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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among:
BROADVISION, INC.,
a Delaware corporation;
INFINITI ACQUISITION SUB, INC.,
a Massachusetts corporation; and
INTERLEAF, INC.,
a Massachusetts corporation
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Dated as of January 26, 2000
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Section 1. Description of Transaction..........................................1
1.1 Merger of Merger Sub into the Company...............................1
1.2 Effect of the Merger................................................1
1.3 Closing; Effective Time.............................................1
1.4 Articles of Organization and Bylaws; Directors and Officers.........2
1.5 Conversion of Shares................................................2
1.6 Closing of the Company's Transfer Books.............................4
1.7 Exchange of Certificates............................................4
1.8 Dissenting Shares...................................................5
1.9 Tax Consequences....................................................6
1.10 Further Action......................................................6
Section 2. Representations and Warranties of the Company.......................6
2.1 Due Organization; Subsidiaries; Etc.................................6
2.2 Articles of Organization and Bylaws.................................7
2.3 Capitalization, Etc.................................................7
2.4 SEC Filings; Financial Statements...................................8
2.5 Absence of Changes..................................................9
2.6 Title to Assets....................................................10
2.7 Receivables; Customers.............................................11
2.8 Real Property; Equipment; Leasehold................................11
2.9 Proprietary Assets.................................................11
2.10 Contracts..........................................................14
2.11 Sale of Products; Performance of Services..........................15
2.12 Liabilities........................................................15
2.13 Compliance with Legal Requirements.................................15
2.14 Certain Business Practices.........................................16
2.15 Governmental Authorizations........................................16
2.16 Tax Matters........................................................16
2.17 Employee and Labor Matters; Benefit Plans..........................17
2.18 Environmental Matters..............................................20
2.19 Insurance..........................................................21
2.20 Transactions with Affiliates.......................................21
2.21 Legal Proceedings; Orders..........................................21
2.22 Authority; Inapplicability of Anti-takeover Statutes;
Binding Nature of Agreement........................................21
2.23 Inapplicability of Section 2115(b) of California
Corporations Code..................................................22
2.24 Vote Required......................................................22
2.25 Non-Contravention; Consents........................................22
2.26 Fairness Opinion...................................................23
2.27 Financial Advisor..................................................23
2.28 Disclosure.........................................................23
Section 3. Representations and Warranties of Parent and Merger Sub............24
3.1 Due Organization; Subsidiaries.....................................24
3.2 Capitalization.....................................................24
3.3 SEC Filings; Financial Statements..................................24
3.4 Absence of Changes.................................................25
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3.5 Liabilities........................................................25
3.6 Compliance with Legal Requirements.................................25
3.7 Tax Matters........................................................25
3.8 Environmental Matters..............................................26
3.9 Legal Proceedings..................................................26
3.10 Authority; Binding Nature of Agreement.............................26
3.11 No Vote Required...................................................26
3.12 Non-Contravention; Consents........................................26
3.13 Valid Issuance.....................................................27
3.14 Financial Advisor..................................................27
3.15 Disclosure.........................................................27
Section 4. Certain Covenants of the Parties...................................27
4.1 Access and Investigation...........................................27
4.2 Operation of the Company's Business................................29
4.3 No Solicitation....................................................31
4.4 Operation of Parent's Business.....................................33
Section 5. Additional Covenants of the Parties................................34
5.1 Registration Statement; Prospectus/Proxy Statement.................34
5.2 Company Stockholders' Meeting......................................35
5.3 Regulatory Approvals...............................................35
5.4 Stock Options......................................................36
5.5 Employee Benefits..................................................37
5.6 Indemnification of Officers and Directors..........................38
5.7 Additional Agreements..............................................39
5.8 Disclosure.........................................................40
5.9 Tax Matters........................................................40
5.10 Listing and Frankfurt Stock Exchange...............................40
5.11 Resignation of Officers and Directors..............................40
Section 6. Conditions Precedent to Obligations of Parent and Merger Sub.......40
6.1 Accuracy of Representations........................................40
6.2 Performance of Covenants...........................................41
6.3 Effectiveness of Registration Statement............................41
6.4 Stockholder Approval...............................................41
6.5 Consents...........................................................41
6.6 Agreements and Documents...........................................41
6.7 Employees..........................................................42
6.8 No Material Adverse Effect.........................................42
6.9 HSR Act............................................................42
6.10 Frankfurt Stock Exchange...........................................42
6.11 Listing............................................................42
6.12 No Restraints......................................................42
6.13 No Governmental Litigation.........................................42
Section 7. Conditions Precedent to Obligation of the Company..................43
7.1 Accuracy of Representations........................................43
7.2 Performance of Covenants...........................................43
7.3 Effectiveness of Registration Statement............................43
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7.4 Stockholder Approval...............................................43
7.5 Documents..........................................................43
7.6 No Material Adverse Effect.........................................43
7.7 HSR Act............................................................44
7.8 Listing............................................................44
7.9 No Restraints......................................................44
8.1 Termination........................................................44
8.2 Effect of Termination..............................................45
8.3 Expenses; Termination Fees.........................................45
Section 9. Miscellaneous Provisions...........................................47
9.1 Amendment..........................................................47
9.2 Waiver.............................................................47
9.3 No Survival of Representations and Warranties......................47
9.4 Entire Agreement; Counterparts.....................................47
9.5 Applicable Law; Jurisdiction.......................................47
9.6 Attorneys' Fees....................................................48
9.7 Assignability......................................................48
9.8 Notices............................................................48
9.9 Cooperation........................................................49
9.10 Construction.......................................................49
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EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION ("Agreement") is made
and entered into as of January 26, 2000, by and among: BROADVISION, INC., a
Delaware corporation ("Parent"); INFINITI ACQUISITION SUB, INC., a Massachusetts
corporation and a wholly owned subsidiary of Parent ("Merger Sub"); and
INTERLEAF, INC., a Massachusetts corporation (the "Company"). Certain
capitalized terms used in this Agreement are defined in Exhibit A.
RECITALS
A. Parent, Merger Sub and the Company intend to effect a merger of Merger
Sub into the Company (the "Merger") in accordance with this Agreement and the
Massachusetts Business Corporation Law (the "MBCL"). Upon consummation of the
Merger, Merger Sub will cease to exist, and the Company will become a wholly
owned subsidiary of Parent.
B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). For financial reporting purposes, it is anticipated that
the Merger be accounted for as a purchase.
C. The respective boards of directors of Parent, Merger Sub and the Company
have approved this Agreement and approved the Merger.
D. In order to induce Parent to enter into this Agreement and to consummate
the Merger, concurrently with the execution and delivery of this Agreement the
Company is entering into a stock option agreement with Parent (the "Stock Option
Agreement"), pursuant to which the Company has granted to Parent an option,
exercisable under the circumstances specified therein, to purchase shares of
Company Common Stock.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
SECTION 1. DESCRIPTION OF TRANSACTION
1.1 Merger of Merger Sub into the Company. Upon the terms and subject
to the conditions set forth in this Agreement, at the Effective Time (as defined
in Section 1.3), Merger Sub shall be merged with and into the Company, and the
separate existence of Merger Sub shall cease. The Company will continue as the
surviving corporation in the Merger (the "Surviving Corporation").
