Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
M2M HOLDINGS, INC.,
ORION ACQUISITION CORPORATION
AND
ONYX SOFTWARE CORPORATION
DATED AS OF JUNE 5, 2006
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TABLE OF CONTENTS
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ARTICLE I THE MERGER..................................................... 2
Section 1.1 The Merger............................................... 2
Section 1.2 Closing.................................................. 2
Section 1.3 Effective Time........................................... 2
Section 1.4 Conversion of the Shares................................. 3
Section 1.5 Organizational Documents................................. 3
Section 1.6 Directors of the Surviving Corporation................... 3
Section 1.7 Company Stock Options.................................... 4
Section 1.8 Restricted Stock......................................... 4
Section 1.9 Company ESPP............................................. 4
Section 1.10 Dissenter Shares......................................... 5
Section 1.11 Adjustments to Prevent Dilution.......................... 5
ARTICLE II EXCHANGE OF CERTIFICATES...................................... 5
Section 2.1 Paying Agent............................................. 5
Section 2.2 Exchange Procedures...................................... 5
Section 2.3 No Further Ownership Rights.............................. 6
Section 2.4 Termination of Exchange Fund............................. 6
Section 2.5 No Liability............................................. 6
Section 2.6 Lost, Stolen or Destroyed Certificates................... 7
Section 2.7 Withholding of Tax....................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................ 7
Section 3.1 Organization and Good Standing; Charter Documents........ 7
Section 3.2 Authority for Agreement.................................. 8
Section 3.3 Capitalization........................................... 8
Section 3.4 Company Subsidiaries..................................... 9
Section 3.5 No Conflict; Required Filings and Consents............... 10
Section 3.6 Compliance............................................... 11
Section 3.7 Litigation............................................... 11
Section 3.8 Company Reports; Financial Statements.................... 11
Section 3.9 Absence of Certain Changes or Events..................... 13
Section 3.10 Taxes.................................................... 13
Section 3.11 Title to Personal Properties; No Real Property........... 15
Section 3.12 Officers, Directors, Employees and Affiliates............ 15
Section 3.13 Employee Benefit Plans................................... 16
Section 3.14 Labor Relations.......................................... 17
Section 3.15 Contracts and Commitments................................ 18
Section 3.16 Intellectual Property.................................... 19
Section 3.17 Insurance Policies....................................... 22
Section 3.18 Brokers.................................................. 23
Section 3.19 Company Financial Advisor Opinion........................ 23
Section 3.20 Rights Agreement......................................... 23
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TABLE OF CONTENTS
(continued)
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Section 3.21 Environmental Matters.................................... 23
Section 3.22 Proxy Statement.......................................... 24
Section 3.23 Export Control Laws...................................... 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....... 25
Section 4.1 Organization and Good Standing........................... 25
Section 4.2 Authority for Agreement.................................. 25
Section 4.3 No Conflict; Required Filings and Consents............... 25
Section 4.4 Litigation............................................... 26
Section 4.5 Sufficient Funds......................................... 26
Section 4.6 Brokers.................................................. 26
Section 4.7 Interim Operations of Merger Sub......................... 26
Section 4.8 Ownership of Shares...................................... 26
Section 4.9 Proxy Statement.......................................... 26
ARTICLE V COVENANTS...................................................... 27
Section 5.1 Conduct of Business by the Company Pending the Merger.... 27
Section 5.2 Access to Information and Employees...................... 29
Section 5.3 Reasonable Efforts; Notification......................... 29
Section 5.4 Proxy Statement.......................................... 31
Section 5.5 Company Shareholders Meeting............................. 31
Section 5.6 No Solicitation of Transactions.......................... 32
Section 5.7 Public Announcements..................................... 34
Section 5.8 Litigation............................................... 34
Section 5.9 Employee Benefit Matters................................. 35
Section 5.10 Directors' and Officers' Indemnification and Insurance... 35
ARTICLE VI CONDITIONS PRECEDENT.......................................... 36
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger................................................... 36
Section 6.2 Additional Conditions to Obligations of Parent and Merger
Sub...................................................... 37
Section 6.3 Additional Conditions to Obligation of the Company....... 37
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER............................ 38
Section 7.1 Termination.............................................. 38
Section 7.2 Expenses................................................. 39
Section 7.3 Effect of Termination.................................... 40
Section 7.4 Amendment................................................ 40
Section 7.5 Extension; Waiver........................................ 40
ARTICLE VIII GENERAL PROVISIONS.......................................... 40
Section 8.1 Nonsurvival of Representations and Warranties............ 40
Section 8.2 Notices.................................................. 41
Section 8.3 Interpretation........................................... 42
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TABLE OF CONTENTS
(continued)
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Section 8.4 Counterparts............................................. 42
Section 8.5 Entire Agreement; No Third-Party Beneficiaries........... 42
Section 8.6 Governing Law............................................ 42
Section 8.7 Assignment............................................... 42
Section 8.8 Enforcement.............................................. 43
Section 8.9 Consent to Jurisdiction; Venue........................... 43
Section 8.10 Waiver of Trial by Jury.................................. 43
ARTICLE IX CERTAIN DEFINITIONS........................................... 44
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (together with all annexes, letters,
schedules and exhibits hereto, this "Agreement"), dated as of June 5, 2006, is
by and among M2M Holdings, Inc., a Delaware corporation ("Parent"), Orion
Acquisition Corporation, a Delaware corporation and wholly owned direct
subsidiary of Parent ("Merger Sub"), and Onyx Software Corporation, a Washington
corporation (the "Company").
RECITALS
A. The Company and Merger Sub each have determined that it is advisable,
fair to and in the best interests of its shareholders to effect a merger (the
"Merger") of Merger Sub with and into the Company pursuant to the Washington
Business Corporation Act (the "WBCA") upon the terms and subject to the
conditions set forth in this Agreement, pursuant to which each outstanding share
of common stock, par value $0.01 per share of the Company (together with each
associated share purchase right (each, a "Right") under the Company's Rights
Agreement dated as of October 25, 1999, by and between the Company and Mellon
Investor Services LLC, as rights agent, as amended by Amendment No. 1 to Rights
Agreement dated as of March 5, 2003 (the "Rights Plan")) (the "Company Common
Stock"), shall be converted into the right to receive cash, as set forth herein,
all upon the terms and subject to the conditions of this Agreement.
B. The Board of Directors of the Company (the "Company Board of Directors")
has unanimously (i) approved this Agreement, the Merger and the other
transactions contemplated hereby, (ii) determined that the Merger and the other
transactions contemplated hereby, taken together, are at a price and on terms
that are fair to, advisable and in the best interests of the Company and its
shareholders (the "Company Shareholders") and (iii) adopted this Agreement and
the "plan of merger" (as such term is used in Chapter 23B.11 of the WBCA)
contained in this Agreement, and recommended the approval by the Company
Shareholders of the Merger and the "plan of merger" (as such term is used in
Chapter 23B.11 of the WBCA) contained in this Agreement.
C. The Board of Directors of Merger Sub has unanimously (i) approved this
Agreement, the Merger and the other transactions contemplated hereby, (ii)
determined that the Merger and the other transactions contemplated hereby, taken
together, are at a price and on terms that are fair to, advisable and in the
best interests of Merger Sub and its sole shareholder and (iii) adopted this
Agreement and the "plan of merger" (as such term is used in Chapter 23B.11 of
the WBCA) contained in this Agreement, and recommended the approval by its sole
shareholder of the Merger and the "plan of merger" (as such term is used in
Chapter 23B.11 of the WBCA) contained in this Agreement.
D. Simultaneously with the execution and delivery of this Agreement,
certain Company Shareholders have entered into support agreements (the "Support
Agreements"), dated as of the date hereof, with Parent, pursuant to which, among
other things, such Company Shareholders have agreed to vote their shares in
favor of the approval of this Agreement and the "plan of merger" (as such term
is used in Chapter 23B.11 of the WBCA) contained in this Agreement and against
any competing proposals.
E. Certain capitalized terms used in this Agreement are defined in Article
IX, and Annex I includes an index of all capitalized terms used in this
Agreement.
AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger.
(a) Promptly following execution of this Agreement, Parent and Merger
Sub shall cause Merger Sub to be reincorporated as a Washington corporation (the
"Reincorporation") by way of a merger of Merger Sub with and into a Washington
corporation wholly owned by Merger Sub. In connection with the Reincorporation,
the surviving entity shall execute a joinder to this Agreement and agree to be
bound as "Merger Sub" hereunder and, from and after the Reincorporation, all
references to Merger Sub herein shall be deemed to refer to such surviving
entity.
(b) Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time, Merger Sub shall be merged with and into the
Company in accordance with the WBCA, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the Surviving Corporation
under the Laws of the State of Washington.
(c) The Merger shall have the effects set forth in Chapter 23B.11 of
the WBCA and other applicable Law. Accordingly, from and after the Effective
Time, the Surviving Corporation shall have all the properties, rights,
privileges, powers, interests and franchises and shall be subject to all
restrictions, disabilities, debts, duties and Liabilities of the Company and
Merger Sub.
Section 1.2 Closing. Subject to the terms and conditions of this Agreement,
the Closing will take place at 10:00 a.m., local time, as promptly as
practicable but in no event later than the second Business Day after the
satisfaction or waiver of the conditions (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the fulfillment
or waiver of those conditions) set forth in Article VI (the "Closing Date"), at
the offices of Xxxxxxxx & Xxxxx LLP, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, unless another time, date or place is agreed to in writing by
the parties.
Section 1.3 Effective Time. On the Closing Date and subject to the terms
and conditions hereof, the Articles of Merger shall be delivered for filing with
the Washington Secretary. The Merger shall become effective at the Effective
Time. If the Washington Secretary requires any changes in the Articles of Merger
as a condition to filing or issuing a certificate to the effect that the Merger
is effective, Merger Sub and the Company shall execute any necessary revisions
incorporating such changes, provided such changes are not inconsistent with and
do not result in any material change in the terms of this Agreement.
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Section 1.4 Conversion of the Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Sub, the Company
or the holders of any of the following securities:
(a) Except as provided in Section 1.4(b), each share of Company Common
Stock issued and outstanding immediately prior to the Effective Time (excluding
Dissenter Shares) (the "Shares") shall be canceled and shall by virtue of the
Merger and without any action on the part of the holder thereof be converted
automatically into the right to receive $4.80 in cash, without interest (the
"Merger Consideration"), upon surrender of the certificate representing such
Shares as provided in Article II. All such Shares, when so converted, shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a Certificate representing such Shares shall
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration into which such Shares have been converted, as provided
herein.
(b) Each Share that is owned by the Company (or any Subsidiary of the
Company) as treasury stock or otherwise and each Share owned by Parent shall be
canceled and retired and cease to exist and no payment or distribution shall be
made with respect thereto.
(c) Each share of common stock of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
validly issued, fully paid and nonassessable share of common stock, par value
$0.01 per share, of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
Section 1.5 Organizational Documents.
(a) At the Effective Time, the Articles of Incorporation of the
Surviving Corporation shall be the Articles of Incorporation of Merger Sub, as
in effect immediately prior to the Effective Time, except that such Articles of
Incorporation shall be amended to change the name of the Surviving Corporation
to "Onyx Software Corporation." Thereafter, as so amended, the Articles of
Incorporation of the Surviving Corporation may be amended in accordance with its
terms and as provided by Law.
(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 (except that all references to Merger Sub in the Bylaws of the
Surviving Corporation shall be amended to refer to "Onyx Software Corporation."
Thereafter, as so amended, the Bylaws of the Surviving Corporation may be
amended or repealed in accordance with their terms and the Articles of
Incorporation of the Surviving Corporation and as provided by Law.
Section 1.6 Directors of the Surviving Corporation. The Company shall cause
to be delivered to Parent, promptly after the date hereof, resignations of all
the directors of the Company to be effective upon the consummation of the
Merger. At the Effective Time, the directors of Merger Sub shall continue in
office as the directors of the Surviving Corporation, and such directors and
officers shall hold office in accordance with and subject to the Articles of
Incorporation and Bylaws of the Surviving Corporation.
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Section 1.7 Company Stock Options.
(a) At the Effective Time, each then-outstanding Company Stock Option,
including unvested Company Stock Options, shall be cancelled, (i) in the case of
a Company Stock Option having a per share exercise price less than the Merger
Consideration, for the right to receive from the Surviving Corporation for each
share of Company Common Stock subject to such Company Stock Option immediately
prior to the Effective Time an amount (subject to any applicable withholding
tax) in cash equal to the product of (A) the number of shares of Company Common
Stock subject to such Company Stock Option immediately prior to the Effective
Time and (B) the amount by which the Merger Consideration exceeds the per share
exercise price of such Company Stock Option, or (ii) in the case of a Company
Stock Option having a per share exercise price equal to or greater than the
Merger Consideration, without the payment of cash or issuance of other
securities in respect thereof. The cancellation of a Company Stock Option as
provided in the immediately preceding sentence shall be deemed a release of any
and all rights the holder thereof had or may have had in respect of such Company
Stock Option.
(b) Prior to the Effective Time, the Company shall take such actions
as may be necessary to give effect to the transactions contemplated by this
Section 1.7, including, but not limited to, satisfaction of the requirements of
Rule 16b-3(e) under the Exchange Act.
(c) Except as otherwise agreed to by the parties, (i) the Company
Option Plans shall terminate as of the Effective Time and the provisions in any
other plan, program or arrangement providing for the issuance or grant of any
other interest in respect of the capital stock of the Company or any Subsidiary
thereof shall be canceled as of the Effective Time and (ii) the Company shall
ensure that following the Effective Time no participant in the Company Option
Plans or other plans, programs or arrangements shall have any right thereunder
to acquire any equity securities of the Company, the Surviving Corporation or
any Subsidiary thereof.
(d) Prior to the Effective Time, the Company shall deliver to the
holders of Company Stock Options notices, in form and substance reasonably
acceptable to Parent, setting forth such holders' rights pursuant to this
Agreement.
Section 1.8 Company Warrants. As a result of the Merger, from and after the
Effective Time, each Company Warrant shall be exercisable for, during the period
specified in such Company Warrant and upon payment of such Company Warrant's
exercise price, only the product of (A) the Merger Consideration and (B) the
number of shares of Company Common Stock deliverable upon exercise of such
Company Warrant as if exercised immediately prior to the Effective Time.
Section 1.9 Restricted Stock. If any share of Company Common Stock
outstanding immediately prior to the Effective Time is unvested or subject to a
repurchase option, then, effective immediately prior to the Effective Time, any
such share of Company Common Stock shall be fully vested and any repurchase
option shall lapse.
Section 1.10 Company ESPP. Prior to the Effective Time, the Company shall
take all actions necessary pursuant to the terms of the Company ESPP to (i)
shorten each currently ongoing purchase and/or offering period under the Company
ESPP that extends beyond the
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Effective Time (the "Current Offerings") such that a new purchase date for each
such Current Offering shall occur prior to the Effective Time and shares of
Company Common Stock shall be purchased by the Company ESPP participants prior
to the Effective Time, and (ii) preclude the commencement of any new purchase or
offering period. The Company shall take all actions necessary so that the
Company ESPP shall terminate immediately prior to the earlier of (A) the
Effective Time and (B) the date upon which the Company ESPP terminates by its
terms.
Section 1.11 Dissenter Shares. Notwithstanding anything in this Agreement
to the contrary, any Dissenter Shares shall not be converted into the right to
receive the Merger Consideration as provided in Section 1.4(a), but instead such
holders of Dissenter Shares shall be entitled to payment of the fair value of
such shares in accordance with the provisions of Chapter 23B.13. Notwithstanding
the foregoing, if any such holder shall fail to perfect or otherwise shall
waive, withdraw or lose dissenters' rights under Chapter 23B.13 or a court of
competent jurisdiction shall determine that such holder is not entitled to the
relief provided by Chapter 23B.13, then the right of such holder to be paid the
fair value of such holder's Dissenter Shares under Chapter 23B.13 shall cease
and such Dissenter Shares shall be deemed to have been converted at the
Effective Time into, and shall have become, the right to receive the Merger
Consideration as provided in Section 1.4(a), without interest. The Company shall
serve prompt notice to Parent of any assertion of dissenters' rights with
respect to any of the Shares, attempted withdrawals of such assertion of
dissenters' rights and any other instruments served pursuant to Chapter 23B.13
received by the Company, and Parent shall have the right to participate in and
direct all negotiations and proceedings with respect to such demands. The
Company shall not, without the prior written consent of Parent, or as otherwise
required under the WBCA, voluntarily make any payment with respect to, or settle
or offer to settle, any such demands, or agree to do or commit to do any of the
foregoing.
Section 1.12 Adjustments to Prevent Dilution. Notwithstanding the
restrictions contained in Section 5.1, in the event that the Company changes the
number of Shares, or securities convertible or exchangeable into or exercisable
for Shares, issued and outstanding prior to the Effective Time as a result of a
reclassification, stock split (including a reverse stock split), stock dividend
or distribution, recapitalization, merger, subdivision, issuer tender or
exchange offer, or other similar transaction, the Merger Consideration shall be
proportionately adjusted to reflect such change.
ARTICLE II
EXCHANGE OF CERTIFICATES
Section 2.1 Paying Agent. Prior to the Effective Time, Parent shall appoint
the Paying Agent to act as paying agent for the payment of the Merger
Consideration upon surrender of the Certificates pursuant to this Article II.
After the Effective Time, Parent shall deposit or cause to be deposited with the
Paying Agent on a timely basis, if and when needed for the benefit of the
Company Shareholders and for payment in accordance with this Article II through
the Paying Agent, cash in an amount sufficient to pay the aggregate Merger
Consideration (such cash being hereinafter referred to as the "Exchange Fund"),
payable pursuant to Section 1.4 in exchange for outstanding Shares. Any income
from investment of the Exchange Fund, which shall be in accordance with the
instructions of Parent, will be payable solely to Parent.
