EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
VERISIGN, INC.,
NICKEL ACQUISITION CORPORATION
AND
NETWORK SOLUTIONS, INC.
MARCH 6, 2000
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TABLE OF CONTENTS
Page
ARTICLE I THE MERGER........................................................1
1.1 The Merger..................................................1
1.2 Effective Time; Closing.....................................1
1.3 Effect of the Merger........................................2
1.4 Certificate of Incorporation; Bylaws........................2
1.5 Directors and Officers......................................2
1.6 Effect on Capital Stock.....................................2
1.7 Exchange of Certificates....................................3
1.8 No Further Ownership Rights in Company Common Stock.........6
1.9 Restricted Stock............................................6
1.10 Tax Consequences............................................7
1.11 Taking of Necessary Action; Further Action..................7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY........................7
2.1 Organization; Subsidiaries..................................7
2.2 Company Capitalization......................................8
2.3 Obligations With Respect to Capital Stock...................9
2.4 Authority; Non-Contravention...............................10
2.5 SEC Filings; Company Financial Statements..................11
2.6 Absence of Certain Changes or Events.......................12
2.7 Taxes......................................................13
2.8 Title to Properties........................................15
2.9 Intellectual Property......................................15
2.10 Compliance with Laws.......................................18
2.11 Litigation.................................................18
2.12 Employee Benefit Plans.....................................19
2.13 Environmental Matters......................................22
2.14 Certain Agreements.........................................23
2.15 Brokers' and Finders' Fees.................................24
2.16 Insurance..................................................24
2.17 Disclosure.................................................25
2.18 Board Approval.............................................25
2.19 Fairness Opinion...........................................26
2.20 DGCL Section 203 and Rights Agreement Not Applicable.......26
2.21 Affiliates.................................................26
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB........26
3.1 Organization of Parent and Merger Sub......................26
3.2 Parent and Merger Sub Capitalization.......................27
3.3 Obligations With Respect to Capital Stock..................27
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3.4 Authority; Non-Contravention...............................28
3.5 SEC Filings; Parent Financial Statements...................29
3.6 Absence of Certain Changes or Events.......................30
3.7 Taxes......................................................31
3.8 Title to Properties........................................32
2.9 Intellectual Property......................................32
3.10 Compliance with Laws.......................................33
3.11 Litigation.................................................34
3.12 Employee Benefit Plans.....................................34
3.13 Environmental Matters......................................37
3.14 Certain Agreements.........................................38
3.15 Brokers' and Finders' Fees.................................38
3.16 Disclosure.................................................38
3.17 Board Approval.............................................39
3.18 Fairness Opinion...........................................39
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME.............................39
4.1 Conduct of Business by Company.............................39
4.2 Conduct of Business by Parent..............................42
ARTICLE V ADDITIONAL AGREEMENTS............................................43
5.1 Proxy Statement/Prospectus; Registration Statement;
Antitrust and Other Filings................................43
5.2 Meeting of Company Stockholders............................44
5.3 Meeting of Parent Stockholders.............................46
5.4 No Solicitation............................................47
5.5 Confidentiality; Access to Information.....................48
5.6 Public Disclosure..........................................49
5.7 Reasonable Efforts; Notification...........................49
5.8 Third Party Consents.......................................50
5.9 Stock Options and ESPP.....................................50
5.10 Form S-8...................................................51
5.11 Indemnification............................................51
5.12 Parent Board of Directors..................................52
5.13 Nasdaq Listing.............................................52
5.14 Letters of Accountants.....................................52
5.15 Takeover Statutes..........................................52
5.16 Certain Employee Benefits..................................52
5.17 Tax Matters................................................53
ARTICLE VI CONDITIONS TO THE MERGER........................................53
6.1 Conditions to Obligations of Each Party to
Effect the Merger..........................................53
6.2 Additional Conditions to Obligations of Company............54
6.3 Additional Conditions to the Obligations of
Parent and Merger Sub......................................55
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................56
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7.1 Termination................................................56
7.2 Notice of Termination; Effect of Termination...............58
7.3 Fees and Expenses..........................................58
7.4 Amendment..................................................59
7.5 Extension; Waiver..........................................60
ARTICLE VIII GENERAL PROVISIONS............................................60
8.1 Non-Survival of Representations and Warranties.............60
8.2 Notices....................................................60
8.3 Interpretation; Certain Defined Terms......................61
8.4 Counterparts...............................................62
8.5 Entire Agreement; Third Party Beneficiaries................62
8.6 Severability...............................................62
8.7 Other Remedies; Specific Performance.......................62
8.8 Governing Law..............................................63
8.9 Rules of Construction......................................63
8.10 Assignment.................................................63
8.11 Waiver Of Jury Trial.......................................63
INDEX OF EXHIBITS
Exhibit A.........Form of Voting Agreement
Exhibit B.........Form of Registration Rights Agreement
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of March 6, 2000, among VeriSign, Inc., a Delaware corporation
("Parent"), Nickel Acquisition Corporation, a Delaware corporation and a wholly
owned first-tier subsidiary of Parent ("Merger Sub"), and Network Solutions,
Inc., a Delaware corporation ("Company").
RECITALS
A. The respective Boards of Directors of Parent, Merger Sub and Company
have approved this Agreement, and declared advisable the merger of Merger Sub
with and into Company (the "Merger") upon the terms and subject to the
conditions of this Agreement and in accordance with the General Corporation Law
of the State of Delaware ("Delaware Law").
B. For United States federal income tax purposes, the Merger is intended to
qualify as a "reorganization" pursuant to the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"). For accounting
purposes, the Merger is intended to be accounted for as a "purchase" under
United States generally accepted accounting principles ("GAAP").
C. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, a
stockholder of Company is entering into a Voting Agreement with Parent in the
form of Exhibit A (the "Voting Agreement").
D. Concurrently with the execution of this Agreement, Parent and a
stockholder of Company are entering into a Registration Rights Agreement in the
form of Exhibit B (the "Registration Rights Agreement").
In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement, the parties agree as
follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions of this
Agreement and the applicable provisions of Delaware Law, at the Effective Time,
Merger Sub shall be merged with and into Company, the separate corporate
existence of Merger Sub shall cease, and Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
1.2 Effective Time; Closing. Subject to the provisions of this
Agreement, Company and Merger Sub will file a certificate of merger, in such
appropriate form as determined by the
parties, with the Secretary of State of
the State of Delaware in accordance with the relevant provisions of Delaware
Law (the "Certificate of Merger") (the time of such filing (or such later time
as may be agreed in writing by Company and Parent and specified in the
Certificate of Merger) being the "Effective Time") as soon as practicable on or
after the Closing Date. The closing of the Merger (the "Closing") shall take
place at the offices of Fenwick & West LLP, Two Palo Alto Square, Palo Alto,
California, at a time and date to be specified by the parties, which shall be
no later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location as
the parties hereto agree in writing (the "Closing Date").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, at the
Effective Time, the Surviving Corporation shall possess all the property,
rights, privileges, powers and franchises of Company and Merger Sub, and shall
be subject to all debts, liabilities and duties of Company and Merger Sub.
1.4 Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of Incorporation of Merger Sub,
as in effect immediately prior to the Effective Time, shall be the Certificate
of Incorporation of the Surviving Corporation until thereafter amended as
provided by law and such Certificate of Incorporation of the Surviving
Corporation; provided, however, that at the Effective Time Article I of the
Certificate of Incorporation of the Surviving Corporation shall be amended to
read: "The name of the corporation is `Network Solutions, Inc.'"
(b) At the Effective Time, the Bylaws of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Bylaws of the Surviving
Corporation until thereafter amended.
1.5 Directors and Officers. The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly elected or appointed
and qualified. The initial officers of the Surviving Corporation shall be the
officers of Company immediately prior to the Effective Time, until their
respective successors are duly appointed.
1.6 Effect on Capital Stock. Subject to the terms and conditions of
this Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Merger Sub, Company or the holders of any of the
following securities:
(a) Conversion of Company Common Stock. Each share of common stock, par
value $0.001 per share, of Company ("Company Common Stock") issued and
outstanding immediately prior to the Effective Time, other than any shares of
Company Common Stock to be canceled pursuant to Section 1.6(b), will be
canceled and extinguished and automatically converted (subject to Section
1.6(e)) into the right to receive 2.15 (the "Exchange Ratio") shares of common
stock, par value $0.001 per share, of Parent ("Parent Common Stock") upon
surrender of the certificate representing such share of Company Common Stock in
the manner
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provided in Section 1.7. No fraction of a share of Parent Common Stock will be
issued by virtue of the Merger, but in lieu thereof, a cash payment shall be
made pursuant to Section 1.7(e). For the avoidance of doubt, following the
two-for-one stock dividend payable on Company Common Stock on March 10, 2000,
the Exchange Ratio will be 1.075.
(b) Cancellation of Company-Owned and Parent-Owned Stock. Each share of
Company Common Stock held by Company or owned by Merger Sub, Parent or any
direct or indirect wholly owned subsidiary of Company or of Parent immediately
prior to the Effective Time shall be canceled and extinguished without any
conversion thereof.
(c) Stock Options; Employee Stock Purchase Plan. At the Effective Time,
all options to purchase Company Common Stock then outstanding under Company's
1996 Stock Incentive Plan (the "Company Stock Option Plan") shall be assumed by
Parent in accordance with Section 5.9 of this Agreement. Rights outstanding
under Company's 1997 Employee Stock Purchase Plan (the "Company ESPP") shall be
treated as set forth in Section 5.9 of this Agreement.
(d) Capital Stock of Merger Sub. Each share of common stock, par value
$0.01 per share, of Merger Sub (the "Merger Sub Common Stock"), issued and
outstanding immediately prior to the Effective Time shall be converted into one
validly issued, fully paid and nonassessable share of common stock, $0.01 par
value per share, of the Surviving Corporation. Following the Effective Time,
each certificate evidencing ownership of shares of Merger Sub common stock
shall evidence ownership of such shares of capital stock of the Surviving
Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted to
reflect appropriately the effect of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into
Parent Common Stock or Company Common Stock), reorganization, recapitalization,
reclassification or other like change with respect to Parent Common Stock or
Company Common Stock occurring on or after the date hereof and prior to the
Effective Time.
1.7 Exchange of Certificates.
(a) Exchange Agent. Parent shall select an institution reasonably
acceptable to Company to act as the exchange agent (the "Exchange Agent") in
the Merger.
(b) Exchange Fund. Promptly after the Effective Time, Parent shall make
available to the Exchange Agent for exchange in accordance with this Article I,
the shares of Parent Common Stock (such shares of Parent Common Stock, together
with cash in lieu of fractional shares and any dividends or distributions with
respect thereto, are hereinafter referred to as the "Exchange Fund") issuable
pursuant to Section 1.6 in exchange for outstanding shares of Company Common
Stock.
(c) Exchange Procedures. Promptly after the Effective Time, Parent shall
instruct the Exchange Agent to mail to each holder of record of a certificate
or certificates ("Certificates") which immediately prior to the Effective Time
represented outstanding shares of
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Company Common Stock whose shares were converted into shares of Parent Common
Stock pursuant to Section 1.6, (i) a letter of transmittal in customary form
(that shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates
to the Exchange Agent and shall contain such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing shares of Parent
Common Stock. Upon surrender of Certificates for cancellation to the Exchange
Agent together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, the holders of such
Certificates shall be entitled to receive in exchange therefor certificates
representing the number of whole shares of Parent Common Stock into which their
shares of Company Common Stock were converted at the Effective Time, payment in
lieu of fractional shares that such holders have the right to receive pursuant
to Section 1.7(e) and any dividends or distributions payable pursuant to
Section 1.7(d), and the Certificates so surrendered shall forthwith be
canceled. Until so surrendered, outstanding Certificates will be deemed from
and after the Effective Time, for all corporate purposes, to evidence only the
ownership of the number of full shares of Parent Common Stock into which such
shares of Company Common Stock shall have been so converted and the right to
receive an amount in cash in lieu of the issuance of any fractional shares in
accordance with Section 1.7(e) and any dividends or distributions payable
pursuant to Section 1.7(d). No interest will be paid or accrued on any cash in
lieu of fractional shares of Parent Common Stock or on any unpaid dividends or
distributions payable to holders of Certificates. In the event of a transfer of
ownership of shares of Company Common Stock which is not registered in the
transfer records of Company, a certificate representing the proper number of
shares of Parent Common Stock may be issued to a transferee if the Certificate
representing such shares of Company Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect such
transfer and by evidence that any applicable stock transfer taxes have been
paid.
(d) Distributions With Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the date of this Agreement with
respect to Parent Common Stock with a record date after the Effective Time will
be paid to the holders of any unsurrendered Certificates with respect to the
shares of Parent Common Stock represented thereby until the holders of record
of such Certificates shall surrender such Certificates. Subject to applicable
law, following surrender of any such Certificates, the Exchange Agent shall
deliver to the holders of certificates representing whole shares of Parent
Common Stock issued in exchange therefor, without interest, (i) promptly, the
amount of any cash payable with respect to a fractional share of Parent Common
Stock to which such holder is entitled pursuant to Section 1.7(e) and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (ii) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect to
such whole shares of Parent Common Stock.
(e) Fractional Shares. (i) As promptly as practicable following the
Effective Time, the Exchange Agent shall determine the excess of (A) the number
of full shares of Parent Common Stock delivered to the Exchange Agent pursuant
to Section 1.7(b), over (B) the aggregate number of full shares of Parent
Common Stock to be distributed to holders of
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Company Common Stock pursuant to Section 1.7(c) (such excess, the "Excess
Shares"). Following the Effective Time, the Exchange Agent, as agent for the
holders of Company Common Stock, shall sell the Excess Shares at then
prevailing prices on the Nasdaq Stock Market in the manner set forth in
paragraph (ii) of this Section 1.7(e).
(ii) The sale of the excess shares by the Exchange Agent shall be
executed on the Nasdaq Stock Market and shall be executed in round lots to the
extent practicable. The Exchange Agent shall use all commercially reasonable
efforts to complete the sale of the Excess Shares as promptly following the
Effective Time as, in the Exchange Agent's reasonable judgment, is practicable
consistent with obtaining the best execution of such sales in light of
prevailing market conditions. Until the net proceeds of such sales have been
distributed to the holders of Company Common Stock, the Exchange Agent will
hold such proceeds in trust for the holders of Company Common Stock. The
Exchange Agent will determine the portion of such net proceeds to which each
holder of Company Common Stock shall be entitled, if any, by multiplying the
amount of the aggregate net proceeds by a fraction the numerator of which is
the amount of the fractional share interest to which such holder of Company
Common Stock is entitled (after taking into account all shares of Parent Common
Stock to be issued to such holder) and the denominator of which is the
aggregate amount of fractional share interests to which all holders of Company
Common Stock are entitled. As soon as practicable after the determination of
the amount of cash, if any, to be paid to holders of Company Common Stock with
respect to fractional share interests, the Exchange Agent shall promptly pay
such amounts to such holders of Company Common Stock in accordance with the
terms of Section 1.7(c).
(iii) Notwithstanding the provisions of paragraphs (i) and (ii) of
this Section 1.7(e), Parent may decide, at its option, exercised prior to the
Effective Time, in lieu of the issuance and sale of Excess Shares and the
making of the payments contemplated in such paragraphs, that Parent shall pay
to the Exchange Agent an amount sufficient for the Exchange Agent to pay each
holder of Company Common Stock the amount such holder would have received
pursuant to Section 1.7(e)(ii) assuming that the sales of Parent Common Stock
were made at a price equal to the average of the closing prices of the Parent
Common Stock on the Nasdaq Stock Market for the ten consecutive trading days
immediately following the Effective Time and, in such case, all references
herein to the cash proceeds of the sale of the Excess Shares and similar
references shall be deemed to mean and refer to the payments calculated as set
forth in this paragraph (iii). In such event, Excess Shares shall not be issued
or otherwise transferred to the Exchange Agent pursuant to Sections 1.7(b) or
(e).
(f) Required Withholding. Each of the Exchange Agent, Parent and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to
any holder or former holder of Company Common Stock such amounts as may be
required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax law or under any other applicable
Legal Requirement (as defined in Section 2.2(b)). To the extent such amounts
are so deducted or withheld, such amounts shall be treated for all purposes
under this Agreement as having been paid to the person to whom such amounts
would otherwise have been paid.
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(g) Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock into which the shares of Company
Common Stock represented by such Certificates were converted pursuant to
Section 1.6, cash for fractional shares, if any, as may be required pursuant to
Section 1.7(e) and any dividends or distributions payable pursuant to Section
1.7(d); provided, however, that Parent may, in its discretion and as a
condition precedent to the issuance of such certificates representing shares of
Parent Common Stock, cash and other distributions, require the owner of such
lost, stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
(h) No Liability. Notwithstanding anything to the contrary in this Section
1.7, neither the Exchange Agent, Parent, the Surviving Corporation nor any
party hereto shall be liable to a holder of shares of Parent Common Stock or
Company Common Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(i) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of Company Common Stock for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Company Common Stock who have not theretofore complied with the
provisions of this Section 1.7 shall thereafter look only to Parent for the
shares of Parent Common Stock, any cash in lieu of fractional shares of Parent
Common Stock to which they are entitled pursuant to Section 1.7(e) and any
dividends or other distributions with respect to Parent Common Stock to which
they are entitled pursuant to Section 1.7(d), in each case, without any
interest thereon.
1.8 No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued in accordance with the terms hereof (including any
cash paid in respect thereof pursuant to Section 1.7(d) and (e)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such shares of Company Common Stock, and there shall be no further registration
of transfers on the records of the Surviving Corporation of shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If
after the Effective Time Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article I.
1.9 Restricted Stock. If any shares of Company Common Stock that are
outstanding immediately prior to the Effective Time are unvested or are subject
to a repurchase option, risk of forfeiture or other condition providing that
such shares ("Company Restricted Stock") may be forfeited or repurchased by the
Company upon any termination of the stockholders' employment, directorship or
other relationship with the Company (and/or any affiliate of the Company) under
the terms of any restricted stock purchase agreement or other agreement with
the Company that does not by its terms provide that such repurchase option,
risk of forfeiture or other condition lapses upon consummation of the Merger,
then the shares of Parent Common Stock issued upon
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the conversion of such shares of Company Common Stock in the Merger will
continue to be unvested and subject to the same repurchase options, risks of
forfeiture or other conditions following the Effective Time, and the
certificates representing such shares of Parent Common Stock may accordingly be
marked with appropriate legends noting such repurchase options, risks of
forfeiture or other conditions. Company shall take all actions that may be
necessary to ensure that, from and after the Effective Time, Parent is entitled
to exercise any such repurchase option or other right set forth in any such
restricted stock purchase agreement or other agreement. A listing of the
holders of Company Restricted Stock, together with the number of shares and the
vesting schedule of Company Restricted Stock held by each, is set forth in Part
1.9 of the Company Disclosure Letter.