1.2 Effect of the Merger. The Merger shall have the effects set forth
in this Agreement and in the applicable provisions of the MBCL.
1.3 Closing; Effective Time. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Cooley
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Godward LLP, Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx, at 10:00
a.m. on a date to be designated by Parent (the "Closing Date"), which shall be
no later than the fifth business day after the satisfaction or waiver of the
last to be satisfied or waived of the conditions set forth in Sections 6 and 7
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such conditions). Subject
to the provisions of this Agreement, an articles of merger (the "Articles of
Merger") satisfying the applicable requirements of the MBCL shall be duly
executed by the Company and Merger Sub and, simultaneously with or as soon as
practicable following the Closing, delivered to the Secretary of State of the
Commonwealth of Massachusetts for filing. The Merger shall become effective upon
the latest of: (a) the date and time of the filing of the Articles of Merger
with the Secretary of State of the Commonwealth of Massachusetts, or (b) such
other date and time as may be specified in the Articles of Merger with the
consent of Parent (the "Effective Time").
1.4 Articles of Organization and Bylaws; Directors and Officers.
Unless otherwise determined by Parent prior to the Effective Time:
(a) the Articles of Organization of the Surviving Corporation
shall be amended and restated as of the Effective Time to conform to Exhibit B;
(b) the Bylaws of the Surviving Corporation shall be amended and
restated as of the Effective Time to conform to the Bylaws of Merger Sub as in
effect immediately prior to the Effective Time; and
(c) the directors and officers of the Surviving Corporation
immediately after the Effective Time shall be the respective individuals who are
directors and officers of Merger Sub immediately prior to the Effective Time.
1.5 Conversion of Shares.
(a) At the Effective Time, by virtue of the Merger and without
any further action on the part of Parent, Merger Sub, the Company or any
stockholder of the Company:
(i) any shares of Company Common Stock then held by the
Company or any wholly owned Subsidiary of the Company (or held in the Company's
treasury) shall be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor;
(ii) any shares of Company Common Stock then held by Parent,
Merger Sub or any other wholly owned Subsidiary of Parent shall be canceled and
retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor;
(iii) except as provided in clauses "(i)" and "(ii)" above
and subject to Sections 1.5(b), 1.5(c) and 1.5(d), each share of Company Common
Stock then outstanding shall be converted into the right to receive 0.3465 of a
share of Parent Common Stock;
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(iv) each share of the common stock, $0.01 par value per
share, of Merger Sub then outstanding shall be converted into one share of
common stock of the Surviving Corporation; and
(v) (x) the Finpiave Warrant (as defined in Section 2.3(b)),
to the extent outstanding immediately prior to the Effective Time, shall be
converted into the right to receive, upon the exercise thereof, the number of
shares of Parent Common Stock that the holder thereof would have received had
such holder exercised the Finpiave Warrant immediately prior to the Effective
Time and the shares of Company Common Stock that would have been held by such
holder upon such exercise were converted into Parent Common Stock pursuant to
this Section 1.5; and (y) each of the Series D Warrants (as defined in Section
2.3(b)), to the extent outstanding immediately prior to the Effective Time,
shall be converted into the right to receive, upon the exercise thereof, the
number of shares of Parent Common Stock that the holder thereof would have
received had such holder exercised such Series D Warrant and elected to convert
the shares of Series D (as defined in Section 2.3(b)) issuable upon such
exercise, in each case, immediately prior to the Effective Time, and the shares
of Company Common Stock that would have been held by such holder upon such
exercise and conversion were converted into Parent Common Stock pursuant to this
Section 1.5.
The fraction of a share of Parent Common Stock specified in clause "(iii)" of
the preceding sentence (as such fraction may be adjusted in accordance with
Section 1.5(b)) is referred to as the "Exchange Ratio."
(b) If, between the date of this Agreement and the Effective
Time, the outstanding shares of Company Common Stock or Parent Common Stock are
changed into a different number or class of shares by reason of any stock split,
division or subdivision of shares, stock dividend, reverse stock split,
reclassification, recapitalization or other similar transaction, then the
Exchange Ratio shall be appropriately adjusted.
(c) If any shares of Company Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with the Company or under which the
Company has any rights, then, unless the terms governing such Company Common
Stock provide that such restriction, repurchase right or risk of forfeiture will
be automatically waived in connection with the transactions contemplated by this
Agreement, the shares of Parent Common Stock issued in exchange for such shares
of Company Common Stock will also be unvested and subject to the same repurchase
option, risk of forfeiture or other condition, and the certificates representing
such shares of Parent Common Stock may accordingly be marked with appropriate
legends.
(d) No fractional shares of Parent Common Stock shall be issued
in connection with the Merger, and no certificates or scrip for any such
fractional shares shall be issued. Any holder of Company Common Stock who would
otherwise be entitled to receive a fraction of a share of Parent Common Stock
(after aggregating all fractional shares of Parent Common Stock issuable to such
holder) shall, in lieu of such fraction of a share and upon surrender of such
holder's Company Stock Certificate(s) (as defined in Section 1.6), be paid in
cash the dollar amount (rounded to the nearest whole cent), without interest,
determined by
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multiplying such fraction by the closing price of a share of Parent Common Stock
on the Nasdaq National Market on the date the Merger becomes effective.
1.6 Closing of the Company's Transfer Books. At the Effective Time:
(a) all shares of Company Common Stock outstanding immediately prior to the
Effective Time shall automatically be canceled and retired and shall cease to
exist, and all holders of certificates representing shares of Company Common
Stock that were outstanding immediately prior to the Effective Time shall cease
to have any rights as stockholders of the Company; and (b) the stock transfer
books of the Company shall be closed with respect to all shares of Company
Common Stock outstanding immediately prior to the Effective Time. No further
transfer of any such shares of Company Common Stock shall be made on such stock
transfer books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any shares of Company Common Stock (a
"Company Stock Certificate") is presented to the Exchange Agent (as defined in
Section 1.7) or to the Surviving Corporation or Parent, such Company Stock
Certificate shall be canceled and shall be exchanged as provided in Section 1.7.
1.7 Exchange of Certificates.
(a) On or prior to the Closing Date, Parent shall select a
reputable bank or trust company to act as exchange agent in the Merger (the
"Exchange Agent"). Promptly after the Effective Time, Parent shall deposit with
the Exchange Agent (i) certificates representing the shares of Parent Common
Stock issuable pursuant to this Section 1, and (ii) cash sufficient to make
payments in lieu of fractional shares in accordance with Section 1.5(d). The
shares of Parent Common Stock and cash amounts so deposited with the Exchange
Agent, together with any dividends or distributions received by the Exchange
Agent with respect to such shares, are referred to collectively as the "Exchange
Fund."