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Section 2.2 Exchange Procedures.
(a) As soon as practicable after the Effective Time, the Paying Agent
shall mail to each holder of record of a Certificate or Certificates that,
immediately prior to the Effective Time, represented outstanding Shares
subsequently converted into the right to receive the Merger Consideration, as
set forth in Section 1.4: (i) a letter of transmittal (a "Letter of
Transmittal") that (A) 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 Paying Agent (or an affidavit of loss in lieu thereof,
together with any bond or indemnity agreement, as contemplated by Section 2.6)
and (B) shall be in such form and have such other provisions as the Surviving
Corporation may reasonably specify; and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for the applicable Merger
Consideration.
(b) Upon surrender of a Certificate for cancellation to the Paying
Agent, together with a Letter of Transmittal, duly completed and executed, and
any other documents reasonably required by the Paying Agent or the Surviving
Corporation, (i) the holder of such Certificate shall be entitled to receive in
exchange therefor a check representing the applicable amount of cash that such
holder has the right to receive pursuant to Section 1.4 and (ii) the Certificate
so surrendered shall forthwith be canceled. No interest will be paid or accrued
on the cash payable upon surrender of the Certificates. Until surrendered as
contemplated by this Section 2.2, each such Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the applicable Merger Consideration.
(c) In the event of a transfer of ownership of Shares that is not
registered in the transfer records of the Company, the appropriate amount of the
Merger Consideration may be paid to a transferee if the Certificate representing
such Shares is presented to the Paying Agent properly endorsed or accompanied by
appropriate stock powers and otherwise in proper form for transfer and
accompanied by all documents reasonably required by the Paying Agent to evidence
and effect such transfer and to evidence that any applicable Taxes have been
paid.
Section 2.3 No Further Ownership Rights. All Merger Consideration paid upon
the surrender for exchange of the Certificates representing Shares in accordance
with the terms hereof shall be deemed to have been paid in full satisfaction of
all rights pertaining to such Shares and, after the Effective Time, there shall
be no further registration of transfers on the transfer books of the Surviving
Corporation of the Shares 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 II, subject to applicable Law in the case of Dissenter
Shares.
Section 2.4 Termination of Exchange Fund. Any portion of the Exchange Fund
(including any interest and other income received with respect thereto) that
remains undistributed to the former Company Shareholders on the date 365 days
after the Effective Time shall be delivered to the Surviving Corporation upon
demand, and any former holder of Shares who has not theretofore received any
applicable Merger Consideration to which such Company Shareholder is entitled
under this Article II shall thereafter look only to the Surviving Corporation
(subject to abandoned property, escheat or other similar Laws) for payment of
claims with respect thereto and only as a general creditor thereof.
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Section 2.5 No Liability. None of Parent, the Surviving Corporation or
Merger Sub shall be liable to any holder of Shares for any part of the Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar Law. Any amounts remaining unclaimed by
holders of any such Shares two (2) years after the Effective Time or at such
earlier date as is immediately prior to the time at which such amounts would
otherwise escheat to, or become property of, any Governmental Entity shall, to
the extent permitted by applicable Law or Order, become the property of the
Surviving Corporation free and clear of any claims or interest of any such
holders or their successors, assigns or personal representatives previously
entitled thereto.
Section 2.6 Lost, Stolen or Destroyed Certificates. If any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by and at the discretion of Parent or the Surviving
Corporation, the posting by such Person of a bond in such reasonable amount as
Parent or the Surviving Corporation may direct, or the execution and delivery by
such Person of an indemnity agreement in such form as Parent or the Surviving
Corporation may direct, in each case as indemnity against any claim that may be
made against it with respect to such Certificate, the Paying Agent shall issue
in exchange for such lost, stolen or destroyed Certificate the appropriate
amount of the Merger Consideration.
Section 2.7 Withholding of Tax. Parent, the Surviving Corporation, any
Affiliate thereof or the Paying Agent shall be entitled to deduct and withhold
from the Merger Consideration otherwise payable pursuant to this Agreement to
any holder of Shares and or Company Stock Options such amount as Parent, the
Surviving Corporation, any Affiliate thereof or the Paying Agent is required to
deduct and withhold with respect to the making of such payment under the Code or
any provision of state, local or foreign Tax Law. To the extent that amounts are
so withheld by the Surviving Corporation or the Paying Agent, such withheld
amounts shall be (a) paid over to the applicable Governmental Entity in
accordance with applicable Law or Order and (b) treated for all purposes of this
Agreement as having been paid to the former holder of a Certificate or Company
Stock Option in respect of which such deduction and withholding was made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in the Company Disclosure Letter delivered by the
Company to Parent prior to the execution of this Agreement, and except as set
forth in the Company Reports (to the extent it is reasonably apparent that any
such disclosure set forth in the Company Reports would qualify the
representations and warranties contained herein), the Company represents and
warrants to each of the other parties hereto as follows:
Section 3.1 Organization and Good Standing; Charter Documents.
(a) The Company and each of its Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing (with respect to jurisdictions
that recognize such concept) under the Laws of its jurisdiction of
incorporation, (ii) has full corporate (or, in the case
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of any Subsidiary that is not a corporation, other) power and authority and all
necessary governmental approvals to own, lease and operate its properties and
assets and to conduct its business as presently conducted, and (iii) is duly
qualified or licensed to do business as a foreign corporation and is in good
standing (with respect to jurisdictions that recognize such concept) in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except where the failure to be so qualified or licensed would not
reasonably be expected to have a Company Material Adverse Effect.
(b) The copies of the Company Articles of Incorporation and Company
Bylaws that are filed as exhibits to the Company 10-K are complete and correct
copies thereof as in effect on the date hereof. The Company is not in violation
of any of the provisions of the Company Articles of Incorporation or the Company
Bylaws and will not be in violation of any of the provisions of the Company
Articles of Incorporation or Company Bylaws, as such Company Articles of
Incorporation and Company Bylaws may be amended (subject to Section 5.1) between
the date hereof and the Closing Date. The Company has made available to Parent
true and complete copies of the minute books of the Company from January 1, 2004
and through the date of this Agreement (except for minutes and consents of the
Company Board of Directors or any committee thereof relating to the evaluation
of the transactions contemplated hereby and the consideration of strategic
alternatives relating to the Company).
Section 3.2 Authority for Agreement.
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the Merger and the other transactions contemplated by this Agreement.
This Agreement has been duly executed and delivered by the Company and, assuming
the due authorization, execution and delivery by Parent and Merger Sub,
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforcement thereof
may be limited against the Company by (i) bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting the enforcement of
creditors' rights or remedies in general as from time to time in effect or (ii)
the exercise by courts of equity powers.
(b) As of the date of this Agreement, each of the Company and the
Company Board of Directors has taken all action required to be taken by it to
exempt this Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby from, and this Agreement and the other
Transaction Documents, and the transactions contemplated hereby and thereby, are
exempt from the requirements of, any and all Antitakeover Laws.
Section 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of 80,000,000
shares of Company Common Stock and 20,000,000 shares of preferred stock. As of
the date hereof, 18,498,858 shares of Company Common Stock are issued and
outstanding, no shares of preferred stock are issued and outstanding and no
shares of Company Common Stock or preferred stock are held in the Company's
treasury. All outstanding Shares are, and any additional Shares issued after the
date hereof and prior to the Effective Time will be, duly
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authorized and validly issued, fully paid and nonassessable, free of any
Encumbrances other than Encumbrances imposed upon the holder thereof by reason
of the acts or omissions of such holder, not subject to any preemptive rights or
rights of first refusal created by statute, and issued in compliance in all
material respects with all applicable federal and state securities Laws.
(b) As of the date hereof, 3,533,535 Company Stock Options are
outstanding pursuant to the Company Option Plans, each such Company Stock Option
entitling the holder thereof to purchase one share of Company Common Stock, and
3,533,535 shares of Company Common Stock are authorized and reserved for future
issuance pursuant to the exercise of such Company Stock Options. 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
and issued in compliance in all material respects with all applicable federal
and state securities Laws. Except as set forth above and other than the Rights,
the Company Warrants and rights pursuant to the Company ESPP, as of the date of
this Agreement, there are no Company Stock Rights. The copies of the Company
Option Plans that are filed as exhibits to the Company 10-K are complete and
correct copies thereof as in effect on the date hereof.
(c) As of the date hereof, the Company has reserved 345,962 shares of
Company Common Stock for issuance under the Company ESPP.
(d) As of the date hereof, the Company had reserved 205,000 shares of
Company Common Stock for issuance upon exercise of the Company Warrants.
(e) As of the date hereof, 241,000 shares of Company Common Stock are
subject to a repurchase option in favor of the Company that lapses over a
vesting period related to the holder's period of employment. Except as set forth
above, there are no outstanding contractual obligations of the Company to
repurchase, redeem or otherwise acquire any Shares or to pay any dividend or
make any other distribution in respect thereof. As of the date hereof, except
for the Support Agreements, there are no voting trusts or other agreements or
understandings to which the Company is a party with respect to the voting of
stock of the Company.
(f) There are no accrued and unpaid dividends with respect to any
outstanding shares of capital stock of the Company or any of its Subsidiaries.
(g) There are no preemptive rights of first refusal, co-sale rights,
"drag-along" rights or registration rights granted by the Company with respect
to the Company's capital stock and in effect as of the date hereof.
(h) Except for the Company's repurchase rights with respect to
unvested shares issued under the Company Option Plans, there are no rights or
obligations, contingent or otherwise (including rights of first refusal in favor
of the Company), of the Company or any of its Subsidiaries, to repurchase,
redeem or otherwise acquire any shares of capital stock of the Company or any of
its Subsidiaries or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any such Subsidiary or any other
Person.
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Section 3.4 Company Subsidiaries. A true and complete list of all the
Subsidiaries of the Company is set forth in Exhibit 21 to the Company 10-K. The
Company or one of its Subsidiaries is the record and beneficial owner of all
outstanding shares of capital stock of each Subsidiary of the Company and all
such shares are duly authorized, validly issued, fully paid and nonassessable.
All of the outstanding shares of capital stock of each Subsidiary of the Company
are owned by the Company free and clear of all Encumbrances. Except for the
capital stock of, or other equity or voting interests in, the Subsidiaries set
forth on Exhibit 21 to the Company 10-K, the Company does not own, directly or
indirectly, any capital stock of, or other equity or voting interests in, any
Person. The Certificate of Incorporation and Bylaws (or other organizational
documents) of each Subsidiary of the Company have been delivered or otherwise
made available to Parent.
Section 3.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company and the consummation
of the Merger (subject to the approval of the "plan of merger" (as such term is
used in Chapter 23B.11 of the WBCA) contained in this Agreement by the Company
Required Vote) and the other transactions contemplated by this Agreement will
not, (i) conflict with or violate any provision of the Company Articles of
Incorporation or Company Bylaws, or the equivalent charter documents of any
Subsidiary of the Company, (ii) conflict with or violate any Law applicable to
the Company or its Subsidiaries or by which any property or asset of the Company
or any of its Subsidiaries is bound or affected, or (iii) result in a breach of
or constitute a default (or an event that with notice or lapse of time or both
would become a default) under, give to others (immediately or with notice or
lapse of time or both) any right of termination, amendment, acceleration or
cancellation of, result (immediately or with notice or lapse of time or both) in
triggering any payment or other obligations, or result (immediately or with
notice or lapse of time or both) in the creation of an Encumbrance on any
property or asset of the Company or its Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries, or
any property or asset of the Company or any of its Subsidiaries, is bound or
affected, except in the case of clauses (ii) and (iii) above for any such
conflicts, violations, breaches, defaults or other occurrences that would not
reasonably be expected to have a Company Material Adverse Effect.
(b) The affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock as of the record date to be
established for the Company Shareholders Meeting, voting as a single class, at
the Company Shareholders Meeting, in favor of adopting this Agreement is the
only vote of the holders of any class or series of the Company's capital stock
necessary to approve and adopt this Agreement, the Merger and the other
transactions contemplated hereby.
(c) The Company Board of Directors has unanimously (i) approved this
Agreement, the Merger and the other transactions contemplated hereby, (ii)
determined that the Merger and the other transactions contemplated hereby, taken
together, are at a price and on terms that are fair to, advisable and in the
best interests of the Company and the Company Shareholders and (iii) adopted
this Agreement and the "plan of merger" (as such term is used in
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Chapter 23B.11 of the WBCA) contained in this Agreement, and recommended the
approval by the Company Shareholders of the Merger and the "plan of merger" (as
such term is used in Chapter 23B.11 of the WBCA) contained in this Agreement.
(d) No consent, approval, Order or authorization of, or registration,
declaration or filing with, or notice to, any Governmental Entity, is required
to be made or obtained by the Company or any of its Subsidiaries in connection
with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby or
compliance with the provisions hereof, except for (i) the filing of a premerger
notification and report form by the Company under the HSR Act, and any
applicable filings and approvals under any other Antitrust Law, (ii) the filing
with the SEC of the Proxy Statement, as may be required in connection with this
Agreement, the Merger and the other transactions contemplated hereby, (iii) any
filings or notifications required under the rules and regulations of Nasdaq of
the transactions contemplated hereby, and (iv) the filing of the Articles of
Merger with the Washington Secretary and appropriate documents with the relevant
authorities of other states in which the Company or any of its Subsidiaries is
qualified to do business.
Section 3.6 Compliance. The Company and its Subsidiaries hold all Company
Permits, except where the failure to hold such Company Permits would not
reasonably be expected to have a Company Material Adverse Effect. All such
Company Permits are in full force and effect and the Company and its
Subsidiaries are in compliance with the terms of the Company Permits and all
applicable Laws, except where the failure to so maintain such Company Permits or
to so comply would not be reasonably expected to have a Company Material Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted
in violation of any Law or Order, except for violations that would not
reasonably be expected to have a Company Material Adverse Effect. The Company
has not received any material notice to the effect that the Company or any of
its Subsidiaries is not in compliance with the terms of such Company Permits or
any such Laws. No investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries or their respective businesses
is pending or, to the Knowledge of the Company, threatened.
Section 3.7 Litigation.
(a) There are no claims, actions, suits, proceedings, governmental
investigations, inquiries or subpoenas which are either (i) pending against the
Company or any of its Subsidiaries, or, to the Knowledge of the Company, any
current or former supervisory employee of the Company or any of its Subsidiaries
with respect to any acts or omissions in connection with their employment with
the Company or any of its Subsidiaries, or any properties or assets of the
Company or of any of its Subsidiaries or (ii) to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries, or any current or
former supervisory employee of the Company or any of its Subsidiaries with
respect to any acts or omissions in connection with their employment with the
Company or any of its Subsidiaries, or any properties or assets of the Company
or of any of its Subsidiaries. Neither the Company nor any Subsidiary of the
Company is subject to any outstanding Order that could reasonably be expected to
have a Material Adverse Effect on the Company or is reasonably expected to
prevent or delay the consummation of the transactions contemplated by this
Agreement. There is not currently any
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internal investigation or inquiry being conducted by the Company, the Company
Board of Directors or any third party or Governmental Entity at the request of
any of the foregoing concerning any financial, accounting, Tax, conflict of
interest, self-dealing, fraudulent or deceptive conduct or other misfeasance or
malfeasance issues.
Section 3.8 Company Reports; Financial Statements.
(a) The Company has timely filed all Company Reports required to be
filed with the SEC on or prior to the date hereof and will timely file all
Company Reports required to be filed with the SEC after the date hereof and
prior to the Effective Time. No Subsidiary of the Company is subject to the
reporting requirements of Section 13(a) or 15(d) of the Exchange Act. Each
Company Report has complied, or will comply as the case may be, in all material
respects with the applicable requirements of the Securities Act, and the rules
and regulations promulgated thereunder, or the Exchange Act, and the rules and
regulations promulgated thereunder, as applicable, each as in effect on the date
so filed. None of the Company Reports (including any financial statements or
schedules included or incorporated by reference therein) contained or will
contain, as the case may be, when filed (and, in the case of registration
statements and proxy statements, on the dates of effectiveness and the dates of
mailing, respectively) any untrue statement of a material fact or omitted or
omits or will omit, as the case may be, to state a material fact required to be
stated or incorporated by reference therein or necessary to make the statements
therein, in the light of the circumstances under which they were or are made,
not misleading.
(b) Each of the Chief Executive Officer and Chief Financial Officer
has made all certifications required by Rules 13a-14 and 15d-14 under the
Exchange Act and Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act with respect to
the applicable Company Reports filed prior to the date hereof (collectively, the
"Certifications") and the statements contained in such Certifications are
accurate in all material respects as of the filing thereof.
(c) The Company has made available (including via the SEC's XXXXX
system, as applicable) to Parent all of the Company Financial Statements. All of
the Company Financial Statements comply in all material respects with applicable
requirements of the Exchange Act and have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of the Company at the respective dates thereof
and the consolidated results of its operations and changes in cash flows for the
periods indicated (subject, in the case of unaudited statements, to normal
year-end audit adjustments consistent with GAAP).
(d) The Company and its Subsidiaries have implemented and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances regarding the reliability of financial reporting and the preparation
of financial statements in accordance with GAAP. The Company has implemented and
maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of
the Exchange Act) designed to ensure that information relating to the Company,
including its consolidated Subsidiaries, required to be disclosed in the reports
the Company files or submits under the Exchange Act is made known to the Chief
Executive Officer and the Chief Financial Officer of the Company by others
within those entities.
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(e) The Company is, and since enactment of the Xxxxxxxx-Xxxxx Act has
been, in compliance in all material respects with the applicable provisions of
the Xxxxxxxx-Xxxxx Act.
