) "Audit" means any audit, assessment, or other examination relating
-----
to Taxes by any Tax Authority or any judicial or administrative proceedings
relating to Taxes. "Tax" or "Taxes" means all Federal, state, local, and
--- -----
foreign taxes, and other assessments of a similar nature (whether imposed
directly or through withholding), including any interest, additions to tax, or
penalties applicable thereto, imposed by any Tax Authority. "Tax Authority"
-------------
means the Internal Revenue Service and any other domestic or foreign
governmental authority responsible for the administration of any Taxes. "Tax
---
Returns" mean all Federal, state, local, and foreign tax returns, declarations,
-------
statements, reports, schedules, forms, and information returns and any
amendments thereto.
Section 3.14 Contracts. (a) Each Company Agreement is valid, binding
---------
and enforceable and is in full force and effect, except where any failure to be
valid, binding and enforceable and in full force and effect would not reasonably
be expected to have a Company Material Adverse Effect, and there are no defaults
thereunder, except those defaults that would not reasonably be expected to have
a Company Material Adverse Effect. Section 3.14 of the Company Disclosure
Schedule sets forth a true and complete list of (i) all material Company
Agreements (defined as any agreement required to be filed as an Exhibit to an
Annual Report on Form 10-K of the Company pursuant to Item 601(b)(10) of
Regulation S-K of the Securities Act) entered into by the Company or any Company
Subsidiary since the Balance Sheet Date and all amendments to any Company
Agreements included as an exhibit to the Company=s Annual Report on Form 10-K
for the fiscal year ended the Balance Sheet Date and (ii) all non-competition
agreements imposing restrictions on the ability of the Company or any Company
Subsidiary to conduct business in any jurisdiction or territory.
Section 3.15 Real and Personal Property. (a) Neither the Company
--------------------------
nor any Company Subsidiary owns any real property. Section 3.15(a) sets forth a
30
complete list of all real property leased by the Company and the Company
Subsidiaries (the "Real Property"). Except as disclosed in Section 3.15(a) of
-------------
the Company Disclosure Schedule, the Company is not a party to any lease,
assignment or similar arrangement under which the Company is a lessor, assignor
or otherwise makes available for use by any third party any portion of the Real
Property.
(b) Except as disclosed in the Company SEC Documents, the Company and
the Company Subsidiaries own, or hold under valid leases, free and clear of all
Encumbrances except Permitted Encumbrances, all personal property, plants,
machinery and equipment necessary for the conduct of the business of the Company
and the Company Subsidiaries.
Section 3.16 Potential Conflict of Interest. Except as set forth
------------------------------
in Section 3.16(a) of the Company Disclosure Schedule or in the Company SEC
Documents filed prior to the date hereof, since December 31, 2000, there have
been no transactions, agreements, arrangements or understandings between the
Company or any Company Subsidiary, on the one hand, and their respective
affiliates, on the other hand, that would be required to be disclosed under Item
404 of Regulation S-K under the Securities Act (except for amounts due as normal
salaries and bonuses and in reimbursements of ordinary expenses). Except as set
forth in Section 3.16(b) of the Company Disclosure Schedule or in the Company
SEC Documents filed prior to the date hereof, no officer of the Company or any
of any Company Subsidiary owns, directly or indirectly, any interest in
(excepting not more than one percent (1%) stock holdings for investment
purposes in securities of publicly-held and traded companies) or is an officer,
director, employee or consultant of any person which is a competitor, lessor,
lessee, customer or supplier of the Company; and no officer or director of the
Company or any of Company Subsidiary (i) owns, directly or indirectly, in whole
or in part, any Intellectual Property which the Company or any Company
Subsidiary is using or the use of which is necessary for the business of the
Company or any Company Subsidiary, (ii) has asserted any claim, charge, action
or cause of action against the Company or any Company Subsidiary, except for
immaterial claims for accrued vacation pay, accrued benefits under any Benefit
Plans and similar matters and agreements existing on the date hereof, and the
Company has no knowledge of any basis for such claims, charges, actions or
causes of action, (iii) has made, on behalf of the Company or any Company
Subsidiary, any payment or commitment to pay any commission, fee or other amount
to, or to purchase or obtain or otherwise contract to purchase or obtain any
goods or services from, any other Person of which any officer or director of the
Company or any Company Subsidiary, or, to the Company's knowledge, a relative of
any of the foregoing, is a partner or stockholder (except stock holdings solely
for investment purposes in securities of
31
publicly held and traded companies) or (iv) owes any money to the Company or any
Company Subsidiary (except for reimbursement of advances in the ordinary course
of business consistent with past practice).
Section 3.17 Intellectual Property. (a) The Company and the
---------------------
Company Subsidiaries own, or are validly licensed or otherwise have the right to
use, free and clear of all Encumbrances, all patents, trademarks, trade secrets,
trade names, service marks, copyrights, Internet domain names and any other
intellectual property that are used in or necessary for the conduct of the
business, as currently conducted or as planned to be conducted, of the Company
and the Company Subsidiaries either individually or taken as a whole. Section
3.17(a) of the Company Disclosure Schedule is a true and complete list of all
(i) patents and patent applications , (ii) trademark registrations and
applications, (iii) service xxxx registrations and applications, (iv) copyright
registrations, applications and renewals (v) material unregistered trademarks,
service marks and copyrights, and (vi) Internet domain names and any
applications therefor for the Company's websites (collectively, "Intellectual
------------
Property"), used or held for use in connection with the business of the Company
--------
or any Company Subsidiary, as currently conducted or as planned to be conducted.
All such Intellectual Property (i) is owned by the Company, is valid,
subsisting, in proper form and enforceable, and has been duly maintained
(including the proper, sufficient and timely submission of all necessary filings
and fees), (ii) has not lapsed, expired or been abandoned, (iii) to the
knowledge of the Company, is not the subject of any opposition, interference,
cancellation or other proceeding before any governmental registration or other
authority in any jurisdiction, and (iv) is free and clear of any Encumbrances,
except for Permitted Encumbrances.
(b) Section 3.17(b) of the Company Disclosure Schedule is a true and
complete list of all Intellectual Property licenses licensed from third parties
and used or held for use in connection with the business of the Company or any
Company Subsidiary, as currently conducted or as planned to be conducted ("IP
--
Licenses"). The Company and the Company Subsidiaries are the owners of record
--------
of the Intellectual Property, free and clear of all Encumbrances. Except for
oppositions and any other adversarial proceedings held in connection with the
examination of patents and trademarks, there is no pending or threatened claim,
suit, arbitration or other adversarial proceeding challenging the ownership,
use, validity, enforceability or registrability of any Intellectual Property.
The Company and the Company Subsidiaries will continue to own the Intellectual
Property free and clear of all Encumbrances except as is set forth in Section
3.17(a) of the Company Disclosure Schedule, and, except as is set forth in
Section 3.28(d) of the Company Disclosure
32
Schedule, will be licensed under the IP Licenses after consummation of the Offer
and the Merger (consistent with their ownership and license rights prior to said
consummation) and such consummation will not result in the breach of any
license, sublicense or other agreement relating to the Intellectual Property.
(c) Except as set forth in Schedule 3.17(c) of the Company Disclosure
Schedule, no claim, suit, action or proceeding involving any infringement of, or
conflict with, any intellectual property rights of any third party has been made
or asserted against the Company or any Company Subsidiary in respect of the
operation of the Company's or any Company Subsidiary's business. Further, to
the Company's knowledge, the conduct by the Company and the Company Subsidiaries
of the business as currently conducted or as planned to be conducted does not
and will not infringe (either directly or indirectly such as through
contributory infringement or inducement to infringe) any intellectual property
rights owned or controlled by any third party.
(d) To the knowledge of the Company, no person is infringing, or
taking any action in conflict with, the rights of the Company or any Subsidiary
with respect to any Intellectual Property. Except as set forth in Schedule
3.17(d), neither the Company nor any Company Subsidiary has licensed, or
otherwise granted, to any third party, any rights in or to any Intellectual
Property other than in the ordinary course of the Company's business of
licensing applications software to resellers, OEM's, and end-users.