(b) As soon as reasonably practicable after the Effective Time,
Parent will cause the Exchange Agent will mail to the record holders of Company
Stock Certificates (i) a letter of transmittal in customary form and containing
such provisions as Parent may reasonably specify (including a provision
confirming that delivery of Company Stock Certificates shall be effected, and
risk of loss and title to Company Stock Certificates shall pass, only upon
delivery of such Company Stock Certificates to the Exchange Agent), and (ii)
instructions for use in effecting the surrender of Company Stock Certificates in
exchange for certificates representing Parent Common Stock. Upon surrender of a
Company Stock Certificate to the Exchange Agent for exchange, together with a
duly executed letter of transmittal and such other documents as may be
reasonably required by the Exchange Agent or Parent, (A) the holder of such
Company Stock Certificate shall be entitled to receive in exchange therefor a
certificate representing the number of whole shares of Parent Common Stock that
such holder has the right to receive pursuant to the provisions of Section 1.5
(and cash in lieu of any fractional share of Parent Common Stock), and (B) the
Company Stock Certificate so surrendered shall be canceled. Until surrendered as
contemplated by this Section 1.7(b), each Company Stock Certificate shall be
deemed, from and after the Effective Time, to represent only the right to
receive shares of Parent Common Stock (and cash in lieu of any fractional share
of Parent Common Stock) as contemplated by Section 1. If any Company Stock
Certificate shall have been lost, stolen or destroyed, Parent may, in its
discretion and as a condition precedent to the issuance of any certificate
representing Parent Common Stock, require the owner of such lost, stolen or
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destroyed Company Stock Certificate to provide an appropriate affidavit and to
deliver a bond (in such sum as Parent may reasonably direct) as indemnity
against any claim that may be made against the Exchange Agent, Parent or the
Surviving Corporation with respect to such Company Stock Certificate.
(c) No dividends or other distributions declared or made with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Company Stock Certificate with
respect to the shares of Parent Common Stock that such holder has the right to
receive in the Merger until such holder surrenders such Company Stock
Certificate in accordance with this Section 1.7 (at which time such holder shall
be entitled, subject to the effect of applicable escheat or similar laws, to
receive all such dividends and distributions, without interest).
(d) Any portion of the Exchange Fund that remains undistributed
to holders of Company Stock Certificates as of the first anniversary of the date
on which the Merger becomes effective shall be delivered to Parent upon demand,
and any holders of Company Stock Certificates who have not theretofore
surrendered their Company Stock Certificates in accordance with this Section 1.7
shall thereafter look only to Parent for satisfaction of their claims for Parent
Common Stock, cash in lieu of fractional shares of Parent Common Stock and any
dividends or distributions with respect to Parent Common Stock.
(e) Each of the Exchange Agent, Parent and the Surviving
Corporation shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable pursuant to this Agreement to any holder or
former holder of Company Common Stock such amounts as may be required to be
deducted or withheld therefrom under the Code or any provision of state, local
or foreign tax law or under any other applicable Legal Requirement. To the
extent such amounts are so deducted or withheld, such amounts shall be treated
for all purposes under this Agreement as having been paid to the Person to whom
such amounts would otherwise have been paid.
(f) Neither Parent nor the Surviving Corporation shall be liable
to any holder or former holder of Company Common Stock or to any other Person
with respect to any shares of Parent Common Stock (or dividends or distributions
with respect thereto), or for any cash amounts, delivered to any public official
pursuant to any applicable abandoned property law, escheat law or similar Legal
Requirement.
1.8 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, the shares of any holder of Company Common Stock who has demanded and
perfected appraisal rights for such shares in accordance with the MBCL and who,
as of the Effective Time, has not effectively withdrawn or lost such appraisal
rights (the "Dissenting Shares"), shall not be converted into or represent a
right to receive Parent Common Stock pursuant to Section 1.5, but the holder
thereof shall only be entitled to such rights as are granted by the MBCL.
(b) Notwithstanding the foregoing, if any holder of shares of
Company Common Stock who demands appraisal of such shares under the MBCL shall
effectively
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withdraw the request for appraisal or lose the right to appraisal, then, as of
the later of the Effective Time and the occurrence of such event, such holder's
shares shall automatically be converted into and represent only the right to
receive Parent Common Stock and cash in lieu of fractional shares, without
interest thereon, upon surrender of the Company Stock Certificates representing
such shares.
(c) The Company shall give Parent (i) prompt notice of any
written demands for appraisal of any shares of Company Common Stock, withdrawals
of such demands and any other instruments served pursuant to the MBCL and
received by Company, which relate to any such demand for appraisal and (ii) the
opportunity to participate in all negotiations and proceedings which take place
prior to the Effective Time with respect to demands for appraisal under the
MBCL. Company shall not, except with the prior written consent of Parent or as
may be required by applicable law, voluntarily make any payment with respect to
any demands for appraisal of Company Common Stock or offer to settle or settle
any such demands.
1.9 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.10 Further Action. If, at any time after the Effective Time, any
further action is determined by Parent to be necessary or desirable to carry out
the purposes of this Agreement or to vest the Surviving Corporation with full
right, title and possession of and to all rights and property of Merger Sub and
the Company, the officers and directors of the Surviving Corporation and Parent
shall be fully authorized (in the name of Merger Sub, in the name of the Company
and otherwise) to take such action.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub that, except
as set forth in the Company SEC Documents (as defined in Section 2.4) or the
Company Disclosure Schedule:
2.1 Due Organization; Subsidiaries; Etc.
(a) Part 2.1(a)(i) of the Company Disclosure Schedule sets forth
all of the Company's Subsidiaries. Neither the Company nor any of the other
corporations identified in Part 2.1(a)(i) of the Company Disclosure Schedule
owns any capital stock of, or any equity interest of any nature in, any other
Entity. (The Company and each of its Subsidiaries are referred to collectively
in this Agreement as the "Acquired Corporations.") None of the Acquired
Corporations has agreed or is obligated to make, or is bound by any Contract
under which it may become obligated to make, any future investment in or capital
contribution to any other Entity.
(b) Each of the Acquired Corporations is a corporation duly
organized, validly existing and in good standing (in jurisdictions that
recognize such concept) under the laws of the jurisdiction of its incorporation
and has all necessary power and authority: (i) to
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conduct its business in the manner in which its business is currently being
conducted; and (ii) to own and use its assets in the manner in which its assets
are currently owned and used.
(c) Each of the Acquired Corporations is qualified to do business
as a foreign corporation, and is in good standing (in jurisdictions that
recognize such concept), under the laws of all jurisdictions where the nature of
its business requires such qualification.
2.2 Articles of Organization and Bylaws. The Company has delivered or
made available (at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or
Xxxxx Xxxxxxxx) to Parent accurate and complete copies of the articles of
organization, bylaws and other charter and organizational documents of the
respective Acquired Corporations, including all amendments thereto.