(f) The Company has adopted a code of ethics, as defined by Item
406(b) of Regulation S-K promulgated under the Exchange Act, for senior
financial officers, applicable to its principal financial officer, comptroller
or principal accounting officer, or persons performing similar functions. The
Company has promptly disclosed, by filing a Form 8-K, any change in or waiver of
the Company's code of ethics, as required by Section 406(b) of Xxxxxxxx-Xxxxx
Act. To the Knowledge of the Company, there have been no violations of
provisions of the Company's code of ethics.
(g) There are no Liabilities of the Company or any of its Subsidiaries
of any kind whatsoever, whether or not accrued and whether or not contingent or
absolute, that are material to the Company, are required by GAAP to be set forth
on the Company Financial Statements and are not set forth on the Company
Financial Statements, other than (i) Liabilities incurred on behalf of the
Company under this Agreement and (ii) Liabilities incurred in the ordinary
course of business consistent with past practice since December 31, 2005, none
of which would reasonably be expected to have a Company Material Adverse Effect.
Section 3.9 Absence of Certain Changes or Events. Since December 31, 2005,
except as disclosed in the Company 10-K or in Company Reports since December 31,
2005 through to the date of this Agreement, and except as specifically
contemplated by, or as disclosed in, this Agreement, the Company and its
Subsidiaries have conducted their businesses in the ordinary course consistent
with past practice and, since such date, there has not been, with respect to
either the Company or any of its Subsidiaries, (i) any action that, if taken
during the period from the date of this Agreement through the Effective Time,
would constitute a breach of Section 5.1 or (ii) any Company Material Adverse
Effect.
Section 3.10 Taxes.
(a) The Company and each of its Subsidiaries has timely filed and will
timely file with the appropriate Governmental Entities all Tax Returns that are
required to be filed by it prior to the Effective Time. All such Tax Returns
were correct and complete in all material respects and, in the case of Tax
Returns to be filed, will be correct and complete in all material respects. All
Taxes due and owing by the Company and each of its Subsidiaries (whether or not
shown on such Tax Returns) have been timely paid and, in the case of Tax Returns
to be filed, will be timely paid. Neither the Company nor any of its
Subsidiaries currently is the beneficiary of any extension of time within which
to file any Tax Return. No claim has ever been made in writing by an authority
in a jurisdiction where the Company does not file Tax Returns that the Company
or any of its Subsidiaries is or may be subject to taxation in that
jurisdiction. There are no security interests or other liens on any of the
assets of the Company or its Subsidiaries that arose in connection with any
failure (or alleged failure) to pay any Tax, other than liens for Taxes not yet
due and payable.
(b) The Company and its Subsidiaries have timely withheld and paid to
the appropriate Governmental Entity all Taxes required to have been withheld and
paid in
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connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder or other Third Party.
(c) There is no dispute concerning any Tax Liability of the Company or
any of its Subsidiaries raised by any Governmental Entity in writing to the
Company or any of its Subsidiaries that remains unpaid, and the Company has not
received written notice of any threatened audits or investigations relating to
any Taxes nor otherwise has any Knowledge of any material threatened audits or
investigations relating to any Taxes, in each case for which the Company or any
of its Subsidiaries may become directly or indirectly liable.
(d) Neither the Company nor any of its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to, or requested, any
extension of time with respect to a Tax assessment or deficiency.
(e) The unpaid Taxes of the Company and its Subsidiaries did not, as
of December 31, 2005, exceed the reserve for Tax Liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the balance sheet set forth in the
Company Financial Statements as of such date (disregarding any notes thereto).
Neither the Company nor any of its Subsidiaries has incurred any Tax Liability
since December 31, 2005 other than a Tax Liability in the ordinary course of
business.
(f) The Company has made available to Parent complete and accurate
copies of all Tax Returns filed by the Company and any of its Subsidiaries on or
prior to the date hereof for all tax periods beginning on or after December 31,
2005.
(g) There are no agreements relating to the allocating or sharing of
Taxes to which the Company or any of its Subsidiaries is a party.
(h) Neither the Company nor any of its Subsidiaries has been a member
of an affiliated group of corporations within the meaning of Section 1504 of the
Code or within the meaning of any similar provision of law to which the Company
or any of its Subsidiaries may be subject, other than the affiliated group of
which the Company is the common parent.
(i) Neither the Company nor any of its Subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" within the
meaning of Section 355(a)(1)(A) of the Code. Neither the Company nor any of its
Subsidiaries has been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code at any time during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code, and Parent is not
required to withhold tax on the purchase of the Company by reason of Section
1445 of the Code. Neither the Company nor any of its Subsidiaries has
constituted either an "expatriated entity" within the meaning of Section
7874(a)(2)(A) of the Code or a "surrogate foreign corporation" within the
meaning of Section 7874(a)(2)(B) of the Code.
(j) Neither the Company nor any of its Subsidiaries has agreed, or is
it required, to make any adjustments pursuant to Section 481(a) of the Code or
any similar provision of state, local or foreign law by reason of a change in
accounting method initiated by it or any other relevant party, and the IRS has
not proposed any such adjustment or change in
-14-
accounting method in writing nor, to the Knowledge of the Company, otherwise
proposed any material adjustment or change in accounting method, nor does the
Company or any of its Subsidiaries have any application pending with any
Governmental Entity requesting permission for any changes in accounting methods
that relate to the business or assets of the Company or any of its Subsidiaries.
(k) No closing agreement pursuant to Section 7121 of the Code (or any
predecessor provision) or any similar provision of any state, local or foreign
law has been entered into by or with respect to the Company or any of its
Subsidiaries.
(l) Neither the Company nor any of its Subsidiaries has participated
in a "reportable transaction" within the meaning of Treasury Regulation Section
1.6011-4(b)(1).
(m) Neither the Company nor any of its Subsidiaries is a party to any
agreement, contract, arrangement or plan that has resulted or would result,
separately or in the aggregate, in the payment of any "excess parachute payment"
within the meaning of Section 280G of the Code (or any corresponding provision
of state, local or foreign Tax law) arising out of the transactions contemplated
by this Agreement.
Section 3.11 Title to Personal Properties; No Real Property. Each of the
Company and its Subsidiaries has good and marketable title to, or a valid
leasehold interest in, all of its tangible personal properties and assets
reflected in the Company 10-K or acquired after December 31, 2005 (other than
assets disposed of since December 31, 2005 in the ordinary course of business
consistent with past practice), in each case free and clear of all Encumbrances,
except for Encumbrances that secure indebtedness and that are properly reflected
in the Company 10-K and Encumbrances that can be removed for a cost of less than
$100,000. The tangible personal property and assets of the Company and its
Subsidiaries are in good operating condition and in a state of good maintenance
and repair, ordinary wear and tear excepted, are operated in accordance with all
applicable licenses, permits, consents and governmental authorizations, and are
usable in the regular and ordinary course of business, except as would not
reasonably be expected to have a Company Material Adverse Effect. Each of the
Company and each of its Subsidiaries either owns, or has valid leasehold
interests in, all tangible personal properties and assets used by it in the
conduct of its business, except where the absence of such ownership or leasehold
interest would not reasonably be expected to have a Company Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has any legal
obligation, absolute or contingent, to any other Person to sell or otherwise
dispose of any of its tangible personal properties or assets (other than the
sale of the Company's products in the ordinary course of business) with an
individual value in excess of $100,000 or an aggregate value in excess of
$250,000. Neither the Company nor any of its Subsidiaries owns any real
property. Each of the Company and its Subsidiaries has complied with the terms
of all material leases to which it is a party and under which it is in
occupancy, and all such leases are in full force and effect, except for such
non-compliances or failures to be in full force and effect that, individually or
in the aggregate, could not reasonably be expected to have a Company Material
Adverse Effect. The leased real property identified in Schedule 3.11 comprises
all of the real property used in the Company's business, and is occupied by the
Company pursuant to the leases listed on Schedule 3.11. The Company has made
available to Parent and Merger Sub a true and complete copy of each such lease
document.
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Section 3.12 Officers, Directors, Employees and Affiliates.
(a) Neither the Company nor any of its Subsidiaries is a party to or
bound by any Employment Agreement and, except as otherwise contemplated by
Section 1.7, Section 1.8 and Section 1.9, no severance or other payment will
become due or benefits or compensation increase or accelerate as a result of the
transactions contemplated by this Agreement, solely or together with any other
event, including a subsequent termination of employment.
(b) Except for compensation and benefits received in the ordinary
course of business as an employee or director of the Company or its
Subsidiaries, no director, officer or other Affiliate or Associate of the
Company or any entity in which, to the Knowledge of the Company, any such
director, officer or other Affiliate or Associate owns any beneficial interest
(other than a beneficial interest in a publicly held corporation whose stock is
traded on a national securities exchange or in the over-the-counter market and
less than 5% of the stock of which is beneficially owned by any such Persons) is
currently a party to or has any interest in (i) any partnership, joint venture,
contract, arrangement or understanding with, or relating to, the business or
operations of the Company or its Subsidiaries in which the amount involved
exceeds $100,000 per annum, (ii) any loan, arrangement, understanding, agreement
or contract for or relating to indebtedness of the Company or its Subsidiaries,
or (iii) any property (real, personal or mixed), tangible or intangible, used or
currently intended to be used in the business or operations of the Company or
its Subsidiaries.
Section 3.13 Employee Benefit Plans.
(a) Section 3.13(a) of the Company Disclosure Letter sets forth a true
and complete list of each Company Benefit Plan. The Company has not been
notified that any Company Benefit Plan is undergoing an audit or is subject to
an investigation of the IRS, the United States Department of Labor or any other
Governmental Entity.
(b) In respect of each Company Benefit Plan, a complete and correct
copy of each of the following documents (if applicable) has been made available
to Parent: (i) the most recent plan documents or written agreement thereof, and
all amendments thereto and all related trust or other funding vehicles with
respect to each such Company Benefit Plan; (ii) the most recent summary plan
description, and all related summaries of material modifications thereto; (iii)
the most recent Form 5500 (including schedules and attachments), financial
statements and actuarial reports for the past three (3) years; and (iv) the most
recent IRS determination or opinion letter.
(c) Neither the Company nor any entity treated as a single employer
with the Company under Section 414(b), (c), (m) or (o) of the Code maintains or
is required to contribute to any Company Benefit Plan that (i) is a
"multiemployer plan" as defined in Sections 3(37) of ERISA, (ii) is subject to
the funding requirements of Section 412 of the Code or Title IV of ERISA, or
(iii) provides for post-retirement medical, life insurance or other welfare-type
benefits (other than as required by Part 6 of Subtitle B of Title I of ERISA or
Section 4980B of the Code or under a similar state law).
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(d) The Company Benefit Plans and their related trusts intended to
qualify under Sections 401 and 501(a) of the Code are subject to current
favorable determination or opinion letters from the IRS and, to the Knowledge of
the Company, nothing has occurred that is reasonably likely to result in the
revocation of such letter.
(e) The Company Benefit Plans have been maintained and administered in
all material respects in accordance with their terms and applicable laws.
(f) There are no suits, actions, disputes, claims (other than routine
claims for benefits), arbitrations, administrative or other proceedings pending
or, to the Knowledge of the Company, threatened, anticipated or expected to be
asserted with respect to any Company Benefit Plan or any related trust or other
funding medium thereunder or with respect to the Company or its Subsidiaries as
the sponsor or fiduciary thereof or with respect to any other fiduciary thereof,
which would reasonably be expected to have a Company Material Adverse Effect.
(g) Except as set forth in Section 3.13(g) of the Company Disclosure
Letter, none of the Company Benefit Plans are subject to any law or applicable
custom of any jurisdiction outside of the United States.
(h) All contributions or premiums due with respect to any Company
Benefit Plan for all periods ending on or before the date of this Agreement have
been made (or accrued on the Company Financial Statements) in accordance with
the terms of the applicable plans and in accordance with historical practice.
Section 3.14 Labor Relations.
(a) The Company and its Subsidiaries are in compliance with all
applicable Laws and Orders governing or concerning conditions of employment,
employment discrimination and harassment, wages, hours or occupational safety
and health, including the Labor Laws, except where the failure to so comply
would not reasonably be expected to have a Company Material Adverse Effect.
(b) The employees of the Company and its Subsidiaries have not been,
and currently are not, represented by a labor organization or group that was
either certified or voluntarily recognized by any labor relations board,
including the NLRB, or certified or voluntarily recognized by any other
Governmental Entity and there is not, to the Knowledge of the Company, any
attempt to organize any employees of the Company or its Subsidiaries. There has
not been, nor is there existent or, to the Knowledge of the Company, threatened,
any material strike, slowdown, picketing or work stoppage by the employees of
the Company or its Subsidiaries.
(c) No claim, complaint, charge or investigation for unpaid wages,
bonuses, commissions, employment withholding taxes, penalties, overtime or other
compensation, benefits, child labor or record-keeping violations has been filed
or is pending or, to the Knowledge of the Company, is threatened under the FLSA,
the Xxxxx-Xxxxx Act, the Xxxxx-Xxxxxx Act or the Service Contract Act, or any
other Law. No discrimination, illegal harassment and/or retaliation claim,
complaint, charge or investigation has been filed or is
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pending or, to the Knowledge of the Company, is threatened against the Company
or any Subsidiary under the 1964 Civil Rights Acts, the Equal Pay Act, the ADEA,
the ADA, the FMLA, the FLSA, ERISA or any other federal Law or comparable state
fair employment practices act or foreign Law, including any provincial Law
regulating discrimination in the workplace. No wrongful discharge, retaliation,
libel, slander or other claim, complaint, charge or investigation that arises
out of the employment relationship between the Company or any of its
Subsidiaries and their respective employees has been filed or is pending or, to
the Knowledge of the Company, is threatened against the Company or any of its
Subsidiaries under any applicable Law.
Section 3.15 Contracts and Commitments.
(a) Neither the Company nor any of its Subsidiaries is a party to, is
bound or affected by, or receives any benefits under, any agreement, contract or
legally binding understanding, whether oral or written: (i) providing for (A)
aggregate noncontingent payments by or to the Company or any of its Subsidiaries
in excess of $100,000 or (B) potential payments by or to the Company or any of
its Subsidiaries reasonably expected to exceed $250,000; (ii) limiting the
freedom of the Company to engage in any line of business or sell, supply or
distribute any service or product, or to compete with any entity or to conduct
business in any geography, or to hire any individual or group of individuals;
(iii) that after the Effective Time would have the effect of limiting in any
respect the freedom of Parent or any of its Subsidiaries (other than the Company
and its Subsidiaries) to engage in any line of business or sell, supply or
distribute any service or product, or to compete with any entity or to conduct
business in any geography, or to hire any individual or group of individuals;
(iv) involving any joint venture, partnership or similar arrangement; (v)
relating to the borrowing of money or the guarantee of any such obligation
(other than trade payables and instruments relating to transactions entered into
in the ordinary course of business); (vi) containing severance or termination
pay Liabilities related to termination of employment; (vii) related to product
supply, manufacturing, distribution or development; (viii) relating to the
acquisition, transfer, development or sharing of any Intellectual Property
(except for any Company contracts pursuant to which (1) any Intellectual
Property is licensed to the Company or any of its Subsidiaries under any third
party software license generally available to the public or (2) any material
Intellectual Property is licensed by the Company or any of its Subsidiaries in
the ordinary course of business pursuant to which the Company's Software is
licensed to a third-party customer, (3) commercially available over-the-counter
"shrink-wrap" licenses are used by the Company or any of its Subsidiaries in the
operation of its business, or (4) non-negotiated licenses of third party
Intellectual Property are embedded in equipment or fixtures and are used by the
Company or any of its Subsidiaries for internal purposes only); (ix) which
provide for indemnification by the Company of any officer, director or employee
of the Company; (x) containing "standstill" or similar provisions to which the
Company is subject and restricted; (xi) pursuant to which the Company or any
Subsidiary of the Company has any obligations or liabilities (whether absolute,
accrued, contingent or otherwise), as guarantor, surety, co-signer, endorser,
co-maker, or otherwise in respect of any obligation of any Person, or any
capital maintenance, keep-well or similar agreements or arrangements in any such
case which, individually is in excess of $100,000; (xiii) involving the lease of
real property with aggregate annual rent payments in excess of $100,000; (xiii)
to which the Company or any Subsidiary of the Company is a party and pursuant to
which any person is authorized to use or has an option to obtain the right to
use any material Company Intellectual
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Property, including any material license or sublicense of Company Intellectual
Property; (xiv) pursuant to which the Company or any of its Subsidiaries is
authorized to use any material Intellectual Property of any Third Party (except
for any Company contracts pursuant to which (1) any Intellectual Property is
licensed to the Company or any of its Subsidiaries under any third party
software license generally available to the public or (2) licenses in which
either the aggregate noncontingent payments by the Company are not in excess of
$100,000 or the potential payment to or by the Company is not expected to exceed
$250,000); or (xv) otherwise required to be filed as an exhibit to an Annual
Report on Form 10-K, as provided by Rule 601 of Regulation S-K promulgated under
the Exchange Act. Each contract of the type described in the immediately
preceding sentence is referred to herein as a "Company Material Contract." The
Company has heretofore made available to Parent a complete and correct copy of
each Company Material Contract, including any amendments or modifications
thereto.
(b) Each Company Material Contract is valid and binding on the Company
or its Subsidiary party thereto and, to the Knowledge of the Company, each other
party thereto, and is in full force and effect, and is enforceable against the
Company in accordance with its terms and, to the Knowledge of the Company,
against each other party thereto (in each case, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relieve and other
equitable remedies), and the Company and each of its Subsidiaries have performed
in all material respects all obligations required to be performed by them under
each Company Material Contract and, to the Knowledge of the Company, each other
party to each Company Material Contract has performed in all material respects
all obligations required to be performed by it under such Company Material
Contract, except, in each case, as would not reasonably be expected to have a
Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries
knows of, or has received notice of, any violation or default under (or any
condition that with the passage of time or the giving of notice, or both, would
cause such a violation of or default under) any Company Material Contract or any
other agreement or contract to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that would not
reasonably be expected to have a Company Material Adverse Effect.