(e) The term "Company Computer Software" means other than off-the-
-------------------------
shelf applications that are owned by or exclusively licensed to the Company (i)
any and all computer programs and applications consisting of sets of statements
and instructions to be used directly or indirectly in computer software or
firmware whether in source code or object code form, (ii) databases and
compilations, including without limitation any and all data and collections of
data, whether machine readable or otherwise, (iii) all versions of the foregoing
including, without limitation, all screen displays and designs thereof, and all
component modules of source code or object code or natural language code
therefor, and whether recorded on papers, magnetic media or other electronic or
non-electronic device, (iv) all descriptions, flow-charts and other work product
used to design, plan, organize and develop any of the foregoing, and (v) all
documentation, including without limitation all technical and user manuals and
training materials, relating to the foregoing, and all content contained on all
world wide web sites of the Company or any Subsidiary. All Company Computer
Software was (x) developed by employees of the Company or any Company Subsidiary
within the scope of their employment, (y) developed on
33
behalf of the Company or any Company Subsidiary by a third party, and all
ownership rights therein have been assigned or otherwise transferred to or
vested in the Company or any Company Subsidiary pursuant to written agreements,
or (z) licensed or acquired from third parties pursuant to written license
agreements, assignments or other contracts in full force and effect and of which
the Company or any Company Subsidiary are not in material breach. Except as set
forth in Section 3.17(e) of the Company Disclosure Schedule, (x) no third party
has had access to any of the source code for any of the Company Computer
Software under clauses (i) or (ii) unless pursuant to a non-disclosure agreement
hereof and (y) no act has been done or omitted to be done by the Company or any
Company Subsidiary to impair or dedicate to the public or entitle any
governmental entity to hold abandoned any of such Company Computer Software.
(f) To the Company's knowledge, no trade secret, know-how or other
confidential information relating to the Company or any Company Subsidiary has
been disclosed or authorized to be disclosed to any employee or third party,
other than pursuant to a non-disclosure agreement that reasonably protects the
Company's interest in and to such confidential information.
Section 3.18 Labor Matters. (a) The Company and each Company
-------------
Subsidiary has good labor relations and there are no controversies pending, or
to the knowledge of the Company, threatened between the Company or any Company
Subsidiary, on the one hand, and any of their respective employees, on the other
hand, which would have, individually or in the aggregate, a Company Material
Adverse Effect. Since the Balance Sheet Date, there has been no labor union
organizing any employees of the Company or any Company Subsidiary into one or
more collective bargaining units.
(b) Except as provided in Section 3.12(b) of the Company Disclosure
Schedule, the Company and all Company Subsidiaries are, to the knowledge of the
Company, in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours, and are not engaged in any unfair labor
practice.
(c) Neither the Company nor any of its subsidiaries nor any of their
respective employees, agents or representatives has committed an unfair labor
practice as defined in the National Labor Relations Act and there is no unfair
labor practice complaint against the Company or any Company Subsidiary pending
before the National Labor Relations Board.
34
(d) Since December 31, 1998, there has been no and there is no actual
or threatened labor dispute, strike, slowdown or work stoppage or, to the
knowledge of the Company, threatened against or affecting the Company or any
Company Subsidiary.
(e) Neither Company nor any of its Subsidiaries has received notice
of any actual or threatened investigation, charge or complaint against Company
or any of its Subsidiaries with respect to employees pending before the Equal
Employment Opportunity Commission or any other Governmental Entity regarding an
unlawful employment practice.
(f) Company and each of its Subsidiaries is and has been in
compliance with all notice and other requirements under the Workers' Adjustment
and Retraining Notification Act.
Section 3.19 Compliance with Laws. Except as set forth in Section
--------------------
3.19 of the Company Disclosure Schedule, the Company and the Company
Subsidiaries have complied in all material respects with all laws, rules and
regulations, ordinances, judgments, decrees, orders, writs and injunctions of
all United States federal, state, local, foreign governments and agencies
thereof which affect the business, properties or assets of the Company and the
Company Subsidiaries, except for instances of possible noncompliance that
individually or in the aggregate would not reasonably be expected to have
Company Material Adverse Effect, and no notice, charge, claim, action or
assertion has been received by the Company or any Company Subsidiary or has been
filed, commenced or, to the Company's knowledge, threatened against the Company
or any Company Subsidiary alleging any violation of any of the foregoing, except
for instances of possible noncompliance that individually or in the aggregate
would not reasonably be expected to have Company Material Adverse Effect. All
licenses, permits and approvals required under such laws, rules and regulations
are in full force and effect except where the failure to be in full force and
effect would not reasonably be expected to have a Company Material Adverse
Effect.
Section 3.20 Product Warranties. The Company provides for
------------------
estimated warranty costs at the time software license fee revenue is recognized.
With respect to each separately priced extended warranty contract, the Company
defers the revenue therefrom and recognizes such revenue on a straight-line
basis over the contract term. On a historical basis, the Company's warranty
experience has, in the aggregate, been consistent with its warranty claims
reserve.
35
Section 3.21 Environmental Matters. Except as set forth in Section
---------------------
3.21 of the Company Disclosure Schedule, (a) the Company and the Company
Subsidiaries are in compliance in all material respects with federal, state,
local and foreign laws and regulations relating to pollution or protection or
preservation of human health or the environment, including, without limitation,
laws and regulations relating to emissions, discharges, releases or threatened
releases of toxic or hazardous substances or hazardous waste, petroleum and
petroleum products, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon, or lead or lead-based paints or materials ("Materials of
------------
Environmental Concern"), or otherwise relating to the generation, storage,
---------------------
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon (collectively,
"Environmental Laws"), and including, but not limited to, compliance with any
------------------
permits or other governmental authorizations or the terms and conditions
thereof, except where noncompliance is not reasonably likely to have a Company
Material Adverse Effect; (b) neither the Company nor any Company Subsidiary has
received any communication or notice, whether from a governmental authority or
otherwise, alleging any violation of or noncompliance with any Environmental
Laws by the Company or any Company Subsidiary or for which the any of them is
responsible, and there is no pending or, to the Company's knowledge, no
threatened claim, action, investigation or notice by any person or entity
alleging potential liability for investigatory, cleanup or governmental response
costs, or natural resources or property damages, or personal injuries,
attorneys' fees or penalties relating to (i) the presence, or release into the
environment, of any Materials of Environmental Concern at any location owned or
operated by the Company or any Company Subsidiary, now or in the past, or (ii)
any violation, or alleged violation, of any Environmental Law (collectively,
"Environmental Claims"), except where such notices, communications or
--------------------
Environmental Claims would not reasonably be expected to have a Company Material
Adverse Effect; and (c) to the Company's knowledge, there are no past or present
facts or circumstances that are reasonably likely to form the basis of any
Environmental Claim against the Company or any Company Subsidiary or against any
person or entity whose liability for any Environmental Claim the Company or such
Company Subsidiary have retained or assumed either contractually or by operation
of law, except where such Environmental Claim, if made, would not reasonably be
expected to have a Company Material Adverse Effect.
Section 3.22 Information in the Proxy Statement. The Proxy
----------------------------------
Statement, if any (and any amendment thereof or supplement thereto), at the date
mailed to the Company's stockholders and at the time of any meeting of Company
36
stockholders to be held in connection with the Merger, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading, except
that no representation is made by the Company with respect to statements made
therein based on information supplied in writing by Parent or the Purchaser
expressly for inclusion in the Proxy Statement. The Proxy Statement will comply
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder.
Section 3.23 Information in the Offer Documents and the Schedule
---------------------------------------------------
14D-9. The information supplied by the Company expressly for inclusion in the
-----
Offer Documents and the Schedule 14D-9 will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The Schedule 14D-9
will comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published or sent or given to the Company's stockholders, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading,
except that the Company makes no representation or warranty with respect to
statements made in the Schedule 14D-9 based on information furnished by Parent
or Purchaser for inclusion therein.
Section 3.24 Opinion of Financial Advisor. The Company has
----------------------------
received the written opinion of U.S. Bancorp Xxxxx Xxxxxxx Inc., ("Piper
-----
Jaffray") dated the date hereof, to the effect that, as of such date, the
-------
consideration to be received in the Offer and the Merger by the Company's
stockholders is fair to the Company's stockholders from a financial point of
view, and a copy of such opinion has been delivered to Parent and the Purchaser.
The Company has been authorized by Xxxxx Xxxxxxx to permit the inclusion of such
opinion in its entirety in the Offer Documents, the Schedule 14D-9 and the Proxy
Statement, provided that Xxxxx Xxxxxxx shall have the right to review and
approve in advance of filing the form and content of such opinion and any
reference thereto contained in the Offer Documents and the Schedule 14D-9.
Section 3.25 Insurance. Each of the Company and each Company
---------
Subsidiary has policies of insurance and bonds of the type and in amounts
37
customarily carried by Persons conducting businesses or owning assets similar to
those of the Company and the Company Subsidiaries. There is no claim pending
under any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. All premiums
due and payable under all such policies and bonds have been paid and the Company
and the Company Subsidiaries are otherwise in compliance in all material
respects with the terms of such policies and bonds. The Company has no
knowledge of any threatened termination of, or material premium increase with
respect to, any such policies. Section 3.25(a) of the Company Disclosure
Schedule reasonably identifies all material policies of fire, liability,
workers' compensation, and other forms of insurance owned or held by the Company
and each Company Subsidiary.