2.3 Capitalization, Etc.
(a) The authorized capital stock of the Company consists of: (i)
50,000,000 shares of Company Common Stock, of which 13,510,416 shares were
issued and are outstanding as of January 24, 2000; and (ii) 5,000,000 shares of
Preferred Stock, $0.10 par value per share, of which no shares are outstanding.
The Company does not hold any shares of its capital stock in its treasury. All
of the outstanding shares of Company Common Stock have been duly authorized and
validly issued, and are fully paid and nonassessable. There are no shares of
Company Common Stock held by any of the other Acquired Corporations. None of the
outstanding shares of Company Common Stock is entitled or subject to any
preemptive right, right of participation, right of maintenance or any similar
right granted by the Company. None of the outstanding shares of Company Common
Stock is subject to any right of first refusal in favor of the Company. There is
no Acquired Corporation Contract relating to the voting or registration of, or
restricting any Person from purchasing, selling, pledging or otherwise disposing
of (or granting any option or similar right with respect to), any shares of
Company Common Stock. None of the Acquired Corporations is under any obligation,
or is bound by any Contract pursuant to which it may become obligated, to
repurchase, redeem or otherwise acquire any outstanding shares of Company Common
Stock.
(b) As of the date of this Agreement: (i) 1,717,387 shares of
Company Common Stock are subject to issuance pursuant to stock options granted
and outstanding under the Company's 1993 Stock Option Plan; (ii) 96,917 shares
of Company Common Stock are subject to issuance pursuant to stock options
granted and outstanding under the Company's 1993 Director Stock Option Plan;
(iii) 299,682 shares of Company Common Stock are subject to issuance pursuant to
stock options granted and outstanding under the Company's 1994 Employee Stock
Option Plan; (iv) 241,667 shares of Company Common Stock are subject to issuance
pursuant to stock options granted and outstanding under the Company's 1997 Key
Man Stock Option Plan and Agreement; (v) 75,000 shares of Company Common Stock
are subject to issuance pursuant to stock options granted and outstanding under
the Company's 1998 Key Man Stock Option Plan and Agreement; (vi) 666,667 shares
of Company Common Stock are reserved for future issuance pursuant to the
Company's 1998 Employee Stock Purchase Plan (the "ESPP"); and (vii) 66,667
shares of Company Common Stock are subject to issuance pursuant to a warrant
issued to Finpiave, S.p.A. at an exercise price of $0.01 per share (the
"Finpiave Warrant") and 763 shares of 6% Convertible Preferred Stock of the
Company (the "Series D")
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are subject to issuance pursuant to three warrants issued to certain principals
of Xxxxxxxx Capital Corporation or their immediate family members at an exercise
price of $1,000 per share (the "Series D Warrants"). (Stock options granted by
the Company (whether pursuant to the Company's stock option plans or otherwise)
are referred to in this Agreement as "Company Options.") Part 2.3(b) of the
Company Disclosure Schedule sets forth the following information with respect to
each Company Option outstanding as of the date of this Agreement: (i) the
particular plan (if any) pursuant to which such Company Option was granted; (ii)
the name of the optionee; (iii) the number of shares of Company Common Stock
subject to such Company Option; (iv) the exercise price of such Company Option;
(v) the date on which such Company Option was granted; and (vi) the extent to
which such Company Option is vested and exercisable as of the date of this
Agreement. The Company has delivered or made available (at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or Xxxxx Xxxxxxxx) to Parent accurate
and complete copies of all stock option plans pursuant to which the Company has
outstanding stock options, and the forms of all stock option agreements
evidencing such outstanding options. The Company has delivered to Parent
accurate and complete copies of the Company Warrants.
(c) Except as set forth in Section 2.3(b), there is no: (i)
outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock or other
securities of any of the Acquired Corporations; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of any of the Acquired
Corporations; (iii) stockholder rights plan (or similar plan commonly referred
to as a "poison pill") or Contract under which any of the Acquired Corporations
is or may become obligated to sell or otherwise issue any shares of its capital
stock or any other securities; or (iv) condition or circumstance that may give
rise to or provide a basis for the assertion of a claim by any Person to the
effect that such Person is entitled to acquire or receive any shares of capital
stock or other securities of any of the Acquired Corporations.
(d) All outstanding shares of Company Common Stock, all
outstanding Company Options and all outstanding shares of capital stock of each
Subsidiary of the Company have been issued and granted in compliance with (i)
all applicable securities laws and other applicable Legal Requirements, and (ii)
all requirements set forth in applicable Contracts.
(e) All of the outstanding shares of capital stock of each of the
Company's Subsidiaries (other than nominee shares of certain foreign
Subsidiaries of the Company held on behalf of the Company) have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
beneficially and of record by the Company, free and clear of any Encumbrances.
2.4 SEC Filings; Financial Statements.
(a) The Company has delivered or made available to Parent
accurate and complete copies of all registration statements, proxy statements
and other statements, reports, schedules, forms and other documents filed by the
Company with the SEC since March 31, 1998, and all amendments thereto (the
"Company SEC Documents"). All statements, reports, schedules, forms and other
documents required to have been filed by the Company with
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the SEC since March 31, 1998 have been so filed on a timely basis. As of the
time it was filed with the SEC (or, if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing): (i) each of the
Company SEC Documents complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the case may be); and
(ii) none of the Company SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The financial statements (including any related notes)
contained in the Company SEC Documents: (i) complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered (except as may be
indicated in the notes to such financial statements or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC, and except that the unaudited
financial statements may not contain footnotes and are subject to normal and
recurring year-end adjustments that will not, individually or in the aggregate,
be material in amount), and (iii) fairly present the consolidated financial
position of the Company and its consolidated subsidiaries as of the respective
dates thereof and the consolidated results of operations and cash flows of the
Company and its consolidated subsidiaries for the periods covered thereby.