(c) To the Knowledge of the Company, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of
time), would reasonably be expected to: (a) result in a material violation or
breach of any provision of any Company Material Contract; (b) give any Person
the right to declare a default or exercise any remedy under any Company Material
Contract; (c) give any person the right to receive or require a material rebate,
chargeback, penalty or change in delivery schedule under any Company Material
Contract; (d) give any Person the right to accelerate the maturity or
performance of any Company Material Contract; or (e) give any Person the right
to cancel terminate or modify any Company Material Contract, in each case, in a
manner that would reasonably be expected to have a Company Material Adverse
Effect.
Section 3.16 Intellectual Property.
(a) The Company or each of its Subsidiaries owns, or is licensed
under, or otherwise possesses sufficient rights under, the Intellectual Property
necessary for the conduct the business of the Company or its Subsidiaries as
currently conducted, except that, with respect
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to patents, the representation and warranty in this sentence is limited to the
Knowledge of the Company.
(b) Section 3.16(b) of the Company Disclosure Letter lists all patents
and pending patent applications, all trademark registrations and applications
and material unregistered trademarks, trade names and service marks, and all
registered copyrights, and domain names included in the Company Intellectual
Property, including, to the extent applicable, the jurisdictions in which each
such Company Intellectual Property right has been issued or registered or in
which any application for such issuance and registration has been filed. To the
Knowledge of the Company, all necessary and material registration, maintenance
and renewal fees in connection with the foregoing have been paid and all
necessary material documents and certificates in connection with the foregoing
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 perfecting, prosecuting and maintaining the foregoing. To
the Company's Knowledge, there are no actions that are required to be taken by
Company within 120 days of the date of this Agreement with respect to any of the
foregoing, except as set out in Section 3.16(b) of the Company Disclosure
Letter. Section 3.16(b) of the Company Disclosure Letter lists all Software
licensed to the Company that is embedded, integrated, bundled with or otherwise
distributed with the Company products. Neither the Company nor any of its
Subsidiaries nor, to the Knowledge of the Company, any Third Party, is in
material violation of any license, sublicense or agreement described in Section
3.16(b) of the Company Disclosure Letter except where any such violation would
not have a Company Material Adverse Effect. Except as otherwise described in
Section 3.16(b) of the Company Disclosure Letter, the execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not (A) cause the Company or any of its
Subsidiaries to be in material violation or material default under any such
license, sublicense or agreement, (B) result in the termination or modification
of, or entitle any other party to, any such license, sublicense or agreement to
terminate or modify such license, sublicense or agreement, or (C) entitle any
Third Party to claim any right to use or practice under any Merger Sub's,
Parent's or any of their respective Affiliates' Intellectual Property rights.
The Company is the owner of all right, title and interest in and to the Company
Intellectual Property and, subject to any license agreements to which the
Company or any of its Subsidiaries is a party and pursuant to which the Company
or any of its Subsidiaries licenses others to use any such Company Intellectual
Property, has sole and exclusive rights to the use thereof or the material
covered thereby in connection with the services or products in respect of which
such Company Intellectual Property is being used by the Company or any of its
Subsidiaries.
(c) To the Knowledge of the Company, there is no unauthorized use,
disclosure, infringement or misappropriation of any Company Intellectual
Property rights by any Third Party, including any employee or former employee of
the Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries has entered into any agreement to indemnify any other Person
against any charge of infringement of any Intellectual Property, other than
indemnification obligations arising in the ordinary course of business or under
or in connection with purchase orders or agreements for the sale, license or
distribution of any Company Intellectual Property or Company products.
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(d) To the Knowledge of the Company, all patents, registered
trademarks and service marks, and registered copyrights held by the Company or
any of its Subsidiaries are valid, enforceable and existing. There is no
assertion or claim pending challenging the validity or enforceability of any
Company Intellectual Property. Neither the Company nor any of its Subsidiaries
is a party to any suit, action or proceeding that involves a claim of
infringement or misappropriation by the Company or any of its Subsidiaries of
any Intellectual Property of any Third Party nor has any such suit, action or
proceeding been threatened in writing against the Company or any of its
Subsidiaries. Neither the conduct of the business of the Company and each of its
Subsidiaries nor the development, manufacture, sale, licensing or use of any of
the products of the Company or any of its Subsidiaries has infringed or
misappropriated or is infringing or misappropriating any Intellectual Property
of any Third Party, except that with respect to patents, the representation and
warranty in this sentence is limited to the Knowledge of the Company. No Third
Party has notified the Company that it is challenging the ownership or use by
the Company or any of its Subsidiaries, or the validity of, any of the Company
Intellectual Property. Neither the Company nor any of its Subsidiaries has
brought or is bringing any action, suit or proceeding for infringement or
misappropriation of the Company Intellectual Property or breach of any license
or agreement involving Company Intellectual Property against any Third Party.
There are no pending or threatened interference, re-examinations, or oppositions
involving any patents or patent applications of the Company or any of its
Subsidiaries. None of the Company or any of its Subsidiaries has received any
opinion of counsel that any product developed, manufactured, sold or licensed by
the Company or any of its Subsidiaries infringes any Intellectual Property owned
by any Third Party.
(e) The Company or its Subsidiaries have taken commercially reasonable
steps to protect and preserve the confidentiality of all trade secrets and
material confidential information of the Company or its Subsidiaries. Without
limiting the foregoing, each of the Company and its Subsidiaries have instituted
policies requiring each employee, consultant and independent contractor to
execute proprietary information and confidentiality agreements substantially in
the Company's standard forms, which forms have been made available to Parent.
(f) The Software owned by the Company or any of its Subsidiaries was
either (i) developed by employees of the Company or its Subsidiaries within the
scope of their employment, (ii) developed by independent contractors who have
assigned their rights (including Intellectual Property rights) to the Company or
its Subsidiaries pursuant to written agreements or (iii) otherwise acquired by
the Company or its Subsidiaries from a third party pursuant to written
agreements.
(g) Section 3.16(g) of the Company Disclosure Letter lists all Open
Source Software that is incorporated into, or combined with, any distributed
Company product. Neither the Company nor any of its Subsidiaries have used Open
Source Software in a manner that would create obligations for Company or its
Subsidiaries with respect to, or grant, or purport to grant, to any third party,
any rights or immunities under, any Company Intellectual Property.
(h) The Company and its Subsidiaries use commercially available
antivirus software with the intention of protecting Company's software products
from becoming infected by viruses and other harmful code.
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(i) No third party that has licensed Intellectual Property to the
Company or any of its Subsidiaries has ownership rights or license rights to
improvements or derivative works made by the Company or any of its Subsidiaries
in such Intellectual Property (other than those aspects of such improvements or
derivative works that are protected by such licensed Intellectual Property).
(j) Neither the Company nor any of its Subsidiaries has disclosed or
delivered to any Third Party, agreed to disclose or deliver to any Third Party,
or permitted the disclosure or delivery to any escrow agent of, any source code
that is Company Intellectual Property and the confidentiality of which is
material to the Company. No event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time, or both) will, or would
reasonably be expected to, result in a requirement that any such source code be
disclosed or delivered to any Third Party by the Company, any of its
Subsidiaries or any person acting on their behalf.
(k) All Company products are free of any disabling codes or
instructions, timer, copy protection device, clock, counter or other limiting
design or routing and any "back door," "time bomb," "Trojan horse," "worm,"
"drop dead device," "virus" or other software routines or hardware components
that permit unauthorized access or the unauthorized disablement or erasure of
such Company product (or any part thereof) or data or other software of users or
otherwise cause them to be incapable of being used in the full manner for which
they were designed.
(l) Each Company product licensed to Third Parties is capable of
performing in accordance with its User Documentation in all material respects
when properly installed and used.
(m) The Company has not received any unresolved, written claims from
Third Parties, and to its Knowledge is not aware of any unwritten claims from
Third Parties, that any installation services, programming services, integration
services, repair services, maintenance services, support services, training
services, upgrade services or other services that have been performed by the
Company or any Subsidiary for such Third Parties were in any material respect
performed improperly or not in conformity with the terms and requirements of all
applicable warranties and other contracts and with all applicable laws and
regulations, except where the same would not have a Company Material Adverse
Effect.
(n) The computer software, computer firmware, computer hardware
(whether general purpose or special purpose), electronic data processing,
information, record keeping, communications, telecommunications, third party
software, networks, peripherals and computer systems, including any outsourced
systems and processes, and other similar or related items of automated,
computerized and/or software systems that are used or relied on by the Company
and its Subsidiaries (collectively, "Information Systems") are, to the Knowledge
of the Company, adequate for the operation of its business as currently
conducted, and the Company and its Subsidiaries have purchased a sufficient
number of license seats for all software used by the Company in such operations.
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Section 3.17 Insurance Policies. The Company and its Subsidiaries maintain
insurance with reputable insurers for the business and assets of the Company and
its Subsidiaries against all risks normally insured against, and in amounts
normally carried by, corporations of similar size engaged in similar lines of
business. All insurance policies and bonds with respect to the business and
assets of the Company and its Subsidiaries are in full force and effect and will
be maintained by the Company and its Subsidiaries in full force and effect as
they apply to any matter, action or event relating to the Company or its
Subsidiaries occurring through the Effective Time, and the Company and its
Subsidiaries have not reached or exceeded their policy limits for any insurance
policies in effect at any time during the past five years. Since December 31,
2005, the Company has not received any written notice or to the Knowledge of the
Company any other communication regarding any actual or possible: (a)
cancellation or invalidation of any insurance policy; (b) refusal or denial of
any material coverage, reservation or rights or rejection of any material claim
under any insurance policy; or (c) material adjustment in the amount of the
premiums payable with respect to any insurance policy.
Section 3.18 Brokers. No broker, finder or investment banker (other than
the Company Financial Advisor, a true and complete copy of whose engagement
letter has been furnished to Parent and whose brokerage, investment banking,
finders and financial advisory fees shall be paid by the Company) is entitled to
any brokerage, finder's or other fee or commission in connection with this
Agreement, the Merger or the other transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company, its Subsidiaries or
any of their respective directors, officers or employees.
Section 3.19 Company Financial Advisor Opinion. The Company Financial
Advisor has delivered to the Company Board of Directors its opinion to the
effect that, as of the date of such opinion, the Merger Consideration to be
received by the holders (other than Parent and its Affiliates) of shares of
Company Common Stock pursuant to the Merger Agreement is fair, from a financial
point of view, to such holders. The Company shall provide a complete and correct
signed copy of such opinion to Parent solely for informational purposes as soon
as practicable after the date of this Agreement.
Section 3.20 Rights Agreement. The Rights Plan has been amended so that the
entering into of this Agreement and the Support Agreements, and the consummation
of the transactions contemplated hereby and thereby, do not and will not, (a)
result in any Person being deemed to have become an Acquiring Person (as defined
in the Rights Plan), (b) result in the ability of any Person to exercise any
Rights under the Rights Plan, (c) enable or require the Rights to separate from
the Shares to which they are attached or to be triggered or become exercisable
or (d) enable the Company to exchange any Rights for shares of the Company's
capital stock, pursuant to the Rights Plan. No triggering or similar event has
occurred or will occur by reason of (i) the adoption, approval, execution or
delivery of this Agreement and the Support Agreements, (ii) the public
announcement of such adoption, approval, execution or delivery or (iii) the
consummation of the transactions contemplated hereby and thereby.
Section 3.21 Environmental Matters. Except for such matters that
individually and in the aggregate have not had and could not reasonably be
expected to have a Company Material Adverse Effect: (a) each of the Company and
its Subsidiaries is and has been in compliance with all applicable Environmental
Laws and possesses and is and has been in compliance with all
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required Environmental Permits; (b) there are no Environmental Claims pending
or, to the Knowledge of the Company, threatened against the Company or any of
its Subsidiaries, and (c) to the Knowledge of the Company, none of the Company
or any of its Subsidiaries or any of their predecessors has caused any releases
or threatened release of Hazardous Materials at any property currently or
formerly owned or operated by the Company or any of its Subsidiaries or any of
their predecessors, or at any offsite disposal location in connection with the
current or past operations of the Company or any of its Subsidiaries or their
predecessors, which in either case could reasonably be expected to result in an
Environmental Claim.
Section 3.22 Proxy Statement. The information supplied by the Company for
inclusion in the Proxy Statement to be sent to the Company Shareholders in
connection with the Company Shareholders Meeting, at the date the Proxy
Statement is first mailed to the Company Shareholders, and at the time of the
Company Shareholders Meeting, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time prior
to the Effective Time any event with respect to the Company or any of its
Subsidiaries shall occur which is required to be described in the Proxy
Statement, such event shall be so described, and an amendment or supplement
shall be promptly filed with the SEC and, as required by law, disseminated to
the Company Shareholders. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent or
Merger Sub that is contained in any of the foregoing documents.
Section 3.23 Export Control Laws. The Company and each of its Subsidiaries
has at all times conducted its export transactions in accordance with (a) all
applicable U.S. export and reexport controls, including the United States Export
Administration Act and Regulations and Foreign Assets Control Regulations and
(b) all other applicable import/export controls in other countries in which the
Company conducts business, except for any instances of noncompliance that would
not have a Company Material Adverse Effect. Without limiting the foregoing and
except in each case as would not have a Company Material Adverse Effect: (i) the
Company and each of its Subsidiaries have obtained all export licenses, license
exceptions and other consents, notices, waivers, approvals, orders,
authorizations, registrations, declarations, classifications and filings with
any Governmental Entity required for (y) the export and reexport of products,
services, software and technologies and (z) releases of technologies and
software to foreign nationals located in the United States and abroad ("Export
Approvals"); (ii) the Company and each of its Subsidiaries are in compliance
with the terms of all applicable Export Approvals; (iii) there are no pending
or, to the Company's Knowledge, threatened claims against the Company or any
Subsidiary with respect to such Export Approvals; (iv) to the Company's
Knowledge, there are no actions, conditions or circumstances pertaining to the
Company's or any Subsidiary's export transactions that may give rise to any
future claims; and (v) no Export Approvals for the transfer of export licenses
to Parent or the Surviving Corporation are required, or such Export Approvals
can be obtained expeditiously without material cost. Section 3.23 of the Company
Disclosure Letter sets forth the true, complete and accurate export control
classifications applicable to the Company's and its Subsidiaries' products,
services, software and technologies.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB.
Parent and Merger Sub represent and warrant to the Company as follows:
Section 4.1 Organization and Good Standing. Each of Parent and Merger Sub
is a corporation duly organized, validly existing and in good standing (with
respect to jurisdictions that recognize such concept) under the Laws of its
jurisdiction of incorporation.
Section 4.2 Authority for Agreement. Each of Parent and Merger Sub has all
necessary corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the Merger and the other
transactions contemplated by this Agreement. The execution, delivery and
performance by Parent and Merger Sub of this Agreement, and the consummation by
Parent and Merger Sub of the Merger and the other transactions contemplated by
this Agreement, have been duly authorized by all necessary corporate action and
no other corporate proceedings on the part of Parent or Merger Sub, and no other
votes or approvals of any class or series of capital stock of Parent or Merger
Sub, are necessary to authorize this Agreement or to consummate the Merger or
the other transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of Parent and Merger Sub enforceable against Parent and
Merger Sub in accordance with its terms, except as enforcement thereof may be
limited against Parent or Merger Sub by (a) bankruptcy, insolvency,
reorganization, moratorium and similar Laws affecting the enforcement of
creditors' rights or remedies in general as from time to time in effect or (b)
the exercise by courts of equity powers.
Section 4.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger
Sub do not, and the performance of this Agreement by Parent and Merger Sub and
the consummation of the Merger and the other transactions contemplated by this
Agreement will not, (i) conflict with or violate Parent's Amended and Restated
Articles of Incorporation or Parent Bylaws, or the equivalent charter documents
of Merger Sub, (ii) conflict with or violate any Law applicable to Parent or its
Subsidiaries or by which any material property or asset of Parent or any of its
Subsidiaries is bound or affected, or (iii) result in a breach of or constitute
a default (or an event that with notice or lapse of time or both would become a
default) under, give to others (immediately or with notice or lapse of time or
both) any right of termination, amendment, acceleration or cancellation of,
result (immediately or with notice or lapse of time or both) in triggering any
payment or other obligations, or result (immediately or with notice or lapse of
time or both) in the creation of an Encumbrance on any material property or
asset of Parent or its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, 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 any material property or asset
of Parent or any of its Subsidiaries, is bound or affected, except in the case
of clauses (ii) and (iii) above for any such conflicts, violations, breaches,
defaults or other occurrences that would not reasonably be expected to have a
Parent Material Adverse Effect.
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(b) The execution and delivery of this Agreement by Parent and Merger
Sub do not, and the performance of this Agreement by Parent and Merger Sub will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, or registration or qualification with, any Governmental
Entity, except for applicable requirements, if any, of the Securities Act, the
Exchange Act, or state securities laws or "blue sky" laws, the HSR Act and
filing and recordation of the Articles of Merger, as required by the WBCA.
Section 4.4 Litigation. There are no suits, actions or proceedings pending
or, to the knowledge of Parent, threatened against Parent or any of its
Subsidiaries, including Merger Sub, that would reasonably be expected to have a
Parent Material Adverse Effect.