1.10 Tax Consequences. It is intended by the parties hereto that the
Merger shall constitute a "reorganization" within the meaning of Section 368 of
the Code. The parties hereto adopt this Agreement as a "plan of reorganization"
within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States
Income Tax Regulations.
1.11 Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Company and Merger Sub, the officers and directors of Company
and Merger Sub will take all such lawful and necessary action. Parent shall
cause Merger Sub to perform all of its obligations relating to this Agreement
and the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
As of the date of this Agreement and as of the Closing Date, except as
disclosed in (i) Company's Annual Report on Form 10-K for the year ending
December 31, 1998 and any Company SEC Reports (as defined below) filed
subsequent to such Form 10-K, and (ii) the disclosure letter delivered by
Company to Parent dated as of the date hereof and certified by a duly
authorized officer of Company (the "Company Disclosure Letter") (each Part of
which qualifies the correspondingly numbered representation, warranty or
covenant to the extent specified therein and such other representations,
warranties or covenants to the extent a matter in such Part is disclosed in
such a way as to make its relevance to such other representation, warranty or
covenant readily apparent), Company represents and warrants to Parent and
Merger Sub as follows:
2.1 Organization; Subsidiaries.
(a) Company and each of its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority, and all
requisite qualifications to do business as a
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foreign corporation, to conduct its business in the manner in which its
business is currently being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority or
qualifications would not, individually or in the aggregate, have a Material
Adverse Effect (as defined in Section 8.3) on Company.
(b) Other than as set forth in Part 2.1 of the Company Disclosure Letter,
neither Company nor any of the other corporations identified in Part 2.1 of the
Company Disclosure Letter owns any capital stock of, or any equity interest of
any nature in, any corporation, partnership, joint venture arrangement or other
business entity, other than the entities identified in Part 2.1 of the Company
Disclosure Letter, except for passive investments in equity interests of public
companies as part of the cash management program of Company. Neither Company
nor any of its subsidiaries has agreed or is obligated to make, or is bound by
any written, oral or other agreement, contract, subcontract, lease, binding
understanding, instrument, note, option, warranty, purchase order, license,
sublicense, insurance policy, benefit plan or legally binding commitment or
undertaking of any nature, as in effect as of the date hereof or as may
hereinafter be in effect under which it may become obligated to make any future
material investment in or material capital contribution to any other entity.
Neither Company, nor any of its subsidiaries, is a general partner of any
general partnership, limited partnership or other similar entity. Part 2.1 of
the Company Disclosure Letter indicates the jurisdiction of organization of
each entity listed therein and Company's direct or indirect equity interest
therein.
(c) Company has delivered or made available to Parent a true and correct
copy of the Certificate of Incorporation and Bylaws of Company and similar
governing instruments of each of its subsidiaries, each as amended to date
(collectively, the "Company Charter Documents"), and each such instrument is in
full force and effect. Neither Company nor any of its subsidiaries is in
violation of any of the provisions of the Company Charter Documents.
2.2 Company Capitalization.
(a) The authorized capital stock of Company consists solely of 210,000,000
shares of Company Common Stock, of which there were 36,166,801 shares issued
and outstanding as of the close of business on March 3, 2000, and 10,000,000
shares of preferred stock, par value $0.001 per share, of which no shares are
issued or outstanding. All outstanding shares of Company Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or
Bylaws of Company or any agreement or document to which Company is a party or
by which it is bound. As of the date of this Agreement, there are no shares of
Company Common Stock held in treasury by the Company. From and after the
Effective Time, the shares of Parent Common Stock issued in exchange for any
shares of Company Restricted Stock will, without any further act of Parent, the
Company or any other person, become subject to the restrictions, conditions and
other provisions of such Company Restricted Stock, and Parent will
automatically succeed to and become entitled to exercise the Company's rights
and remedies under such Company Restricted Stock.
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(b) As of the close of business on March 3, 2000, (i) 4,076,097 shares of
Company Common Stock are subject to issuance pursuant to outstanding options to
purchase Company Common Stock under the Company Stock Option Plan ("Company
Options") for a weighted average aggregate exercise price of approximately
$75.43, (ii) 457,370 shares of Company Common Stock are reserved for future
issuance under the Company ESPP, and (iii) 500,000 shares of Company Common
Stock are reserved for future issuance under the Company's 401(k) Plan. Part
2.2(b) of the Company Disclosure Letter sets forth the following information
with respect to each Company Option outstanding as of the date of this
Agreement: (i) the name of the optionee; (ii) the number of shares of Company
Common Stock subject to such Company Option; (iii) the exercise price of such
Company Option; (iv) the date on which such Company Option was granted or
assumed; (v) the date on which such Company Option expires and (vi) whether the
exercisability of such option will be accelerated in any way by the
transactions contemplated by this Agreement, and indicates the extent of any
such acceleration. Company has made available to Parent an accurate and
complete copy of the Company Stock Option Plan and the form of all stock option
agreements evidencing Company Options. There are no options outstanding to
purchase shares of Company Common Stock other than pursuant to the Company
Stock Option Plan. All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable.
(c) All outstanding shares of Company Common Stock, all outstanding
Company Options, and all outstanding shares of capital stock of each subsidiary
of Company have been issued and granted in compliance with (i) all applicable
securities laws and other applicable material Legal Requirements and (ii) all
material requirements set forth in applicable agreements or instruments. For
the purposes of this Agreement, "Legal Requirements" means any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation,
ruling or requirement issued, enacted, adopted, promulgated, implemented or
otherwise put into effect by or under the authority of any Governmental Entity
(as defined in Section 2.4).
2.3 Obligations With Respect to Capital Stock. Except as set forth in
Part 2.3 of the Company Disclosure Letter, there are no equity securities,
partnership interests or similar ownership interests of any class of Company
equity security, or any securities exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Company owns
all of the securities of its subsidiaries identified on Part 2.1 of the Company
Disclosure Letter, free and clear of all claims and Encumbrances, and there are
no other equity securities, partnership interests or similar ownership
interests of any class of equity security of any subsidiary of Company, or any
security exchangeable or convertible into or exercisable for such equity
securities, partnership interests or similar ownership interests, issued,
reserved for issuance or outstanding. For purposes of this Agreement,
"Encumbrances" means any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, claim, infringement, interference, option,
right of first refusal, preemptive right, community property interest or
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset, any
restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
-9-
exercise or transfer of any other attribute of ownership of any asset). Except
as set forth in Part 2.2 or Part 2.3 of the Company Disclosure Letter, there
are no subscriptions, options, warrants, equity securities, partnership
interests or similar ownership interests, calls, rights (including preemptive
rights), commitments or agreements of any character to which Company or any of
its subsidiaries is a party or by which it is bound obligating Company or any
of its subsidiaries to issue, deliver or sell, or cause to be issued, delivered
or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership
interests or similar ownership interests of Company or any of its subsidiaries
or obligating Company or any of its subsidiaries to grant, extend, accelerate
the vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement. Except as contemplated by this
Agreement, the Registration Rights Agreement, and the Registration Rights
Agreement between Company and Science Applications International Corporation,
there are no registration rights with respect to any equity security of any
class of Company or with respect to any equity security, partnership interest
or similar ownership interest of any class of any of its subsidiaries.
2.4 Authority; Non-Contravention.
(a) Company has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Company, subject only to the approval and
adoption of this Agreement and the approval of the Merger by Company's
stockholders (the "Company Stockholder Approvals") and the filing of the
Certificate of Merger pursuant to Delaware Law. The affirmative vote of the
holders of a majority of the outstanding shares of Company Common Stock is
sufficient for Company's stockholders to approve and adopt this Agreement and
approve the Merger, and no other approval of any holder of any securities of
Company is required in connection with the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Company and, assuming the due execution and delivery by Parent and Merger Sub,
constitutes the valid and binding obligation of Company, enforceable against
Company in accordance with its terms, except as enforceability may be limited
by bankruptcy and other similar laws affecting the rights of creditors
generally and general principles of equity.
(b) The execution and delivery of this Agreement by Company does not, and
the performance of this Agreement by Company will not, (i) conflict with or
violate the Company Charter Documents, (ii) subject to obtaining the Company
Stockholder Approvals and compliance with the requirements set forth in Section
2.4(c), conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to Company or any of its subsidiaries or by which Company or
any of its subsidiaries or any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair Company's rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of an Encumbrance on any of the
properties or assets of Company or any of its subsidiaries pursuant to, any
note, bond, mortgage, indenture, agreement, lease, license, permit, franchise,
concession, or other instrument
-10-
or obligation to which Company or any of its subsidiaries is a party or by
which Company or any of its subsidiaries or its or any of their respective
assets are bound or affected, except, in the case of clauses (ii) and (iii),
for such conflicts, violations, breaches, defaults, impairments, or rights
which, individually or in the aggregate, would not have a Material Adverse
Effect on Company. Part 2.4(b) of the Company Disclosure Letter list all
consents, waivers and approvals under any of Company's or any of its
subsidiaries' agreements, licenses or leases required to be obtained in
connection with the consummation of the transactions contemplated hereby,
which, if individually or in the aggregate not obtained, would result in a
material loss of benefits to Company, Parent or the Surviving Corporation as a
result of the Merger.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission or
other governmental authority or instrumentality, foreign or domestic
("Governmental Entity") or other person, is required to be obtained or made by
Company in connection with the execution and delivery of this Agreement or the
consummation of the Merger, except for (i) the filing of the Certificate of
Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (ii) the filing of the Proxy Statement/Prospectus (as
defined in Section 2.17) with the Securities and Exchange Commission ("SEC") in
accordance with the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the effectiveness of the Registration Statement (as defined in
Section 2.17), (iii) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal, foreign and state securities (or related) laws and the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and the securities or antitrust laws of any foreign country, and (iv)
such other consents, authorizations, filings, approvals and registrations which
if not obtained or made would not be material to the Company, Parent or the
Surviving Corporation or have a material adverse effect on the ability of the
parties hereto to consummate the Merger.
2.5 SEC Filings; Company Financial Statements.
(a) Company has filed all forms, reports and documents required to be
filed by Company with the SEC since the effective date of the registration
statement of Company's initial public offering and has made available to Parent
such forms, reports and documents in the form filed with the SEC. All such
required forms, reports and documents (including those that Company may file
subsequent to the date hereof) are referred to herein as the "Company SEC
Reports." As of their respective dates, the Company SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Company SEC
Reports and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except to the extent corrected prior to the date of this
Agreement by a subsequently filed Company SEC Report. None of Company's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
-11-
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports (the
"Company Financials"), including each Company SEC Report filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the Exchange Act) and (iii)
fairly presented the consolidated financial position of Company and its
subsidiaries as at the respective dates thereof and the consolidated results of
Company's operations and cash flows for the periods indicated, except that the
unaudited interim financial statements may not contain footnotes and were or
are subject to normal and recurring year-end adjustments. The balance sheet of
Company contained in Company SEC Reports as of September 30, 1999 is
hereinafter referred to as the "Company Balance Sheet." Except as disclosed in
the Company Financials, since the date of the Company Balance Sheet, neither
Company nor any of its subsidiaries has any liabilities required under GAAP to
be set forth on a balance sheet (absolute, accrued, contingent or otherwise)
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of Company and its subsidiaries taken as a
whole, except for liabilities incurred since the date of the Company Balance
Sheet in the ordinary course of business consistent with past practices and
liabilities incurred in connection with this Agreement.
(c) Company has heretofore furnished to Parent a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC pursuant to
the Securities Act or the Exchange Act.
2.6 Absence of Certain Changes or Events. Since the date of the Company
Balance Sheet there has not been: (i) any Material Adverse Effect with respect
to Company, (ii) any declaration, setting aside or payment of any dividend on,
or other distribution (whether in cash, stock or property) in respect of, any
of Company's or any of its subsidiaries' capital stock, or any purchase,
redemption or other acquisition by Company of any of Company's capital stock or
any other securities of Company or its subsidiaries or any options, warrants,
calls or rights to acquire any such shares or other securities except for
repurchases which are not, individually or in the aggregate, material in amount
from employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements, (iii) any split, combination
or reclassification of any of Company's or any of its subsidiaries' capital
stock, (iv) any granting by Company or any of its subsidiaries of any increase
in compensation or fringe benefits to any of their officers or employees, or
any payment by Company or any of its subsidiaries of any bonus to any of their
officers or employees, or any granting by Company or any of its subsidiaries of
any increase in severance or termination pay, other than in the ordinary
course, consistent with past practice, or any entry by Company or any of its
subsidiaries into, or material modification or amendment of, any currently
effective employment, severance, termination or indemnification agreement or
any agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving Company of
the nature contemplated hereby, (v) since November 10, 1999, any material
modification, amendment or cancellation of any of the Registry Agreement, dated
November 10, 1999, between Company
-12-
and the Internet Corporation for Assigned Names and Numbers, a not-for-profit
corporation ("ICANN"), the Registrar Accreditation Agreement, dated November
10, 1999, between Company and ICANN, and the Cooperative Agreement No.
NCR-92-18742, in each case, as amended, (vi) any material change by Company in
its accounting methods, principles or practices, except as required by
concurrent changes in GAAP, (vii) any material revaluation by Company of any of
its material assets, including writing off notes or accounts receivable other
than in the ordinary course of business, or (viii) any material change in the
pricing of the registration fees Company charges for its registration services.
2.7 .Taxes.
(a) Company and each of its subsidiaries have timely filed all material
federal, state, local and foreign returns, estimates, information statements
and reports ("Returns") relating to Taxes required to be filed by or on behalf
of Company and each of its subsidiaries with any Tax authority, such Returns
are true, correct and complete in all material respects, and Company and each
of its subsidiaries have paid all Taxes shown to be due on such Returns.
(b) Company and each of its subsidiaries have withheld with respect to its
employees all federal and state income taxes, Taxes pursuant to the Federal
Insurance Contribution Act ("FICA"), Taxes pursuant to the Federal Unemployment
Tax Act ("FUTA") and other Taxes required to be withheld, except such Taxes
which are not material to Company.
(c) Other than as set forth in Part 2.7(c) of the Company Disclosure
Letter, neither Company nor any of its subsidiaries has been delinquent in the
payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Company or any of its subsidiaries,
nor has Company or any of its subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.
(d) No audit or other examination of any Return of Company or any of its
subsidiaries by any Tax authority is presently in progress, nor has Company or
any of its subsidiaries been notified of any request for such an audit or other
examination that is reasonably likely to result in any adjustment that is
material to Company.
(e) No adjustment relating to any Returns filed by Company or any of its
subsidiaries has been proposed in writing formally or informally by any Tax
authority to Company or any of its subsidiaries or any representative thereof
that is reasonably likely to be material to Company.
(f) Neither Company nor any of its subsidiaries has any liability for
unpaid Taxes which has not been accrued for or reserved on the Company Balance
Sheet in accordance with GAAP, whether asserted or unasserted, contingent or
otherwise, which is material to Company, other than any liability for unpaid
Taxes that may have accrued since the date of the Company Balance Sheet in
connection with the operation of the business of Company and its subsidiaries
in the ordinary course.
-13-
(g) There is no agreement, plan or arrangement to which Company or any of
its subsidiaries is a party, including this Agreement and the agreements
entered into in connection with this Agreement, covering any employee or former
employee of Company or any of its subsidiaries that, individually or
collectively, would be reasonably likely to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of
the Code.
(h) Neither Company nor any of its subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by Company.
(i) Neither Company nor any of its subsidiaries is party to or has any
obligation under any tax-sharing, tax indemnity or tax allocation agreement or
arrangement, other than the Tax Sharing Agreement between Company and Science
Applications International Corporation, a Delaware corporation ("SAIC").
(j) Except as may be required as a result of the Merger, Company and its
subsidiaries have not been and will not be required to include any adjustment
in Taxable income for any Tax period (or portion thereof) pursuant to Section
481 of the Code or any comparable provision under state or foreign Tax laws as
a result of transactions, events or accounting methods employed prior to the
Closing.
(k) None of Company's or its subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.
(l) Company has not been distributed in a transaction qualifying under
Section 355 of the Code within the last two years, nor has Company distributed
any corporation in a transaction qualifying under Section 355 of the Code
within the last two years.
(m) Company is not aware of any fact, circumstance, plan or intention on
the part of Company that would be reasonably likely to prevent the Merger from
qualifying as a "reorganization" pursuant to the provisions of Section 368 of
the Code.
For the purposes of this Agreement, "Tax" or "Taxes" refers to (i) any and
all federal, state, local and foreign taxes, assessments and other governmental
charges, duties, impositions and liabilities relating to taxes, including taxes
based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, together with all
interest, penalties and additions imposed with respect to such amounts, (ii)
any liability for payment of any amounts of the type described in clause (i) as
a result of being a member of an affiliated consolidated, combined or unitary
group, and (iii) any liability for amounts of the type described in clauses (i)
and (ii) as a result of any express or implied obligation to indemnify another
person or as a result of any obligations under any agreements or arrangements
with any other person with respect to such amounts and including any liability
for taxes of a predecessor entity.
-14-
2.8 Title to Properties.
(a) Company owns no real property interests. Part 2.8 of the Company
Disclosure Letter list all real property leases to which Company is a party and
each amendment thereto that is in effect as of the date of this Agreement that
provide for annual payments in excess of $5,000,000. All such current leases
are in full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time, or
both, would constitute a default) that would give rise to a material claim
against Company.
(b) Company has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in its
business, free and clear of any Encumbrances, except as reflected in the
Company Financials and except for liens for Taxes not yet due and payable and
such Encumbrances which are not material in character, amount or extent.
2.9 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"Intellectual Property" shall mean any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights
registrations and applications therefor, and all other rights corresponding
thereto throughout the world; (iv) all industrial designs and any registrations
and applications therefor throughout the world; (v) all trade names, URLs,
logos, common law trademarks and service marks, trademark and service xxxx
registrations and applications therefor throughout the world; (vi) all
databases and data collections and all rights therein throughout the world;
(vii) all moral and economic rights of authors and inventors, however
denominated, throughout the world, and (viii) any similar or equivalent rights
to any of the foregoing anywhere in the world.