Section 3.26 Brokers. No broker, investment banker, financial
-------
advisor or other person, other than Xxxxx Xxxxxxx, the fees and expenses of
which will be paid by the Company, 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 Company or the
Purchaser. True and correct copies of all agreements between the Company and
Xxxxx Xxxxxxx, including, without limitation, any fee arrangements, are included
in Section 3.26 of the Disclosure Schedule.
Section 3.27 Personnel. Section 3.27 of the Company Disclosure
---------
Schedule sets forth a true and complete list of (a) the names and current
salaries of all directors and elected and appointed officers of the Company, (b)
the number of shares of the Company Stock owned beneficially or of record, or
both, by each such person and the family relationships, if any, among such
persons, and (c) the names of the directors and executive officers of each of
the Company Subsidiaries.
Section 3.28 Symantec License. The Company has delivered to Parent
----------------
and its counsel true and complete copies of that certain Software License
Agreement by and among SalesLogix Corporation, Symantec Corporation and Symantec
Limited (Symantec Limited and Symantec Corporation, collectively "Symantec")
--------
dated as of December 6, 1999, as amended December 31, 1999, together with all
associated exhibits, schedules, appendices, disclosure letters, bills of sales,
certificates, and assignments, and the Ancillary Agreements (as defined therein)
(collectively, the "Symantec License") and all correspondence between the
----------------
parties to the Symantec License from and after December 6, 1999. With respect
to the Symantec License: (x) no party thereto has been or is in any violation,
breach or default with respect to any term, condition or provision thereunder,
and there has neither been nor is there continuing any condition or event that
could reasonably be
38
expected to give rise to any right by any party thereto to terminate, amend,
cancel, accelerate or otherwise modify, in any manner or degree whatsoever, any
term, condition or provision thereunder; and (y) the Company has neither
knowledge nor reason to believe that Symantec will (i) violate, breach or
default with respect to any term, condition or provision thereunder, or (ii)
seek to terminate, amend, cancel, accelerate or otherwise modify, in any manner
or degree whatsoever, any term, condition or provision thereunder. The software
products licensed pursuant to the Symantec License ("Licensed Products")
-----------------
incorporate certain third party software. Schedule 3.28(a) is a true and
complete list of the third party software as incorporated into the Licensed
Products as of December 6, 1999. Schedule 3.28(b) is a true and complete list of
the third party software additionally incorporated into the Licensed Products
since December 6, 1999. Schedule 3.28(c) is a true and complete list of the
third party software removed from the Licensed Products since December 6, 1999.
Except as set forth in Schedule 3.28(d), Company represents that it received all
necessary consent(s), license(s) and/or sublicense(s) from the appropriate third
parties to fully exercise its rights in the Licensed Products granted under the
Symantec License. Company further represents that all of the foregoing
consent(s), license(s), and/or sublicense(s) have been delivered to Parent. The
shared technology licensed programs, including LiveUpdate, LiveReg, AboutBox,
and EMS code are no longer incorporated in the Licensed Products. The support
service for the Macintosh version of the Licensed Products has been outsourced
to a third party, but no rights in the Licensed Products were granted with
respect thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser jointly and severally represent and warrant
to the Company as follows:
Section 4.1 Organization. Each of Parent and the Purchaser is a
------------
corporation duly organized and validly existing under the laws of the
jurisdiction of its respective incorporation or organization and has all
requisite corporate power and authority and all necessary governmental approvals
to own, lease and operate its properties and to carry on its business as is now
being conducted, except where the failure to be so organized and existing or to
have such power, authority, and governmental approvals would not, individually
or in the aggregate, impair in any material respect the ability of each of
Parent and the Purchaser, as the case may be,
39
to perform its obligations under this Agreement, or prevent or materially delay
the consummation of any of the Transactions.
Section 4.2 Authorization; Validity of Agreement; Necessary Action. Each
------------------------------------------------------
of Parent and the Purchaser has full corporate power and authority to execute
and deliver this Agreement and to consummate the Transactions. The execution,
delivery and performance by Parent and the Purchaser of this Agreement and the
consummation of the Transactions have been duly authorized by the boards of
directors of each of Parent and the Purchaser, and by Parent as the sole
stockholder of the Purchaser, and no other corporate authority or approval on
the part of Parent or the Purchaser is necessary to authorize the execution and
delivery by Parent and the Purchaser of this Agreement and the consummation of
the Transactions. This Agreement has been duly executed and delivered by Parent
and the Purchaser and, assuming due and valid authorization, execution and
delivery hereof by the Company, is the valid and binding obligation of each of
Parent and the Purchaser enforceable against each of them in accordance with its
terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
Section 4.3 Consents and Approvals; No Violations. None of the
-------------------------------------
execution, delivery or performance of this Agreement by Parent or the Purchaser,
the consummation by Parent or the Purchaser of the Transactions, or compliance
by Parent or the Purchaser with any of the provisions hereof will (a) conflict
with or result in any breach of any provision of the organizational documents of
Parent or the Certificate of Incorporation or Bylaws of the Purchaser, (b)
require any filing by Parent or the Purchaser with, or permit, authorization,
consent or approval of, any Governmental Entity (except for (i) compliance with
any applicable requirements of the Exchange Act, (ii) any filing pursuant to the
DGCL, (iii) filings, permits, authorizations, consents and approvals as may be
required under, and the HSR Act and comparable merger and notifications, laws or
regulations of foreign jurisdictions, (iv) the filing or deemed filing with the
SEC and the Nasdaq Stock Market, Inc. of (A) the Schedule TO, (B) the Proxy
Statement, if stockholder approval is required by law and (C) such reports under
Section 13(a) of the Exchange Act as may be required in connection with this
Agreement and the Transactions, or (iv) such filings and approvals as may be
required by any applicable state securities, blue sky or takeover laws), or (c)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its Subsidiaries, or any of their properties or
40
assets, except in the case of clause (b) or (c) such violations, breaches or
defaults which would not, individually or in the aggregate, impair in any
material respect the ability of each Parent and the Purchaser to perform its
obligations under this Agreement, as the case may be, or prevent or materially
delay the consummation of any the Transactions.
Section 4.4 Information in the Proxy Statement. None of the information
----------------------------------
supplied by Parent or the Purchaser in writing expressly for inclusion or
incorporation by reference in the Proxy Statement (or any amendment thereof or
supplement thereto) will, at the date mailed to stockholders and at the time of
the meeting of stockholders to be held in connection with the Merger, 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.
Section 4.5 Information in the Offer Documents. The Offer Documents will
----------------------------------
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published or sent or given to the Company's stockholders, will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading,
except that no representation is made by Parent or Purchaser with respect to
information furnished by the Company expressly for inclusion in the Offer
Documents.
Section 4.6 Brokers. No broker, investment banker, financial advisor or
-------
other Person, other than Deutsche Banc Alex. Xxxxx, the fees and expenses of
which will be paid by Parent, 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 Parent or Purchaser.
Section 4.7 Financing. Purchaser has, and will have available to it upon
---------
the consummation of the Offer, sufficient funds to consummate the Transactions,
including payment in full for all Shares validly tendered into the Offer or
outstanding at the Effective Time (and all related fees and expenses), subject
to the terms and conditions of the Offer and this Agreement.
41
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Acquisition Proposals. The Company shall promptly notify
---------------------
Parent and the Purchaser if any 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 officers, directors, employees, investment
bankers, attorneys, accountants or other agents, in each case in connection with
any Acquisition Proposal (as hereinafter defined) indicating, in connection with
such notice, the name of the Person making such Acquisition Proposal and the
material terms and conditions of any proposals or offers. The Company agrees
that it shall keep Parent and the Purchaser informed, on a current basis, of the
status and terms of any Acquisition Proposal. As used in this Agreement,
"Acquisition Proposal" means any tender or exchange offer involving the Company,
--------------------
any proposal for a merger, consolidation or other business combination involving
the Company, any proposal or offer to acquire in any manner a substantial equity
interest in, or a substantial portion of the business or assets of, the Company
(other than immaterial or insubstantial assets or inventory in the ordinary
course of business or assets held for sale), any proposal or offer with respect
to any recapitalization or restructuring with respect to the Company or any
proposal or offer with respect to any other transaction similar to any of the
foregoing with respect to the Company other than pursuant to the transactions to
be effected pursuant to this Agreement.