Section 4.5 Sufficient Funds. Assuming satisfaction of the conditions set
forth in Article VI, Parent, through its wholly owned subsidiary Made2Manage
Systems, Inc. ("M2M"), will have available at the consummation of the Merger
sufficient immediately available funds through cash on hand or binding credit
facility commitments from reputable lenders and financial institutions for
borrowings of up to $150,000,000 in funds (the "Commitments"), true and complete
copies of which have been furnished to the Company, to enable Merger Sub to
perform all of its obligations under this Agreement, to consummate the Merger
and to pay in full all fees and expenses payable by Parent in connection with
this Agreement and the transactions contemplated hereby. Each of the
Commitments, in the form so delivered, is a legal, valid and binding obligation
of M2M and, to the knowledge of Parent or Merger Sub, the other parties thereto.
No event has occurred which, with or without notice, lapse of time or both,
would constitute a default or breach on the part of M2M, Parent or Merger Sub
under any term or condition of the Commitments. Neither Parent nor Merger Sub
has any reason to believe that M2M, Parent and Merger Sub will be unable to
satisfy on a timely basis any term or condition of closing to be satisfied by it
contained in the Commitments. M2M, Parent or Merger Sub will pay in full any and
all commitment fees or other fees required by the Commitments prior to the end
of the first Business Day following the date of this Agreement. Without limiting
the generality of the foregoing, Parent's ability to consummate the transactions
contemplated hereby is not contingent on Parent's ability to complete any public
offering or private placement of equity or debt securities or to obtain any
other type of financing prior to consummating the Merger.
Section 4.6 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with this
Agreement, the Merger or the other transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Parent or Merger Sub or any of
their respective directors, officers or employees, for which the Company may
become liable.
Section 4.7 Interim Operations of Merger Sub. Merger Sub was formed solely
for the purpose of engaging in the transactions contemplated by this Agreement,
and Merger Sub has engaged in no business other than in connection with the
transactions contemplated by this Agreement.
Section 4.8 Ownership of Shares. During the period three (3) years prior to
the date hereof (other than by reason of the execution, delivery and performance
of this Agreement and the Support Agreements and the consummation of the
transactions contemplated hereby and
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thereby), neither Parent nor any of its Subsidiaries, including Merger Sub, was
an "acquiring person," as such term is defined in Chapter 23B.19 of the
Washington Business Corporation Act.
Section 4.9 Proxy Statement. The information supplied by Parent for
inclusion in the Proxy Statement to be sent to the Company Shareholders in
connection with the Company Shareholders Meeting, at the date the Proxy
Statement is first mailed to the Company Shareholders, and at the time of the
Company Shareholders Meeting, will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time prior
to the Effective Time any event with respect to Parent or Merger Sub shall occur
which is required to be described in the Proxy Statement, Parent shall promptly
disclose such event to the Company. Notwithstanding the foregoing, Parent makes
no representation or warranty with respect to any information supplied by the
Company that is contained in any of the foregoing documents.
ARTICLE V
COVENANTS
Section 5.1 Conduct of Business by the Company Pending the Merger.
(a) The Company covenants and agrees that between the date of this
Agreement and the Effective Time, unless Parent shall otherwise agree in writing
(and except as set forth in Section 5.1 of the Company Disclosure Letter or as
otherwise expressly contemplated, permitted or required by this Agreement), the
Company shall and shall cause each of its Subsidiaries to, (i) maintain its
existence in good standing under applicable Law, (ii) subject to the
restrictions and exceptions set forth in Section 5.1(b) or elsewhere in this
Agreement, conduct its business and operations only in the ordinary and usual
course of business and in a manner consistent with prior practice, and (iii) use
commercially reasonable efforts to (A) preserve intact its assets, properties,
contracts or other legally binding understandings, licenses and business
organizations, (B) keep available the services of its current officers and key
employees and (C) to preserve the current relationships of the Company and its
Subsidiaries with customers, suppliers, distributors, lessors, licensors,
licensees, creditors, employees, contractors and other Persons with which the
Company or any of its Subsidiaries has business relations.
(b) Without limiting the foregoing, the Company covenants and agrees
that between the date of this Agreement and the Effective Time, the Company
shall not and shall cause each of its Subsidiaries not to (except as expressly
contemplated, permitted or required by this Agreement, as set forth on the
applicable subsection of Schedule 5.1(b) of the Company Disclosure Letter or
with the prior written approval of Parent): (i) declare, set aside, make or pay
any dividends or other distributions (whether in cash, stock or property) in
respect of any of its capital stock; (ii) adjust, split, combine or reclassify
any of its capital stock or that of its Subsidiaries or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or that of its Subsidiaries; (iii)
repurchase, redeem or otherwise acquire, directly or indirectly, any shares of
its or its Subsidiaries' capital stock or any Company Stock Rights or Subsidiary
Stock Rights (except pursuant to restricted stock award agreements outstanding
on the date hereof); (iv) issue, deliver or sell, pledge or
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encumber any shares of its or its Subsidiaries' capital stock or any Company
Stock Rights (other than the issuance of shares of Company Common Stock (A) upon
the exercise of Company Stock Options outstanding as of the date of this
Agreement, (B) pursuant to the Company ESPP; or (C) in the ordinary course of
business and consistent with past practice to employees and directors of the
Company (so long as such additional amount of Company Common Stock issued
directly or subject to options granted by the Company does not exceed 275,000
shares and any option grants shall be made at fair market value) (v) take any
action that would reasonably be expected to result in any of the conditions set
forth in Article VI not being satisfied or that would impair the ability of the
Company to consummate the Merger in accordance with the terms hereof or
materially delay such consummation; (vi) amend the Company Articles of
Incorporation or Company Bylaws or equivalent organizational documents of the
Company's Subsidiaries; (vii) incur, create, assume or otherwise become liable
for any indebtedness for borrowed money, other than short-term borrowings under
existing lines of credit (or under any refinancing of such existing lines)
incurred in the ordinary course of business consistent with prior practice or
assume, guaranty, endorse or otherwise become liable or responsible for the
obligations of any other Person; (viii) make any loans, advances or capital
contributions to or investments in any other Person (other than loans, advances,
capital contributions or investments less than $250,000 made in the ordinary
course of business consistent with prior practice); (ix) merge or consolidate
with any other entity or adopt a plan of complete or partial liquidation,
dissolution, recapitalization or other reorganization or otherwise permit its
corporate existence to be suspended, lapsed or revoked; (x) change its Tax
accounting methods, principles or practices, except as required by GAAP or
applicable Laws (other than a change of certain customers from the sell-in
method of accounting to the sell-through method of accounting); (xi) alter,
amend or create any obligations with respect to compensation, severance,
benefits, change of control payments or any other payments to present or former
employees, directors or Affiliates of the Company, other than alterations or
amendments (A) made with respect to non-officers and non-directors in the
ordinary course of business consistent with past practice that, in the
aggregate, do not result in a material increase in benefits or compensation
expense to the Company or (B) as expressly contemplated by Section 1.7, Section
1.8 and Section 1.9 of this Agreement; (xii) hire any new employees other than
non-officer employees in the ordinary course of business consistent with past
practice; (xiii) sell, license, mortgage, transfer, lease, pledge or otherwise
subject to any Encumbrance or otherwise dispose of any material properties or
assets (including stock or other ownership interests of its Subsidiaries), other
than in the ordinary course of business consistent with prior practice; (xiv)
acquire any material business, assets or securities other than in the ordinary
course of business consistent with prior practice; (xv) make any Tax election
not consistent with prior practice or settle or compromise any income Tax
Liability or fail to file any material Tax Return when due or fail to cause such
Tax Returns when filed to be complete and accurate in all material respects;
(xvi) incur or commit to incur any capital expenditures, or any obligations or
liabilities in connection therewith that individually or in the aggregate, are
in excess of $150,000, except in the ordinary course of business consistent with
past practices; (xvii) pay, discharge, settle or satisfy any Liabilities, other
than the payment, discharge or satisfaction of Liabilities in the ordinary
course of business, consistent with past practice, as required by any applicable
Law, as accrued for in the Company Financial Statements or as required by the
terms of any contract of the Company, as in effect on the date of this
Agreement; (xviii) waive, release, grant or transfer any right of material
value, other than in the ordinary course of business, consistent with past
practice, or waive any material
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benefits of, or agree to modify in any material adverse respect, or, subject to
the terms hereof, fail to enforce, or consent to any material matter with
respect to which its consent is required under, any material confidentiality,
standstill or similar agreement to which the Company or any of its Subsidiaries
is a party; (xix) enter into, modify, amend or terminate (A) any contract which
if so entered into, modified, amended or terminated could be reasonably likely
to (x) have a Company Material Adverse Effect, (y) impair in any material
respect the ability of the Company to perform its obligations under this
Agreement or (z) prevent or materially delay the consummation of the
transactions contemplated by this Agreement or (B) except in the ordinary course
of business, any Company Material Contract; (xx) terminate any officer or key
employee of the Company or any of its Subsidiaries other than for good reason or
for reasonable cause; (xxi) maintain insurance at less than current levels or
otherwise in a manner inconsistent with past practice; (xxii) except as required
by GAAP, revalue any of its material assets or make any changes in accounting
methods, principles or practices; (xxiii) enter into any transaction that could
give rise to a disclosure obligation as a "reportable transaction" under Section
6011 of the Code and the regulations thereunder; (xxiv) engage in any
transaction with, or enter into any agreement, arrangement or understanding with
any Affiliate of the Company or other Person covered by Item 404 of Regulation
S-K promulgated under the Exchange Act that would be required to be disclosed
under such Item 404 (xxv) compromise or settle any suit, claim, action,
investigation or proceeding directly relating to or affecting the Company's
Intellectual Property or having a value or in an amount in excess of $100,000;
(xxvi) effectuate a "plant closing" or "mass layoff," as those terms are defined
in WARN, affecting in whole or in part any site of employment, facility,
operating unit or employee of the Company or any of its Subsidiaries; (xxvii)
grant any material refunds, credits, rebates or other allowances by the Company
to any end user, customer, reseller or distributor, in each case, other than in
the ordinary course of business; (xxviii) abandon or allow to lapse or expire
any registration or application for material Company Intellectual Property; or
(xxix) agree to take any of the actions described in this Section 5.1(b).
Section 5.2 Access to Information and Employees.
(a) From the date hereof to the Effective Time, the Company shall, and
shall cause the Representatives of the Company to, afford the Representatives of
Parent and Merger Sub reasonable access during normal business hours to the
officers, employees, agents (including outside accountants), properties, offices
and other facilities, books and records of the Company and, during such period,
the Company shall, and shall cause each of its Subsidiaries to, furnish or
otherwise make available (including via XXXXX, if applicable) to Parent (i) a
copy of each report, schedule, form, statement and other document filed by it or
received by it during such period pursuant to the requirements of federal or
state securities Laws reasonably promptly following such filing or receipt, (ii)
to the extent available, for the period beginning after the date of this
Agreement and ending at the Effective Time, as soon as practicable after the end
of each month, and in any event within thirty days thereafter, a copy of the
monthly consolidated financial statements of the Company, including statements
of financial condition, results of operations, and statements of cash flow, and
(iii) all other information concerning its business, properties and personnel as
Parent may reasonably request.
(b) During the period between the date hereof and the Effective Time,
the Company shall provide, and shall cause its Subsidiaries and its and their
Representatives to
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provide, to Parent and to the Representatives of Parent, all cooperation that
may be reasonably requested by Parent in connection with Parent's financing of
the consideration payable pursuant to Sections 1.4(a) and 1.7(a), including but
not limited to using commercially reasonable efforts to cause its advisors to
provide financial statements and comfort letters that may be reasonably
requested and are otherwise customary for such financing transactions.
(c) No investigation pursuant to this Section 5.2 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
Section 5.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of Parent, Merger Sub and the Company agrees to use its
commercially 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 fulfill all conditions
applicable to such party pursuant to this Agreement and to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by the Transaction Documents, including (i) the taking
of all commercially reasonable acts necessary to cause the conditions set forth
in Article VI to be satisfied, (ii) obtaining all necessary, proper or advisable
actions or non-actions, waivers, consents, qualifications and approvals from
Governmental Entities and making all necessary, proper or advisable
registrations, filings and notices and taking all reasonable steps as may be
necessary to obtain an approval, waiver or exemption from any Governmental
Entity (including, without limitation, under the HSR Act); (iii) obtaining all
necessary, proper or advisable consents, qualifications, approvals, waivers or
exemptions from non-governmental Third Parties; and (iv) executing and
delivering any additional documents or instruments necessary, proper or
advisable to consummate the transactions contemplated by, and to fully carry out
the purposes of, the Transaction Documents.
(b) Without limiting the foregoing, (i) each of the Company, Parent
and Merger Sub shall use its commercially reasonable efforts to make promptly
any required submissions under the HSR Act and any other Antitrust Laws which
the Company or Parent determines should be made, in each case with respect to
the Merger and the transactions contemplated hereby and (ii) Parent, Merger Sub
and the Company shall cooperate with one another (A) in promptly determining
whether any filings are required to be or should be made or consents, approvals,
permits or authorizations are required to be or should be obtained under any
other federal, state or foreign Law or regulation or whether any consents,
approvals or waivers are required to be or should be obtained from other parties
to loan agreements or other contracts or instruments material to the Company's
business in connection with the consummation of the transactions contemplated by
this Agreement and (B) in promptly making any such filings, furnishing
information required in connection therewith and seeking to obtain timely any
such consents, permits, authorizations, approvals or waivers. Each of the
Company and Parent shall (1) give the other party prompt notice of the
commencement or threat of commencement of any suit, claim, action, investigation
or proceeding by or before any Governmental Entity with respect to the Merger or
any of the other transactions contemplated by this Agreement, (2) keep the other
party informed as to the status of any such suit, claim, action, investigation,
proceeding
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or threat, (3) promptly inform the other party of any material communication
concerning the HSR Act or other Antitrust Laws to or from any Governmental
Entity regarding the Merger and (4) furnish to the other party such information
and assistance as the other may reasonably request in connection with any filing
or other act undertaken in compliance with the HSR Act and any other Antitrust
Laws. Except as may be prohibited by any Governmental Entity, the Company and
Parent will consult and cooperate with one another, and will consider in good
faith the views of one another, in connection with any analysis, appearance,
presentation, memorandum, brief, argument, opinion or proposal made or submitted
in connection with any suit, claim, action, investigation or proceeding under or
relating to the HSR Act or any other Antitrust Law. Each of the Company and
Parent will permit authorized Representatives of the other party to be present
at each meeting or conference relating to any such legal proceeding and to have
access to and be consulted in connection with any document, opinion or proposal
made or submitted to any Governmental Entity in connection with any such legal
proceeding.
(c) Each of the Company, on the one hand, and Parent and Merger Sub,
on the other, shall promptly (and in any event within five (5) Business Days)
notify the other party in writing if it believes that such party has breached
any representation, warranty, covenant or agreement contained in this Agreement
that could, individually or in the aggregate, result in a failure of a condition
set forth in Section 6.2 or Section 6.3 if continuing on the Closing Date.
(d) If any Antitakeover Laws are or may become applicable to the
Merger or any of the other transactions contemplated by this Agreement, the
Company and the Company Board of Directors shall promptly grant such approvals
and use commercially reasonable efforts to take such other lawful actions as are
necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement or the Merger, as the
case may be, and otherwise take such other commercially reasonable and lawful
actions to eliminate or minimize the effects of such statute, and any
regulations promulgated thereunder, on such transactions.
Section 5.4 Proxy Statement.
(a) As promptly as practicable after execution of this Agreement,
Parent and the Company shall in consultation with each other prepare, and the
Company shall file with the SEC, preliminary proxy materials which shall
constitute the Proxy Statement. As promptly as practicable after comments are
received from the SEC thereon and after the furnishing by the Company and Parent
of all information required to be contained therein, Parent and the Company
shall, in consultation with each other, prepare and the Company shall file any
required amendments to, and the definitive, Proxy Statement with the SEC. The
Company shall notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
consult with Parent regarding, and supply Parent with copies of, all
correspondence between the Company or any of its Representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement. Without limiting the foregoing, prior to filing or mailing the Proxy
Statement (or any amendment or supplement thereto) or responding to any comments
of the SEC with respect thereto, the Company (i) shall provide Parent with a
reasonable opportunity to review and comment on such document or
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response and (ii) shall not file or mail such document or respond to the SEC
prior to receiving Parent's approval, which approval shall not be unreasonably
withheld, delayed or conditioned.
(b) The Company and Parent shall make any necessary filings with
respect to the Merger under the Exchange Act and the rules and regulations
thereunder.
Section 5.5 Company Shareholders Meeting.
(a) The Company, acting through the Company Board of Directors, shall
take all actions in accordance with applicable law, the Company Articles of
Incorporation, the Company Bylaws and the rules of Nasdaq to duly call, give
notice of, convene and hold as promptly as practicable the Company Shareholders
Meeting for the purpose of considering and voting upon the approval of the "plan
of merger" (as such term is used in Chapter 23B.11 of the WBCA) contained in
this Agreement. Subject to Section 5.6(c), to the fullest extent permitted by
applicable law, (i) the Company Board of Directors shall recommend approval of
the "plan of merger" (as such term is used in Chapter 23B.11 of the WBCA)
contained in this Agreement and approval of the Merger by the Company
Shareholders and include such recommendation in the Proxy Statement and (ii)
neither the Company Board of Directors nor any committee thereof shall withdraw
or modify, or propose or resolve to withdraw or modify in a manner adverse to
Parent, the recommendation of the Company Board of Directors that the Company
Shareholders vote in favor of the approval of the "plan of merger" (as such term
is used in Chapter 23B.11 of the WBCA) contained in this Agreement and approval
of the Merger. Unless this Agreement has been duly terminated in accordance with
the terms herein (including payment of any termination fees payable under
Article VII), the Company shall, subject to the right of the Company Board of
Directors to modify its recommendation in a manner adverse to Parent under
certain circumstances as specified in Section 5.6(c), take all lawful action to
solicit from the Company Shareholders proxies in favor of the proposal to
approve the "plan of merger" (as such term is used in Chapter 23B.11 of the
WBCA) contained in this Agreement and approve the Merger and shall take all
other action necessary or advisable to secure the vote or consent of the Company
Shareholders that are required by the rules of Nasdaq or the WBCA.