"Company Intellectual Property" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, Company or one of its subsidiaries.
"Registered Intellectual Property" means all United States, international
and foreign: (i) patents and patent applications (including provisional
applications); (ii) registered trademarks, applications to register trademarks,
intent-to-use applications, or other registrations or applications related to
trademarks; (iii) registered copyrights and applications for copyright
registration; and (iv) any other Intellectual Property that is the subject of
an application, certificate, filing, registration or other document issued,
filed with, or recorded by any Governmental Entity.
"Company Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, Company or one of its
subsidiaries.
-15-
(a) No material Company Intellectual Property or product or service of
Company is subject to any proceeding or outstanding decree, order, judgment,
agreement, or stipulation restricting in any manner the use, transfer, or
licensing thereof by Company, or which may affect the validity, use or
enforceability of such Company Intellectual Property.
(b) Each material item of Company Registered Intellectual Property is
valid and subsisting, all necessary registration, maintenance and renewal fees
currently due in connection with such Registered Intellectual Property have
been made and all necessary documents, recordations and certificates in
connection with such Registered Intellectual Property have been filed with the
relevant patent, copyright, trademark or other authorities in the United States
or foreign jurisdictions, as the case may be, for the purposes of maintaining
such Registered Intellectual Property, except, in each case, as would not
materially adversely affect such item of Company Registered Intellectual
Property.
(c) Company or one of its subsidiaries owns and has good and exclusive
title to, or has license (sufficient for the conduct of its business as
currently conducted) to, each material item of Company Intellectual Property
free and clear of any Encumbrance (excluding licenses and related
restrictions).
(d) Neither Company has nor any of its subsidiaries transferred ownership
of, or granted any exclusive license with respect to, any Intellectual Property
that is or was material Company Intellectual Property, to any third party.
(e) Part 2.9(e) of the Company Disclosure Letter lists (i) all material
contracts, licenses, agreements to which Company is a party with respect to
Company's authority as a registry and registrar for Internet general top level
domains including but not limited to the .com, .net and .org domains, (ii) all
Internet distribution and advertising agreements to which Company is a party
(except for any agreement which, if terminated, would not have a Material
Adverse Effect on Company), and (iii) all contracts, licenses and agreements to
which Company is a party pursuant to which a third party has licensed or
transferred any material Intellectual Property to Company (except for any
contract, license and agreement which, if terminated, would not have a Material
Adverse Effect on Company). There are no material contracts, licenses and
agreements to which Company is a party with respect to the software, hardware,
network and technology infrastructure used in Company's business as currently
conducted which, if terminated, would have a Material Adverse Effect on
Company.
(f) To Company's knowledge, the operation of the business of Company as
such business currently is conducted, including Company's design, development,
marketing and sale of the products or services of Company (including with
respect to products currently under development) has not and does not infringe
or misappropriate the Intellectual Property of any third party or, to its
knowledge, constitute unfair competition or trade practices under the laws of
any jurisdiction.
(g) Company has not received notice from any third party that the
operation of the business of Company or any act, product or service of Company,
infringes or misappropriates the Intellectual Property of any third party or
constitutes unfair competition or trade practices
-16-
under the laws of any jurisdiction, which allegation, if true, would have a
Material Adverse Effect on Company.
(h) Except as set forth in Part 2.9(h) of the Company Disclosure Letter,
to the knowledge of Company, no person has or is infringing or misappropriating
any Company Intellectual Property, which infringement or misappropriation,
individually or in the aggregate, would have a Material Adverse Effect on
Company.
(i) Company and its subsidiaries have taken reasonable steps to protect
Company's and its subsidiaries' rights in Company's and such subsidiaries'
confidential information and trade secrets, except where the failure to do so
would have a Material Adverse Effect on Company.
(j) None of the Company Intellectual Property or product or service of
Company contains any defect in connection with processing data containing dates
in leap years or in the year 2000 or any preceding or following years, which
defects, individually or in the aggregate, would have a Material Adverse Effect
on Company.
(k) Company has obtained requisite authority, governmental approvals and
rights (sufficient for the conduct of its business as currently conducted) to
act as the exclusive registry and a non-exclusive registrar for certain general
Internet top level domains, including but not limited to the .com, .net and .org
domains. The Company Disclosure Letter lists all material contracts, licenses
and agreements to which Company is a party with respect to Company's authority
and obligations as a registry and registrar for Internet general top level
domains including but not limited to the .com, .net and .org domains.
(l) All material contracts, licenses and agreements relating to Company's
authority and obligations as a registry and registrar for Internet general top
level domains including but not limited to the .com, .net and .org domains, are
in full force and effect. The consummation of the transactions contemplated by
this Agreement will neither violate nor result in the breach, modification,
cancellation, termination, or suspension of such contracts, licenses and
agreements. Company and each of its subsidiaries are in material compliance
with, and have not materially breached any term of any of such contracts,
licenses and agreements and, to the knowledge of Company and its subsidiaries,
all other parties to such contracts, licenses and agreements are in compliance
in all material respects with, and have not materially breached any term of,
such contracts, licenses and agreements.
(m) Since November 10, 1999, Company has received no notice from any
United States Governmental Entity or ICANN (i) of any material complaint by a
United States Governmental Entity or ICANN regarding Company's services or
activities related to its role as a registry and registrar for Internet general
top level domains including but not limited to the .com, .net and .org domains;
or (ii) questioning Company's authority to act as the exclusive registry and a
non-exclusive registrar for Internet general top level domains, including but
not limited to the .com, .net and .org domains.
-17-
(n) To the Company's knowledge, as of the date of this Agreement,
Company's separation of its registrar and registry computer systems was
achieved without a material failure, which, for purposes of this Section
2.9(n), shall be defined as uptime availability of less than 99% since the date
of the separation of such systems due to the separation of such systems.
2.10 Compliance with Laws.
(a) Neither Company nor any of its subsidiaries is in conflict with, or in
default or in violation of (i) any law, rule, regulation, order, judgment or
decree applicable to Company or any of its subsidiaries or by which Company or
any of its subsidiaries or any of their respective properties is bound or
affected, or (ii) any note, bond, mortgage, indenture, agreement, lease,
license, permit, franchise or other instrument or obligation to which Company
or any of its subsidiaries is a party or by which Company or any of its
subsidiaries or its or any of their respective properties is bound or affected,
except for conflicts, violations and defaults that, individually or in the
aggregate, would not have a Material Adverse Effect on Company. To Company's
knowledge, no investigation or review by any Governmental Entity is pending or,
has been threatened in a writing delivered to Company against Company or any of
its subsidiaries, nor, to Company's knowledge, has any Governmental Entity
indicated an intention to conduct an investigation of Company or any of its
subsidiaries. There is no judgment, injunction, order or decree binding upon
Company or any of its subsidiaries which has or could reasonably be expected to
have the effect of prohibiting or materially impairing any material business
practice of Company or any of its subsidiaries, or any acquisition of material
property by Company or any of its subsidiaries.
(b) Company and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities that are
material to or required for the operation of the business of Company as
currently conducted (collectively, the "Company Permits"), and are in
compliance with the terms of the Company Permits, except where the failure to
hold such Company Permits, or be in such compliance, would not, individually or
in the aggregate, have a Material Adverse Effect on Company.
2.11 Litigation. There are no claims, suits, actions or proceedings
pending or, to the knowledge of Company, threatened against, relating to or
affecting Company or any of its subsidiaries, before any Governmental Entity or
any arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated by this Agreement or which could reasonably be
expected, either singularly or in the aggregate with all such claims, actions
or proceedings, to have a Material Adverse Effect on Company or on the
Surviving Corporation following the Merger or have a material adverse effect on
the ability of the parties hereto to consummate the Merger. No director or
executive officer of Company has asserted a claim to seek indemnification from
Company under the Company Charter Documents or any indemnification agreement
between Company and such person.
-18-
2.12 Employee Benefit Plans.
(a) Definitions. With the exception of the definition of "Affiliate" set
forth in Section 2.12(a)(i) below (which definition shall apply only to this
Section 2.12), for purposes of this Agreement, the following terms shall have
the meanings set forth below:
(i) "Affiliate" shall mean any other person or entity under common
control with Company within the meaning of Section 414(b), (c), (m) or (o) of
the Code and the regulations issued thereunder;
(ii) "Company Employee Plan" shall mean any plan, program, policy,
practice, contract, agreement or other arrangement providing for compensation,
severance, termination pay, performance awards, stock or stock-related awards,
fringe benefits or other employee benefits or remuneration of any kind, whether
written or unwritten or otherwise, funded or unfunded, including without
limitation, each "employee benefit plan," within the meaning of Section 3(3) of
ERISA which is or has been maintained, contributed to, or required to be
contributed to, by Company or any Affiliate for the benefit of any Employee;
(iii) "COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended;
(iv) "DOL" shall mean the Department of Labor;
(v) "Employee" shall mean any current, former, or retired employee,
officer, or director of Company or any subsidiary of Company;
(vi) "Employee Agreement" shall mean each management, employment,
severance, consulting, relocation, repatriation, expatriation, visas, work
permit or similar agreement or contract between Company or any subsidiary of
Company, on the one hand, and any Employee or consultant of Company or any
subsidiary of Company, on the other hand;
(vii) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended;
(viii) "FMLA" shall mean the Family Medical Leave Act of 1993, as
amended;
(ix) "International Employee Plan" shall mean each Company Employee
Plan that has been adopted or maintained by Company, whether informally or
formally, for the benefit of Employees outside the United States;
(x) "IRS" shall mean the Internal Revenue Service;
(xi) "Multiemployer Plan" shall mean any "Pension Plan" (as defined
below) which is a "multiemployer plan," as defined in Section 3(37) of ERISA;
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(xii) "PBGC" shall mean the Pension Benefit Guaranty Corporation; and
(xiii) "Pension Plan" shall mean each Company Employee Plan which is
an "employee pension benefit plan," within the meaning of Section 3(2) of ERISA.
(b) Schedule. Part 2.12 of the Company Disclosure Letter contains an
accurate and complete list of each Company Employee Plan and each Employee
Agreement. Company does not have any plan or commitment to establish any new
Company Employee Plan, to modify any Company Employee Plan or Employee
Agreement (except to the extent required by law or to conform any such Company
Employee Plan or Employee Agreement to the requirements of any applicable law,
in each case as previously disclosed to Parent in writing, or as required by
this Agreement), or to enter into any Company Employee Plan or Employee
Agreement, nor does it have any intention or commitment to do any of the
foregoing.
(c) Documents. Company has made available to Parent, to the extent
requested by Parent: (i) correct and complete copies of all documents embodying
each Company Employee Plan and each Employee Agreement including all amendments
thereto and written interpretations thereof; (ii) the most recent annual
actuarial valuations, if any, prepared for each Company Employee Plan; (iii)
the most recent annual report (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Company Employee Plan or related trust; (iv) if the
Company Employee Plan is funded, the most recent annual and periodic accounting
of Company Employee Plan assets; (v) the most recent summary plan description
together with the summary of material modifications thereto, if any, required
under ERISA with respect to each Company Employee Plan; (vi) all IRS
determination, opinion, notification and advisory letters, and rulings relating
to Company Employee Plans and copies of all applications and correspondence to
or from the IRS or the DOL with respect to any Company Employee Plan; (vii) all
material written agreements and contracts relating to each Company Employee
Plan, including, but not limited to, administrative service agreements, group
annuity contracts and group insurance contracts; (viii) all communications
material to any Employee or Employees relating to any Company Employee Plan and
any proposed Company Employee Plans, in each case, relating to any amendments,
terminations, establishments, increases or decreases in benefits, acceleration
of payments or vesting schedules or other events which would result in any
material liability to Company; (ix) all COBRA forms and related notices; and
(x) all registration statements and prospectuses prepared in connection with
each Company Employee Plan.
(d) Employee Plan Compliance. Except, in each case, as would not,
individually or in the aggregate, result in a material liability to Company:
(i) Company has performed in all material respects all obligations required to
be performed by it under, is not in default or violation of, and has no
knowledge of any default or violation by any other party to, each Company
Employee Plan, and each Company Employee Plan has been established and
maintained in all material respects in accordance with its terms and in
compliance with all applicable laws, statutes, orders, rules and regulations,
including but not limited to ERISA or the Code; (ii) each Company Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code has either received a
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favorable determination letter from the IRS with respect to each such Plan as
to its qualified status under the Code or has remaining a period of time under
applicable Treasury regulations or IRS pronouncements in which to apply for
such a determination letter and make any amendments necessary to obtain a
favorable determination and, to the knowledge of Company, no event has occurred
giving rise to a material likelihood that such Plan would not be treated as
qualified by the IRS; (iii) no "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 408 of ERISA, has occurred with respect to any Company
Employee Plan; (iv) there are no actions, suits or claims pending, or, to the
knowledge of Company, threatened or reasonably anticipated (other than routine
claims for benefits) against any Company Employee Plan or against the assets of
any Company Employee Plan; (v) each Company Employee Plan can be amended,
terminated or otherwise discontinued after the Effective Time in accordance
with its terms, without liability to Parent, Company or any of its Affiliates
(other than ordinary administration expenses typically incurred in a
termination event); (vi) there are no audits, inquiries or proceedings pending
or, to the knowledge of Company, threatened by the IRS or DOL with respect to
any Company Employee Plan; (vii) neither Company nor any Affiliate is subject
to any penalty or tax with respect to any Company Employee Plan under Section
402(i) of ERISA or Sections 4975 through 4980 of the Code; and (viii) all
contributions due from the Company or any Affiliate with respect to any of the
Company Employee Plans have been made as required under ERISA or have been
accrued on the Company Balance Sheet.
(e) Pension Plans. Neither Company nor SAIC has now, nor has it ever,
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Title IV of ERISA or Section 412 of the Code,
that would result in material liability to Company.
(f) Multiemployer Plans. At no time has Company or SAIC contributed to or
been requested to contribute to any Multiemployer Plan, that would result in
material liability to Company.
(g) No Post-Employment Obligations. No Company Employee Plan provides, or
has any liability to provide, retiree life insurance, retiree health or other
retiree employee welfare benefits to any person for any reason, except as may
be required by COBRA or other applicable statute, and Company has never
represented, promised or contracted (whether in oral or written form) to any
Employee (either individually or to Employees as a group) or any other person
that such Employee(s) or other person would be provided with retiree life
insurance, retiree health or other retiree employee welfare benefit, except to
the extent required by statute.
(h) Effect of Transaction. Except as expressly contemplated by this
Agreement, the execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Company
Employee Plan, Employee Agreement, trust or loan that will or may result in any
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Employee.
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(i) Employment Matters. Except, in each case, as would not, individually
or in the aggregate, have a Material Adverse Effect on the Company, Company and
each of its subsidiaries: (i) is in compliance in all material respects with
all applicable foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of employment
and wages and hours, in each case, with respect to Employees; (ii) has withheld
all amounts required by law or by agreement to be withheld from the wages,
salaries and other payments to Employees; (iii) has properly classified
independent contractors for purposes of federal and applicable state tax laws,
laws applicable to employee benefits and other applicable laws; (iv) is not
liable for any arrears of wages or any taxes or any penalty for failure to
comply with any of the foregoing; and (v) is not liable for any material
payment to any trust or other fund or to any governmental or administrative
authority, with respect to unemployment compensation benefits, social security
or other benefits or obligations for Employees (other than routine payments to
be made in the normal course of business and consistent with past practice).
There are no pending, or, to Company's knowledge, threatened material claims or
actions against Company under any worker's compensation policy or long-term
disability policy. To Company's knowledge, no Employee of Company has
materially violated any employment contract, nondisclosure agreement or
noncompetition agreement by which such Employee is bound due to such Employee
being employed by Company and disclosing to Company or using trade secrets or
proprietary information of any other person or entity.
(j) Labor. No work stoppage or labor strike against Company is pending,
threatened or reasonably anticipated. Company does not know of any activities
or proceedings of any labor union to organize any Employees. There are no
actions, suits, claims, labor disputes or grievances pending, or, to the
knowledge of Company, threatened relating to any labor, safety or
discrimination matters involving any Employee, including charges of unfair
labor practices or discrimination complaints, which, if adversely determined,
would, individually or in the aggregate, result in any material liability to
Company. Neither Company nor any of its subsidiaries has engaged in any unfair
labor practices within the meaning of the National Labor Relations Act. Company
is not presently, nor has it been in the past, a party to, or bound by, any
collective bargaining agreement or union contract with respect to Employees and
no collective bargaining agreement is being negotiated by Company.
(k) International Employee Plan. Each International Employee Plan has been
established, maintained and administered in material compliance with its terms
and conditions and with the requirements prescribed by any and all statutory or
regulatory laws that are applicable to such International Employee Plan.
Furthermore, no International Employee Plan has unfunded liabilities, that as
of the Effective Time, will not be offset by insurance or fully accrued. Except
as required by law, no condition exists that would prevent Company or Parent
from terminating or amending any International Employee Plan at any time for
any reason.
2.13 Environmental Matters.
(a) Hazardous Material. Except as would not have a Material Adverse Effect
on Company, no underground storage tanks and no amount of any substance that
has been designated by any Governmental Entity or by applicable federal, state
or local law to be radioactive, toxic, hazardous or otherwise a danger to
health or the environment, including,
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without limitation, PCBs, asbestos, petroleum, urea-formaldehyde and all
substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the United States Resource
Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws, but excluding office and janitorial supplies
(a "Hazardous Material") are present, as a result of the actions of Company or
any of its subsidiaries or any affiliate of Company, or, to Company's
knowledge, as a result of any actions of any third party or otherwise, in, on
or under any property, including the land and the improvements, ground water
and surface water thereof that Company or any of its subsidiaries has at any
time owned, operated, occupied or leased.
(b) Hazardous Materials Activities. Except as would not have a Material
Adverse Effect on Company (in any individual case or in the aggregate) (i)
neither Company nor any of its subsidiaries has transported, stored, used,
manufactured, disposed of released or exposed its employees or others to
Hazardous Materials in violation of any law in effect on or before the Closing
Date, and (ii) neither Company nor any of its subsidiaries has disposed of,
transported, sold, used, released, exposed its employees or others to or
manufactured any product containing a Hazardous Material (collectively
"Hazardous Materials Activities") in violation of any rule, regulation, treaty
or statute promulgated by any Governmental Entity in effect prior to or as of
the date hereof to prohibit, regulate or control Hazardous Materials or any
Hazardous Material Activity.