Section 5.2 Interim Operations of the Company. The Company covenants and
---------------------------------
agrees that, except (i) as expressly contemplated by this Agreement or the Stock
Option Agreement, (ii) in the ordinary course of business consistent with past
practice or (iii) as agreed in writing by Parent, after the date hereof, and
prior to the earlier of (x) the termination of this Agreement in accordance with
Article VIII and (y) the time the designees of Parent have been elected to, and
shall constitute a majority of, the Company Board of Directors pursuant to
Section 1.3 (the "Appointment Date"):
----------------
(a) the business of the Company and the Company Subsidiaries shall be
conducted only in the ordinary course of business consistent with past practice,
and each of the Company and the Company Subsidiaries shall use its commercially
reasonable efforts to preserve its present business organization intact and
maintain satisfactory relations with customers, suppliers, employees (except as
noted in severance agreements or stay bonuses), contractors, distributors and
others having business dealings with it;
42
(b) the Company shall not, directly or indirectly, (i) except upon
exercise of the Options or other rights to purchase Shares pursuant to the
Option Plans outstanding on the date hereof or granted in compliance with this
Section 5.2, issue, sell, transfer or pledge or agree to sell, transfer or
pledge any treasury stock of the Company or any capital stock of any Company
Subsidiary beneficially owned by it, (ii) amend its Certificate of Incorporation
or Bylaws or similar organizational documents; or (iii) split, combine or
reclassify the outstanding Shares or any outstanding capital stock of the
Company;
(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; (ii) issue, sell, pledge, dispose of
or encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of capital stock of any class of the Company or any
Company Subsidiaries, other than Shares reserved for issuance on the date hereof
pursuant to the exercise of the Options outstanding on the date hereof or as
permitted under this Agreement; (iii) transfer, 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 consistent with past practice; or (iv) redeem, purchase or otherwise
acquire any shares of any class or series of its capital stock, or any
instrument or security which consists of or includes a right to acquire such
shares except in connection with the exercise of repurchase rights or rights of
first refusal in favor of the Company with respect to shares of Common Stock
issued upon exercise of Options granted under the Option Plans;
(d) except as provided in Section 5.2(d) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary shall make any change
in the compensation or benefits payable or to become payable to any of its
officers, directors, employees, agents or consultants (other than increases in
wages to employees who are not directors or affiliates, in the ordinary course
of business consistent with past practice) or to persons providing management
services, enter into or amend any employment, severance, consulting, termination
or other agreement or employee benefit plan or make any loans to any of its
officers, directors, employees, affiliates, agents or consultants or make any
change in its existing borrowing or lending arrangements for or on behalf of any
of such persons pursuant to an employee benefit plan or otherwise;
(e) neither the Company nor any Company Subsidiary shall pay or make any
accrual or arrangement for payment of any pension, retirement
43
allowance or other employee benefit pursuant to any existing plan, agreement or
arrangement to any officer, director, employee or affiliate or pay or agree to
pay or make any accrual or arrangement for payment to any officers, directors,
employees or affiliates of the Company of any amount relating to unused vacation
days, except payments and accruals made in the ordinary course of business
consistent with past practice; adopt or pay, grant, issue, accelerate or accrue
salary or other payments or benefits pursuant to any 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 with or for the benefit of any Company
director, officer, employee, agent or consultant, whether past or present,
except pay benefits under a Benefit Plan in the ordinary course of business
consistent with past practice, or amend in any material respect any such
existing plan, agreement or arrangement in a manner inconsistent with the
foregoing; nor, except as provided in Section 2.4(b) with respect to the ESPP,
will the Company or any Company Subsidiary offer, grant or issue any stock
options;
(f) the Company will not, in any material respect, modify, amend or
terminate any of the Company Agreements, and neither the Company nor any Company
Subsidiary shall waive, release or assign any material rights on claims under
any of the Company Agreements;
(g) neither the Company nor any Company Subsidiary will permit any
insurance policy naming it as a beneficiary or a loss payee to be cancelled or
terminated without notice to Parent;
(h) except as permitted under Section 7.1 of that certain Loan and
Security Agreement dated March 16, 2001 between the Company and Foothill Capital
Corporation as in effect on the date hereof (the "Foothill Agreement," true and
------------------
complete copies of which have been provided to Parent and its counsel, as
amended to the date hereof) neither the Company nor any Company Subsidiary will
(i) incur or assume any long-term or short-term indebtedness; (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person; (iii) make
any loans, advances or capital contributions to, or investments in, any other
Person; or (iv) enter into any material commitment or transaction (including,
but not limited to, any borrowing, capital expenditure or purchase, sale or
lease of assets or real estate). Notwithstanding the foregoing, the Company
shall not, without the prior consent of Parent, make any investment within the
meaning of clause (d) of the definition of "Permitted Investment" in the
Foothill Agreement, nor shall it enter into any
44
guarantees for the obligations of any of its Subsidiaries other than general
guarantees, not to exceed one year, for the obligations of its international
subsidiaries that may required as part of a statutory audit.;
(i) neither the Company nor any Company Subsidiary will (i) change any of
the accounting methods used by it materially affecting its assets, liabilities
or business, except for such changes required by GAAP or (ii) 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 claim or assessment relating to Taxes or consent to any claim or
assessment relating to Taxes or any waiver of the statute of limitations for any
such claim or assessment;
(j) neither the Company nor any Company Subsidiary will pay, discharge or
satisfy any claims, liabilities or obligations (whether absolute, accrued,
contingent or otherwise), other than the payment, discharge or satisfaction of
any such claims, liabilities or obligations, in the ordinary course of business
consistent with past practice, or of claims, liabilities or obligations
reflected or reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of the Company;
(k) 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);
(l) neither the Company nor any Company Subsidiary will take, or agree in
writing or otherwise to take, any action that would or is reasonably likely to
result in any of the conditions to the Merger set forth in Article VII or any of
the conditions to the Offer set forth in Annex I not being satisfied, or would
make many representation or warranty of the Company contained herein inaccurate
in any material respect at, or as of any time prior to, the Effective Time, or
that would materially impair the ability of the Company to consummate the Merger
in accordance with the terms hereof or materially delay such consummation; and
(m) neither the Company nor any Company Subsidiary will enter into any
written agreement, contract, commitment or arrangement to do any of the
foregoing, or authorize, recommend, propose, in writing or announce an intention
to do any of the foregoing.
45
Section 5.3 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. Except as provided in Section 5.3(b), from the date of this Agreement
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 knowingly take any action to facilitate the
making of, any offer or proposal which constitutes or is reasonably likely to
lead to any Acquisition Proposal, (ii) enter into any agreement with respect to
any Acquisition Proposal, or (iii) in the event of an unsolicited Acquisition
Proposal for the Company, 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 any Acquisition Proposal. Any
violation of the foregoing restrictions by any of the Company's authorized
Representatives shall be deemed to be a breach of this Agreement by the Company.
Notwithstanding the foregoing, nothing contained in this Section 5.3 or any
other provision hereof shall prohibit the Company or the Company Board of
Directors from (x) taking and disclosing to the Company's stockholders its
position with respect to tender or exchange offer by a third party pursuant to
Rules 14d-9 and 14e-2 promulgated under the Exchange Act, (y) making such
disclosure to the Company's stockholders as in the good-faith judgment of the
Company Board of Directors, only after receipt of advice from outside legal
counsel to the Company that such disclosure is required under applicable law and
that the failure to make such disclosure is reasonably likely to cause the
Company Board of Directors to violate its fiduciary duties to the Company's
stockholders under applicable law, is required, or (z) otherwise complying with
its fiduciary duties to stockholders.