2.5 Absence of Changes. Between September 30, 1999 and the date of
this Agreement:
(a) there has not been any material adverse change in the
business, financial condition, capitalization, assets, liabilities, operations
or results of operations of the Acquired Corporations taken as a whole, and no
event has occurred or circumstance has arisen that, in combination with any
other events or circumstances, could reasonably be expected to result in any
material adverse change in the business, financial condition, capitalization,
assets, liabilities, operations or results of operations of the Acquired
Corporations taken as a whole;
(b) none of the Acquired Corporations has (i) declared, accrued,
set aside or paid any dividend or made any other distribution in respect of any
shares of capital stock, or (ii) repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities, other than dividends,
distributions, repurchases, redemptions or other acquisitions between Parent
and/or any of its wholly owned Subsidiaries;
(c) the Company has not amended or waived any of its rights
under, or, except in accordance with their existing terms, permitted the
acceleration of vesting under, (i) any provision of any of the Company's stock
option plans, (ii) any provision of any Contract evidencing any outstanding
Company Option, or (iii) any restricted stock purchase agreement;
(d) there has been no amendment to the certificate of
incorporation, bylaws or other charter or organizational documents of any of the
Acquired Corporations, and, except as permitted pursuant to Section 4.3, none of
the Acquired Corporations has effected or
9
been a party to any merger, consolidation, share exchange, business combination,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(e) none of the Acquired Corporations has made any capital
expenditure which, when added to all other capital expenditures made on behalf
of the Acquired Corporations between September 30, 1999 and the date of this
Agreement, exceeds $1,250,000 in the aggregate;
(f) except in the ordinary course of business and consistent with
past practices, none of the Acquired Corporations has (i) entered into or
permitted any of the assets owned or used by it to become bound by any Material
Contract (as defined in Section 2.10), or (ii) amended or terminated, or waived
any material right or remedy under, any Material Contract;
(g) none of the Acquired Corporations has written off as
uncollectible, or established any extraordinary reserve with respect to, any
account receivable or other indebtedness;
(h) none of the Acquired Corporations has made any pledge of any
of its assets or otherwise permitted any of its assets to become subject to any
Encumbrance, except for (i) pledges of immaterial assets made in the ordinary
course of business and consistent with past practices or (ii) any lien for Taxes
not yet due and payable;
(i) none of the Acquired Corporations has (i) lent money to any
Person, or (ii) incurred or guaranteed any indebtedness for borrowed money;
(j) none of the Acquired Corporations has changed any of its
methods of accounting or accounting practices in any material respect;
(k) none of the Acquired Corporations has made any material Tax
election not required to be made by any applicable Legal Requirement;
(l) none of the Acquired Corporations has commenced or settled
any Legal Proceeding;
(m) none of the Acquired Corporations has entered into any
material transaction or taken any other material action that has had, or could
reasonably be expected to have, a Material Adverse Effect on the Acquired
Corporations; and
(n) none of the Acquired Corporations has agreed or committed to
take any of the actions referred to in clauses "(c)" through "(m)" above.
2.6 Title to Assets. The Acquired Corporations own, and have good and
valid title to, all assets purported to be owned by them, including: (a) all
assets reflected on the Unaudited Interim Balance Sheet (except for inventory
sold or otherwise disposed of in the ordinary course of business since the date
of the Unaudited Interim Balance Sheet); and (b) all other assets reflected in
the books and records of the Acquired Corporations as being owned by the
Acquired Corporations. All of said assets are owned by the Acquired Corporations
free and clear of any Encumbrances, except for (i) any lien for Taxes not yet
due and payable, (ii) minor
10
liens that have arisen in the ordinary course of business and that do not (in
any case or in the aggregate) materially detract from the value of the assets
subject thereto or materially impair the operations of any of the Acquired
Corporations, and (iii) liens described in the Company Disclosure Schedule.
2.7 Receivables; Customers. All existing accounts receivable of the
Acquired Corporations (including those accounts receivable reflected on the
Unaudited Interim Balance Sheet that have not yet been collected and those
accounts receivable that have arisen since September 30, 1999 and have not yet
been collected) (a) represent valid obligations of customers of the Acquired
Corporations arising from bona fide transactions entered into in the ordinary
course of business, (b) are current and, to the Company's knowledge, will be
collected in full when due, without any counterclaim or set off (net of an
allowance for doubtful accounts not to exceed $966,000 in the aggregate). The
Company has not received any written notice or other written (including
electronic) communication, and has not received any other information,
indicating that any customer or other Person accounting for more than 10% of the
gross revenues received by the Acquired Corporations from the sale of the
Company's BladeRunner and QuickSilver products since the launch of such products
may cease dealing with the Company or may otherwise reduce the volume of
business transacted by such Person with the Company below historical levels.
2.8 Real Property; Equipment; Leasehold. All material items of
equipment and other tangible assets owned by or leased to the Acquired
Corporations are adequate for the uses to which they are being put, are in good
and safe condition and repair (ordinary wear and tear excepted) and are adequate
for the conduct of the business of the Acquired Corporations in the manner in
which such business is currently being conducted.
2.9 Proprietary Assets.
(a) Part 2.9(a)(i) of the Company Disclosure Schedule sets forth,
with respect to each Proprietary Asset owned by the Acquired Corporations and
registered with any Governmental Body or for which an application has been filed
with any Governmental Body, (i) a brief description of such Proprietary Asset,
and (ii) the names of the jurisdictions covered by the applicable registration
or application. Part 2.9(a)(ii) of the Company Disclosure Schedule identifies
and provides a brief description of all other Proprietary Assets owned by the
Acquired Corporations that are material to the business of the Acquired
Corporations. Part 2.9(a)(iii) of the Company Disclosure Schedule identifies and
provides a brief description of, and identifies any ongoing royalty or payment
obligations in excess of $10,000 per quarter with respect to, each Proprietary
Asset that is licensed or otherwise made available to the Acquired Corporations
by any Person and is material to the business of the Acquired Corporations
(except for any Proprietary Asset that is licensed to the Acquired Corporations
under any third party software license generally available to the public or that
was at the time the license was entered into available on substantially similar
terms to companies that are similarly situated), and identifies the Contract
under which such Proprietary Asset is being licensed or otherwise made available
to such Acquired Corporation. The Acquired Corporations have good and valid
title to all of the Acquired Corporation Proprietary Assets owned by the
Acquired Corporations, free and clear of all Encumbrances, except for (i) any
lien for Taxes not yet due and payable, and (ii) minor liens that have arisen in
the ordinary course of business and that do not (individually or in the
11
aggregate) materially detract from the value of the assets subject thereto or
materially impair the operations of either of the Acquired Corporations. The
Acquired Corporations have a valid right to use, license and otherwise exploit
all Proprietary Assets required to be identified in Part 2.9(a)(iii) of the
Company Disclosure Schedule subject to the terms of any applicable Contracts.
Except as set forth in Part 2.9(a)(iv) of the Company Disclosure Schedule, none
of the Acquired Corporations has developed jointly with any other Person any
Acquired Corporation Proprietary Asset that is material to the business of the
Acquired Corporations with respect to which such other Person has any rights.
There is no Acquired Corporation Contract (with the exception of end user
license agreements in the form previously delivered or made available (at the
offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or Xxxxx Xxxxxxxx) by the
Company to Parent) pursuant to which any Person has any right (whether or not
currently exercisable) to use, license or otherwise exploit any Acquired
Corporation Proprietary Asset, other than Acquired Corporation Contracts for the
distribution of products of the Acquired Corporations by distributors, resellers
and channel partners.
(b) The Acquired Corporations have taken reasonable measures and
precautions to protect and maintain the confidentiality, secrecy and value of
all material Acquired Corporation Proprietary Assets (except Acquired
Corporation Proprietary Assets whose value would be unimpaired by disclosure).