(c) Permits. Company and its subsidiaries currently hold all environmental
approvals, permits, licenses, clearances and consents ("Environmental Permits")
material to and necessary for the conduct of Company's and its subsidiaries'
Hazardous Material Activities and other businesses of Company and its
subsidiaries as such activities and businesses are currently being conducted.
(d) Environmental Liabilities. No material action, proceeding, revocation
proceeding, amendment procedure, writ or injunction is pending, and to
Company's knowledge, no material action, proceeding, revocation proceeding,
amendment procedure, writ or injunction has been threatened by any Governmental
Entity against Company or any of its subsidiaries in a writing delivered to
Company concerning any Environmental Permit of Company, Hazardous Material or
any Hazardous Materials Activity of Company or any of its subsidiaries. Company
is not aware of any fact or circumstance which reasonably could be expected to
involve Company or any of its subsidiaries in any environmental litigation or
impose upon Company any environmental liability, with such exceptions as would
not have a Material Adverse Effect on Company.
2.14 Certain Agreements. Except as set forth in Part 2.14 of the Company
Disclosure Letter, neither Company nor any of its subsidiaries is a party to or
is bound by:
(a) any employment or consulting agreement or commitment with any employee
or member of Company's Board of Directors, that, individually or in the
aggregate, is material to Company, other than those that are terminable by
Company or any of its subsidiaries on no more than thirty days notice without
liability or financial obligation, except to the extent
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general principles of wrongful termination law may limit Company's or any of
its subsidiaries' ability to terminate employees at will;
(b) any agreement or plan, including any stock option plan, stock
appreciation right plan or stock purchase plan, any of the benefits of which
will be increased, or the vesting of benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement;
(c) any material guaranty or any instrument evidencing indebtedness for
borrowed money by way of direct loan or sale of debt securities;
(d) any agreement, obligation or commitment containing covenants
purporting to limit or which effectively limit the Company's or any of its
subsidiaries' freedom to compete in any line of business or in any geographic
area or which would so limit Company or Surviving Corporation or any of its
subsidiaries after the Effective Time that would have a Material Adverse Effect
on Company;
(e) any agreement or commitment currently in force relating to the
disposition or acquisition by Company or any of its subsidiaries after the date
of this Agreement of a material amount of assets not in the ordinary course of
business, or pursuant to which Company has any material ownership or
participation interest in any corporation, partnership, joint venture,
strategic alliance or other business enterprise other than Company's
subsidiaries;
(f) any material agreement or commitment with SAIC other than the
Corporate Services Agreement between Company and SAIC; or
(g) any agreement or commitment currently in force providing for capital
expenditures by Company or its subsidiaries in excess of $5,000,000.
The agreements required to be disclosed in the Company Disclosure Letter
pursuant to clauses (a) through (g) above or pursuant to Section 2.9 or are
required to be filed with any Parent SEC Report ("Company Contracts") are valid
and in full force and effect, except to the extent that such invalidity would
not have a Material Adverse Effect on Company. Neither Company nor any of its
subsidiaries, nor to Company's knowledge, any other party thereto, is in
breach, violation or default under, and neither Company nor any of its
subsidiaries has received written notice that it has breached, violated or
defaulted, any of the terms or conditions of any Company Contract in such a
manner as would have a Material Adverse Effect on Company.
2.15 Brokers' and Finders' Fees. Except for fees payable to X.X. Xxxxxx &
Co. Incorporated and Chase Securities, Inc. pursuant to engagement letters
which have been provided to Parent, Company has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
2.16 Insurance. Company and each of its subsidiaries have policies
of insurance and bonds of the type and in amounts customarily carried by
persons conducting business or owning
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assets similar to those of the Company and its subsidiaries. There is no
material 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 have been paid and
the Company and its subsidiaries are otherwise in compliance in all material
respects with the terms of such policies and bonds. To the knowledge of
Company, there has been no threatened termination of, or material premium
increase with respect to, any of such policies.
2.17 Disclosure. The information supplied by Company for inclusion in the
Form S-4 (or any similar successor form thereto) Registration Statement to be
filed by Parent with the SEC in connection with the issuance of Parent Common
Stock in the Merger (the "Registration Statement") shall not at the time the
Registration Statement is filed with the SEC and at the time it becomes
effective under the Securities Act contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The information
supplied by Company for inclusion or incorporation by reference in the proxy
statement/prospectus to be filed with the SEC as part of the Registration
Statement (the "Proxy Statement/Prospectus") shall not, on the date the Proxy
Statement/Prospectus is mailed to Company's stockholders or to Parent's
stockholders, at the time of the meeting of Company's stockholders (the
"Company Stockholders' Meeting") to consider the Company Stockholder Approvals,
at the time of the meeting of Parent's stockholders (the "Parent Stockholders'
Meeting") to consider (1) the issuance of shares of Parent Common Stock
pursuant to the Merger, (2) an amendment to Parent's Certificate of
Incorporation to increase the authorized number of shares of Parent Common
Stock in order to permit the issuance of shares of Parent Common Stock pursuant
to the Merger, and (3) an amendment to Parent's Bylaws to increase the
authorized number of directors of Parent (collectively, the "Parent Stockholder
Approvals") or as of the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Company
Stockholders' Meeting or Parent Stockholders' Meeting which has become false or
misleading. The Proxy Statement/Prospectus will comply as to form in all
material respects with the provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder. If at any time prior to the Effective
Time any event relating to Company or any of its affiliates, officers or
directors should be discovered by Company which is required to be set forth in
an amendment to the Registration Statement or a supplement to the Proxy
Statement/Prospectus, Company shall promptly inform Parent. Notwithstanding the
foregoing, Company makes no representation or warranty with respect to any
information supplied by Parent or Merger Sub which is contained in any of the
foregoing documents.
2.18 Board Approval. The Board of Directors of Company has, as of the date
of this Agreement, (i) determined that the Merger is fair to, and in the best
interests of Company and its stockholders, and has approved this Agreement and
(ii) declared the advisability of the Merger and recommends that the
stockholders of Company approve and adopt this Agreement and approve the
Merger.
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2.19 Fairness Opinion. Company's Board of Directors has received opinions
from X.X. Xxxxxx & Co. Incorporated and Chase Securities, Inc., dated as of the
date hereof, to the effect that, as of the date hereof, the consideration to be
received by Company's stockholders in the Merger is fair to Company's
stockholders from a financial point of view, and will promptly deliver to
Parent copies of such opinions.
2.20 DGCL Section 203 and Rights Agreement Not Applicable. The
restrictions contained in Section 203 of the Delaware Law applicable to a
"business combination" (as defined in such Section 203) are not applicable to
the execution, delivery or performance of this Agreement or to the consummation
of the Merger by express provision of the Company's Certificate of
Incorporation, duly adopted pursuant to the provisions of Section 203(b)(3) of
the Delaware Law. To Company's knowledge, no other anti-takeover, control share
acquisition, fair price, moratorium or other similar statute or regulation
(each, a "Takeover Statute") applies or purports to apply to this Agreement,
the Merger or the other transactions contemplated hereby. Company is not a
party to, and Company's equity securities will not be affected by, any rights
agreement, "poison pill" or similar plan, agreement or arrangement which would
have an adverse effect on the ability of Parent to consummate the Merger or the
other transactions contemplated hereby.
2.21 Affiliates. Part 2.21 of the Company Disclosure Letter is a complete
list of those persons who may be deemed to be, in Company's reasonable
judgment, affiliates of Company within the meaning of Rule 145 promulgated
under the Securities Act. Except as set forth in the Company SEC Reports, since
the date of the Company's last proxy statement filed with the SEC, no event has
occurred as of the date of this Agreement that would be required to be reported
by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
As of the date of this Agreement and as of the Closing Date, except as
disclosed in (i) Parent's Annual Report on Form 10-K for the year ending
December 31, 1998 and any Parent SEC Reports (as defined below) filed
subsequent to such Form 10-K, and (ii) the disclosure letter delivered by
Parent to Company dated as of the date hereof and certified by a duly
authorized officer of Parent (the "Parent Disclosure Letter") (each Part of
which qualifies the correspondingly numbered representation, warranty or
covenant to the extent specified therein and such other representations,
warranties or covenants to the extent a matter in such Part is disclosed in
such a way as to make its relevance to such other representation, warranty or
covenant readily apparent, Parent and Merger Sub represent and warrant as
follows:
3.1 Organization of Parent and Merger Sub.
(a) Each of Parent and Merger Sub is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority, and all
requisite qualifications to do business as a
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foreign corporation, to conduct its business in the manner in which its
business is currently being conducted, except where the failure to be so
organized, existing or in good standing or to have such power, authority or
qualifications would not, individually or in the aggregate, have a Material
Adverse Effect on Parent.
(b) Parent has delivered or made available to Company a true and correct
copy of the Certificate of Incorporation and Bylaws of Parent and Merger Sub,
each as amended to date (collectively, the "Parent Charter Documents"), and
each such instrument is in full force and effect. Neither Parent nor Merger Sub
is in violation of any of the provisions of the Parent Charter Documents.
3.2 Parent and Merger Sub Capitalization.
(a) The authorized capital stock of Parent consists solely of 200,000,000
shares of Parent Common Stock, of which there were 114,820,683 shares issued
and outstanding as of the close of business on March 3, 2000, and 5,000,000
shares of Preferred Stock, par value $0.001 per share, of which no shares are
issued or outstanding. All outstanding shares of Parent Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
preemptive rights created by statute, the Certificate of Incorporation or
Bylaws of Parent or any agreement or document to which Parent is a party or by
which it is bound. As of the close of business on March 3, 2000, (i) 17,137,292
shares of Parent Common Stock are subject to issuance pursuant to outstanding
options to purchase Parent Common Stock, and (ii) 1,748,494 shares of Parent
Common Stock are reserved for future issuance under Parent's 1998 Equity
Employee Stock Purchase Plan. All shares of Parent Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable.
(b) The authorized capital stock of Merger Sub consists of 1,000 shares of
common stock, $0.01 par value, all of which, as of the date hereof, are issued
and outstanding and are held by Parent. All of the outstanding shares of Merger
Sub's common stock have been duly authorized and validly issued, and are fully
paid and nonassessable. Merger Sub was formed for the purpose of consummating
the Merger and has no material assets or liabilities except as necessary for
such purpose.
(c) All outstanding shares of Company Common Stock, all outstanding
Company Options, and all outstanding shares of capital stock of each subsidiary
of Company have been issued and granted in compliance with (i) all applicable
securities laws and other applicable material Legal Requirements and (ii) all
material requirements set forth in applicable agreements or instruments.
(d) The Parent Common Stock to be issued in the Merger, when issued in
accordance with the provisions of this Agreement, will be validly issued, fully
paid and nonassessable.
3.3 Obligations With Respect to Capital Stock. Except as set forth in Part
3.3 of the Parent Disclosure Letter, there are no equity securities,
partnership interests or similar ownership interests of any class of Parent
equity security, or any securities exchangeable or convertible into
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or exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except for
securities Parent owns free and clear of all claims and Encumbrances, directly
or indirectly through one or more subsidiaries, and except for shares of
capital stock or other similar ownership interests of certain subsidiaries of
Parent that are owned by certain nominee equity holders as required by the
applicable law of the jurisdiction of organization of such subsidiaries, as of
the date of this Agreement, there are no equity securities, partnership
interests or similar ownership interests of any class of equity security of any
subsidiary of Parent, or any security exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. Except as
set forth in Part 3.2 or Part 3.3 of the Parent Disclosure Letter, there are no
subscriptions, options, warrants, equity securities, partnership interests or
similar ownership interests, calls, rights (including preemptive rights),
commitments or agreements of any character to which Parent or any of its
subsidiaries is a party or by which it is bound obligating Parent or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,
redemption or acquisition of, any shares of capital stock, partnership
interests or similar ownership interests of Parent or any of its subsidiaries
or obligating Parent or any of its subsidiaries to grant, extend, accelerate
the vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement.
3.4 Authority; Non-Contravention.
(a) Each of Parent and Merger Sub has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Parent and Merger Sub, subject
only to the Parent Stockholder Approvals and the filing of the Certificate of
Merger pursuant to Delaware Law. The affirmative vote of (i) the holders of a
majority in interest of the stock present or represented by proxy at the Parent
Stockholders' Meeting is sufficient for Parent's stockholders to approve the
issuance of shares of Parent Common Stock pursuant to the Merger, (ii) the
holders of a majority of the outstanding shares of Parent Common Stock is
sufficient for Parent's stockholders to amend Parent's Certificate of
Incorporation to increased the authorized number of shares of Parent Common
Stock in order to permit the issuance of shares of Parent Common Stock pursuant
to the Merger, and (iii) the holders of at least a majority of the voting power
of all of then outstanding shares of Parent Common Stock is sufficient to amend
Parent's Bylaws to increase the authorized number of directors of Parent, and
no other approval of any holder of any securities of Company is required in
connection with the consummation of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by each of Parent and Merger Sub
and, assuming the due authorization, execution and delivery by Company,
constitute the valid and binding obligations of Parent and Merger Sub,
respectively, enforceable against Parent and Merger Sub in accordance with
their terms, except as enforceability may be limited by bankruptcy and other
similar laws affecting the rights of creditors generally and general principles
of equity.
(b) The execution and delivery of this Agreement by each of Parent and
Merger Sub does not, and the performance of this Agreement by Parent and Merger
Sub will not,
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(i) subject to obtaining the Parent Stockholder Approvals, conflict with or
violate the Certificate of Incorporation or Bylaws of Parent or Merger Sub,
(ii) subject to obtaining the Parent Stockholder Approvals and compliance with
the requirements set forth in Section 3.4(c), conflict with or violate any law,
rule, regulation, order, judgment or decree applicable to Parent or Merger Sub
or by which any of their respective properties is bound or affected, or (iii)
result in any breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or impair Parent's
rights or alter the rights or obligations of any third party under, or give to
others any rights of termination, amendment, acceleration or cancellation of;
or result in the creation of an Encumbrance on any of the properties or assets
of Parent or Merger Sub pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or Merger Sub is a party or by which Parent or
Merger Sub or any of their respective properties are bound or affected, except,
in the case of clauses (ii) and (iii), for such conflicts, violations,
breaches, defaults, impairments, or rights which, individually or in the
aggregate, would not have a Material Adverse Effect on Parent. Part 3.4(b) of
the Parent Disclosure Letter list all consents, waivers and approvals under any
of Parent's or any of its subsidiaries' agreements, contracts, licenses or
leases required to be obtained in connection with the consummation of the
transactions contemplated hereby, which, if individually or in the aggregate
not obtained, would result in a material loss of benefits to Parent or the
Surviving Corporation as a result of the Merger.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity or other person is required
to be obtained or made by Parent or Merger Sub in connection with the execution
and delivery of this Agreement or the consummation of the Merger, except for
(i) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (ii) the filing of the Proxy Statement/Prospectus and the
Registration Statement with the SEC and a Schedule 13D with regard to the
Voting Agreement in accordance with the Securities Act and the Exchange Act,
and the effectiveness of the Registration Statement, (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal, foreign and state securities (or
related) laws and the HSR Act and the securities or antitrust laws of any
foreign country, and (v) such other consents, authorizations, filings,
approvals and registrations which if not obtained or made would not be material
to Parent or the Surviving Corporation or have a material adverse effect on the
ability of the parties hereto to consummate the Merger.
3.5 SEC Filings; Parent Financial Statements.
(a) Parent has filed all forms, reports and documents required to be filed
by Parent with the SEC since the effective date of the registration statement
of Parent's initial public offering, and has made available to Company such
forms, reports and documents in the form filed with the SEC. All such required
forms, reports and documents (including those that Parent may file subsequent
to the date hereof) are referred to herein as the "Parent SEC Reports." As of
their respective dates, the Parent SEC Reports (i) were prepared in accordance
with the requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Parent SEC Reports, and (ii) did not at the time they were filed (or if amended
or superseded by a filing prior to the date of this Agreement, then on the date
of such filing) contain any untrue statement of a material fact or omit to
state a
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material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except to the extent corrected prior to the date of this
Agreement by a subsequently filed Parent SEC Report. None of Parent's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports (the
"Parent Financials"), including any Parent SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 1O-Q, 8-K or any successor form under the Exchange Act) and (iii)
fairly presented the consolidated financial position of Parent and its
subsidiaries as at the respective dates thereof and the consolidated results of
Parent's operations and cash flows for the periods indicated, except that the
unaudited interim financial statements may not contain footnotes and were or
are subject to normal and recurring year-end adjustments. The balance sheet of
Parent contained in Parent SEC Reports as of September 30, 1999 is hereinafter
referred to as the "Parent Balance Sheet." Except as disclosed in the Parent
Financials, since the date of the Parent Balance Sheet neither Parent nor any
of its subsidiaries has any liabilities required under GAAP to be set forth on
a balance sheet (absolute, accrued, contingent or otherwise) which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Parent and its subsidiaries taken as a
whole, except for liabilities incurred since the date of the Parent Balance
Sheet in the ordinary course of business consistent with past practices and
liabilities incurred in connection with this Agreement.
(c) Parent has heretofore furnished to Company a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Parent with the SEC pursuant to
the Securities Act or the Exchange Act.
3.6 Absence of Certain Changes or Events. Since the date of the Parent
Balance Sheet there has not been (i) any Material Adverse Effect with respect
to Parent, (ii) any declaration, setting aside or payment of any dividend on,
or other distribution (whether in cash, stock or property) in respect of, any
of Parent's or any of its subsidiaries' capital stock, or any purchase,
redemption or other acquisition by Parent of any of Parent's capital stock or
any other securities of Parent or its subsidiaries or any options, warrants,
calls or rights to acquire any such shares or other securities except for
repurchases which are not, individually or in the aggregate, material in amount
from employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements, (iii) any split, combination
or reclassification of any of Parent's or any of its subsidiaries' capital
stock, (iv) any material change by Parent in its accounting methods, principles
or practices, except as required by concurrent changes in GAAP, or (v) any
material revaluation by Parent of any of its material assets, including writing
off notes or accounts receivable other than in the ordinary course of business.
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3.7 Taxes.