(b) Notwithstanding the foregoing, prior to the acceptance of Shares
pursuant to the Offer, the Company may furnish information concerning its
business, properties or assets to any Person pursuant to a confidentiality
agreement with terms no less favorable to the Company than those contained in
the Confidentiality Agreement, dated February 22, 2000 entered into between
Parent and the Company (the "Confidentiality Agreement") and may negotiate and
-------------------------
participate in discussions and negotiations with such Person concerning an
Acquisition Proposal if, but only if, (x) such Acquisition Proposal provides for
consideration to be received by the holders of all, but not less than all, of
the issued and outstanding Shares; (y) such entity or group has on an
unsolicited basis, and in the absence of any violation of this Section 5.3 by
the Company, submitted a bona fide written proposal to the Company relating to
any such transaction which the Board of Directors determines in good
46
faith, after receiving advice from a nationally recognized investment banking
firm, involves consideration to the holders of the Shares that is superior to
the consideration offered pursuant to the Offer and otherwise represents a
superior transaction to the Offer and the Merger and which is not conditioned
upon obtaining additional financing, and (z) in the good faith opinion of the
Company Board of Directors, only after consultation with outside legal counsel
to the Company, providing such information or access or engaging in such
discussions or negotiations is in the best interests of the Company and its
stockholders and the failure to provide such information or access or to engage
in such discussions or negotiations would cause the Company Board of Directors
to violate its fiduciary duties to the Company's stockholders under applicable
law (an Acquisition Proposal which satisfies clauses (x), (y) and (z) being
referred to herein as a "Superior Proposal"). The Company shall promptly, and in
-----------------
any event within one business day following receipt of a Superior Proposal and
prior to providing any such party with any material non-public information,
notify Parent of the receipt of the same. The Company shall promptly provide to
Parent any material non-public information regarding the Company provided to any
other party which was not previously provided to Parent, such additional
information to be provided no later than the date of provision of such
information to such other party.
(c) Except as set forth herein, neither the Company Board of Directors nor
any committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to the Transactions, to Parent or to the Purchaser,
the approval or recommendation by the Company Board of Directors or any such
committee of the Offer, 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 time of acceptance for payment of Shares in the Offer,
the Company Board of Directors may (subject to the terms of this and the
following sentence) withdraw or modify its approval or recommendation of the
Offer, this Agreement or the Merger, approve or recommend a Superior Proposal,
or enter into an agreement with respect to a Superior Proposal (other than a
confidentiality agreement entered into in compliance with the terms of Section
5.3(b)), in each case at any time after the fourth business day following the
Company's delivery to Parent of written notice advising Parent that the Company
Board of Directors has received a Superior Proposal, specifying the material
terms and conditions of such Superior Proposal and identifying the Person making
such Superior Proposal; provided, however, that the Company shall not enter into
--------
an agreement with respect to a Superior Proposal unless the Company shall also
have terminated this Agreement in compliance with Section 5.3(d). Any such
withdrawal, modification or change of the
47
recommendation or the Company Board of Directors, the approval or recommendation
or proposed approval or recommendation of any Superior Proposal or the entry by
the Company into any agreement with respect to any Superior Proposal shall not
change the approval of the Company Board of Directors for purposes of causing
any state takeover statute or other state law to be inapplicable to the
Transactions, including each of the Offer, the Merger, the Stock Option
Agreement and the Shareholder Agreement.
(d) The Company may terminate this Agreement and enter into a letter of
intent, agreement-in- principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") with respect to such Superior
---------------------
Proposal, provided that, prior to any such termination, (i) the Company has
provided Parent written notice that it intends to terminate this Agreement
pursuant to this Section 5.3(d), identifying the Superior Proposal then
determined to be more favorable and the parties thereto and delivering a copy of
the Acquisition Agreement for such Superior Proposal in the form to be entered
into, (ii) during the period following the delivery of the notice referred to in
clause (i) above, during which Parent shall have the right to propose
adjustments in the terms and conditions of this Agreement and the Company shall
have caused its financial and legal advisors to negotiate with Parent in good
faith such proposed adjustments in the terms and conditions of this Agreement,
(iii) at least four full business days after the Company has provided the notice
referred to in clause (i) above, the Company delivers to Parent (A) a written
notice of termination of this Agreement pursuant to this Section 5.3(d), and (B)
a cashier's check in the amount of the Termination Fee (as defined in Section
8.2(b)) plus the reasonable out-of-pocket expenses of Parent and Purchaser as
set forth in Section 8.2(b), as the same may have been estimated by Parent in
good faith prior to the date of such delivery (subject to an adjustment payment
between the parties upon Parent's definitive determination of such expenses),
(C) a written acknowledgment from the Company that (x) the termination of this
Agreement and the entry into the Acquisition Agreement for the Superior Proposal
will be a "Triggering Event" as defined in the Stock Option Agreement and (y)
the Stock Option Agreement shall be honored in accordance with its terms, and
(D) a written acknowledgment from each other party to such Superior Proposal
that it is aware of the substance of the Company's acknowledgment under clause
(C) above, and waives any right it may have to contest the matters thus
acknowledged by the Company and each such stockholder or the validity or
enforceability of any of the terms and conditions of this Agreement, the Stock
Option Agreement or the Shareholder Agreement.
48
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Proxy Statement. As promptly as practicable after the
---------------
consummation of the Offer and if required by the Exchange Act, the Company shall
prepare and file with the SEC, and shall use its reasonable efforts to respond
promptly to any comments made by the SEC, and promptly thereafter shall mail to
stockholders, the Proxy Statement. In such event, the Proxy Statement shall
contain the recommendation of the Company Board of Directors in favor of the
Merger.
Section 6.2 Meeting of Stockholders of the Company. In connection with
--------------------------------------
the Special Meeting, if any, the Company shall use its reasonable efforts to
solicit from stockholders of the Company proxies in favor of the Merger, and
shall take all other action necessary or, in the reasonable opinion of the
Purchaser, advisable to secure any vote or consent of such stockholders required
by the DGCL and the Company's Certificate of Incorporation to effect the Merger.
The Purchaser agrees that it shall vote, or cause to be voted, in favor of the
Merger all Shares directly or indirectly beneficially owned by it.
Section 6.3 Additional Agreements. Subject to the terms and conditions
---------------------
as herein provided, the Company, Parent and Purchaser shall each comply in all
material respects with all applicable laws and with all applicable rules and
regulations of any Governmental Entity to achieve the satisfaction of the
Minimum Condition and all conditions set forth in Annex I attached hereto and in
Article VII, and to consummate and make effective the Merger and the other
Transactions. Each of the parties hereto agrees to use all commercially
reasonable efforts to obtain in a timely manner all necessary waivers, consents
and approvals and to effect all necessary registrations and filings, and to use
all commercially reasonable efforts to take, or cause to be taken, all other
actions and to do, or cause to be done, all other things necessary, proper or
advisable to consummate and make effective as promptly as practicable the
Transactions; provided; that nothing contained in this Section 6.3 shall require
--------
any party to waive or exercise any right hereunder which is waivable or
exercisable in the sole discretion of such party. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of the Company,
Parent and the Purchaser shall use all commercially reasonable efforts to take,
or cause to be taken, all such necessary actions.
49
Section 6.4 Notification of Certain Matters. The Company shall give
-------------------------------
prompt notice to the Purchaser and the Purchaser shall give prompt notice to the
Company, of (a) the occurrence or non-occurrence of any event whose occurrence
or non-occurrence, as the case may be, would be likely to cause either (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (ii) any condition set forth in Annex I to be unsatisfied in
any material respect at any time from the date hereof to the date the Purchaser
purchases Shares pursuant to the Offer (except to the extent it refers to a
specific date) and (b) any material failure of the Company, the Purchaser or
Parent, as the case may be, or any officer, director, employee or agent thereof,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
--------
notice pursuant to this Section 6.4 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.
Section 6.5 Access; Confidentiality. From the date hereof until the
-----------------------
Effective Time, upon reasonable notice and subject to the terms of the
Confidentiality Agreement, 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 Parent and the
Purchaser, reasonable access, during normal business hours throughout the period
prior to the Appointment Date, to all of its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of the Company Subsidiaries to), subject to any limitations imposed
by law with respect to records of employees, furnish promptly to 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 and (b) all other information concerning its
business, properties and personnel as Parent or the Purchaser may reasonably
request. After the Appointment Date, the Company shall provide Parent or the
Purchaser and such persons as Parent or the Purchaser shall designate with all
such information as is in Company's possession or control and as Parent or the
Purchaser shall reasonably request, at such time as Parent or the Purchaser
shall reasonably request. Unless otherwise required by law or regulation
(including stock exchange rules) and until the Appointment Date, Parent and the
Purchaser will hold any such information which is non-public in confidence in
accordance with the terms of the Confidentiality Agreement (except as may be
required by law or by any listing agreement with or by the listing rules of the
London Stock Exchange) and, in the event this Agreement is terminated for any
reason, Parent or the Purchaser shall promptly return or destroy
50
such information in accordance with the Confidentiality Agreement. No
investigation pursuant to this Section 6.5 shall affect any representation or
warranty made by the parties hereunder.
Section 6.6 Consents and Approvals. (a) Each of Parent, the Purchaser
----------------------
and the Company shall take all reasonable actions necessary to comply promptly
with all 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 the HSR Act and in connection with
approvals of or filings with any other Governmental Entity) and shall promptly
cooperate with and, subject to such confidentiality agreements as may be
reasonably necessary or requested, furnish information to each other or their
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.