Notwithstanding anything to the contrary contained in this Agreement, the
Company, after consultation with Parent, may adjourn or postpone the Company
Shareholders Meeting to the extent necessary to ensure that any legally required
supplement or amendment to the Proxy Statement is provided to the Company
Shareholders or, if as of the time for which the Company Shareholders Meeting is
originally scheduled (as set forth in the Proxy Statement), 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
Shareholders Meeting.
(b) The Company agrees that none of the information included or
incorporated by reference in the Proxy Statement will (except to the extent
revised or superseded by amendments or supplements contemplated hereby), at the
date the Proxy Statement is filed with the SEC or mailed to the Company
Shareholders or at the time of the Company Shareholders Meeting, or at the time
of any amendment or supplement thereof, 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 Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act.
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Section 5.6 No Solicitation of Transactions.
(a) The Company shall, and shall cause its Affiliates, Representatives
and any other agents to, immediately cease any discussions, negotiations or
communications with any party or parties with respect to any Competing
Transaction.
(b) The Company shall not, nor shall it authorize or permit any
Affiliate or Representative of the Company or its Subsidiaries to, (i) solicit,
initiate or intentionally encourage the submission of any Competing Transaction
or (ii) participate in any discussions or negotiations regarding, or furnish to
any Third Party any information or data with respect to or provide access to the
properties, offices, books, records, officers, directors or employees of, or
take any other action to knowingly facilitate, induce or encourage the making of
any proposal that constitutes, or may reasonably be expected to lead to, any
Competing Transaction. Notwithstanding the foregoing, if, prior to obtaining the
Company Required Vote, (A) the Company has complied with this Section 5.6 and
(B) the Company Board of Directors reasonably determines in good faith after
consultation with financial advisors that a Competing Transaction constitutes or
would reasonably be expected to lead to a Superior Competing Transaction, then,
to the extent required by the fiduciary obligations of the Company Board of
Directors, as determined in good faith by a majority thereof after consultation
with the Company's outside counsel, the Company may, subject to the Company's
providing prior written notice to Parent of its decision to take such action and
compliance by the Company with Section 5.6(d), furnish information with respect
to the Company to, and participate in discussions and negotiations directly or
through its Representatives with, such Third Party, subject to a confidentiality
agreement not materially less favorable to the Company than the Confidentiality
Agreement.
(c) Neither the Company Board of Directors nor any committee thereof
shall (i) withdraw or modify, or propose or resolve to withdraw or modify, in a
manner adverse to Parent or Merger Sub, the approval and recommendation by the
Company Board of Directors of the Merger, this Agreement and the "plan of
merger" (as such term is used in Chapter 23B.11 of the WBCA) contained herein,
the Transaction Documents, the transactions contemplated hereby and thereby and
the actions taken in connection herewith and therewith, (ii) approve or
recommend, or propose or resolve to approve or recommend, any Competing
Transaction, (iii) approve or recommend, or propose or resolve to approve or
recommend, or execute or enter into, any Acquisition Agreement, (iv) approve or
recommend, or propose or resolve to approve or recommend, or execute or enter
into, any agreement requiring it to abandon, terminate or fail to consummate the
Merger, this Agreement, any Transaction Document or the transactions
contemplated hereby or thereby, (v) take any action necessary to render the
provisions of any Antitakeover Law inapplicable to any Competing Transaction, or
(vi) propose or agree to do any of the foregoing constituting or related to, or
that is intended to lead to, any Competing Transaction. Notwithstanding the
foregoing, prior to obtaining the Company Required Vote, in response to a
Superior Competing Transaction that was not solicited, initiated, intentionally
encouraged, participated in or otherwise facilitated by the Company in breach of
Section 5.6(b), the Company Board of Directors may, if it determines in good
faith (after consulting with the Company's outside legal counsel) that the
failure to do so would result in a breach of the fiduciary duties of the Company
Board of Directors to the Company Shareholders under applicable Law or Order,
(A) modify, or propose or resolve to modify, in a manner adverse to
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Parent or Merger Sub, the approvals and recommendations of the Company Board of
Directors of the Merger, or the transactions contemplated hereby or by the
Transaction Documents, or (B) terminate this Agreement in accordance with
Section 7.1(d).
(d) In addition to the obligations set forth in Sections 5.6(a), (b)
and (c), the Company shall promptly advise Parent orally and, if requested by
Parent, in writing of (i) the existence of any Competing Transaction or any
offer, proposal or inquiry with respect to or which could reasonably be expected
to lead to any Competing Transaction received by any officer or director of the
Company or, to the Knowledge of the Company, other Representative of the Company
and (ii) the material terms and conditions of such Competing Transaction. The
Company shall promptly update Parent on the status and content of any material
discussions or negotiations regarding the Competing Transaction and shall
promptly inform Parent of any change in the price, structure or form of
consideration or terms and conditions of such Competing Transaction. Promptly
upon determination by the Company Board of Directors that a Competing
Transaction Constitutes a Superior Competing Transaction, the Company shall
deliver to Parent a written notice (a "Notice of Superior Competing
Transaction") advising Parent that the Company Board of Directors has received a
Superior Competing Transaction, specifying in detail the terms and conditions of
such Superior Competing Transaction and the identity of the Person making such
Superior Competing Transaction. During the three (3) Business Day period
following Parent's receipt from the Company of a Notice of Superior Competing
Transaction, if requested by Parent, the Company shall negotiate in good faith
with Parent to revise this Agreement and the Offer so that the Acquisition
Proposal of such Person no longer constitutes a Superior Competing Transaction;
provided, however, that in the event of a subsequent Notice of Superior
Competing Transaction involving the same third party, the foregoing period of
negotiation shall be only one (1) Business Day.
(e) Nothing contained in this Section 5.6 or any other provision
hereof shall prohibit the Company or the Company Board of Directors from taking
and disclosing to the Company Shareholders pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act a position with respect to a tender or
exchange offer by a Third Party that is consistent with its obligations
hereunder; provided, however, that neither the Company nor the Company Board of
Directors may either, except as provided by Section 5.6(c), (i) modify, or
propose publicly to modify, in a manner adverse to Parent and Merger Sub, the
approvals or recommendations of the Company Board of Directors of the Merger or
this Agreement and the "plan of merger" (as such term is used in Chapter 23B.11
of the WBCA) contained herein, or (ii) approve or recommend a Competing
Transaction, or propose publicly to approve or recommend a Competing
Transaction.
(f) Nothing in this Section 5.6 shall permit the Company to terminate
this Agreement (except as expressly provided in Article VII).
Section 5.7 Public Announcements. The Company and Parent shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any of the transactions
contemplated by the Transaction Documents and shall not issue any such press
release or make any such public statement without the prior consent of the other
party, which consent shall not be unreasonably withheld or delayed; provided,
however, that a party may, without the prior consent of the other party, issue
such press release or make such public statement as may be required by Law or
Order or the applicable rules of Nasdaq or
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any listing agreement if it has used its commercially reasonable efforts to
consult with the other party and to obtain such party's consent but has been
unable to do so prior to the time such press release or public statement is so
required to be issued or made.
Section 5.8 Litigation. Each of Parent, Merger Sub and the Company agrees
to use its commercially reasonable efforts to defend any lawsuits or other legal
proceedings, whether judicial or administrative, challenging, or seeking damages
or other relief as a result of, the Merger, this Agreement or the transactions
contemplated by the Transaction Documents, including seeking to have any Order
adversely affecting the ability of the parties to consummate the transactions
contemplated by the Transaction Documents entered by any court or other
Governmental Entity promptly vacated or reversed.
Section 5.9 Employee Benefit Matters.
(a) From and after the Effective Time, Parent shall cause the
Surviving Corporation to honor and provide for payment of all accrued
obligations and benefits under all Company Benefit Plans set forth, and
identified as such, in the Company Disclosure Letter (including, without
limitation, employment or severance agreements between the Company and Persons
who are or had been employees of the Company or any of its Subsidiaries at or
prior to the Effective Time), all in accordance with their respective terms.
(b) Parent will offer, or cause the Surviving Corporation to offer,
Company Employees compensation opportunities and employee benefits that are
commensurate in all material respects with the compensation and employee
benefits currently provided to Parent's U.S. employees. Company Employees shall
receive credit for past service with the Company for purposes of accrual of
vacation time and for purposes of eligibility for participation and vesting
under Parent Benefit Plans.
(c) All actively-at-work or similar limitations, eligibility waiting
periods and evidence of insurability requirements under any Parent Benefit Plan
that is a group health plan shall be waived with respect to such Company
Employees and their eligible dependents, in each case, to the same extent as
service with the Company or its Subsidiaries was taken into account under the
comparable Company Benefit Plan, and credit shall be provided for any
co-payments, deductibles and offsets (or similar payments) made under Company
Benefit Plans for the applicable plan year prior to the Effective Time for
purposes of satisfying any applicable deductible, out-of-pocket or similar
requirements under any Parent Benefit Plans in which they become eligible to
participate after the Effective Time.
(d) Notwithstanding anything in this Agreement to the contrary, from
and after the Effective Time, the Surviving Corporation will have sole
discretion over the hiring, promotion, retention, firing and other terms and
conditions of the employment of employees of the Surviving Corporation. Except
as otherwise provided in this Section 5.9, nothing herein shall prevent Parent
or the Surviving Corporation from amending or terminating any Company Benefit
Plan in accordance with its terms.
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Section 5.10 Directors' and Officers' Indemnification and Insurance.
(a) For a period of six (6) years from and after the Effective Time,
the Surviving Corporation shall indemnify and hold harmless all past and present
officers and directors of the Company to the same extent and in the same manner
such persons are indemnified as of the date of this Agreement by the Company
pursuant to any indemnification agreements between the Company and its directors
and officers as of the date hereof, the WBCA, the Company Articles of
Incorporation and the Company Bylaws for acts or omissions occurring at or prior
to the Effective Time, and Parent shall guarantee such performance by the
Surviving Corporation. The Articles of Incorporation and the 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 Company Articles of Incorporation and the Company Bylaws
as in effect on the date hereof, which provisions will not be amended, repealed
or otherwise modified for a period of not less than six years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who, immediately prior to the Effective Time, were directors,
officers, employees or agents of the Company, unless such a modification is
required by Law.
(b) For a period of six (6) years from the Effective Time, Parent
shall cause the Surviving Corporation to maintain in effect (or Parent may
instead elect to maintain pursuant to Parent's policy or policies) for the
benefit of the Company's current directors and officers an insurance and
indemnification policy that provides coverage for acts or omissions occurring
prior to the Effective Time that is substantially equivalent to the Company's
existing policy on terms with respect to coverage in the aggregate no less
favorable than those of such policy in effect on the date hereof, or, if
substantially equivalent insurance coverage is unavailable, the best available
coverage; provided, however, that the Surviving Corporation shall not be
required to pay an annual premium for such insurance in excess of 150% of the
last annual premiums paid prior to the date hereof (which premiums the Company
has disclosed to Parent), but in such case shall purchase as much coverage as
possible for such amount.
(c) This Section 5.10 shall survive the consummation of the Merger, is
intended to benefit the 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. The
provisions of this Section 5.10 are intended to be for the benefit of, and will
be enforceable by, each indemnified party, his or her heirs, and his or her
representatives and are in addition to, and not in substitution for, any other
rights to indemnification or contribution that any such Person may have by
contract or otherwise.
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ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The
obligations of the parties to effect the Merger on the Closing Date are subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Company Shareholder Approval. The Company Required Vote shall have
been obtained.
(b) No Order. No Law or Order (whether temporary, preliminary or
permanent) shall have been enacted, issued, promulgated, enforced or entered
that is in effect and that prevents or prohibits consummation of the Merger.
(c) Consents and Approvals. Other than the filing of the Articles of
Merger with the Washington Secretary, all consents, approvals and authorizations
of any Governmental Entity required to consummate the Merger shall have been
obtained.
(d) HSR Act or other Foreign Competition Law. The applicable waiting
periods, together with any extensions thereof, under the HSR Act or any other
applicable pre-clearance requirement of any foreign competition Law shall have
expired or been terminated.
Section 6.2 Additional Conditions to Obligations of Parent and Merger Sub.
The obligations of Parent and Merger Sub to effect the Merger on the Closing
Date are also subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement shall be true and correct in all
material respects (without giving effect to any limitation as to "materiality"
or "Company Material Adverse Effect" set forth therein) at and as of the date
hereof and at and as of the Effective Time as if made at and as of the Effective
Time (except to the extent expressly made as of an earlier date, in which case
as of such earlier date). Parent shall have received a certificate signed by an
executive officer of the Company on its behalf to the foregoing effect.
(b) Agreements and Covenants. The 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 on or prior to the
Effective Time. Parent shall have received a certificate of an executive officer
of the Company to that effect.
(c) FIRPTA. Parent shall have received a certificate from the Company
to the effect that the Company is not a U.S. real property holding company,
substantially in the form attached as Exhibit A hereto.
(d) No Material Adverse Effect. There shall not have occurred a
Company Material Adverse Effect.
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Section 6.3 Additional Conditions to Obligation of the Company. The
obligation of the Company to effect the Merger on the Closing Date is also
subject to the following conditions:
(a) Representations and Warranties. The representations and warranties
of Parent contained in this Agreement shall be true and correct in all material
respects (without giving effect to any limitation as to "materiality" set forth
therein) at and as of the date hereof and at and as of the Effective Time as if
made at and as of the Effective Time (except to the extent expressly made as of
an earlier date, in which case as of such earlier date). The Company shall have
received a certificate signed by an executive officer of Parent on its behalf to
the foregoing effect.
(b) Agreements and Covenants. Parent shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time. The Company shall have received a certificate of an executive officer of
Parent to that effect.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated and the Merger
(and the other transactions contemplated by the Transaction Documents) may be
abandoned at any time prior to the Effective Time (notwithstanding if the
Company Required Vote has been obtained):
(a) by the mutual written consent of the Company and Parent, which
consent shall have been approved by the action of their respective Boards of
Directors;
(b) by the Company or Parent, if any Governmental Entity shall have
issued an Order or taken any other action permanently enjoining, restraining or
otherwise prohibiting the Merger or any of the other transactions contemplated
hereby or by any of the Transaction Documents, and such Order or other action
shall have become final and nonappealable; provided, however, that the party
seeking to terminate this Agreement pursuant to this clause (b) shall not have
initiated such proceeding or taken any action in support of such proceeding;
(c) by either Parent or the Company, if at the Company Shareholders
Meeting (giving effect to any adjournment or postponement thereof), the Company
Required Vote shall not have been obtained; provided, however, that the right to
terminate this Agreement under this Section 7.1(c) shall not be available to the
Company if the Company has materially breached any of its obligations under
Section 5.6(b), (c) or (d);
(d) by the Company in order to enter into an Acquisition Agreement for
a Superior Competing Transaction; provided, however, that this Agreement may not
be so terminated unless (i) the Company Board of Directors shall have complied
with the procedures set forth in Sections 5.6(c) and (d) and (ii) all of the
payments required by Section 7.2 have been made in full to Parent;
(e) by Parent if (i) the Company Board of Directors shall have
withdrawn or adversely modified its approvals or recommendations of the Merger
or the transactions
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contemplated thereby or by the Transaction Documents (it being understood,
however, that for all purposes of this Agreement, the fact that the Company has
supplied any Person with information regarding the Company or has entered into
discussions or negotiations with such Person as permitted by this Agreement, or
the disclosure of such facts, shall not be deemed in and of itself a withdrawal
or modification of such approvals or recommendations), (ii) the Company Board of
Directors has failed to reaffirm its approvals and recommendations of the Merger
or this Agreement within ten (10) Business Days after Parent has requested in
writing that it do so, (iii) the Company Board of Directors shall have (A)
recommended to the Company Shareholders that they approve or accept a Competing
Transaction or (B) determined to accept a proposal or offer for a Superior
Competing Transaction, (iv) the Company shall have materially breached any of
its obligations under Section 5.6(a), (b), (c) or (d), or Section 5.5 or 5.8, or
(v) any Third Party shall have commenced a tender or exchange offer or other
transaction constituting or potentially constituting a Competing Transaction and
the Company shall not have sent to its security holders pursuant to Rule 14e-2
promulgated under the Securities Act, within ten (10) Business Days after such
tender or exchange offer is first published, sent or given, a statement
disclosing that the Company recommends rejection of such tender or exchange
offer;
(f) by Parent or the Company, if the Merger shall not have been
consummated prior to November 30, 2006 (the "Outside Termination Date");
provided, however, that the right to terminate this Agreement under this Section
7.1(f) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or results in, the
failure of the Merger to occur on or before such date;
(g) by Parent, if (i) there has been a breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement that
would, individually or in the aggregate, result in a failure of a condition set
forth in Section 6.2(a) or Section 6.2(b) if continuing on the Closing Date and
(ii) such breach (A) shall not have been cured (or is not capable of being
cured) before the Outside Termination Date, (B) such breach is not reasonably
capable of being cured before the Outside Termination Date or (C) the Company
does not within ten (10) days after receipt of written notice thereof initiate
and sustain commercially reasonable efforts to cure such breach (it being
understood that Parent may not terminate this Agreement pursuant to this Section
7.1(g) if such breach by the Company is so cured);
(h) by the Company, if (i) there has been a breach by Parent of any
representation, warranty, covenant or agreement contained in this Agreement that
would, individually or in the aggregate, result in a failure of a condition set
forth in Section 6.3(a) or Section 6.3(b) if continuing on the Closing Date and
(ii)(A) such breach shall not have been cured before the Outside Termination
Date, (B) is not reasonably capable of being cured before the Outside
Termination Date or (c) Parent does not within ten (10) days after receipt of
written notice thereof initiate and sustain commercially reasonable efforts to
cure such breach (it being understood that the Company may not terminate this
Agreement pursuant to this Section 7.1(h) if such breach by Parent is so cured);
The party desiring to terminate this Agreement pursuant to subsection (b), (c),
(d), (e), (f), (g) or (h) of this Section 7.1 shall give written notice of such
termination to the other party in accordance with Section 8.2, specifying the
provision or provisions hereof pursuant to which
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such termination is effected. The right of any party hereto to terminate this
Agreement pursuant to this Section 7.1 shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any party
hereto, or any of their respective Affiliates or Representatives, whether prior
to or after the execution of this Agreement.