(a) Parent and each of its subsidiaries have timely filed all material
Returns relating to Taxes required to be filed by or on behalf of Parent and
each of its subsidiaries with any Tax authority, such Returns are true, correct
and complete in all material respects, and Parent and each of its subsidiaries
have paid all Taxes shown to be due on such Returns.
(b) Parent and each of its subsidiaries have withheld with respect to its
employees all federal and state income taxes, Taxes pursuant to FICA, Taxes
pursuant to FUTA and other Taxes required to be withheld, except such Taxes
which are not material to Parent.
(c) Neither Parent nor any of its subsidiaries has been delinquent in the
payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Parent or any of its subsidiaries,
nor has Parent or any of its subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.
(d) No audit or other examination of any Return of Parent or any of its
subsidiaries by any Tax authority is presently in progress, nor has Parent or
any of its subsidiaries been notified of any request for such an audit or other
examination that is reasonably likely to result in any adjustment that is
material to Parent.
(e) No adjustment relating to any Returns filed by Parent or any of its
subsidiaries has been proposed in writing formally or informally by any Tax
authority to Company or any of its subsidiaries or any representative thereof
that is reasonably likely to be material to Parent.
(f) Neither Parent nor any of its subsidiaries has any liability for
unpaid Taxes which has not been accrued for or reserved on the Parent Balance
Sheet in accordance with GAAP, whether asserted or unasserted, contingent or
otherwise, which is material to Parent, other than any liability for unpaid
Taxes that may have accrued since the date of the Parent Balance Sheet in
connection with the operation of the business of Parent and its subsidiaries in
the ordinary course.
(g) There is no agreement, plan or arrangement to which Parent or any of
its subsidiaries is a party, including this Agreement and the agreements
entered into in connection with this Agreement, covering any employee or former
employee of Parent or any of its subsidiaries that, individually or
collectively, would be reasonably likely to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of
the Code. There is no contract, agreement, plan or arrangement to which Parent
is a party or by which it is bound to compensate any individual for excise
taxes paid pursuant to Section 4999 of the Code.
(h) Neither Parent nor any of its subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code
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apply to any disposition of a subsection (f) asset (as defined in Section
341(f)(4) of the Code) owned by Parent.
(i) Neither Parent nor any of its subsidiaries is party to or has any
obligation under any tax-sharing, tax indemnity or tax allocation agreement or
arrangement.
(j) Except as may be required as a result of the Merger, Parent and its
subsidiaries have not been and will not be required to include any adjustment
in Taxable income for any Tax period (or portion thereof) pursuant to Section
481 of the Code or any comparable provision under state or foreign Tax laws as
a result of transactions, events or accounting methods employed prior to the
Closing.
(k) None of Parent's or its subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.
(l) Parent has not been distributed in a transaction qualifying under
Section 355 of the Code within the last two years, nor has Parent distributed
any corporation in a transaction qualifying under Section 355 of the Code
within the last two years.
(m) Parent is not aware of any fact, circumstance, plan or intention on
the part of Parent that would be reasonably likely to prevent the Merger from
qualifying as a "reorganization" pursuant to the provisions of Section 368 of
the Code.
3.8 Title to Properties. Parent has good and valid title to, or, in the
case of leased properties and assets, valid leasehold interests in, all of its
tangible properties and assets, real, personal and mixed, used or held for use
in its business, free and clear of any Encumbrances, except as reflected in the
Parent Financials and except for liens for Taxes not yet due and payable and
such Encumbrances which are not material in character, amount or extent.
3.9 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"Parent Intellectual Property" shall mean any Intellectual Property that
is owned by, or exclusively licensed to, Parent or one of its subsidiaries.
"Parent Registered Intellectual Property" means all of the Registered
Intellectual Property owned by, or filed in the name of, Parent or one of its
subsidiaries.
(a) No material Parent Intellectual Property or product or service of
Parent is subject to any proceeding or outstanding decree, order, judgment,
agreement, or stipulation restricting in any manner the use, transfer, or
licensing thereof by Parent, or which may affect the validity, use or
enforceability of such Parent Intellectual Property.
(b) Each material item of Parent Registered Intellectual Property is valid
and subsisting, all necessary registration, maintenance and renewal fees
currently due in connection with such Registered Intellectual Property have
been made and all necessary documents, recordations and certificates in
connection with such Registered Intellectual Property have been
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filed with the relevant patent, copyright, trademark or other authorities in
the United States or foreign jurisdictions, as the case may be, for the
purposes of maintaining such Registered Intellectual Property except, in each
case, as would not materially adversely affect such item of Parent Registered
Intellectual Property.
(c) Parent or one of its subsidiaries owns and has good and exclusive
title to, or has license (sufficient for the conduct of its business as
currently conducted and as proposed to be conducted) to, each material item of
Parent Intellectual Property free and clear of any Encumbrance (excluding
licenses and related restrictions).
(d) Neither Parent nor any of its subsidiaries have transferred ownership
of, or granted any exclusive license with respect to, any Intellectual Property
that is or was material Parent Intellectual Property, to any third party.
(e) To Parent's knowledge, the operation of the business of Parent as such
business currently is conducted, including Parent's design, development,
marketing and sale of the products or services of Parent (including with
respect to products currently under development) has not, does not and will not
infringe or misappropriate the Intellectual Property of any third party or, to
its knowledge, constitute unfair competition or trade practices under the laws
of any jurisdiction.
(f) Parent has not received notice from any third party that the operation
of the business of Parent or any act, product or service of Parent, infringes
or misappropriates the Intellectual Property of any third party or constitutes
unfair competition or trade practices under the laws of any jurisdiction, which
allegation, if true, would have a Material Adverse Effect on Parent.
(g) To the knowledge of Parent, no person has or is infringing or
misappropriating any material Parent Intellectual Property, which infringement
or misappropriation, individually or in the aggregate, would have a Material
Adverse Effect on Parent.
(h) Parent and its subsidiaries have taken reasonable steps to protect
Parent's and its subsidiaries' rights in Parent's and such subsidiaries'
confidential information and trade secrets, except where the failure to do so
would have a Material Adverse Effect on Parent.
(i) None of the Parent Intellectual Property or product or service of
Parent contains any significant defect in connection with processing data
containing dates in leap years or in the year 2000 or any preceding or
following years, which defects, individually or in the aggregate, would have a
Material Adverse Effect on Parent.
3.10 Compliance with Laws.
(a) Neither Parent nor any of its subsidiaries is in conflict with, or in
default or in violation of (i) any law, rule, regulation, order, judgment or
decree applicable to Parent or any of its subsidiaries or by which Parent or
any of its subsidiaries or any of their respective properties is bound or
affected, or (ii) any note, bond, mortgage, indenture, agreement, lease,
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license, permit, franchise or other instrument or obligation to which Parent or
any of its subsidiaries is a party or by which Parent or any of its
subsidiaries or its or any of their respective properties is bound or affected,
except for conflicts, violations and defaults that, individually or in the
aggregate, would not have a Material Adverse Effect on Parent. No investigation
or review by any Governmental Entity is pending or, to Parent's knowledge, has
been threatened in a writing delivered to Parent against Parent or any of its
subsidiaries, nor, to Parent's knowledge, has any Governmental Entity indicated
an intention to conduct an investigation of Parent or any of its subsidiaries.
There is no judgment, injunction, order or decree binding upon Parent or any of
its subsidiaries which has or could reasonably be expected to have the effect
of prohibiting or materially impairing any material business practice of Parent
or any of its subsidiaries, or any acquisition of material property by Parent
or any of its subsidiaries.
(b) Parent and its subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals from governmental authorities that are
material to or required for the operation of the business of Parent as
currently conducted (collectively, the "Parent Permits"), and are in compliance
with the terms of the Parent Permits, except where the failure to hold such
Parent Permits, or be in such compliance, would not, individually or in the
aggregate, have a Material Adverse Effect on Parent.
3.11 Litigation. There are no claims, suits, actions or proceedings
pending or, to the knowledge of Parent, threatened against, relating to or
affecting Parent or any of its subsidiaries, before any Governmental Entity or
any arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated by this Agreement or which could reasonably be
expected, either singularly or in the aggregate with all such claims, actions
or proceedings, to have a Material Adverse Effect on Parent or have a material
adverse effect on the ability of the parties hereto to consummate the Merger.
No director or executive officer of the Parent has asserted a claim to seek
indemnification from the Parent under Parent Charter Documents or any
indemnification agreements between Parent and such person.
3.12 Employee Benefit Plans.
(a) Definitions. With the exception of the definition of "Affiliate" set
forth in Section 3.12(a)(i) below (which definition shall apply only to this
Section 3.12), for purposes of this Agreement, the following terms shall have
the meanings set forth below:
(i) "Affiliate" shall mean any other person or entity under common
control with Parent within the meaning of Section 414(b), (c), (m) or (o) of
the Code and the regulations issued thereunder;
(ii) "Parent Employee Plan" shall mean any plan, program, policy,
practice, contract, agreement or other arrangement providing for compensation,
severance, termination pay, performance awards, stock or stock-related awards,
fringe benefits or other employee benefits or remuneration of any kind, whether
written or unwritten or otherwise, funded or unfunded, including without
limitation, each "employee benefit plan," within the
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meaning of Section 3(3) of ERISA which is or has been maintained, contributed
to, or required to be contributed to, by Parent or any Affiliate for the
benefit of any Employee;
(iii) "Parent Employees" shall mean any current, former or retired
employee, officer or director or any subsidiary of Parent;
(iv) "International Parent Employee Plan" shall mean each Parent
Employee Plan that has been adopted or maintained by Parent, whether informally
or formally, for the benefit of Employees outside the United States;
(v) "Multiemployer Plan" shall mean any "Pension Plan" (as defined
below) which is a "multiemployer plan," as defined in Section 3(37) of ERISA;
(vi) "Pension Plan" shall mean each Parent Employee Plan which is an
"employee pension benefit plan," within the meaning of Section 3(2) of ERISA.
(b) Schedule. Part 3.12 of the Parent Disclosure Letter contains an
accurate and complete list of each Parent Employee Plan. Parent does not have
any plan or commitment to establish any new Parent Employee Plan, to modify any
Parent Employee Plan (except to the extent required by law or to conform any
such Parent Employee Plan to the requirements of any applicable law, in each
case as previously disclosed to Parent in writing, or as required by this
Agreement), or to enter into any Parent Employee Plan, nor does it have any
intention or commitment to do any of the foregoing.
(c) Documents. Parent has made available to Company, to the extent
requested by Company: (i) correct and complete copies of all documents
embodying each Parent Employee Plan including all amendments thereto and
written interpretations thereof; (ii) the most recent annual actuarial
valuations, if any, prepared for each Parent Employee Plan; (iii) the most
recent annual report (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA or the Code in
connection with each Parent Employee Plan or related trust; (iv) if the Parent
Employee Plan is funded, the most recent annual and periodic accounting of
Parent Employee Plan assets; (v) the most recent summary plan description
together with the summary of material modifications thereto, if any, required
under ERISA with respect to each Parent Employee Plan; (vi) all IRS
determination, opinion, notification and advisory letters, and rulings relating
to Parent Employee Plans and copies of all applications and correspondence to
or from the IRS or the DOL with respect to any Parent Employee Plan; and (vii)
all registration statements and prospectuses prepared in connection with each
Parent Employee Plan.
(d) Employee Plan Compliance. Except, in each case, as would not,
individually or in the aggregate, result in a material liability to Parent, (i)
Parent has performed in all material respects all obligations required to be
performed by it under, is not in default or violation of, and has no knowledge
of any default or violation by any other party to, each Parent Employee Plan,
and each Parent Employee Plan has been established and maintained in all
material respects in accordance with its terms and in compliance with all
applicable laws, statutes, orders, rules and regulations, including but not
limited to ERISA or the Code; (ii) each
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Parent Employee Plan intended to qualify under Section 401(a) of the Code and
each trust intended to qualify under Section 501(a) of the Code has either
received a favorable determination letter from the IRS with respect to each
such Plan as to its qualified status under the Code or has remaining a period
of time under applicable Treasury regulations or IRS pronouncements in which to
apply for such a determination letter and make any amendments necessary to
obtain a favorable determination and, to the knowledge of Parent, no event has
occurred giving rise to a material likelihood that such Plan would not be
treated as qualified by the IRS; (iii) no "prohibited transaction," within the
meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not
otherwise exempt under Section 408 of ERISA, has occurred with respect to any
Parent Employee Plan; (iv) there are no actions, suits or claims pending, or,
to the knowledge of Parent, threatened or reasonably anticipated (other than
routine claims for benefits) against any Parent Employee Plan or against the
assets of any Parent Employee Plan; (v) each Parent Employee Plan can be
amended, terminated or otherwise discontinued after the Effective Time in
accordance with its terms, without liability to Parent or any of its Affiliates
(other than ordinary administration expenses typically incurred in a
termination event); (vi) neither Parent nor any Affiliate is subject to any
penalty or tax with respect to any Parent Employee Plan under Section 402(i) of
ERISA or Sections 4975 through 4980 of the Code.
(e) Pension Plans. Parent does not now, nor has it ever, maintained,
established, sponsored, participated in, or contributed to, any Pension Plan
which is subject to Title IV of ERISA or Section 412 of the Code, that would
result in material liability to Parent.
(f) Multiemployer Plans. At no time has Parent contributed to or been
requested to contribute to any Multiemployer Plan, that would result in
material liability to Parent.
(g) No Post-Employment Obligations. No Parent Employee Plan provides, or
has any liability to provide, retiree life insurance, retiree health or other
retiree employee welfare benefits to any person for any reason, except as may
be required by COBRA or other applicable statute, and Parent has never
represented, promised or contracted (whether in oral or written form) to any
Parent Employee (either individually or to Parent Employees as a group) or any
other person that such Parent Employee(s) or other person would be provided
with retiree life insurance, retiree health or other retiree employee welfare
benefit, except to the extent required by statute.
(h) Effect of Transaction. Except as expressly contemplated by this
Agreement, the execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Parent
Employee Plan, trust or loan that will or may result in any payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits with
respect to any Parent Employee.
(i) Employment Matters. Except, in each case, as would not, individually
or in the aggregate, have a Material Adverse Effect on the Parent, Parent and
each of its subsidiaries
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is in compliance in all material respects with all applicable foreign, federal,
state and local laws, rules and regulations respecting employment, employment
practices, terms and conditions of employment and wages and hours, in each
case, with respect to Employees.
(j) Labor. No work stoppage or labor strike against Parent is pending,
threatened or reasonably anticipated. Parent does not know of any activities or
proceedings of any labor union to organize any Parent Employees. There are no
actions, suits, claims, labor disputes or grievances pending, or, to the
knowledge of Parent, threatened relating to any labor, safety or discrimination
matters involving any Parent Employee, including charges of unfair labor
practices or discrimination complaints, which, if adversely determined, would,
individually or in the aggregate, result in any material liability to Parent.
Neither Parent nor any of its subsidiaries has engaged in any unfair labor
practices within the meaning of the National Labor Relations Act. Parent is not
presently, nor has it been in the past, a party to, or bound by, any collective
bargaining agreement or union contract with respect to Parent Employees and no
collective bargaining agreement is being negotiated by Parent.
(k) International Parent Employee Plan. No International Parent Employee
Plan has unfunded liabilities, that as of the Effective Time, will not be
offset by insurance or fully accrued.
3.13 Environmental Matters.
(a) Hazardous Material. Except as would not have a Material Adverse Effect
on Parent, no underground storage tanks and no amount of any Hazardous
Materials are present, as a result of the actions of Parent or any of its
subsidiaries or any affiliate of Parent, or, to Parent's knowledge, as a result
of any actions of any third party or otherwise, in, on or under any property,
including the land and the improvements, ground water and surface water thereof
that Parent or any of its subsidiaries has at any time owned, operated,
occupied or leased.
(b) Hazardous Materials Activities. Except as would not have a Material
Adverse Effect on Parent (in any individual case or in the aggregate) (i)
neither Parent nor any of its subsidiaries has transported, stored, used,
manufactured, disposed of released or exposed its employees or others to
Hazardous Materials in violation of any law in effect on or before the Closing
Date, and (ii) neither Parent nor any of its subsidiaries has disposed of;
transported, sold, used, released, exposed its employees or others to or
manufactured any product containing a Hazardous Material in violation of any
rule, regulation, treaty or statute promulgated by any Governmental Entity in
effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity.
(c) Permits. Parent and its subsidiaries currently hold all Environmental
Permits material to and necessary for the conduct of Parent's and its
subsidiaries' Hazardous Material Activities and other businesses of Parent and
its subsidiaries as such activities and businesses are currently being
conducted.
(d) Environmental Liabilities. No material action, proceeding, revocation
proceeding, amendment procedure, writ or injunction is pending, and to Parent's
knowledge, no
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material action, proceeding, revocation proceeding, amendment procedure, writ
or injunction has been threatened by any Governmental Entity against Parent or
any of its subsidiaries in a writing delivered to Parent concerning any
Environmental Permit of Parent, Hazardous Material or any Hazardous Materials
Activity of Parent or any of its subsidiaries. Parent is not aware of any fact
or circumstance which reasonably could be expected to involve Parent or any
subsidiaries in any environmental litigation or impose upon Parent any material
environmental liability, with such exceptions as would not have a Material
Adverse Effect on Parent.
3.14 Certain Agreements. Except as set forth in Part 3.14 of the Parent
Disclosure Letter, neither Parent nor any of its subsidiaries is a party to or
is bound by:
(a) any agreement, obligation or commitment containing covenants
purporting to limit or which effectively limit the Parent's or any of its
subsidiaries' freedom to compete in any line of business or in any geographic
area or granting any exclusive distribution or other exclusive rights; or
(b) any agreement or commitment currently in force relating to the
disposition or acquisition by Parent or any of its subsidiaries after the date
of this Agreement of a material amount of assets not in the ordinary course of
business, or pursuant to which Parent has any material ownership or
participation interest in any corporation, partnership, joint venture,
strategic alliance or other business enterprise other than Parent's
subsidiaries.
The agreements required to be disclosed in the Parent Disclosure Letter
pursuant to clauses (a) and (b) above or pursuant to Section 3.9 or are
required to be filed with any Parent SEC Report ("Parent Contracts") are valid
and in full force and effect, except to the extent that such invalidity would
not have a Material Adverse Effect on Parent. Neither Parent nor any of its
subsidiaries, nor to Parent's knowledge, any other party thereto, is in breach,
violation or default under, and neither Parent nor any of its subsidiaries has
received written notice that it has breached, violated or defaulted, any of the
terms or conditions of any Parent Contract in such a manner as would have a
Material Adverse Effect on Parent.