Each of the Company, Parent and the Purchaser shall, and shall cause respective
Subsidiaries to, take all reasonable actions necessary to obtain (and shall
cooperate with each other in obtaining) any consent, authorization, order or
approval of, or any exemption by, any Governmental Entity or other public or
private third party required to be obtained or made by 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.
(b) Each of the Company, the Purchaser and Parent shall take all
reasonable actions necessary to file as soon as practicable following the date
hereof notifications under the HSR Act, or under comparable merger notification
laws under foreign jurisdictions, and to respond as promptly as practicable to
any inquiries received from the Federal Trade Commission or the Antitrust
Division of the Department of Justice or any authorities of such other foreign
jurisdictions for additional information or documentation and to respond as
promptly as practicable to all inquiries and requests received from any State
Attorney General or other Governmental Entity in connection with antitrust or
competition matters. Notwithstanding the foregoing, or any other covenant herein
contained, in connection with the receipt of any necessary approvals under the
HSR Act, neither Parent nor the Company shall be required to divest or hold
separate or otherwise take or commit to take any action that limits Parent's or
Company's freedom of action with respect to, or their ability to retain, the
Company or any material portions thereof or any of the businesses, product
lines, properties or assets of the Company.
Section 6.7 Publicity. The initial press release with respect to the
---------
execution of this Agreement shall be a joint press release acceptable to Parent
and the
51
Company. Thereafter, so long as this Agreement is in effect, neither the Company
nor Parent, nor any of their respective affiliates, shall issue or cause the
publication of any press release or other announcement with respect to the
Offer, the Merger or this Agreement without the prior consultation of the other
party, except as such party believes, after receiving the advice of outside
counsel, may be required by law or by any listing agreement with or listing
rules of a national securities exchange or trading market or by the listing
rules of The London Stock Exchange, in which case, the party proposing to issue
such press release or make such public announcement shall use its best efforts
to consult in good faith with the other party before issuing such press release
or making such public announcements.
Section 6.8 Directors' and Officers' Insurance and Indemnification. (a)
------------------------------------------------------
For a period of six years after the Effective Time, 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 officers and
directors of the Company and the 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 (provided that any
such settlement is effected with the written consent of the Parent or the
Surviving Corporation, which consent shall not unreasonably be withheld))
arising out of actions or omissions occurring at or prior to the Effective Time
to the full extent permissible under applicable provisions of the DGCL, the
terms of the Company's Certificate of Incorporation or the Bylaws, and under any
agreements as in effect at the date hereof (true and correct copies of which
have been previously provided to Parent) including rights to reimbursement or
advancement of expenses and exculpation from liability; provided, however, that
--------
in the event any claim or claims are asserted or made within such six-year
period, all rights to indemnification in respect of any such claim or claims
shall continue until disposition of any and all such claims.
(b) 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 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 Parent or the Surviving
Corporation shall use all reasonable efforts to obtain substantially similar D&O
Insurance of at least the same coverage containing terms and conditions that are
not materially less advantageous;
52
provided further, however, that in no event shall Parent be required to pay
--------
aggregate premiums for insurance under this Section 6.8(b) in excess of 150% of
the average of the aggregate premiums paid by the Company for periods subsequent
to May 27, 1999 on an annualized basis for such purpose (the "Average Premium"),
---------------
which true and correct amounts are set forth in Section 6.8(b) of the Company
Disclosure Schedule; and provided, further, that if Parent or the Surviving
--------
Corporation is unable to obtain the amount of insurance required by this Section
6.8(b) for such aggregate premium, Parent or the Surviving Corporation shall
obtain as much insurance as can be obtained for an annual premium not in excess
of 150% of the Average Premium.
Section 6.9 Purchaser Compliance. Parent shall cause the Purchaser to
--------------------
comply with all of its obligations under this Agreement.
Section 6.10 Reasonable Efforts. (a) Prior to the Closing, upon the terms
------------------
and subject to the conditions of this Agreement, the Purchaser and the Company
agree to use their respective reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things reasonably necessary and
appropriate, under applicable laws to consummate and make effective the
Transactions as promptly as practicable including, but not limited to (i) the
preparation and filing of all forms, registrations and notices required to be
filed to consummate the Transactions and the taking of such actions as are
necessary to obtain any requisite approvals, consents, orders, exemptions or
waivers by any third party or Governmental Entity, and (ii) the satisfaction of
the other parties' conditions to Closing. In addition, no party hereto shall
take any action after the date hereof that would reasonably be expected to
materially delay the obtaining of, or result in not obtaining, any permission,
approval or consent from any Governmental Entity necessary to be obtained prior
to Closing.
(b) Prior to the Closing, each party shall promptly consult with the other
parties hereto with respect to, provide any necessary information with respect
to, and provide the other (or its counsel) copies of, all filings made by such
party with any Governmental Entity or any other information supplied by such
party to a Governmental Entity in connection with this Agreement and the
Transactions. Each party hereto shall promptly inform the other of any
communication from any Governmental Entity regarding any of the Transactions
unless otherwise prohibited by law. If any party hereto or affiliate thereof
receives a request for additional information or documentary material from any
such Government Entity with respect to the Transactions, then such party shall
endeavor in good faith to make, or cause to be made, as soon as reasonably
practicable and after consultation with the other party, an appropriate response
in compliance with such request. To the extent that transfers,
53
amendments or modifications of permits (including environmental permits) are
required as a result of the execution of this Agreement or consummation of the
Transactions, the Company shall use its commercially reasonable efforts to
effect such transfers.
(c) Notwithstanding the foregoing, nothing in this Agreement shall require
the Purchaser to defend against any litigation brought by any Governmental
Entity seeking to prevent the consummation of the Transactions.
Section 6.11 State Takeover Laws. If any state takeover statute becomes
-------------------
or is deemed to become applicable to the Company, the Offer, the acquisition of
Shares pursuant to the Offer, or the Merger, then the Company Board of Directors
shall, subject to its fiduciary duties as advised of the same by its counsel,
use its reasonable efforts to cause such statute to be inapplicable to the
foregoing.
Section 6.12 Interim Directors. Pursuant to Section 1.3(b), the Company
-----------------
shall use its reasonable efforts to cause a sufficient number of its current
directors to continue as Independent Directors of the Company until the
Effective Time.
Section 6.13 Symantec License. With respect to the Symantec License, the
----------------
Company shall use its reasonable efforts to (a) take appropriate actions to
prevent any violation, breach or default by the Company of any term, condition
or provision thereunder, (b) enforce all of the Company's rights and benefits
thereunder, and (c) maintain a mutually-satisfactory relationship with Symantec
with respect thereto. The Company shall not waive, release or assign any rights
thereunder. The Company will use its reasonable efforts to assist Parent in
obtaining from Symantec (a) a certificate with respect to the Symantec License
in form reasonably satisfactory to Parent and its counsel, to the effect that,
upon consummation of the Transactions, Parent will be entitled to all of the
Company's current rights and benefits under the Symantec License, and (b) such
other assurances by Symantec with respect to the Symantec License as Parent may
reasonably request.
54
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligations to Effect the Merger.
-----------------------------------------------------------
The respective obligations of each party to effect the Merger 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 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 holders of the Shares, to the
extent required pursuant to the requirements of the Certificate of Incorporation
and the DGCL.
(b) Statutes; Court Orders. No statute, rule or regulation shall have been
----------------------
enacted or promulgated by any United States or United Kingdom Governmental
Entity which prohibits the consummation of the Merger, and there shall be no
order or injunction of a court of competent jurisdiction in effect preventing
consummation of the Merger; and
(c) Purchase of Shares in Offer. The Purchaser shall have purchased, or
---------------------------
caused to be purchased, Shares pursuant to the Offer; provided, however, that
--------
this condition shall be deemed to have been satisfied with respect to the
obligation of Parent and the Purchaser to effect the Merger if the Purchaser
fails to accept for payment or pay for Shares validly tendered pursuant to the
Offer in violation of the terms of the Offer or of this Agreement; and
(d) HSR Approval. The applicable waiting period under the HSR Act and any
------------
comparable provisions under any applicable pre-merger notification laws or
regulations of foreign jurisdictions shall have expired or been terminated.
Section 7.2 Conditions to Obligations of Parent and the Purchaser to
--------------------------------------------------------
Effect the Merger. The obligations of Parent and the Purchaser to effect the
-----------------
Merger shall be subject to the additional condition, which may be waived in
whole or in part by Parent or the Purchaser to the extent permitted by
applicable law; that all actions contemplated by Section 2.4 shall have been
taken.