Without limiting the generality of the foregoing, (i) all current and former
employees of the Acquired Corporations who are or were involved in, or who have
contributed to, the creation or development of any material Acquired Corporation
Proprietary Asset have executed and delivered to the Acquired Corporations an
agreement (containing no material exceptions to or exclusions from the scope of
its coverage) that is substantially identical to the form of Invention and
Nondisclosure Agreement previously delivered by the Company to Parent, and (ii)
all current and former consultants and independent contractors to the Acquired
Corporations who are or were involved in, or who have contributed to, the
creation or development of any material Acquired Corporation Proprietary Asset
have executed and delivered to the Company an agreement (containing no material
exceptions to or exclusions from the scope of its coverage) that is
substantially identical to one of the two forms of Contractor Agreements
previously delivered to Parent. No current or former employee, officer,
director, stockholder, consultant or independent contractor has any right, claim
or interest in or with respect to any Acquired Corporation Proprietary Asset.
(c) To the knowledge of the Company: (i) all patents, trademark
registrations currently used in the business of the Acquired Corporations,
service xxxx registrations currently used in the business of the Acquired
Corporations and copyright registrations held by any of the Acquired
Corporations are valid, enforceable and subsisting; (ii) none of the Acquired
Corporation Proprietary Assets and no Proprietary Asset that is currently being
developed by any of the Acquired Corporations (either by itself or with any
other Person) infringes, misappropriates or conflicts with any rights in any
Proprietary Asset owned or used by any other Person; (iii) none of the products
that are or have been designed, created, developed, assembled, manufactured or
sold by any of the Acquired Corporations is infringing, misappropriating or
making any unlawful or unauthorized use of any Proprietary Asset owned or used
by any other Person, and none of such products has at any time infringed,
misappropriated or made any unlawful or unauthorized use of, and none of the
Acquired Corporations has received any notice or other communication (in writing
or otherwise) of any actual, alleged, possible or potential infringement,
misappropriation or unlawful or unauthorized use of, any
12
Proprietary Asset owned or used by any other Person; (iv) no other Person is
materially infringing, misappropriating or making any unlawful or unauthorized
use of, and no Proprietary Asset owned or used by any other Person materially
infringes or conflicts with, any Acquired Corporation Proprietary Asset.
(d) The Acquired Corporation Proprietary Assets constitute all
the Proprietary Assets necessary to enable the Acquired Corporations to conduct
their business in the manner in which such business has been and is being
conducted. None of the Acquired Corporations has (i) licensed any of the
material Acquired Corporation Proprietary Assets to any Person on an exclusive
basis, or (ii) entered into any covenant not to compete or Contract limiting its
ability to exploit fully any material Acquired Corporation Proprietary Assets or
to transact business in any market or geographical area or with any Person.
(e) None of the Acquired Corporations has disclosed or delivered
to any Person, or permitted the disclosure or delivery to any escrow agent or
other Person, of any Acquired Corporation Source Code. No event has occurred,
and no circumstance or condition exists, that (with or without notice or lapse
of time) will, or could reasonably be expected to, result in the disclosure or
delivery to any Person of any Acquired Corporation Source Code. Part 2.10(a)(ii)
of the Company Disclosure Schedule identifies each Contract pursuant to which
the Company has deposited or is required to deposit with an escrowholder or any
other Person any Acquired Corporation Source Code, and further describes whether
the execution of this Agreement or the consummation of any of the transactions
contemplated hereby could reasonably be expected to result in the release or
disclosure of any Acquired Corporation Source Code.
(f) To the knowledge of the Company, each computer, computer
program and other item of software (whether installed on a computer or on any
other piece of equipment, including firmware) that is currently used by any of
the Acquired Corporations and material for their internal business operations is
Year 2000 Compliant. To the knowledge of the Company, each computer program and
other item of software that is currently generally offered for sale or otherwise
made available to any Person by any of the Acquired Corporations is Year 2000
Compliant. For purposes of this Section 2.9, a computer, computer program or
other item of software shall be deemed to be "Year 2000 Compliant" only if it
meets the definition of "Year 2000 Compliant" set forth as of the date of this
Agreement on the Company's web page under the heading "Year 2000 Statement."
(g) Except with respect to demonstration or trial copies and
except for security routines intended to restrict the end-user to use within the
scope of such end-user's license, no product, system, program or software module
designed, developed, sold, licensed or otherwise made available by any of the
Acquired Corporations to any Person contains any "back door," "time bomb,"
"Trojan horse," "worm," "drop dead device," "virus" or other software routines
or hardware components designed by or on behalf of any Acquired Corporation to
permit unauthorized access or to disable or erase software, hardware or data
without the consent of the user.
13
2.10 Contracts.
(a) Part 2.10 of the Company Disclosure Schedule identifies each
Acquired Corporation Contract that constitutes a "Material Contract." For
purposes of this Agreement, each of the following shall be deemed to constitute
a "Material Contract":
(i) any Contract (A) pursuant to which any of the Acquired
Corporations is or may become obligated to make any severance, termination or
similar payment to any current or former officer or director, or (B) pursuant to
which any of the Acquired Corporations is or may become obligated to make any
bonus or similar payment (other than payments constituting base salary) in
excess of $100,000 to any current or former employee or director;
(ii) any Contract (A) relating to the acquisition, transfer,
development, sharing or license of any Proprietary Asset (except for any
Contract pursuant to which (1) any Proprietary Asset is licensed to the Acquired
Corporations under any third party software license which is or was at the time
the license was entered into generally available to the public or that is or was
at the time the license was entered into available on substantially similar
terms to companies that are similarly situated, or (2) any Proprietary Asset is
licensed by any of the Acquired Corporations to any Person on a non-exclusive
basis), or (B) of the type required to be set forth in Part 2.9 of the Company
Disclosure Schedule;
(iii) any Contract that provides for indemnification of any
officer, director, employee or agent;
(iv) any Contract imposing any restriction on the right or
ability of any Acquired Corporation (A) to compete with any other Person, (B) to
acquire any product or other asset or any services from any other Person, (C) to
develop, sell, supply, distribute, offer, support or service any product or any
technology or other asset to or for any other Person or (D) to perform services
for any other Person;
(v) any Contract relating to any currency hedging;
(vi) any Contract to which any Governmental Body is a party;
(vii) any other Contract, the breach of which by any
Acquired Corporation could reasonably be expected to have a Material Adverse
Effect on the Acquired Corporations.
The Company has delivered or made available (at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP or Xxxxx Xxxxxxxx) to Parent an accurate and complete
copy of each Acquired Corporation Contract that constitutes a Material Contract.