3.15 Brokers' and Finders' Fees. Except for fees payable to Xxxxxx Xxxxxxx
& Co. Incorporated, Parent has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.16 Disclosure. The information supplied by Parent for inclusion in the
Registration Statement shall not at the time the Registration Statement is
filed with the SEC and at the time it becomes effective under the Securities
Act contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading. The information supplied by Parent for inclusion in the Proxy
Statement/Prospectus shall not, on the date the Proxy Statement/Prospectus is
mailed to Company's stockholders or to Parent's stockholders, at the time of
the Company Stockholders' Meeting, at the time of the Parent Stockholders'
Meeting or as of the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make
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the statements therein, in light of the circumstances under which they are
made, not false or misleading, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Company Stockholders' Meeting or the Parent
Stockholders' Meeting which has become false or misleading. The Registration
Statement and Proxy Statement/Prospectus will comply as to form in all material
respects with the provisions of the Securities Act and the rules and
regulations thereunder. If at any time prior to the Effective Time, any event
relating to Parent or any of its affiliates, officers or directors should be
discovered by Parent which is required to be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement/Prospectus,
Parent shall promptly inform Company. Notwithstanding the foregoing, Parent
makes no representation or warranty with respect to any information supplied by
Company which is contained in any of the foregoing documents.
3.17 Board Approval. The Board of Directors of Parent has, as of the date
of this Agreement, (i) determined that the Merger is fair to, and in the best
interests of Parent and its stockholders, and has approved this Agreement and
(ii) recommends that the stockholders of Parent approve each of the Parent
Stockholder Approvals.
3.18 Fairness Opinion. Parent's Board of Directors has received a written
opinion from Xxxxxx Xxxxxxx & Co. Incorporated, dated as of the date hereof, to
the effect that, as of the date hereof, the Exchange Ratio is fair to Parent
from a financial point of view, and has delivered to Company a copy of such
opinion.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business by Company. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Company and each of its
subsidiaries shall, except to the extent that Parent shall otherwise consent in
writing, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance in all
material respects with all applicable laws and regulations, pay its debts and
Taxes when due subject to good faith disputes over such debts or Taxes, pay or
perform other material obligations when due, and use its commercially
reasonable efforts consistent with past practices and policies to (i) preserve
intact its present business organization, (ii) keep available the services of
its present officers and employees and (iii) preserve its relationships with
customers, suppliers, licensors, licensees, and others with which it has
business dealings. In addition, during that period Company will promptly notify
Parent of any material event involving its business or operations consistent
with the agreements contained herein.
In addition, except as permitted by the terms of this Agreement, and
except as contemplated by this Agreement or provided in Schedule 4.1 of the
Company Disclosure Letter, without the prior written consent of Parent, during
the period from the date of this Agreement
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and continuing until the earlier of the termination of this Agreement pursuant
to its terms or the Effective Time, Company shall not do any of the following
and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Grant any severance or termination pay to any officer or employee
except (i) pursuant to written agreements in effect, or policies existing, on
the date hereof and as previously disclosed in writing to Parent, (ii) in an
amount not to exceed four months base pay of the terminated person or (iii) as
consented to by Parent, whose consent shall not be unreasonably withheld or
delayed, or adopt any new severance plan;
(c) Transfer or license to any person or entity or otherwise extend, amend
or modify in any material respect any rights to the material Company
Intellectual Property, other than non-exclusive licenses in the ordinary course
of business and consistent with past practice;
(d) Except for the two-for-one stock dividend payable on Company Common
Stock on March 10, 2000, declare, set aside or pay any dividends on or make any
other distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock of Company or split, combine or reclassify any
capital stock of Company or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for any capital stock
of Company;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Company or its subsidiaries, except repurchases of
unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any
shares of capital stock or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than the issuance
delivery and/or sale of (i) shares of Company Common Stock pursuant to the
exercise of Company Options, (ii) shares of Company Common Stock issuable to
participants in the Company ESPP, (iii) shares of Company Common Stock issuable
to participants in the Company's 401(k) Plan, in the case of (i), (ii) and
(iii), consistent with the terms thereof, and (iv) pursuant to grants of
Company Options to newly hired employees, upon promotions of existing
employees, or as part of Company's annual option grant program, in each case,
in the ordinary course of business, consistent with past practice, and not to
exceed in the aggregate pursuant to this clause (iv), 500,000 shares of Company
Common Stock;
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(g) Cause, permit or propose any amendments to its Certificate of
Incorporation, Bylaws or other charter documents (or similar governing
instruments of any of its subsidiaries);
(h) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof; or otherwise acquire or agree
to acquire any assets which are material, individually or in the aggregate, to
the business of Company or enter into any material joint ventures, strategic
relationships or alliances; provided, that Company shall not be prohibited
under this clause (h) from (i) making or agreeing to make debt or equity
investments which do not exceed (A) the lesser of (x) 20% of the fully diluted
ownership of the entity or (y) $10 million, individually, or (B) $100 million,
in the aggregate, or (ii) making or agreeing to make acquisitions which do not
(A) exceed $200 million per acquisition, (B) exceed $500 million in the
aggregate (which valuations shall be determined upon the signing of agreements
regarding such transactions), or (C) which could reasonably be expected to
delay the Merger or the other transactions contemplated hereby; provided,
further, that Company shall provide written notice to Parent prior to signing
any agreement regarding any such acquisition;
(i) Sell, lease, license, encumber or otherwise dispose of any properties
or assets which are material, individually or in the aggregate, to the business
of Company;
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Company,
enter into any "keep well" or other agreement to maintain any financial
statement condition or enter into any arrangement having the economic effect of
any of the foregoing other than (i) in the ordinary course of business,
consistent with past practice or (ii) pursuant to existing credit facilities,
in the ordinary course of business;
(k) Except as required to comply with any Legal Requirement, adopt or
amend any employee benefit plan or employee stock purchase or employee stock
option plan, or enter into any employment contract (other than offer letters
and letter agreements entered into in the ordinary course of business
consistent with past practice providing for compensation and other benefits
generally commensurate with similarly situated employees) or collective
bargaining agreement, pay any special bonus or special remuneration to any
director or employee, or increase the salaries or wage rates or fringe benefits
(including rights to severance or indemnification) of its directors, officers,
employees or consultants other than in the ordinary course of business,
consistent with past practice, or change in any material respect any management
policies or procedures that are material to the business of Company; provided,
that any unilateral amendment by SAIC of any employee benefit plan in which
Company participates shall not be a violation of this Section 4.1(k);
(1) Make any material capital expenditures other than capital expenditures
contained in the capital budget of Company approved by Company prior to the
date of this Agreement;
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(m) Modify, amend or terminate any Company Contract to which Company or
any subsidiary thereof is a party or waive, release or assign any material
rights or claims thereunder, in each case, in a manner that could reasonably be
expected to materially adversely affect the Company;
(n) Enter into any licensing or other agreement with regard to the
acquisition, distribution or licensing of any material Intellectual Property
other than licenses, distribution or other similar agreements entered into in
the ordinary course of business consistent with past practice;
(o) Materially revalue any of its assets or, except as required by GAAP,
make any change in accounting methods, principles or practices;
(p) Materially change the pricing of the registration fees Company charges
for its registration services; or
(q) Agree in writing or otherwise to take any of the actions described in
Section 4.1 (a) through (p) above.
4.2 Conduct of Business by Parent. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, Parent and each of its
subsidiaries shall, except to the extent that Company shall otherwise consent
in writing, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance in all
material respects with all applicable laws and regulations, pay its debts and
Taxes when due subject to good faith disputes over such debts or Taxes, pay or
perform other material obligations when due, and use its commercially
reasonable efforts consistent with past practices and policies to (i) preserve
intact its present business organization, (ii) keep available the services of
its present officers and employees and (iii) preserve its relationships with
customers, suppliers, licensors, licensees, and others with which it has
business dealings. In addition, during that period Parent will promptly notify
Company of any material event involving its business or operations consistent
with the agreements contained herein.
In addition, except as permitted by the terms of this Agreement, and
except as contemplated by this Agreement or provided in Schedule 4.2 of the
Parent Disclosure Letter, without the prior written consent of Company, during
the period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement pursuant to its terms or the Effective Time,
Parent shall not do any of the following and shall not permit its subsidiaries
to do any of the following:
(a) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in
respect of any capital stock of Parent or split, combine or reclassify any
capital stock of Parent or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for any capital stock
of Parent;
(b) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Parent or its subsidiaries, except repurchases of
unvested shares at cost in
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connection with the termination of the employment relationship with any
employee pursuant to stock option or purchase agreements in effect on the date
hereof;
(c) Cause, permit or propose any amendments to its Certificate of
Incorporation, Bylaws or other charter documents (or similar governing
instruments of any of its subsidiaries);
(d) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof; or otherwise acquire or agree
to acquire any assets which are material, individually or in the aggregate, to
the business of Parent or enter into any material joint ventures, strategic
relationships or alliances; provided, that Parent shall not be prohibited under
this clause (h) from (i) making or agreeing to make debt or equity investments
which do not exceed (A) the lesser of (x) 20% of the fully diluted ownership of
the entity or (y) $10 million, individually, or (B) $100 million, in the
aggregate, or (ii) making or agreeing to make acquisitions which do not (A)
exceed $200 million per acquisition, (B) exceed $500 million in the aggregate
(which valuations shall be determined upon the signing of agreements regarding
such transactions), or (C) which could reasonably be expected to delay the
Merger or the other transactions contemplated hereby; provided, further, that
Parent shall provide written notice to Company prior to signing any agreement
regarding any such acquisition;
(e) Enter into any licensing or other agreement with regard to the
acquisition, distribution or licensing of any material Intellectual Property
other than licenses, distribution or other similar agreements entered into in
the ordinary course of business consistent with past practice;
(f) Except as required by GAAP, make any change in accounting methods,
principles or practices; or
(g) Agree in writing or otherwise to take any of the actions described in
Section 4.2 (a) through (f) above.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Proxy Statement/Prospectus; Registration Statement; Antitrust and
Other Filings.
(a) As promptly as practicable after the execution of this Agreement,
Company and Parent will prepare and file with the SEC, the Proxy
Statement/Prospectus and Parent will prepare and file with the SEC the
Registration Statement in which the Proxy Statement/Prospectus will be included
as a prospectus. Each of Company and Parent will respond to any comments of the
SEC, will use its respective commercially reasonable efforts to have the
Registration Statement declared effective under the Securities Act as promptly
as
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practicable after such filing and each of Company and Parent will cause the
Proxy Statement/Prospectus to be mailed to its respective stockholders at the
earliest practicable time after the Registration Statement is declared
effective by the SEC. Promptly after the date of this Agreement, each of the
Company and Parent will prepare and file (i) with the United States Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice Notification and Report Forms relating to the transactions contemplated
herein as required by the HSR Act, as well as comparable pre-merger
notification forms required by the merger notification or control laws and
regulations of any applicable jurisdiction, as agreed to by the parties (the
"Antitrust Filings") and (ii) any other filings required to be filed by it
under the Exchange Act, the Securities Act or any other federal, state or
foreign laws relating to the Merger and the transactions contemplated by this
Agreement (the "Other Filings"). The Company and Parent each shall promptly
supply the other with any information which may be required in order to
effectuate any filings pursuant to this Section 5.1.
(b) Each of the Company and Parent will notify the other promptly upon the
receipt of any comments from the SEC or its staff or any other government
officials in connection with any filing made pursuant hereto and of any request
by the SEC or its staff or any other government officials for amendments or
supplements to the Registration Statement, the Proxy Statement/Prospectus or
any Antitrust Filings or Other Filings or for additional information and will
supply the other with copies of all correspondence between such party or any of
its representatives, on the one hand, and the SEC, or its staff or any other
government officials, on the other hand, with respect to the Registration
Statement, the Proxy Statement/Prospectus, the Merger or any Antitrust Filing
or Other Filing. Each of the Company and Parent will cause all documents that
it is responsible for filing with the SEC or other regulatory authorities under
this Section 5.1 to comply in all material respects with all applicable
requirements of law and the rules and regulations promulgated thereunder.
Whenever any event occurs which is required to be set forth in an amendment or
supplement to the Proxy Statement/Prospectus, the Registration Statement or any
Antitrust Filing or Other Filing, the Company or Parent, as the case may be,
will promptly inform the other of such occurrence and cooperate in filing with
the SEC or its staff or any other government officials, and/or mailing to
stockholders of the Company and/or Parent, such amendment or supplement.
5.2 Meeting of Company Stockholders.
(a) Promptly after the date hereof, Company will take all action necessary
in accordance with the Delaware Law and its Certificate of Incorporation and
Bylaws to convene the Company Stockholders' Meeting to be held as promptly as
practicable, and in any event (to the extent permissible under applicable law)
within 45 days after the declaration of effectiveness of the Registration
Statement, for the purpose of voting upon approval and adoption of this
Agreement and approval of the Merger. Subject to Section 5.2(c), Company will
use its commercially reasonable efforts to solicit from its stockholders
proxies in favor of the adoption and approval of this Agreement and the
approval of the Merger and will take all other action necessary to secure the
vote or consent of its stockholders required by the rules of the Nasdaq Stock
Market or Delaware Law to obtain such approvals. Notwithstanding anything to
the contrary contained in this Agreement, Company may adjourn or postpone the
Company Stockholders' Meeting to the extent necessary to ensure that any
necessary supplement or
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amendment to the Proxy Statement/Prospectus is provided to Company's
stockholders in advance of a vote on the Merger and this Agreement or, if as of
the time for which Company Stockholders' Meeting is originally scheduled (as
set forth in the Proxy Statement/Prospectus) there are insufficient shares of
Company Common Stock represented (either in person or by proxy) to constitute a
quorum necessary to conduct the business of the Company Stockholders' Meeting.
Company shall ensure that the Company Stockholders' Meeting is called, noticed,
convened, held and conducted, and that all proxies solicited by the Company in
connection with the Company Stockholders' Meeting are solicited, in compliance
with the Delaware Law, its Certificate of Incorporation and Bylaws, the rules
of the Nasdaq Stock Market and all other applicable legal requirements.
Company's obligation to call, give notice of, convene and hold the Company
Stockholders' Meeting in accordance with this Section 5.2(a) shall not be
limited to or otherwise affected by the commencement, disclosure, announcement
or submission to Company of any Acquisition Proposal or Superior Offer, or by
any withdrawal, amendment or modification of the recommendation of the Board of
Directors of Company with respect to this Agreement or the Merger.
(b) Subject to Section 5.2(c): (i) the Board of Directors of Company shall
recommend that Company's stockholders vote in favor of and adopt and approve
this Agreement and approve the Merger at the Company Stockholders' Meeting;
(ii) the Proxy Statement/Prospectus shall include a statement to the effect
that the Board of Directors of Company has recommended that Company's
stockholders vote in favor of and adopt and approve this Agreement and the
Merger at the Company Stockholders' Meeting; and (iii) neither the Board of
Directors of Company nor any committee thereof shall withdraw, amend or modify,
or propose or resolve to withdraw, amend or modify in a manner adverse to
Parent, the recommendation of the Board of Directors of Company that Company's
stockholders vote in favor of and adopt and approve this Agreement and the
Merger.
(c) Nothing in this Agreement shall prevent the Board of Directors of the
Company from withholding, withdrawing, amending or modifying its recommendation
in favor of the Merger if (i) a Superior Offer (as defined below) is made to
the Company and is not withdrawn, (ii) the Company shall have provided written
notice to Parent (a "Notice of Superior Offer") advising Parent that the
Company has received a Superior Offer, specifying all of the material terms and
conditions of such Superior Offer and identifying the person or entity making
such Superior Offer, (iii) Parent shall not have, within three business days of
Parent's receipt of the Notice of Superior Offer, made an offer that the
Company's Board of Directors by a majority vote determines in its good faith
judgment (based on the written advice of a financial advisor of national
standing) to be at least as favorable to Company's stockholders as such
Superior Offer (it being agreed that the Board of Directors of Company shall
convene a meeting to consider any such offer by Parent promptly following the
receipt thereof), (iv) the Board of Directors of Company concludes in good
faith, after consultation with its outside counsel, that, in light of such
Superior Offer, the withholding, withdrawal, amendment or modification of such
recommendation is required in order for the Board of Directors of Company to
comply with its fiduciary obligations to Company's stockholders under
applicable law and (v) Company shall not have violated any of the restrictions
set forth in Section 5.4 or this Section 5.2. Company shall provide Parent with
at least two business days prior notice (or such lesser prior notice as
provided to the members of the Company's Board of Directors but in no event
less than twenty-
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four hours) of any meeting of the Company's Board of Directors at which
Company's Board of Directors is reasonably expected to consider any Acquisition
Proposal (as defined in Section 5.4) to determine whether such Acquisition
Proposal is a Superior Offer. Nothing contained in this Section 5.2(c) shall
limit the Company's obligation to hold and convene the Company Stockholders'
Meeting (regardless of whether the recommendation of the Board of Directors of
Company shall have been withdrawn, amended or modified). For purposes of this
Agreement, "Superior Offer" shall mean an unsolicited, bona fide written offer
made by a third party to consummate any of the following transactions: (i) a
merger or consolidation involving Company pursuant to which the stockholders of
Company immediately preceding such transaction hold less than 50% of the equity
interest in the surviving or resulting entity of such transaction or (ii) the
acquisition by any person or group (including by way of a tender offer or an
exchange offer or a two step transaction involving a tender offer followed with
reasonable promptness by a merger involving the Company), directly or
indirectly, of ownership of 100% of the then outstanding shares of capital
stock of the Company, on terms that the Board of Directors of the Company
determines, in its reasonable judgment (based on the written advice of a
financial advisor of national standing) to be more favorable to the Company
stockholders than the terms of the Merger; provided, however, that any such
offer shall not be deemed to be a "Superior Offer" if any financing required to
consummate the transaction contemplated by such offer is not committed and is
not likely in the reasonable judgment of the Company's Board of Directors
(based on the advice of its financial advisor) to be obtained by such third
party on a timely basis.
(d) Nothing contained in this Agreement shall prohibit the Company or its
Board of Directors from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act.