55
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the
-----------
Transactions may be abandoned at any time before the Effective Time, whether
before or after stockholder approval thereof:
(a) By mutual written consent of Parent and the Company; or
(b) By (i) Parent if the Minimum Condition shall not have been satisfied
by the Initial Expiration Date (including any extensions thereof) provided,
--------
however, that Parent shall not be entitled to terminate this Agreement pursuant
to this Section 8.1(b) if it or the Purchaser is in material breach of its
representations and warranties, covenants or other obligations under this
Agreement and such breach has been the cause of, or resulted in, such failure to
satisfy the Minimum Condition; or (ii) by the Company (A) if the Offer has not
commenced within seven business days of the execution of this Agreement, or (B)
the Offer (including any extensions thereof) shall have expired without any
Shares being accepted for purchase thereunder by the Purchaser, or (C) if prior
to the acceptance for Purchase of Shares pursuant to the Offer, there has been a
material breach by either Parent or the Purchaser of any representation,
warranty, covenant or agreement set forth herein (and such breach is not
reasonably capable of being cured within 30 days of notice thereof); provided,
however, that the Company shall not be entitled to terminate this Agreement
pursuant to this Section 8.1(b) if it is in material breach of its
representations and warranties, covenants or other obligations under this
Agreement; or
(c) By either Parent or the Company (i) if a court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other action, in each case permanently restraining,
enjoining or otherwise prohibiting any of the Transactions, the Stock Option
Agreement or the Shareholder Agreement, (ii) prior to the purchase of Shares
pursuant to the Offer, if there has been a willful breach by the other party of
any representation, warranty, covenant or agreement set forth in this Agreement,
which breach shall result in any condition set forth in Annex I not being
satisfied (and such breach is not reasonably capable of being cured and such
condition is not reasonably capable of being satisfied within ten days after the
receipt of notice thereof), or (iii) if the Merger has not been consummated by
September 26, 2001; provided, however, that the right to terminate this
--------
Agreement pursuant to this clause (iii) shall not be available to any party
whose
56
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 such date; or
(d) By Parent, at any time prior to the purchase of the Shares pursuant to
the Offer, if (i) the Company Board of Directors shall have withdrawn, modified,
or changed its recommendation in respect of this Agreement or the Offer in a
manner adverse to the Transactions, to the Parent or to the Purchaser, (ii) the
Company Board of Directors shall have recommended any proposal other than by
Parent or the Purchaser in respect of an Acquisition Proposal, (iii) the Company
shall have exercised a right with respect to a Superior Proposal referenced in
Section 5.3(b) and shall, directly or through its representatives, continue
discussions with any third party concerning a Superior Proposal for more than
ten days after the date of receipt of such Superior Proposal, (iv) an
Acquisition Proposal that is publicly disclosed shall have been commenced,
publicly proposed or communicated to the Company which contains a proposal as to
price (without regard to whether such proposal specifies a specific price or a
range of potential prices) and the Company shall not have rejected such proposal
within ten business days of its receipt or, if sooner, the date its existence
first becomes publicly disclosed,(v) the Company shall have violated or breached
any of its obligations under Section 5.3, or (vi) any Person other than Parent
or Purchaser shall have become the beneficial owner of more than ten percent of
the Shares (either on a primary or a fully-diluted basis); or
(e) By the Company pursuant to Section 5.3(d).
Section 8.2 Effect of Termination. (a) In the event of the termination
---------------------
of this Agreement as provided in Section 8.1, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made, and this Agreement shall forthwith
become null and void and there shall be no liability on the part of Parent, the
Purchaser or the Company, except (i) as set forth in Sections 6.5(a), 8.2 and
9.3 and (ii) nothing herein shall relieve any party from liability for any
breach of this Agreement.
(b) If (i) Parent shall have terminated this Agreement pursuant to Section
8.1(d), (ii) the Company shall have terminated this Agreement pursuant to
Section 8.1(e), or (iii) both (x) Parent shall have terminated this Agreement
pursuant to Section 8.1(c)(ii) and (y) following the date hereof but prior to
such termination there shall have been an Acquisition Proposal, then the Company
shall pay to Parent promptly, but in no event later than two business days after
the date of such termination if pursuant to Section 8.1(c)(ii) or Section
8.1(e), a termination fee (the "Termination Fee") of $7,875,000 plus an amount,
---------------
not in excess of $1,500,000, equal
57
to the Purchaser's reasonable actual and documented out-of-pocket expenses
incurred by Parent and the Purchaser in connection with the Offer, the Merger,
this Agreement and the consummation of the Transactions, which amount shall be
payable by wire transfer to such account as Parent may designate in writing to
the Company. The Company shall not withhold any United States withholding taxes
on any payment under this Section 8.2.
Section 8.3 Indemnity.
---------
(a) Subject to the provisions of this Section 8.3, Parent hereby agrees to
indemnify the Company and its officers and directors with respect to any
liability for United States federal withholding taxes (including any interest,
additions to tax, or penalties related thereto) with respect to the payment by
the Company to Parent of the Termination Fee described in Section 8.2 of this
Agreement and with respect to any payment under Section 1.5 of the Option
Agreement ("Possible Withholding Taxes").
--------------------------
(b) If the Company is notified, in writing, as part of an audit or other
administrative proceeding related to taxes (a "Contest"), that the Internal
-------
Revenue Service is asserting a claim for Possible Withholding Taxes, then (i)
the Company shall promptly notify Parent of such claim in writing, (ii) the
Company shall permit Parent, at Parent's own cost and expense, to control that
portion of the Contest related to Possible Withholding Taxes, including the
execution of any powers-of-attorney or similar documents necessary for Parent to
control such portion of the Contest; provided that in executing such powers-of-
attorney or similar documents, the Company and Parent agree that such powers
shall be limited to such portion of the Contest, and (iii) the Company shall not
settle or otherwise compromise such portion of the Contest related to Possible
Withholding Taxes without the prior written consent of Parent which consent
shall not be unreasonably withheld. If Parent does not assume control under
Section 8.3(b)(ii) above, then Parent shall reimburse the Company promptly upon
demand for reasonable out-of-pocket expenses incurred in connection with that
portion of a Contest related to Possible Withholding Taxes. Parent must inform
the Company of all terms of any proposed settlement prior to settling that
portion of the Contest related to Possible Withholding Taxes and, if the Company
objects to Parent entering into such settlement, Parent shall pay to the Company
the amount that would be payable by Parent under Section 8.3(a) if such
settlement were entered into and upon payment of such amount, any liability of
Parent under this Section 8.3 shall terminate. Parent shall keep the Company
informed of material developments in that portion of the Contest that is
controlled by Parent. Further, without the prior written consent of Parent, the
Company shall not
58
take any position on any tax return or similar filing that Possible Withholding
Taxes may be due and owing, unless such position is required by law pursuant to
a final determination. Neither the Company nor its officers, employees,
representatives, or affiliates shall take any action that prejudices the defense
by Parent of any claim subject to indemnification hereunder. Parent and the
Company shall (i) provide, or cause to be provided, to each other, the
assistance of officers, employees, representatives and affiliates, or such
assistance as may reasonably be requested by any of them in connection with the
portion of the Contest related to Possible Withholding Taxes and (ii) retain, or
cause to be retained, for so long as the taxable year in which a payment was
made by the Company to Parent shall remain open for adjustments, any records or
information which may be relevant to any Tax Returns or Audits for such taxable
year related to Possible Withholding Taxes. If the Company fails to comply with
any of the provisions set forth in this Section 8.3(b), Parent shall be relieved
of any obligation under Section 8.3(a) to the extent of any actual prejudice
suffered by Parent as a result of such failure.
(c) In connection with the payment of a Termination Fee under Section
8.2(b) or a payment under Section 1.5 of the Option Agreement, Parent shall
provide a Form 1001 or similar form on a protective basis certifying that if the
payment of a Termination Fee under Section 8.2(b) or a payment under Section 1.5
of the Option Agreement were deemed to be United States source income, such
payments would be exempt from withholding tax under the United Kingdom-U.S.
Income Tax Treaty as in effect as of the date any such payment is made.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. Subject to applicable law
--------------------------
and as otherwise provided in the Agreement, this Agreement may be amended,
modified and supplemented in any and all respects, whether before or after any
vote of the stockholders of the Company contemplated hereby, by written
agreement of the parties hereto, by action taken by their respective Boards of
Directors or equivalent governing bodies, but, after the purchase of Shares
pursuant to the Offer, no amendment shall be made which decreases the Merger
Consideration and, after the approval of this Agreement by the stockholders, no
amendment shall be made which by law requires further approval by such
stockholders without obtaining such further approval. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
59
Section 9.2 Non-survival of Representations and Warranties. None of
----------------------------------------------
the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the acceptance for payment, and payment for, the Shares by the Purchaser
pursuant to the Offer.