(b) Each Acquired Corporation Contract that constitutes a
Material Contract is valid and in full force and effect, and is enforceable in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
14
(c) None of the Acquired Corporations has violated or breached,
or committed any default under, any Acquired Corporation Contract that
constitutes a Material Contract, except for violations, breaches and defaults
that have not had and would not reasonably be expected to have a Material
Adverse Effect on the Acquired Corporations; and, to the knowledge of the
Company, no other Person has violated or breached, or committed any default
under, any Acquired Corporation Contract that constitutes a Material Contract,
except for violations, breaches and defaults that have not had and would not
reasonably be expected to have a Material Adverse Effect on the Acquired
Corporations. 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)
will, or would reasonably be expected to, (A) result in a violation or breach of
any of the provisions of any Acquired Corporation Contract that constitutes a
Material Contract, (B) give any Person the right to declare a default or
exercise any remedy under any Acquired Corporation Contract that constitutes a
Material Contract, (C) give any Person the right to receive or require a rebate,
chargeback, penalty or change in delivery schedule under any Acquired
Corporation Contract that constitutes a Material Contract, (D) give any Person
the right to accelerate the maturity or performance of any Acquired Corporation
Contract that constitutes a Material Contract, (E) result in the disclosure,
release or delivery of any Acquired Corporation Source Code, or (F) give any
Person the right to cancel, terminate or modify any Acquired Corporation
Contract that constitutes a Material Contract, except in each such case for
defaults, acceleration rights, termination rights and other rights that have not
had and would not reasonably be expected to have a Material Adverse Effect on
the Acquired Corporations. Since September 30, 1999, none of the Acquired
Corporations has received any written notice or other written (including
electronic) communication regarding any actual or possible violation or breach
of, or default under, any Acquired Corporation Contract that constitutes a
Material Contract, except in each such case for defaults, acceleration rights,
termination rights and other rights that have not had and would not reasonably
be expected to have a Material Adverse Effect on the Acquired Corporations.
2.11 Sale of Products; Performance of Services. Since September 30,
1999, no customer or other Person has asserted or threatened in writing
(including an electronic communication) to assert any claim against any of the
Acquired Corporations (a) under or based upon any warranty provided by or on
behalf of any of the Acquired Corporations, or (b) based upon any services
performed by any of the Acquired Corporations.
2.12 Liabilities. None of the Acquired Corporations has any accrued,
contingent or other liabilities of any nature, either matured or unmatured,
except for: (a) liabilities reflected in the Unaudited Interim Balance Sheet or
the notes thereto; (b) normal and recurring current liabilities that have been
incurred by the Acquired Corporations since September 30, 1999 in the ordinary
course of business and consistent with past practices; (c) liabilities arising
out of this Agreement and the transactions contemplated herein; or (d)
liabilities described in Part 2.12 of the Company Disclosure Schedule.
2.13 Compliance with Legal Requirements. Each of the Acquired
Corporations is, and has at all times since January 1, 1998 been, in compliance
with all applicable Legal Requirements, except where the failure to comply with
such Legal Requirements has not had and would not reasonably be expected to have
a Material Adverse Effect on the Acquired Corporations. Since September 30,
1999, none of the Acquired
15
Corporations has received any written notice or other written (including
electronic) communication from any Governmental Body or other Person regarding
any actual or possible violation of, or failure to comply with, any Legal
Requirement.
2.14 Certain Business Practices. None of the Acquired Corporations,
and (to the knowledge of the Company) no director, officer, agent or employee of
any of the Acquired Corporations, has (a) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (b) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (c) made any other unlawful payment.
2.15 Governmental Authorizations.
(a) The Acquired Corporations hold all Governmental
Authorizations necessary to enable the Acquired Corporations to conduct their
respective businesses in the manner in which such businesses are currently being
conducted, except where the failure to hold such Governmental Authorizations has
not had and would not reasonably be expected to have a Material Adverse Effect
on the Acquired Corporations. All such Governmental Authorizations are valid and
in full force and effect. Each Acquired Corporation is, and at all times since
January 1, 1998 has been, in substantial compliance with the terms and
requirements of such Governmental Authorizations, except where the failure to be
in compliance with the terms and requirements of such Governmental
Authorizations has not had and would not reasonably be expected to have a
Material Adverse Effect on the Acquired Corporations. Since September 30, 1999,
none of the Acquired Corporations has received any written notice or other
written (including electronic) communication from any Governmental Body
regarding (a) any actual or possible violation of or failure to comply with any
term or requirement of any material Governmental Authorization, or (b) any
actual or possible revocation, withdrawal, suspension, cancellation, termination
or modification of any material Governmental Authorization.
(b) No grant, incentive or subsidy has been provided or made
available to or for the benefit of any of the Acquired Corporations by any U.S.
or foreign Governmental Body or otherwise.
2.16 Tax Matters.
(a) Each of the material Tax Returns required to be filed by or
on behalf of the respective Acquired Corporations with any Governmental Body
with respect to any taxable period ending on or before the Closing Date (the
"Acquired Corporation Returns") (i) has been or will be filed on or before the
applicable due date (including any extensions of such due date), and (ii) has
been, or will be when filed, prepared in all material respects in compliance
with all applicable Legal Requirements. All amounts shown on the Acquired
Corporation Returns to be due on or before the Closing Date have been or will be
paid on or before the Closing Date.
(b) The Unaudited Interim Balance Sheet accrues all actual and
contingent liabilities for Taxes with respect to all periods through September
30, 1999 in
16
accordance with generally accepted accounting principles. Each Acquired
Corporation will establish, in the ordinary course of business and consistent
with its past practices, reserves in accordance with generally accepted
accounting principles for the payment of all Taxes for the period from September
30, 1999 through the Closing Date.
(c) No Acquired Corporation Return is currently under examination
or audit by any Governmental Body. No extension or waiver of the limitation
period applicable to any of the Acquired Corporation Returns has been granted
(by the Company or any other Person) that is still in effect, and no such
extension or waiver has been requested from any Acquired Corporation that is
still in effect.
(d) No claim or Legal Proceeding is pending or, to the knowledge
of the Company, has been threatened in writing against or with respect to any
Acquired Corporation in respect of any material Tax. There are no unsatisfied
liabilities for material Taxes (including liabilities for interest, additions to
tax and penalties thereon and related expenses) with respect to any notice of
deficiency or similar document received by any Acquired Corporation with respect
to any material Tax (other than liabilities for Taxes asserted under any such
notice of deficiency or similar document which are being contested in good faith
by the Acquired Corporations and with respect to which reserves in accordance
with generally accepted accounting principles for payment have been established
on the Unaudited Interim Balance Sheet). None of the Acquired Corporations has
been, and none of the Acquired Corporations will be, required to include any
material adjustment in taxable income for any Tax period (or portion thereof)
pursuant to Section 481 or 263A of the Code (or any comparable provision of
state or foreign Tax laws) as a result of transactions or events occurring, or
accounting methods employed, prior to the Closing.
(e) The Company has delivered to Parent all documents relevant to
all agreements, Plans, arrangements or other Contracts covering any employee or
independent contractor or former employee or independent contractor of any of
the Acquired Corporations that, considered individually or considered
collectively with any other such Contracts, will, or could reasonably be
expected to, give rise directly or indirectly to the payment of any amount that
would not be deductible pursuant to Section 280G or Section 162 of the Code (or
any comparable provision under state Tax laws). With respect to the documents
provided pursuant to the preceding sentence, the Company has provided to Parent
the following information: (i) the name of each person who the Company expects
to be a "disqualified individual" within the meaning of Section 280G(c) of the
Code; and (ii) the "base amount" within the meaning of Section 280G(b)(3) of the
Code for each such individual.