5.3 Meeting of Parent Stockholders.
(a) Promptly after the date hereof, Parent will take all action necessary
in accordance with the Delaware Law and its Certificate of Incorporation and
Bylaws to convene the Parent Stockholders' Meeting to be held as promptly as
practicable, and in any event (to the extent permissible under applicable law)
within 45 days after the declaration of effectiveness of the Registration
Statement, for the purpose of voting upon the Parent Stockholder Approvals.
Parent will use its commercially reasonable efforts to solicit from its
stockholders proxies in favor of the approval of the Parent Stockholder
Approvals and will take all other action necessary to secure the vote or
consent of its stockholders required by the rules of the Nasdaq Stock Market or
Delaware Law to obtain such approvals. Notwithstanding anything to the contrary
contained in this Agreement, Parent may adjourn or postpone the Parent
Stockholders' Meeting to the extent necessary to ensure that any necessary
supplement or amendment to the Proxy Statement/Prospectus is provided to
Parent's stockholders in advance of a vote on the Parent Stockholder Approvals
or, if as of the time for which Parent Stockholders' Meeting is originally
scheduled (as set forth in the Proxy Statement/Prospectus) there are
insufficient shares of Parent Common Stock represented (either in person or by
proxy) to constitute a quorum necessary to conduct the business of the Parent
Stockholders' Meeting. Parent shall ensure that the Parent Stockholders'
Meeting is called, noticed, convened, held and conducted, and that all proxies
solicited by Parent in connection with the Parent Stockholders' Meeting are
solicited, in
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compliance with the Delaware Law, its Certificate of Incorporation and Bylaws,
the rules of the Nasdaq Stock Market and all other applicable legal
requirements.
(b) (i) The Board of Directors of Parent shall recommend that Parent's
stockholders approve the Parent Stockholder Approvals at the Parent
Stockholders' Meeting; (ii) the Proxy Statement/Prospectus shall include a
statement to the effect that the Board of Directors of Parent has recommended
that Parent's stockholders approve the Parent Stockholder Approvals at the
Company Stockholders' Meeting; and (iii) neither the Board of Directors of
Parent nor any committee thereof shall withdraw, amend or modify, or propose or
resolve to withdraw, amend or modify in a manner adverse to Company, the
recommendation of the Board of Directors of Parent that Parent's stockholders
approve the Parent Stockholder Approvals.
(c) Nothing contained in this Agreement shall prohibit Parent or its Board
of Directors from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act.
5.4 No Solicitation.
(a) From and after the date of this Agreement until the Effective Time or
termination of this Agreement pursuant to Article VII, Company and its
subsidiaries will not, nor will they authorize or permit any of their
respective officers, directors, affiliates or employees or any investment
banker, attorney or other advisor or representative retained by any of them to,
directly or indirectly, (i) solicit, initiate, encourage or induce the making,
submission or announcement of any Acquisition Proposal (as hereinafter
defined), (ii) participate in any discussions or negotiations regarding, or
furnish to any person any non-public information with respect to, or take any
other action to facilitate any inquiries or the making of any Acquisition
Proposal, (iii) engage in discussions with any person with respect to any
Acquisition Proposal, except as to the existence of these provisions, (iv)
approve, endorse or recommend any Acquisition Proposal or (v) enter into any
letter of intent or similar document or any contract, agreement or commitment
contemplating or otherwise relating to any Acquisition Proposal; provided,
however, that notwithstanding the foregoing, prior to the approval of this
Agreement and the Merger at the Company Stockholders' Meeting, this Section
5.4(a) shall not prohibit Company from furnishing nonpublic information
regarding Company and its subsidiaries to, or entering into discussions or
negotiations with, any person or group who has submitted (and not withdrawn) to
Company an unsolicited, written, bona fide Acquisition Proposal that the Board
of Directors of Company reasonably concludes (based on the written advice of a
financial advisor of national standing) may constitute a Superior Offer if (1)
neither Company nor any representative of Company and its subsidiaries shall
have violated any of the restrictions set forth in this Section 5.4, (2) the
Board of Directors of Company concludes in good faith, after consultation with
its outside legal counsel, that such action is required in order for the Board
of Directors of Company to comply with its fiduciary obligations to Company's
stockholders under applicable law, (3) prior to furnishing any such nonpublic
information to, or entering into any such discussions with, such person or
group, Company gives Parent written notice of the identity of such person or
group and all of the material terms and conditions of such Acquisition Proposal
and of Company's intention to furnish nonpublic information to, or enter into
discussions with, such person or group, and Company receives from such person
or group an executed
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confidentiality agreement containing terms at least as restrictive with regard
to Company's confidential information as the Confidentiality Agreement, (4)
Company gives Parent at least two business days advance notice of its intent to
furnish such nonpublic information or enter into such discussions, and (5)
contemporaneously with furnishing any such nonpublic information to such person
or group, Company furnishes such nonpublic information to Parent (to the extent
such nonpublic information has not been previously furnished by the Company to
Parent). Company and its subsidiaries will immediately cease any and all
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding two sentences by any officer, director or employee of Company or
any of its subsidiaries or any investment banker, attorney or other advisor or
representative of Company or any of its subsidiaries shall be deemed to be a
breach of this Section 5.4 by Company.
For purposes of this Agreement, "Acquisition Proposal" shall mean any
offer or proposal by a third party relating to: (A) any acquisition or purchase
from the Company by any person or "group" (as defined under Section 13(d) of
the Exchange Act and the rules and regulations thereunder) of more than a 20%
interest in the total outstanding voting securities of the Company or any of
its subsidiaries or any tender offer or exchange offer that if consummated
would result in any person or "group" (as defined under Section 13(d) of the
Exchange Act and the rules and regulations thereunder) beneficially owning 20%
or more of the total outstanding voting securities of the Company or any of its
subsidiaries or any merger, consolidation, business combination or similar
transaction involving the Company pursuant to which the stockholders of the
Company immediately preceding such transaction hold less than 80% of the equity
interests in the surviving or resulting entity of such transaction; (B) any
sale, lease (other than in the ordinary course of business), exchange,
transfer, license (other than in the ordinary course of business), acquisition,
or disposition of more than 50% of the assets of the Company; (C) any sale,
lease, exchange, transfer, license or disposition to a third party of either of
the "registry" or "registrar" businesses of Company; or (D) any liquidation or
dissolution of the Company.
(b) In addition to the obligations of Company set forth in paragraph (a)
of this Section 5.4, Company as promptly as reasonably practicable shall advise
Parent orally and in writing of any request for non-public information which
Company reasonably believes would lead to an Acquisition Proposal or of any
Acquisition Proposal, or any inquiry with respect to or which Company
reasonably should believe would lead to any Acquisition Proposal, the material
terms and conditions of such request, Acquisition Proposal or inquiry, and the
identity of the person or group making any such request, Acquisition Proposal
or inquiry. Company will keep Parent informed as promptly as reasonably
practicable in all material respects of the status and details (including
material amendments or proposed amendments) of any such request, Acquisition
Proposal or inquiry.
5.5 Confidentiality; Access to Information.
(a) The parties acknowledge that Company and Parent have previously
executed a mutual confidentiality agreement, dated as of March 3, 2000 (the
"Confidentiality Agreement"), which Confidentiality Agreement will continue in
full force and effect in accordance with its terms.
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(b) Access to Information. Company will afford Parent and its accountants,
counsel and other representatives reasonable access during normal business
hours to the properties, books, records and personnel of Company during the
period prior to the Effective Time to obtain all information concerning the
business, including the status of product development efforts, properties,
results of operations and personnel of Company, as Parent may reasonably
request. Parent will afford Company and its accountants, counsel and other
representatives reasonable access during normal business hours to the
properties, books, records and personnel of Parent during the period prior to
the Effective Time to obtain all information concerning the business, including
the status of product development efforts, properties, results of operations
and personnel of Parent, as Company may reasonably request. No information or
knowledge obtained in any investigation pursuant to this Section 5.5 will
affect or be deemed to modify any representation or warranty contained herein
or the conditions to the obligations of the parties to consummate the Merger.
5.6 Public Disclosure. Parent and Company will consult with each other,
and to the extent practicable, agree, before issuing any press release or
otherwise making any public statement with respect to the Merger, this
Agreement or an Acquisition Proposal and will not issue any such press release
or make any such public statement prior to such consultation, except as may be
required by law or any listing agreement with a national securities exchange.
The parties have agreed to the text of the joint press release announcing the
signing of this Agreement.
5.7 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by this
Agreement, including using reasonable efforts to accomplish the following: (i)
the taking of all reasonable acts necessary to cause the conditions precedent
set forth in Article VI to be satisfied, (ii) the obtaining of all necessary
actions or nonactions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings
with Governmental Entities, if any) and the taking of all reasonable steps as
may be necessary to avoid any suit, claim, action, investigation or proceeding
by any Governmental Entity, (iii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iv) the defending of any suits,
claims, actions, investigations or proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed and (v) the execution or delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement. Notwithstanding anything in
this Agreement to the contrary, neither Parent nor any of its affiliates shall
be under any obligation to make proposals, execute or carry out agreements or
submit to orders providing for the sale or other disposition or holding
separate (through the establishment of a trust or otherwise) of any assets or
categories of assets of Parent,
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any of its affiliates or Company or the holding separate of the shares of
Company Common Stock (or shares of stock of the Surviving Corporation) or
imposing or seeking to impose any limitation on the ability of Parent or any of
its subsidiaries or affiliates to conduct their business or own such assets or
to acquire, hold or exercise full rights of ownership of the shares of Company
Common Stock (or shares of stock of the Surviving Corporation).
(b) Each of Company and Parent will give prompt notice to the other of (i)
any notice or other communication from any person alleging that the consent of
such person is or may be required in connection with the Merger, (ii) any
notice or other communication from any Governmental Entity in connection with
the Merger, (iii) any litigation relating to, involving or otherwise affecting
Company, Parent or their respective subsidiaries that relates to the
consummation of the Merger. Company shall give prompt notice to Parent of any
representation or warranty made by it contained in this Agreement becoming
untrue or inaccurate, or any failure of Company to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with
or satisfied by it under this Agreement, in each case, such that the conditions
set forth in Section 6.3 would not be satisfied, provided, however, that no
such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement. Parent shall give prompt notice to Company of any
representation or warranty made by it or Merger Sub contained in this Agreement
becoming untrue or inaccurate, or any failure of Parent or Merger Sub to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement, in each case, such
that the conditions set forth in Section 6.2 would not be satisfied, provided,
however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
5.8 Third Party Consents. As soon as practicable following the date
hereof, Parent and Company will each use its commercially reasonable efforts to
obtain any material consents, waivers and approvals under any of its or its
subsidiaries' respective agreements, contracts, licenses or leases required to
be obtained in connection with the consummation of the transactions
contemplated hereby.
5.9 Stock Options and ESPP.
(a) At the Effective Time, each outstanding Company Option, whether or not
then exercisable, will be assumed by Parent. Each Company Option so assumed by
Parent under this Agreement will continue to have, and be subject to, the same
terms and conditions set forth in the Company Stock Option Plan immediately
prior to the Effective Time (including, without limitation, any repurchase
rights or vesting provisions), except that (i) each Company Stock Option will
be exercisable (or will become exercisable in accordance with its terms) for
that number of whole shares of Parent Common Stock equal to the product of the
number of shares of Company Common Stock that were issuable upon exercise of
such Company Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounded down to the nearest whole number of shares of Parent
Common Stock and (ii) the per share exercise price for the shares of Parent
Common Stock issuable upon exercise of such assumed Company Option will be
equal to the quotient determined by dividing the exercise price per share of
Company
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Common Stock at which such Company Option was exercisable immediately prior to
the Effective Time by the Exchange Ratio, rounded up to the nearest whole cent.
Continuous employment with Company or its subsidiaries shall be credited to the
optionee for purposes of determining the vesting of all assumed Company Options
after the Effective Time.
(b) It is intended that Company Options assumed by Parent shall qualify
following the Effective Time as incentive stock options as defined in Section
422 of the Code to the extent Company Options qualified as incentive stock
options immediately prior to the Effective Time and the provisions of this
Section 5.9 shall be applied consistent with such intent.
(c) Company shall take all actions necessary pursuant to the terms of the
Company ESPP in order to shorten the Participation Period(s) under such plan
which includes the Effective Time (the "Current Offerings") such that a new
purchase date for each such Participation Period shall occur prior to the
Effective Time and shares shall be purchased by Company ESPP participants prior
to the Effective Time. The Current Offerings shall expire immediately following
such new purchase date, and the Company ESPP shall terminate immediately prior
to the Effective Time. Subsequent to such new purchase date, Company shall take
no action, pursuant to the terms of the Company ESPP, to commence any new
offering period.
5.10 Form S-8. Parent agrees to file a registration statement on Form S-8
for the shares of Parent Common Stock issuable with respect to assumed Company
Options as soon as is reasonably practicable, but in no event more than five
business days, after the Effective Time and shall maintain the effectiveness of
such registration statement thereafter for so long as any of such options or
other rights remain outstanding.
5.11 Indemnification.
(a) From and after the Effective Time, Parent will cause the Surviving
Corporation to fulfill and honor in all respects the obligations of Company
pursuant to any indemnification agreements between Company and its directors
and officers as of the Effective Time (the "Indemnified Parties") and any
indemnification provisions under Company's Certificate of Incorporation or
Bylaws as in effect on the date hereof. The Certificate of Incorporation and
Bylaws of the Surviving Corporation will contain provisions with respect to
exculpation and indemnification that are at least as favorable to the
Indemnified Parties as those contained in the Certificate of Incorporation and
Bylaws of Company as in effect on the date hereof, which provisions will not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who, immediately prior to the Effective Time, were directors,
officers, employees or agents of Company, unless such modification is required
by law.
(b) For a period of six years after the Effective Time, Parent will cause
the Surviving Corporation to maintain in effect, if available, directors' and
officers' liability insurance covering those persons who are currently covered
by Company's directors' and officers' liability insurance policy on terms
comparable to those applicable to the current directors and officers of
Company; provided, however, that in no event will Parent or the
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Surviving Corporation be required to expend in excess of 200% of the annual
premium currently paid by Company for such coverage (or such coverage as is
available for such 200% of such annual premium).
(c) This Section 5.11 shall survive the consummation of the Merger, is
intended to benefit Company, the Surviving Corporation and each Indemnified
Party, shall be binding on all successors and assigns of the Surviving
Corporation and Parent, and shall be enforceable by the Indemnified Parties.
5.12 Parent Board of Directors. Parent will submit to its stockholders for
consideration at the Parent Stockholders' Meeting an amendment to Parent's
Bylaws to increase the authorized number of members of the Parent Board of
Directors to a number to be determined by the Parent Board of Directors from
time to time, provided, that for three years following the Effective Time, any
increase in the actual number of directors to a total of more than nine will
require the affirmative vote of 80% of the directors then in office. The Board
of Directors of Parent will take all actions reasonably necessary such that,
effective upon the Effective Time, three persons mutually agreed upon by
Parent's Board of Directors and Company's Board of Directors (the "New
Directors") shall be appointed to Parent's Board of Directors, one of each of
whom shall be appointed to Class I, Class II and Class III of Parent's Board of
Directors, such designation to be made by mutual agreement of Parent's Board of
Directors and Company's Board of Directors. Parent will use its best efforts to
fulfill the conditions set forth in Section 6.2(e).
5.13 Nasdaq Listing. Parent agrees to authorize for listing on the Nasdaq
Stock Market the shares of Parent Common Stock issuable, and those required to
be reserved for issuance, in connection with the Merger, effective upon
official notice of issuance.
5.14 Letters of Accountants. Company and Parent shall use their respective
reasonable efforts to cause to be delivered to Parent letters of Company's and
Parent's independent accountants, respectively, dated no more than two business
days before the date on which the Registration Statement becomes effective (and
satisfactory in form and substance to Parent), that is customary in scope and
substance for letters delivered by independent public accountants in connection
with registration statements similar to the Registration Statement.
5.15 Takeover Statutes. If any Takeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, each of Parent and Company and their respective Boards of Directors
shall grant such approvals and take such lawful actions as are necessary to
ensure that such transactions may be consummated as promptly as practicable on
the terms contemplated by this Agreement and otherwise act to eliminate or
minimize the effects of such statute and any regulations promulgated thereunder
on such transactions.
5.16 Certain Employee Benefits.
(a) As soon as practicable after the execution of this Agreement, Company
and Parent shall confer and work together in good faith to agree upon mutually
acceptable employee benefit and compensation arrangements (and terminate
Company Employee Plans immediately prior to the Effective Time if appropriate).
In addition, Company agrees that it and its
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subsidiaries shall terminate any and all severance, separation, retention and
salary continuation plans, programs or arrangements (other than contractual
agreements disclosed on the Company Disclosure Letter) prior to the Effective
Time.
(b) Employees of the Company and its subsidiaries will be granted credit
for all service with the Company, its subsidiaries and with SAIC and its
Affiliates under each Company employee benefit plan, program or arrangement of
Parent or its Affiliates in which such Employees are eligible to participate
for all purposes, except for purposes of benefit accrual under a defined
benefit pension plan. If Employees become eligible to participate in a medical,
dental or health plan of Parent or its Affiliates, Parent will cause such plan
to (i) waive any preexisting condition exclusions and waiting period
limitations for conditions covered under the applicable medical, dental or
health plans maintained or contributed to by Company (but only to the extent
corresponding exclusions and limitations were satisfied by such Employees under
the applicable medical, dental or health plans maintained or contributed to by
Company); and (ii) credit any deductible or out of pocket expenses incurred by
the Employees and their beneficiaries under such plans during the portion of
the calendar year prior to such participation.
(c) Company and Parent agree to work diligently and cooperate to separate
the benefit plans of SAIC and Company.
5.17 Tax Matters. Each of Parent, Merger Sub and Company agrees that it
will not take any action, or fail to take any action, which action or failure
to act would be reasonably likely to cause the Merger to fail to qualify as a
"reorganization" pursuant to the provisions of Section 368 of the Code.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) Company Stockholder Approval. This Agreement shall have been approved
and adopted, and the Merger shall have been approved, by the requisite vote of
the stockholders of Company under applicable law and the Company Charter
Documents.
(b) Parent Stockholder Approval. The issuance of shares of Parent Common
Stock pursuant to the Merger, and the amendment to Parent's Certificate of
Incorporation to increase the authorized number of shares of Parent Common
Stock in order to permit the issuance of shares of Parent Common Stock pursuant
to the Merger, shall have been approved by the requisite vote of the
stockholders of Parent under applicable law and the Parent Charter Documents.