Section 7.2 Expenses.
(a) Expense Allocation. Except as otherwise specified in this Section
7.2 or agreed in writing by the parties, all out-of-pocket costs and expenses
incurred in connection with the Transaction Documents, the Merger and the other
transactions contemplated hereby shall be paid by the party incurring such cost
or expense; provided, however, that Parent and the Company shall share equally
all fees and expenses, other than attorneys' and accountants' fees and expenses,
incurred in connection with filings required under the HSR Act (including the
HSR filing fee).
(b) Company Termination Fees. If this Agreement is terminated (i) by
the Company pursuant to Section 7.1(d), (ii) by Parent pursuant to Section
7.1(e), or (iii) by Parent or the Company pursuant to Section 7.1(c), Section
7.1(f) or Section 7.1(g), the Company shall promptly, and in any event within
five (5) Business Days after the date of such termination, pay Parent the
Company Termination Fee by wire transfer of immediately available funds;
provided, however, that in the case of a termination pursuant to clause (iii)
above: (A) such payment shall be made only if (1) within twelve (12) months
following the termination of this Agreement a Company Acquisition is consummated
or (2) within twelve (12) months following the termination of this Agreement the
Company enters into an Acquisition Agreement with respect to a Company
Acquisition, and (B) such payment shall be made promptly, but in no event later
than five (5) Business Days, after the consummation of such Company Acquisition
or the entering into of such Acquisition Agreement.
Section 7.3 Effect of Termination. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent and Merger Sub or the Company, except that
(a) the provisions of Section 7.1, Section 7.2, this Section 7.3 and Article
VIII shall survive termination and (b) nothing herein shall relieve any party
from liability for any willful breach of this Agreement or for fraud.
Section 7.4 Amendment. This Agreement may be amended by the parties in
writing by action of their respective Boards of Directors at any time before or
after the Company Required Vote has been obtained and prior to the filing of the
Articles of Merger with the Washington Secretary; provided, however, that, after
the Company Required Vote shall have been obtained, no such amendment,
modification or supplement shall alter the amount or change the form of the
Merger Consideration to be delivered to the Company Shareholders or alter or
change any of the terms or conditions of this Agreement if such alteration or
change would adversely affect the Company Shareholders. This Agreement may not
be amended, changed or supplemented or otherwise modified except by an
instrument in writing signed on behalf of all of the parties.
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Section 7.5 Extension; Waiver. At any time prior to the Effective Time,
each of the Company, Parent and Merger Sub may (a) extend the time for the
performance of any of the obligations or other acts of the other party, (b)
waive any inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any document delivered pursuant to this
Agreement, or (c) subject to the provisions of Section 7.4, waive compliance
with any of the agreements or conditions of the other parties contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 8.1
shall not limit any covenant or agreement of the parties in this Agreement that
by its terms contemplates performance after the Effective Time.
Section 8.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing (and made orally if so
required pursuant to any section of this Agreement) and shall be deemed given
(and duly received) if delivered personally, sent by overnight courier
(providing proof of delivery and confirmation of receipt by telephonic notice to
the applicable contact person) to the parties or sent by fax (providing proof of
transmission and confirmation of transmission by telephonic notice to the
applicable contact person) at the following addresses or fax numbers (or at such
other address or fax number for a party as shall be specified by like notice):
if to Parent, to
M2M Holdings, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: R. Xxxxx Xxxxxx, President
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
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if to the Company, to
Onyx Software Corporation
0000 -- 000xx Xxx. XX
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Section 8.3 Interpretation. When a reference is made in this Agreement to
an Article or a Section, such reference shall be to an Article or a Section of
this Agreement unless otherwise indicated. The table of contents, headings and
index of defined terms contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the word "include," "includes" or "including" is used in
this Agreement, it shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein" and "hereby" refer to this Agreement.
The Company Disclosure Letter, as well as any schedules thereto and any exhibits
hereto, shall be deemed part of this Agreement and included in any reference to
this Agreement.
Section 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 parties.
Section 8.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein, including the
Confidentiality Agreement) (a) constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter of this Agreement
and (b) is not intended to and does not confer upon any Person other than the
parties hereto any rights or remedies hereunder, other than the Persons intended
to benefit from the provisions of Section 5.9 (Employee Benefit Matters) and
Section 5.10 (Directors' and Officers' Indemnification and Insurance), who shall
have the right to enforce such provisions directly.
Section 8.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES
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THEREOF; PROVIDED, HOWEVER, THAT MATTERS RELATED TO THE MERGER OR CORPORATE LAW
MATTERS SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH WASHINGTON LAW.
Section 8.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or delegated, in
whole or in part, by operation of Law or otherwise by any of the parties without
the prior written consent of the other parties, except that Merger Sub's rights
and obligations may be assigned to and assumed by Parent or any other
corporation directly or indirectly wholly owned by Parent; provided, however,
that any such assignment does not affect the economic or legal substance of the
transactions contemplated hereby and provided further that such assignment does
not create adverse Tax consequences for the Company Shareholders. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
Section 8.8 Enforcement. The parties 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 an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any state or federal court sitting
in the State of Washington, this being in addition to any other remedy to which
they are entitled at Law or in equity.
Section 8.9 Consent to Jurisdiction; Venue.
(a) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the state courts of Delaware and to the jurisdiction of the
United States District Court for the District of Delaware for the purpose of any
action arising out of or relating to this Agreement and the Confidentiality
Agreement, and each of the parties hereto irrevocably agrees that all claims in
respect to such action may be heard and determined exclusively in any Delaware
state or federal court sitting in the State of Delaware. Each of the parties
hereto agrees that a final judgment in any action shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) Each of the parties hereto irrevocably consents to the service of
any summons and complaint and any other process in any other action relating to
the Merger, on behalf of itself or its property, by the personal delivery of
copies of such process to such party. Nothing in this Section 8.9 shall affect
the right of any party hereto to serve legal process in any other manner
permitted by law.
Section 8.10 Waiver of Trial by Jury. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
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EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.10.
ARTICLE IX
CERTAIN DEFINITIONS
"Acquisition Agreement" shall mean any letter of intent, agreement in
principle, merger agreement, stock purchase agreement, asset purchase agreement,
acquisition agreement, option agreement or similar agreement relating to a
Competing Transaction.
"ADA" shall mean the Americans with Disabilities Act.
"ADEA" shall mean the Age Discrimination in Employment Act.
"Affiliate" of any Person shall mean another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.
"Antitakeover Laws" shall mean any "moratorium," "control share," "fair
price," "affiliate transaction," "business combination" or other antitakeover
laws and regulations of any state or other jurisdiction, including the
provisions of Chapter 23B.19 of the WBCA.
"Antitrust Laws" shall mean any other antitrust, unfair competition, merger
or acquisition notification, or merger or acquisition control Laws under any
applicable jurisdictions, whether federal, state, local or foreign.
"Articles of Merger" shall mean the certificate of merger with respect to
the Merger, containing the provisions required by, and executed in accordance
with, the WBCA.
"Associate" of any Person shall have the meaning assigned thereto by Rule
12b-2 under the Exchange Act.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in Seattle, Washington are authorized or obligated by
Law or executive order to be closed.
"Certificate" shall mean each certificate representing one or more Shares
or, in the case of uncertificated Shares, each entry in the books of the Company
representing uncertificated Shares.
"Chapter 23B.13" shall mean Chapter 23B.13 of the WBCA.
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"Closing" shall mean the closing of the Merger, as contemplated by Section
1.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company Acquisition" shall mean (i) a merger, consolidation or business
combination involving the Company pursuant to which the shareholders of the
Company immediately preceding such transaction hold less than 50% of the equity
interest in the surviving or resulting entity of such transaction, (ii) a sale
or other disposition by the Company of all or a substantial part of its assets,
or (iii) the acquisition by any Person or group (including by way of a tender
offer or an exchange offer or issuance by the Company), directly or indirectly,
of beneficial ownership of shares representing in excess of 50% of the voting
power of the then-outstanding shares of capital stock of the Company.
"Company Articles of Incorporation" shall mean the Company's Restated
Articles of Incorporation as in effect as of the date hereof.
"Company Benefit Plan" shall mean (i) each "employee welfare benefit plan,"
as defined in Section 3(1) of ERISA, including, but not limited to, any medical
plan, life insurance plan, short-term or long-term disability plan or dental
plan, (ii) each "employee pension benefit plan," as defined in Section 3(2) of
ERISA, including, but not limited to, any excess benefit plan, top hat plan or
deferred compensation plan or arrangement, nonqualified retirement plan or
arrangement or qualified defined contribution or defined benefit arrangement,
and (iii) each other benefit plan, policy, program, arrangement or agreement,
including, but not limited to, any fringe benefit plan or program, bonus or
incentive plan, stock option, restricted stock, stock bonus, sick pay, bonus
program, service award, deferred bonus plan, salary reduction agreement,
change-of-control agreement, employment agreement or consulting agreement, which
in all cases is sponsored, maintained or contributed to by the Company or any of
its Subsidiaries or with respect to which the Company or any of its Subsidiaries
is a party and in which any employee of the Company or its Subsidiaries is
eligible to participate or derive a benefit.
"Company Bylaws" shall mean the Amended and Restated Bylaws of the Company,
as in effect as of the date hereof, including any amendments.
"Company Disclosure Letter" shall mean the Company Disclosure Schedule
dated the date hereof and delivered by the Company to Parent prior to the
execution of this Agreement.
"Company Employees" shall mean employees of the Company who remain with the
Surviving Corporation.
"Company ESPP" shall mean the Company's 1998 Employee Stock Purchase Plan,
as amended and restated on April 6, 2001, including the addendums thereto.
"Company Financial Advisor" shall mean Xxxxx Xxxxxxx & Co..
"Company Financial Statements" shall mean all of the financial statements
of the Company and its Subsidiaries included in the Company Reports.
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"Company Intellectual Property" shall mean Intellectual Property that is
used in the business of the Company or any of its Subsidiaries as currently
conducted by the Company or any of its Subsidiaries and to which the Company or
any of its Subsidiaries claims rights by virtue of ownership of title to such
Intellectual Property.
"Company Knowledge Person" shall mean the Persons set forth on Schedule 9.1
to the Company Disclosure Letter.
"Company Material Adverse Effect" shall mean, with respect to the Company,
any change, event, violation, inaccuracy, effect or circumstance (any such item,
an "Effect") that, individually or taken together with all other Effects that
have occurred prior to the date of determination of the occurrence of the
Company Material Adverse Effect, is or could reasonably expected to (i) be
materially adverse to the business, operations, properties, condition (financial
or otherwise), assets or Liabilities of the Company or (ii) prevent or
materially delay the performance by the Company of any of its obligations under
this Agreement or the consummation of the Merger or the other transactions
contemplated by the Transaction Documents, or (iii) Parent's ability to vote,
receive dividends with respect to or otherwise exercise ownership rights with
respect to the stock of the Surviving Corporation; provided, however, that in no
event shall any of the following occurring after the date hereof, alone or in
combination, be deemed to constitute, nor be taken into account in determining
whether there has been or will be, a Company Material Adverse Effect: (A) any
change in the Company's stock price or trading volume, in and of itself
(provided, however, that the exception in this clause shall not in any way
prevent or otherwise affect a determination that any change, event,
circumstance, development or effect underlying such decrease has resulted in, or
contributed to, a Company Material Adverse Effect), (B) any failure by the
Company to meet published revenue or earnings projections, in and of itself, (c)
any Effect that results from changes affecting the enterprise software industry
or the customer relationship management software market generally (to the extent
such Effect is not disproportionate with respect to the Company in any material
respect) or the United States economy generally (to the extent such Effect is
not disproportionate with respect to the Company in any material respect), (C)
any Effect that results from changes affecting general worldwide economic or
capital market conditions (to the extent such Effect is not disproportionate
with respect to the Company in any material respect), (D) any Effect resulting
from compliance with the terms and conditions of this Agreement, (E) any Effect
caused by an impact to the Company's relationships with its employees,
customers, suppliers or partners directly attributable to the announcement or
pendency of the Merger, or (F) any shareholder class action litigation arising
from allegations of a breach of fiduciary duty relating to this Agreement.
"Company Option Plans" shall mean the Company's 1998 Stock Incentive
Compensation Plan, as amended and restated on March 21, 2003, the Company's
Amended and Restated 1994 Stock Option Plan, the Company's 2001 Nonofficer
Employee Stock Compensation Plan as amended and restated on April 27, 2001 and
the four Stock Option Letter Agreements by and between the Company and the Chief
Executive Officer of the Company each dated June 7, 2004 with respect to Company
Options to purchase an aggregate of 600,000 shares of Company Common Stock, in
each case as amended and restated prior to the date hereof.
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"Company Permits" shall mean all authorizations, licenses, permits,
certificates, approvals and orders of all Governmental Entities necessary for
the lawful conduct of the businesses of the Company and its Subsidiaries.
"Company Reports" shall mean all forms, reports, statements, information
and other documents (as supplemented and amended since the time of filing) filed
or required to be filed by the Company with the SEC since December 31, 2002.
"Company Required Vote" shall mean the affirmative vote of the holders of a
majority of the outstanding Shares entitled to vote on the approval of the "plan
of merger" (as such term is used in Chapter 23B.11 of the WBCA) contained in
this Agreement.
"Company Shareholders Meeting" shall mean a meeting of the Company
Shareholders to be called to consider the Merger.
"Company Stock Option" shall mean each outstanding option to purchase
shares of Company Common Stock under the Company Option Plans.
"Company Stock Rights" shall mean any options, warrants, convertible
securities, subscriptions, stock appreciation rights, voting interest, phantom
stock plans or stock equivalents or other rights, agreements, arrangements or
commitments (contingent or otherwise) obligating the Company to issue or sell
any shares of capital stock of, or options, warrants, convertible securities,
subscriptions or other equity interests in, the Company or which would otherwise
alter the capitalization of the Company.
"Company Termination Fee" shall mean an amount in cash equal to: (i) in the
case of a termination of the kind described in clauses (i) or (ii) of Section
7.2(b), $4,000,000 plus up to $500,000 of reasonably documented out-of-pocket
fees payable and expenses incurred by Parent (including fees and expenses of
counsel to Parent) in connection with this Agreement and the transactions
contemplated hereby and (ii) in the case of a termination of the kind described
in clause (iii) of Section 7.2(b), an amount equal to five percent (5%) of the
aggregate fair market value of the consideration paid to the shareholders of the
Company in the Company Acquisition giving rise to the payment of the Company
Termination Fee.
"Company 10-K" shall mean the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.
"Company Warrants" shall mean all outstanding warrants to purchase shares
of Company Common Stock.
"Competing Transaction" shall mean any proposal or offer, whether in
writing or otherwise, from any Third Party to acquire beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act) of all or more than (i) 15% of the
assets of the Company or (ii) 15% or more of any class of equity securities of
the Company, in each case pursuant to a merger, consolidation or other business
combination, sale of shares of stock, sale of assets, tender offer, exchange
offer or similar transaction or series of related transactions, which is
structured to permit such Third Party to acquire beneficial ownership of more
than (A) 15% of the assets of the Company or (B) 15% or more of any class of
equity securities in the Company, as the case may be.
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"Confidentiality Agreement" shall mean the Confidentiality Agreement
between the Company and an Affiliate of Parent dated April 17, 2006, as amended
to include additional Affiliates of Parent by that certain Exclusivity Agreement
dated May 8, 2006 by and between the Company and an Affiliate of Parent.
"Dissenter Shares" shall mean Shares issued and outstanding immediately
prior to the Effective Time that are held by any holder who has not voted such
Shares in favor of the Merger and who is entitled to assert and properly asserts
dissenters' rights with respect to such Shares pursuant to, and who complies in
all respects with, the provisions of Chapter 23B.13, and who has not effectively
withdrawn or lost the right to assert dissenter's rights under the provisions of
Chapter 23B.13.
"Effective Time" shall mean the effective time of the Merger, which shall
be the time the Articles of Merger is duly filed with the Washington Secretary,
or at such other time as the parties hereto agree shall be specified in such
Articles of Merger.
"Employment Agreements" shall mean any contracts, termination or severance
agreements, change of control agreements or any other agreements respecting the
terms and conditions of employment of any officer, employee or former employee.
"Encumbrance" shall mean any lien, mortgage, pledge, deed of trust,
security interest, charge, encumbrance or other adverse claim or interest.
"Environmental Claims" shall mean any and all actions, Orders, suits,
demands, directives, claims, Encumbrances, investigations, proceedings or
notices of violation by any Governmental Entity or other Person alleging
potential responsibility or liability arising out of, based on or related to (1)
the presence, release or threatened release of, or exposure to, any Hazardous
Materials at any location or (2) circumstances forming the basis of any
violation or alleged violation of any Environmental Law.