Section 9.3 Expenses. Except as expressly set forth in Section
--------
8.2(b), all fees, costs and expenses incurred in connection with this Agreement
and the Transactions shall be paid by the party incurring such fees, costs and
expenses except that any transfer, stamp or similar taxes shall be borne by
Parent.
Section 9.4 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by a nationally recognized overnight
courier service, such as Federal Express (providing proof of delivery), to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or the Purchaser, to:
The Sage Group plc
Xxxx Xxxxx
Xxxxxx Xxxx Xxxx
Xxxxxxxxx xxxx Xxxx
XX0 0XX
Attention: Xxxx Xxxxxx
Telephone No.: (00 000) 000-0000
Facsimile No.: (00 000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
60
(b) if to the Company, to:
Interact Commerce Corporation
Suite 200
0000 X. Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx, P.A.
21/st/ Floor
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Section 9.5 Interpretation. When a reference is made in this
--------------
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation." As used in this Agreement, the term "affiliates"
shall have the meaning set forth in Rule 12b-2 of the Exchange Act.
Section 9.6 Counterparts. This Agreement may be executed manually or
------------
by facsimile by the parties hereto, or xerographically or electronically by
their respective attorneys, in any number of counterparts, each of which shall
be considered one and the same agreement and shall become effective when a
counterpart hereof shall have been signed by each of the parties and delivered
to the other parties.
Section 9.7 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement and the Confidentiality Agreement:
(a) constitute the entire agreement among the parties with respect to
the subject matter hereof and thereof and supersedes all other prior agreements
and understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof and thereof (provided that the provisions
of this
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Agreement shall supersede any conflicting provisions of the Confidentiality
Agreement), and
(b) except as provided in Sections 2.4 and 6.8, is not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.
Section 9.8 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by rule of law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
Transactions are fulfilled to the extent possible.
Section 9.9 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof, provided, however, that
--------
the laws of the respective jurisdictions of incorporation of each of the parties
shall govern the relative rights, obligations, powers, duties and other internal
affairs of such party and its board of directors.
Section 9.10 Assignment. This Agreement shall not be assigned by any
----------
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties, except that the Purchaser may
assign, in its sole discretion and without the consent of any other party, any
or all of its rights, interests and obligations hereunder to (i) Parent, (ii) to
Parent and one or more direct or indirect wholly-owned Subsidiaries of Parent,
or (iii) to one or more direct or indirect wholly-owned Subsidiaries of Parent
(each, an "Assignee"). Any such Assignee may thereafter assign, in its sole
--------
discretion and without the consent of any other party, any or all of its rights,
interests and obligations hereunder to one or more additional Assignees.
Subject to the preceding sentence, but without relieving any party hereto of any
obligation hereunder, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the parties and their respective successors and
assigns.
IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
THE SAGE GROUP PLC
By ________________________________
Name:
Title:
ISAIAH ACQUISITION CORP.
By ________________________________
Name:
Title:
INTERACT COMMERCE CORPORATION
By ________________________________
Name:
Title:
Signature page to Agreement and Plan of Reorganization and Merger
ANNEX I
Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) the Purchaser's rights to extend and amend the Offer
at any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule 14e-
1(c) under the Exchange Act (relating to the Purchaser's obligation to pay for
or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any validly tendered Shares
unless the Minimum Condition shall have been satisfied. Furthermore,
notwithstanding any other provisions of the Offer, the Purchaser shall not be
required to accept for payment or pay for any validly tendered Shares if, at the
scheduled expiration date (i) any applicable waiting periods under the HSR Act
and any comparable provisions under any applicable pre-merger notification laws
or regulations of foreign jurisdictions have not expired or terminated prior to
termination of the Offer, or (ii) any of the following events shall occur, or
shall be deemed by Purchaser to have occurred, and be continuing:
(a) there shall be threatened in writing or pending any suit, action
or proceeding by any United States or United Kingdom Governmental Entity against
the Purchaser, Parent, the Company or any Company Subsidiary (i) seeking to
prohibit or impose any material limitations on Parent's or the Purchaser's
ownership or operation (or that of any of their respective Subsidiaries or
affiliates) of all or a material portion of their or the Company's and the
Company Subsidiaries' businesses or assets, taken as a whole, or to compel
Parent or the Purchaser or their respective Subsidiaries and affiliates to
dispose of or hold separate any material portion of the business or assets of
the Company or Parent and their respective Subsidiaries, in each case taken as a
whole, (ii) challenging the acquisition by Parent or the Purchaser of any Shares
under the Offer, seeking to restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any of the other Transactions, or
seeking to obtain from the Company, Parent or the Purchaser any damages that are
material in relation to the Company and the Company Subsidiaries taken as a
whole, (iii) seeking to impose material limitations on the ability of the
Purchaser, or render the Purchaser unable, to accept for payment, pay for or
purchase some or all of the Shares pursuant to the Offer and the Merger, or (iv)
seeking to impose material limitations on the ability of Purchaser or Parent
effectively to exercise full rights of ownership of the Shares, including,
without
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limitation, the right to vote the Shares purchased by it on all matters properly
presented to the Company's stockholders;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under HSR Act, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the London Stock Exchange, the
New York Stock Exchange, the American Stock Exchange or the NASDAQ Stock Market
for a period in excess of three hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchanges not
related to market conditions), (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or the United
Kingdom (whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States or the United Kingdom, (iv) any limitation (whether
or not mandatory) by any United States or United Kingdom Governmental Entity on
the extension of credit generally by banks or other financial institutions;
(d) any of the representations and warranties of Company contained in
this Agreement shall not be true and correct in all material respects as of the
date of such determination, except for representations and warranties that
relate to a specific date or time (which need only be true and correct as of
such date or time), and except where the failure to be so true and correct would
not, in the aggregate, be reasonably likely to have a Company Material Adverse
Effect; provided, however, that except with respect to a willful breach of any
representation and warranties by the Company (in which case this proviso shall
not apply), the condition contained in this paragraph (d) shall not be deemed to
have failed unless (i) the Company fails to cure such breach within ten (10)
days after receiving written notice of same from Purchaser or Parent, and (ii)
the aggregate effect all such breaches would be reasonably likely to be
significant to the Company (taking into account the criteria set forth in Rule
1-02(w) of Regulation S-X);
(e) the Company Board of Directors or any committee thereof shall
have (i) withdrawn, or modified or changed in a manner adverse to the
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Transactions, to the Parent or to the Purchaser (including by amendment of the
Schedule 14D-9), its recommendation of the Offer, the Merger Agreement, or the
Merger, (ii) recommended any Acquisition Proposal, (iii) resolved to do any of
the foregoing or (iv) taken a neutral position or made no recommendation with
respect to another proposal or offer (other than by Parent or the Purchaser)
after a reasonable amount of time (and in no event more than 10 business days
following receipt thereof) has elapsed for the Company Board of Directors or any
committee thereof to review and make a recommendation with respect thereto;
(f) the Company shall have materially breached or failed, in any
material respect, to perform or to comply with any material agreement or
material covenant to be performed or complied with by it under this Agreement,
except where such breach is not willful and would not, in the aggregate, be
reasonably likely to have a Company Material Adverse Effect; provided, however,
that the condition contained in this paragraph (f) shall not be deemed to have
failed if (i) such breach is curable and (ii) the Company has cured such breach
within ten (10) days after receiving written notice of same from Purchaser or
Parent;
(g) the Purchaser shall have failed to receive a certificate executed
by the Company's President or a Vice President of the Company on behalf of the
Company, dated as of the scheduled expiration of the Offer, to the effect that
the conditions set forth in paragraphs (d), (e) and (f) of this Annex I have not
occurred;
(h) all consents, permits and approvals of Governmental Authorities
and other persons listed in Section 3.7 of the Company Disclosure Schedule and
identified with an asterisk shall not have been obtained;
(i) the Merger Agreement shall have been terminated in accordance
with its terms;
The foregoing conditions are for the sole benefit of Parent and the
Purchaser, may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to such condition, and may be waived by Parent or the
Purchaser in whole or in part at any time and from time to time and in the sole
discretion of Parent or the Purchaser, subject in each case to the terms of this
Agreement. The failure by Parent or the Purchaser at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right and, each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
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The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
annexed.
XXIXII12.112.2(a)(b)(c)(i)
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