(c) Registration Statement Effective; Proxy Statement. The SEC shall have
declared the Registration Statement effective. No stop order suspending the
effectiveness of the
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Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of the Proxy
Statement/Prospectus, shall have been initiated or threatened in writing by the
SEC.
(d) No Order; HSR Act. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which has the effect of making the Merger
illegal or otherwise prohibiting consummation of the Merger. All waiting
periods, if any, under the HSR Act relating to the transactions contemplated
hereby will have expired or been terminated.
(e) Nasdaq Listing. The shares of Parent Common Stock to be issued in the
Merger shall have been approved for listing on the Nasdaq Stock Market, subject
to official notice of issuance.
(f) Consents. (i) All required approvals or consents of any Governmental
Entity or other person in connection with the Merger and the consummation of
the other transactions contemplated hereby shall have been obtained (and all
relevant statutory, regulatory or other governmental waiting periods, shall
have expired) unless the failure to receive any such approval or consent would
not be reasonably likely, directly or indirectly, to result in a Material
Adverse Effect on Parent and its subsidiaries (including, for the purposes of
this condition, Company and its subsidiaries), taken as a whole, and (ii) all
such approvals and consents which have been obtained shall be on terms that are
not reasonably likely, directly or indirectly, to result in a Material Adverse
Effect on Parent and its subsidiaries (including, for the purposes of this
condition, Company and its subsidiaries), taken as a whole.
6.2 Additional Conditions to Obligations of Company. The obligation of
Company to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Company:
(a) Representations and Warranties. The representations and warranties of
Parent and Merger Sub contained in this Agreement, disregarding all
qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect or any similar standard or qualification, shall be true
and correct at and as of the Closing Date as if made at and as of the Closing
Date (other than representations and warranties that address matters only as of
a certain date, which shall be true and correct as of such date), except where
the failure of such representations or warranties to be true or correct would
not have, individually or in the aggregate, a Material Adverse Effect on
Parent. It is understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the Parent
Disclosure Letter made or purported to have been made after the execution of
this Agreement shall be disregarded. Company shall have received a certificate
with respect to the foregoing signed on behalf of Parent by the Chief Executive
Officer or Chief Financial Officer of Parent.
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(b) Agreements and Covenants. Parent and Merger Sub shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Closing Date, and Company shall have received a certificate to such effect
signed on behalf of Parent by the Chief Executive Officer or Chief Financial
Officer of Parent.
(c) Material Adverse Effect. No Material Adverse Effect with respect to
Parent shall have occurred since the date of this Agreement and be continuing.
(d) Tax Opinion. Company shall have received an opinion of Xxxxx Xxxx &
Xxxxxxxx, dated as of the Closing Date, in form and substance reasonably
satisfactory to it, on the basis of the facts, representations and assumptions
set forth or referred to in such opinion, that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code and that each
of Parent and Company will be a party to the reorganization within the meaning
of Section 368(a) of the Code. The parties to this Agreement agree to make such
reasonable representations as requested by such counsel for the purpose of
rendering such opinions.
(e) Parent Board of Directors. All actions necessary in order for the New
Directors to become members of the Parent Board of Directors upon the Effective
Time shall have occurred, and, if such actions included an amendment to
Parent's Bylaws, such amendment shall have been approved at the Parent
Stockholders' Meeting and shall be substantially as described in Section 5.12.
6.3 Additional Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate and effect the Merger shall
be subject to the satisfaction at or prior to the Closing Date of each of the
following conditions, any of which may be waived, in writing, exclusively by
Parent:
(a) Representations and Warranties. The representations and warranties of
Company contained in this Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or Material Adverse Effect
or any similar standard or qualification, shall be true and correct at and as
of the Closing Date as if made at and as of the Closing Date (other than
representations and warranties that address matters only as of a certain date,
which shall be true and correct as of such date), except where the failure of
such representations or warranties to be true or correct would not have,
individually or in the aggregate, a Material Adverse Effect on Company. It is
understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the Company
Disclosure Letter made or purported to have been made after the execution of
this Agreement shall be disregarded. Parent shall have received a certificate
with respect to the foregoing signed on behalf of Company by the Chief
Executive Officer or Chief Financial Officer of Company.
(b) Agreements and Covenants. Company shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Parent shall have received a certificate to such effect signed on
behalf of Company by the Chief Executive Officer or Chief Financial Officer of
Company.
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(c) Material Adverse Effect. No Material Adverse Effect with respect to
Company shall have occurred since the date of this Agreement and be continuing.
(d) Tax Opinion. Parent shall have received an opinion of Fenwick & West
LLP, dated as of the Closing Date, in form and substance reasonably
satisfactory to it, on the basis of the facts, representations and assumptions
set forth or referred to in such opinion, that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code and that each
of Parent and Company will be a party to the reorganization within the meaning
of Section 368(a) of the Code. The parties to this Agreement agree to make such
reasonable representations as requested by such counsel for the purpose of
rendering such opinions.
(e) No Restraints. There shall not be instituted or pending any action or
proceeding by any Governmental Entity (i) seeking to restrain, prohibit or
otherwise interfere with the ownership or operation by Parent or any of its
subsidiaries of all or any portion of the business of Company or any of its
subsidiaries or of Parent or any of its subsidiaries or to compel Parent or any
of its subsidiaries to dispose of or hold separate all or any portion of the
business or assets of Company or any of its subsidiaries or of Parent or any of
its subsidiaries, (ii) seeking to impose or confirm limitations on the ability
of Parent or any of its subsidiaries effectively to exercise full rights of
ownership of the shares of Company Common Stock (or shares of stock of the
Surviving Corporation) including the right to vote any such shares on any
matters properly presented to stockholders or (iii) seeking to require
divestiture by Parent or any of its subsidiaries of any such shares.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after the requisite approvals of the
stockholders of Company or Parent:
(a) by mutual written consent duly authorized by the Boards of Directors
of Parent and Company;
(b) by either Company or Parent if the Merger shall not have been
consummated by September 15, 2000 for any reason; provided, however, that the
right to terminate this Agreement under this Section 7.1(b) shall not be
available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Merger to occur on or before such
date and such action or failure to act constitutes a breach of this Agreement;
(c) by either Company or Parent if a Governmental Entity shall have issued
an order, decree or ruling or taken any other action, in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or other action is final and nonappealable;
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(d) by either Company or Parent, if the approval and adoption of this
Agreement, and the approval of the Merger, by the stockholders of Company shall
not have been obtained by reason of the failure to obtain the required vote at
a meeting of Company stockholders duly convened therefore or at any adjournment
thereof; provided, however, that the right to terminate this Agreement under
this Section 7.1(d) shall not be available to Company where the failure to
obtain the Company stockholder approval shall have been caused by (i) the
action or failure to act of Company and such action or failure to act
constitutes a material breach by Company of this Agreement or (ii) a breach of
the Voting Agreement by any party thereto other than Parent;
(e) by either Company or Parent, if the approval of the issuance of shares
of Parent Common Stock pursuant to the Merger, and the amendment to Parent's
Certificate of Incorporation to increase the authorized number of shares of
Parent Common Stock in order to permit the issuance of shares of Parent Common
Stock pursuant to the Merger by the stockholders of Parent shall not have been
obtained by reason of the failure to obtain the respective required votes at a
meeting of Parent stockholders duly convened therefore or at any adjournment
thereof; provided, however, that the right to terminate this Agreement under
this Section 7.1(e) shall not be available to Parent where the failure to
obtain the Parent stockholder approvals shall have been caused by the action or
failure to act of Parent and such action or failure to act constitutes a
material breach by Parent of this Agreement;
(f) by Parent (at any time prior to the adoption and approval of this
Agreement and the Merger by the required vote of the stockholders of Company)
if a Triggering Event (as defined below) shall have occurred;
(g) by Company, upon a breach of any representation, warranty, covenant or
agreement on the part of Parent set forth in this Agreement, or if any
representation or warranty of Parent shall have become untrue, in either case
such that the conditions set forth in Section 6.2(a) or Section 6.2(b) would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that if such
inaccuracy in Parent's representations and warranties or breach by Parent is
curable by Parent through the exercise of its commercially reasonable efforts,
then Company may not terminate this Agreement under this Section 7.1(g) for 30
days after delivery of written notice from Company to Parent of such breach,
provided Parent continues to exercise commercially reasonable efforts to cure
such breach (it being understood that Company may not terminate this Agreement
pursuant to this paragraph (g) if such breach by Parent is cured during such
30-day period, or if Company shall have materially breached this Agreement); or
(h) by Parent, upon a breach of any representation, warranty, covenant or
agreement on the part of Company set forth in this Agreement, or if any
representation or warranty of Company shall have become untrue, in either case
such that the conditions set forth in Section 6.3(a) or Section 6.3(b) would
not be satisfied as of the time of such breach or as of the time such
representation or warranty shall have become untrue, provided that if such
inaccuracy in Company's representations and warranties or breach by Company is
curable by Company through the exercise of its commercially reasonable efforts,
then Parent may not terminate this Agreement under this Section 7.1(h) for 30
days after delivery of written notice
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from Parent to Company of such breach, provided Company continues to exercise
commercially reasonable efforts to cure such breach (it being understood that
Parent may not terminate this Agreement pursuant to this paragraph (h) if such
breach by Company is cured during such 30-day period, or if Parent shall have
materially breached this Agreement).
For the purposes of this Agreement, a "Triggering Event" shall be deemed
to have occurred if: (i) the Board of Directors of Company or any committee
thereof shall for any reason have withdrawn or shall have amended or modified
in a manner adverse to Parent its recommendation in favor of the adoption and
approval of the Agreement or the approval of the Merger; (ii) Company shall
have failed to include in the Proxy Statement/Prospectus the recommendation of
the Board of Directors of Company in favor of the adoption and approval of the
Agreement and the approval of the Merger; (iii) the Board of Directors of
Company fails to reaffirm its recommendation in favor of the adoption and
approval of the Agreement and the approval of the Merger within 10 business
days after Parent requests in writing that such recommendation be reaffirmed at
any time following the public announcement of an Acquisition Proposal; (iv) the
Board of Directors of Company or any committee thereof shall have approved or
publicly recommended any Acquisition Proposal; (v) Company shall have entered
into any letter of intent of similar document or any agreement, contract or
commitment accepting any Acquisition Proposal; (vi) Company shall have
materially breached any of the provisions of Sections 5.2 or 5.4; or (vii) a
tender or exchange offer relating to securities of Company shall have been
commenced by a person unaffiliated with Parent, and Company shall not have sent
to its securityholders pursuant to Rule 14e-2 promulgated under the Securities
Act, within 10 business days after such tender or exchange offer is first
published sent or given, a statement disclosing that Company recommends
rejection of such tender or exchange offer.
7.2 Notice of Termination; Effect of Termination. Any proper
termination of this Agreement under Section 7.1 above will be effective
immediately upon the delivery of written notice of the terminating party to the
other parties hereto. In the event of the termination of this Agreement as
provided in Section 7.1, this Agreement shall be of no further force or effect,
except (i) as set forth in this Section 7.2, Section 7.3 and Article 8, each of
which shall survive the termination of this Agreement, and (ii) nothing herein
shall relieve any party from liability for any willful breach of this
Agreement. No termination of this Agreement shall affect the obligations of the
parties contained in the Confidentiality Agreement, all of which obligations
shall survive termination of this Agreement in accordance with their terms.
7.3 Fees and Expenses.
(a) General. Except as set forth in this Section 7.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses whether
or not the Merger is consummated; provided, however, that Parent and Company
shall share equally all fees and expenses, other than attorneys' and
accountants fees and expenses, incurred in relation to the printing and filing
with the SEC of the Proxy Statement/Prospectus (including any preliminary
materials related thereto) and the Registration Statement (including financial
statements and exhibits) and any amendments or supplements thereto.
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(b) Company Payments. In the event that this Agreement is terminated by
Parent or Company, as applicable, pursuant to Sections 7.1(d), 7.1(f) or
7.1(h), the Company shall promptly, but in no event later than two days after
the date of such termination, pay Parent a fee equal to $425 million in
immediately available funds (the "Termination Fee"); provided, that in the case
of a termination under Sections 7.1(d) or 7.1(h) prior to which no Triggering
Event has occurred, (i) such payment shall be made only if (A) following the
date of this Agreement and prior to the termination of this Agreement, a person
has publicly announced an Acquisition Proposal and (B) within nine months
following the termination of this Agreement, either a Company Acquisition (as
defined below) is consummated, or the Company enters into an agreement
providing for a Company Acquisition and such Company Acquisition is later
consummated with the person (or another person controlling, controlled by, or
under common control with, such person) with whom such agreement was entered
into (regardless of when such consummation occurs if the Company has entered
into such an agreement within such nine-month period), and (ii) such payment
shall be made promptly, but in no event later than two days after the
consummation of such Company Acquisition (regardless of when such consummation
occurs if the Company has entered into such an agreement within such nine-month
period). Company acknowledges that the agreements contained in this Section
7.3(b) are an integral part of the transactions contemplated by this Agreement,
and that, without these agreements, Parent would not enter into this Agreement.
Accordingly, if the Company fails to pay in a timely manner the amounts due
pursuant to this Section 7.3(b), and, in order to obtain such payment, Parent
makes a claim that results in a judgment against the Company for the amounts
set forth in this Section 7.3(b), Company shall pay to Parent its reasonable
costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such suit, together with interest on the amounts set forth in
this Section 7.3(b) at the prime rate of The Chase Manhattan Bank in effect on
the date such payment was required to be made. Payment of the fees described in
this Section 7.3(b) shall not be in lieu of damages incurred in the event of
breach of this Agreement.
For the purposes of this Agreement, "Company Acquisition" shall mean any
of the following transactions (other than the transactions contemplated by this
Agreement); (i) a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company pursuant to which the stockholders of the Company immediately preceding
such transaction hold less than 50% of the aggregate equity interests in the
surviving or resulting entity of such transaction, (ii) a sale or other
disposition by the Company of assets representing in excess of 50% of the
aggregate fair market value of the Company's business immediately prior to such
sale, or of either of the "registry" or "registrar" businesses of Company, or
(iii) the acquisition by any person or group (including by way of a tender
offer or an exchange offer or issuance by Company), directly or indirectly, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing in excess of 50% of the voting power of the then outstanding
shares of capital stock of the Company; provided, that, notwithstanding the
foregoing, a Company Acquisition shall not include a spin-off or other
distribution of either the "registry" or "registrar" businesses of Company to
Company's stockholders.
7.4 Amendment. Subject to applicable law, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of Parent and Company.
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7.5 Extension; Waiver. At any time prior to the Effective Time any
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties made
to such party contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions for the benefit
of such party contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. Delay in exercising any right under
this Agreement shall not constitute a waiver of such right.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Non-Survival of Representations and Warranties. The representations
and warranties of Company, Parent and Merger Sub contained in this Agreement
shall terminate at the Effective Time, and only the covenants that by their
terms survive the Effective Time shall survive the Effective Time.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given upon delivery either personally or by
commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following addresses or facsimile numbers (or at such other
address or facsimile numbers for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
VeriSign, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: 000-000-0000
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Facsimile No.: 000-000-0000
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(b) if to Company, to:
Network Solutions, Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile No.: 000-000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx
Facsimile No.: 000-000-0000
8.3 Interpretation; Certain Defined Terms.
(a) When a reference is made in this Agreement to Exhibits, such reference
shall be to an Exhibit to this Agreement unless otherwise indicated. When a
reference is made in this Agreement to Sections, such reference shall be to a
Section of this Agreement unless otherwise indicated. The words "include,"
"includes" and "including" when used herein shall be deemed in each case to be
followed by the words "without limitation." The table of contents and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement. When
reference is made herein to "the business of" an entity, such reference shall
be deemed to include the business of all direct and indirect subsidiaries of
such entity. Reference to the subsidiaries of an entity shall be deemed to
include all direct and indirect subsidiaries of such entity.
(b) For purposes of this Agreement, the term "knowledge" means with
respect to a party hereto, with respect to any matter in question, that any of
the executive officers of such party has actual knowledge of such matter, after
reasonable inquiry of such matter. For purposes of this definition, the
"executive officers" of Company shall be those person listed on Part 8.3(b) of
the Company Disclosure Letter.
(c) For purposes of this Agreement, the term "Material Adverse Effect"
when used in connection with an entity means any change, event, circumstance or
effect that is or is reasonably likely to be materially adverse to the
business, assets (including intangible assets), capitalization, financial
condition, operations or results of operations of such entity taken as a whole
with its subsidiaries, except to the extent that any such change, event,
circumstance or effect results from (i) changes in general economic conditions,
(ii) changes affecting the industry generally in which such entity operates
(provided that such changes do not affect such entity in a substantially
disproportionate manner) or (iii) changes in the trading prices for such
entity's capital stock.
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(d) For purposes of this Agreement, the term "person" shall mean any
individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
(e) For purposes of this Agreement, "subsidiary" of a specified entity
will be any corporation, partnership, limited liability company, joint venture
or other legal entity of which the specified entity (either alone or through or
together with any other subsidiary) owns, directly or indirectly, 50% or more
of the stock or other equity or partnership interests the holders of which are
generally entitled to vote for the election of the Board of Directors or other
governing body of such corporation or other legal entity.
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each
of the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement, its
Exhibits and the documents and instruments and other agreements among the
parties hereto as contemplated by or referred to herein, including the Company
Disclosure Letter and the Parent Disclosure Letter (a) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, it being understood that
the Confidentiality Agreement shall continue in full force and effect until the
Closing and shall survive any termination of this Agreement; and (b) are not
intended to confer upon any other person any rights or remedies hereunder,
except as specifically provided in Section 5.11.
8.6 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
8.7 Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
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provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
8.9 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.
8.10 Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written consent
of the other parties hereto. Subject to the preceding sentence, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Any purported assignment in
violation of this Section shall be void.
8.11 Waiver Of Jury Trial. EACH OF PARENT, COMPANY AND MERGER SUB HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan
of Merger to be executed by their duly authorized respective officers as of the
date first written above.
VERISIGN, INC.
By:
--------------------------------
Name:
Title:
NICKEL ACQUISITION CORPORATION
By:
--------------------------------
Name:
Title:
NETWORK SOLUTIONS, INC.
By:
--------------------------------
Name:
Title:
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