"Environmental Laws" shall mean all Laws relating to pollution or
protection of the environment or human health.
"Environmental Permits" shall mean all Permits required to be obtained by
the Company in connection with its business under applicable Environmental Laws.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"FLSA" shall mean the Fair Labor Standards Act.
"FMLA" shall mean the Family and Medical Leave Act.
"GAAP" shall mean United States generally accepted accounting principles.
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"Governmental Entity" shall mean any United States federal, state or local
or any foreign government or any court of competent jurisdiction, administrative
or regulatory agency or commission or other governmental authority or agency,
domestic or foreign.
"Hazardous Materials" shall mean all hazardous, toxic, explosive or
radioactive substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos, polychlorinated biphenyls, radon gas and all
other substances or wastes of any nature regulated pursuant to any Environmental
Law.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Intellectual Property" shall mean all of the following in any jurisdiction
throughout the world: (i) all trademarks, trademark registrations, trademark
rights and renewals thereof, trade names, trade name rights, trade dress,
corporate names, logos, slogans, all service marks, service xxxx registrations
and renewals thereof, service xxxx rights, and all applications to register any
of the foregoing, together with the goodwill associated with each of the
foregoing; (ii) all issued patents, patent rights, and patent applications;
(iii) all registered and unregistered copyrights, copyrightable works, copyright
registrations, renewals thereof, and applications to register the same; (iv) all
Software; (v) all Internet domain names and Internet web-sites and the content
thereof; (vi) all confidential and proprietary information, including trade
secrets, know-how, inventions, invention disclosures (whether or not patentable
and whether or not reduced to practice), inventor rights, reports, quality
records, engineering notebooks, models, processes, procedures, drawings,
specifications, designs, ingredient or component lists, formulae, plans,
proposals, technical data, financial, marketing, customer and business data,
pricing and cost information, business and marketing plans, and customer and
supplier lists and information; and (vii) all other intellectual property.
"IRS" shall mean the Internal Revenue Service.
"Knowledge," or any similar expression used with respect to the Company,
shall mean the actual knowledge of any Company Knowledge Person.
"Labor Laws" shall mean ERISA, the Immigration Reform and Control Act of
1986, the National Labor Relations Act, the Civil Rights Acts of 1866 and 1964,
the Equal Pay Act, ADEA, ADA, FMLA, WARN, the Occupational Safety and Health
Act, the Xxxxx-Xxxxx Act, the Xxxxx-Xxxxx Act, the Service Contract Act,
Executive Order 11246, FLSA and the Rehabilitation Act of 1973, and all
regulations under such acts.
"Law" shall mean any federal, state, local or foreign statute, law,
regulation, requirement, interpretation, permit, license, approval,
authorization, rule, ordinance, code, policy or rule of common law of any
Governmental Entity, including any judicial or administrative interpretation
thereof.
"Liabilities" shall mean any and all debts, liabilities and obligations of
any nature whatsoever, whether accrued or fixed, absolute or contingent, matured
or unmatured or determined or determinable, including those arising under any
Law, those arising under any
-49-
contract, agreement, commitment, instrument, permit, license, franchise or
undertaking and those arising as a result of any act or omission.
"Nasdaq" shall mean The Nasdaq National Market System, a.k.a. the Nasdaq
Stock Market.
"NLRB" shall mean the United States National Labor Relations Board.
"Open Source Software" shall mean any Software that is subject to the GNU
General Public License (GPL), the Lesser GNU Public License (LGPL), any
"copyleft" license or any other license that requires a condition of use,
modification or distribution of such Software that such software or other
software combined or distributed with it be (i) disclosed or distributed in
source code form, (ii) licensed for the purpose of making derivative works, or
(iii) redistributable at no charge
"Order" shall mean any writ, judgment, injunction, consent, order, decree,
stipulation, award or executive order of or by any Governmental Entity.
"Parent Benefit Plan" shall mean (i) each "employee welfare benefit plan,"
as defined in Section 3(1) of ERISA, including, but not limited to, any medical
plan, life insurance plan, short-term or long-term disability plan or dental
plan; (ii) each "employee pension benefit plan," as defined in Section 3(2) of
ERISA, including, but not limited to, any excess benefit plan, top hat plan or
deferred compensation plan or arrangement, nonqualified retirement plan or
arrangement, or qualified defined contribution or defined benefit arrangement;
and (iii) each other material benefit plan, policy, program, arrangement or
agreement, including, but not limited to, any material fringe benefit plan or
program, bonus or incentive plan, stock option, restricted stock, stock bonus,
sick pay, bonus program, service award, deferred bonus plan, salary reduction
agreement, change-of-control agreement, employment agreement or consulting
agreement, which in all cases is sponsored or maintained by Parent or any of its
Subsidiaries for the benefit of its employees.
"Parent Bylaws" shall mean Parent's Bylaws as in effect as of the date
hereof.
"Parent Material Adverse Effect" shall mean, with respect to Parent, any
Effect that, individually or taken together with all other Effects that have
occurred prior to the date of determination of the occurrence of the Parent
Material Adverse Effect, is or would be reasonably likely to prevent or
materially delay the performance by Parent of any of its obligations under this
Agreement or the consummation of the Merger or the other transactions
contemplated by the Transaction Documents.
"Paying Agent" shall mean Mellon Investor Services LLC.
"Person" shall mean any individual, corporation, partnership (general or
limited), limited liability company, limited liability partnership, trust, joint
venture, joint-stock company, syndicate, association, entity, unincorporated
organization or government, or any political subdivision, agency or
instrumentality thereof.
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"Proxy Statement" shall mean a definitive proxy statement, including the
related preliminary proxy statement and any amendment or supplement thereto,
relating to the Merger and this Agreement to be mailed to the Company
Shareholders in connection with the Company Shareholders Meeting.
"Representatives" shall mean officers, directors, employees, auditors,
attorneys and financial advisors (including the Company Financial Advisor).
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Software" shall mean any and all (A) computer programs, including any and
all software implementations of algorithms, models and methodologies, whether in
source code or object code, (B) databases and compilations, including any and
all data and collections of data, whether machine readable or otherwise, (C)
descriptions, schematics, flow-charts and other work product used to design,
plan, organize and develop any of the foregoing and (D) all documentation,
including User Documentation, user manuals and training materials, relating to
any of the foregoing.
"Subsidiary" of any Person shall mean any corporation, partnership, limited
liability company, joint venture or other legal entity of which such Person
(either directly or through or together with another Subsidiary of such Person)
owns more than 50% of the voting stock or value of such corporation,
partnership, limited liability company, joint venture or other legal entity.
"Subsidiary Stock Rights" shall mean any options, warrants, convertible
securities, subscriptions, stock appreciation rights, phantom stock plans or
stock equivalents or other rights, agreements, arrangements or commitments
(contingent or otherwise) of any character issued or authorized by the Company
or any Subsidiary of the Company relating to the issued or unissued capital
stock of the Subsidiaries of the Company or obligating the Company or any of its
Subsidiaries to issue or sell any shares of capital stock of, or options,
warrants, convertible securities, subscriptions or other equity interests in,
any Subsidiary of the Company.
"Superior Competing Transaction" shall mean a bona fide, unsolicited
written proposal or offer made by a Third Party to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction, more than 50% of the voting power of the capital stock
of the Company then outstanding or all or substantially all of the assets of the
Company on terms the Company Board of Directors determines in good faith (after
consulting with the Company's outside legal counsel and the Company Financial
Advisor), taking into account, among other things, all legal, financial,
regulatory, timing and other aspects of the offer and the Third Party making the
offer, are more favorable from a financial point of view to the Company
Shareholders than the Merger and the other transactions contemplated by this
Agreement, and is reasonably capable of being consummated.
"Surviving Corporation" shall mean the corporation surviving the Merger.
-51-
"Tax" (and, with correlative meaning, "Taxes") shall mean any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, premium, withholding, alternative or
added minimum, ad valorem, transfer or excise tax, or any other tax of any kind
whatsoever, together with any interest or penalty or addition thereto, whether
disputed or not, imposed by any Governmental Entity.
"Tax Return" shall mean any return, report or similar statement required to
be filed with respect to any Tax (including any attached schedules), including
any information return, claim for refund, amended return or declaration of
estimated Tax.
"Third Party" shall mean any Person or group (as defined in Section
13(d)(3) of the Exchange Act) other than Company, Parent, Merger Sub or any
Affiliates thereof.
"Transaction Documents" shall mean this Agreement, the Support Agreements
and all other agreements, instruments and documents to be executed by Parent,
Merger Sub and the Company in connection with the transactions contemplated by
such agreements.
"User Documentation" shall mean explanatory and informational materials
concerning the Company products, in printed or electronic format, which the
Company or any Subsidiary has released for distribution to end users with such
Company products, which may include manuals, descriptions, user and/or
installation instructions, diagrams, printouts, listings, flow-charts and
training materials, contained on visual media such as paper or photographic
film, or on other physical storage media in machine readable form.
"WARN" shall mean the United States Worker Adjustment and Retraining
Notification Act.
"Washington Secretary" shall mean the Secretary of State of the State of
Washington.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
M2M HOLDINGS, INC.
By: /S/ R. XXXXX XXXXXX
------------------------------------
Name: R. Xxxxx Xxxxxx
Title: President
ORION ACQUISITION CORPORATION
By: /S/ R. XXXXX XXXXXX
------------------------------------
Name: R. Xxxxx Xxxxxx
Title: President
ONYX SOFTWARE CORPORATION
By: /S/ XXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and
Chief Executive Officer
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ANNEX I
INDEX OF DEFINED TERMS
Defined Term Location
------------ ---------------
Acquisition Agreement.............................. Article IX
ADA................................................ Article IX
ADEA............................................... Article IX
Affiliate.......................................... Article IX
Agreement.......................................... Preamble
Antitakeover Laws.................................. Article IX
Antitrust Laws..................................... Article IX
Articles of Merger................................. Article IX
Associate.......................................... Article IX
Business Day....................................... Article IX
Certificate........................................ Article IX
Certifications..................................... Section 3.8(b)
Chapter 23B.13..................................... Article IX
Closing............................................ Article IX
Closing Date....................................... Section 1.2
Code............................................... Article IX
Commitments........................................ Section 4.5
Company............................................ Preamble
Company Acquisition................................ Article IX
Company Articles of Incorporation.................. Article IX
Company Benefit Plan............................... Article IX
Company Board of Directors......................... Recital B
Company Bylaws..................................... Article IX
INDEX OF DEFINED TERMS
Defined Term Location
------------ ---------------
Company Common Stock............................... Recital A
Company Disclosure Letter.......................... Article IX
Company Employees.................................. Article IX
Company ESPP....................................... Article IX
Company Financial Advisor.......................... Article IX
Company Financial Statements....................... Article IX
Company Intellectual Property...................... Article IX
Company Knowledge Person........................... Article IX
Company Material Adverse Effect.................... Article IX
Company Material Contract.......................... Section 3.15(a)
Company Option Plans............................... Article IX
Company Permits.................................... Article IX
Company Reports.................................... Article IX
Company Required Vote.............................. Article IX
Company Shareholders............................... Recital B
Company Shareholders Meeting....................... Article IX
Company Stock Option............................... Article IX
Company Stock Rights............................... Article IX
Company Termination Fee............................ Article IX
Company 10-K....................................... Article IX
Company Warrants................................... Article IX
Competing Transaction.............................. Article IX
Confidentiality Agreement.......................... Article IX
Current Offerings.................................. Section 1.9
INDEX OF DEFINED TERMS
Defined Term Location
------------ ---------------
Dissenter Shares................................... Article IX
Effect............................................. Article IX
Effective Time..................................... Article IX
Employment Agreements.............................. Article IX
Encumbrance........................................ Article IX
Environmental Claims............................... Article IX
Environmental Laws................................. Article IX
Environmental Permits.............................. Article IX
ERISA.............................................. Article IX
Exchange Act....................................... Article IX
Exchange Fund...................................... Section 2.1
Export Approvals................................... Section 3.23
FLSA............................................... Article IX
FMLA............................................... Article IX
GAAP............................................... Article IX
Governmental Entity................................ Article IX
Hazardous Materials................................ Article IX
HSR Act............................................ Article IX
Information Systems................................ Section 3.16(n)
Intellectual Property.............................. Article IX
IRS................................................ Article IX
Knowledge.......................................... Article IX
Labor Laws......................................... Article IX
Law................................................ Article IX
INDEX OF DEFINED TERMS
Defined Term Location
------------ ---------------
Letter of Transmittal.............................. Section 2.2(a)
Liabilities........................................ Article IX
M2M................................................ Section 4.5
Merger............................................. Recital A
Merger Consideration............................... Section 1.4(a)
Merger Sub......................................... Preamble
Nasdaq............................................. Article IX
NLRB............................................... Article IX
Notice of Superior Competing Transaction........... Section 5.6(d)
Open Source Software............................... Article IX
Order.............................................. Article IX
Outside Termination Date........................... Section 7.1(f)
Parent............................................. Preamble
Parent Benefit Plan................................ Article IX
Parent Bylaws...................................... Article IX
Parent Material Adverse Effect..................... Article IX
Paying Agent....................................... Article IX
Person............................................. Article IX
Proxy Statement.................................... Article IX
Reincorporation.................................... Section 1.1(a)
Representatives.................................... Article IX
Right.............................................. Recital A
Rights Plan........................................ Recital A
SEC................................................ Article IX
INDEX OF DEFINED TERMS
Defined Term Location
------------ ---------------
Securities Act..................................... Article IX
Shares............................................. Section 1.4(a)
Software........................................... Article IX
Subsidiary......................................... Article IX
Subsidiary Stock Rights............................ Article IX
Superior Competing Transaction..................... Article IX
Support Agreements................................. Recital D
Surviving Corporation.............................. Article IX
Tax................................................ Article IX
Tax Return......................................... Article IX
Termination Fee Cap................................ Article IX
Third Party........................................ Article IX
Transaction Documents.............................. Article IX
User Documentation................................. Article IX
WARN............................................... Article IX
Washington Secretary............................... Article IX
WBCA............................................... Recital A
EXHIBIT A
NOTICE TO THE INTERNAL REVENUE SERVICE
This notice is being provided by Onyx Software Corporation, a Washington
corporation (the "Company"), pursuant to the requirements of Treasury Regulation
Section 1.897-2(H)(2).
The Company is located at 0000 000xx Xxxxxx XX, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000. The Company's Taxpayer Identification Number is 00-0000000.
The attached Notice of Non-U.S. Real Property Holding Corporation Status
was not requested by a foreign interest holder. Rather, it was requested by M2M
Holdings, Inc., a Delaware corporation ("Parent"), the transferee of capital
stock of the Company. Parent is located at 00 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000. Parent's Taxpayer Identification Number is ____________.
The interests in question (shares of the Company stock to be received by
Parent pursuant to an Agreement and Plan of Merger) are not U.S. Real Property
Interests.
Under penalties of perjury, I declare that I have examined this notice and
the attachment hereto and to the best of my knowledge and belief they are true,
correct and complete, and I further declare that I have authority to sign this
document on behalf of the Company.
ONYX SOFTWARE CORPORATION
Dated: ________________, 2006 By
-------------------------------------
Chief Executive Officer
NOTICE OF NON-U.S. REAL PROPERTY HOLDING CORPORATION
STATUS PURSUANT TO TREASURY REGULATION
SECTION 1.897-2(H) AND CERTIFICATION OF NON-FOREIGN STATUS
Pursuant to an Agreement and Plan of Merger, dated as of June 5, 2006,
among M2M Holdings, Inc., a Delaware corporation ("Parent"), Orion Acquisition
Corporation, a Washington corporation and wholly owned subsidiary of Parent
("Merger Sub"), and Onyx Software Corporation, a Washington corporation (the
"Company"), Merger Sub shall be merged with and into the Company, and the
Company will become a wholly owned subsidiary of Parent. In completing that
merger, Parent will receive shares of the Company's capital stock in exchange
for the merger consideration provided for in the Agreement and Plan of Merger.
Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that a transferee of a U.S. Real Property Interest must withhold tax if
the transferor is not a U.S. person. In order to confirm that Parent, as
transferee, is not required to withhold tax upon the receipt of the capital
stock of the Company in exchange for the merger consideration, the undersigned,
in his capacity as Chief Executive Officer of the Company, hereby certifies as
follows:
1. The capital stock of the Company outstanding immediately prior to the
merger does not constitute a U.S. Real Property Interest as that term
is defined in Section 897(c)(1)(A)(ii) of the Code.
2. The assertion in Paragraph 1 above is based on a determination by the
Company that the Company is not and has not been a U.S. Real Property
Holding Corporation, as that term is defined in Section 897(c)(2) of
the Code, at any time during the five-year period preceding the date
of this Notice.
3. The Company is not a foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Code and
the related regulations).
4. The Company's U.S. employer identification number is 00-0000000.
5. The Company is not a disregarded entity as defined in Section
1.1445-2(b)(2)(iii) of the Treasury Regulations.
6. The Company's office address is 0000 -- 000xx Xxx. XX, Xxxxx 000,
Xxxxxxx, XX 00000.
7. The Company will file this notice with the Internal Revenue Service
within 30 days after this notice is delivered to Parent.
This notice is made in accordance with the requirements of Treasury
Regulation Sections 1.897-2(h) and 1.1445-2(c)(3). The Company understands that
any false statement contained herein could be punished by fine, imprisonment or
both.
Under penalties of perjury I declare that I have examined this notice and
to the best of my knowledge and belief it is true, correct and complete, and I
further declare that I have authority to sign this notice on behalf of the
Company.
ONYX SOFTWARE CORPORATION
Dated: ________________, 2006 By
-------------------------------------
Chief Executive Officer