(f) None of the Acquired Corporations is, or has ever been, a
party to or bound by any Tax indemnity agreement, Tax sharing agreement, Tax
allocation agreement or similar Contract.
2.17 Employee and Labor Matters; Benefit Plans.
(a) Part 2.17(a) of the Company Disclosure Schedule identifies
each bonus, vacation, deferred compensation, incentive compensation, stock
purchase, stock option, severance pay, termination pay, death and disability
benefits, hospitalization, medical, life or other insurance, flexible benefits,
supplemental unemployment benefits, profit-sharing, pension
17
or retirement plan, program or agreement and each other employee benefit plan or
arrangement (collectively, the "Plans") sponsored, maintained, contributed to or
required to be contributed to by any of the Acquired Corporations for the
benefit of any current or former employee of any of the Acquired Corporations.
None of the Acquired Corporations is obligated to make any severance,
termination or similar payment to any current or former employee or director in
excess of six months of such employee's or director's salary.
(b) None of the Acquired Corporations maintains, sponsors or
contributes to, and none of the Acquired Corporations has at any time in the
past maintained, sponsored or contributed to, any employee pension benefit plan
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any similar pension benefit plan under the laws
of any foreign jurisdiction, whether or not excluded from coverage under
specific Titles or Subtitles of ERISA for the benefit of employees or former
employees of any of the Acquired Corporations (a "Pension Plan").
(c) With respect to each Plan, the Company has delivered or made
available (at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or Xxxxx
Xxxxxxxx) to Parent: (i) an accurate and complete copy of such Plan (including
all amendments thereto); (ii) an accurate and complete copy of the annual
report, if required under ERISA, with respect to such Plan for the last two
years; (iii) an accurate and complete copy of the most recent summary plan
description, together with each summary of material modifications, if required
under ERISA, with respect to such Plan, (iv) if such Plan is funded through a
trust or any third party funding vehicle, an accurate and complete copy of the
trust or other funding agreement (including all amendments thereto) and accurate
and complete copies the most recent financial statements thereof; and (v) an
accurate and complete copy of the most recent determination letter received from
the Internal Revenue Service with respect to such Plan (if such Plan is intended
to be qualified under Section 401(a) of the Code).
(d) None of the Acquired Corporations is or has ever been
required to be treated as a single employer with any other Person under Section
4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code, except for
the Acquired Corporations. None of the Acquired Corporations has ever been a
member of an "affiliated service group" within the meaning of Section 414(m) of
the Code. None of the Plans identified in the Company Disclosure Schedule is a
multiemployer plan (within the meaning of Section 3(37) of ERISA) or subject to
Title IV of ERISA. None of the Acquired Corporations has ever made a complete or
partial withdrawal from a multiemployer plan, as such term is defined in Section
3(37) of ERISA, resulting in "withdrawal liability," as such term is defined in
Section 4201 of ERISA (without regard to subsequent reduction or waiver of such
liability under either Section 4207 or 4208 of ERISA).
(e) None of the Acquired Corporations has any binding commitment
to create any Welfare Plan or any Pension Plan, or to modify or change any
existing Welfare Plan or Pension Plan (other than to comply with applicable law)
in a manner that would affect any current or former employee or director of any
of the Acquired Corporations.
(f) No Plan provides death, medical or health benefits (whether
or not insured) with respect to any current or former employee or director of
any of the Acquired
18
Corporations after any termination of service of such employee or director
(other than benefit coverage mandated by applicable law, including coverage
provided pursuant to Section 4980B of the Code).
(g) Each of the Plans has been operated and administered in all
material respects in accordance with its terms and with applicable Legal
Requirements, including ERISA, the Code and applicable foreign Legal
Requirements. Part 2.17(g) of the Company Disclosure Schedule lists (i) the
former employees of the Acquired Corporations who, as of the date of this
Agreement, have elected continuation coverage under Section 4980B of the Code
with respect to themselves or their dependents and (ii) the qualified
beneficiaries (within the meaning of Section 4980B(g)(1) of the Code) under the
Plans who, as of the date of this Agreement, have elected continuation coverage
under Section 4980B of the Code.
(h) Each of the Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service, and nothing has occurred that could reasonably be
expected to adversely affect such determination.
(i) Neither the execution, delivery or performance of this
Agreement, nor the consummation of the Merger or any of the other transactions
contemplated by this Agreement, will result in any bonus, golden parachute,
severance or other payment or obligation to any current or former employee or
director of any of the Acquired Corporations (whether or not under any Plan), or
materially increase the benefits payable or provided under any Plan, or result
in any acceleration of the time of payment or vesting of any such benefits.
Without limiting the generality of the foregoing (and except as set forth in
Part 2.17(i) of the Company Disclosure Schedule), the consummation of the Merger
will not result in the acceleration of vesting of any unvested Company Options.
(j) Part 2.17(j) of the Company Disclosure Schedule contains a
list of all salaried employees of each of the Acquired Corporations as of the
date of this Agreement, and correctly reflects, in all material respects, their
salaries, any other compensation payable to them (including compensation payable
pursuant to bonus, deferred compensation or commission arrangements), their
dates of employment and their positions. None of the Acquired Corporations is a
party to any collective bargaining contract or other Contract with a labor union
involving any of its employees. To the extent permitted by Legal Requirements,
all employees of the Acquired Corporations are "at will" employees.
(k) Part 2.17(k) of the Company Disclosure Schedule identifies
each employee of any of the Acquired Corporations who is not fully available to
perform work because of disability or other leave.
(l) Each of the Acquired Corporations is in compliance in all
material respects with all applicable Legal Requirements and Contracts relating
to employment, employment practices, wages, bonuses and terms and conditions of
employment, including employee compensation matters.
(m) Each of the Acquired Corporations has good labor relations,
and none of the Acquired Corporations has any knowledge of any facts indicating
that (i) the
19
consummation of the Merger or any of the other transactions contemplated by this
Agreement will have a material adverse effect on the labor relations of any of
the Acquired Corporations, or (ii) any of the employees of any of the Acquired
Corporations intends to terminate his or her employment with the Acquired
Corporation with which such employee is employeed.
(n) With respect to any Plan maintained for employees of the
Acquired Corporations who are based outside of the United States (each a
"Foreign Plan"), if applicable: (i) the fair market value of the assets of each
funded Foreign Plan, the liability of each insurer for any Foreign Plan funded
through insurance, or the book reserve established for any unfunded Foreign
Plan, together with any accrued contributions, is sufficient to procure or
provide for all accrued benefit obligations under each such Foreign Plan
according to the actuarial assumptions and valuations most recently used to
determine employer contributions or the accruals of employer benefit
obligations; and (ii) the consummation of the transactions contemplated by this
Agreement will not by itself create or otherwise result in any material
liability with respect to any Foreign Plan.
2.18 Environmental Matters. Each of the Acquired Corporations (a) is
in compliance in all material respects with all applicable Environmental Laws,
and (b) possesses all permits and other Governmental Authorizations required
under applicable Environmental Laws, and is in compliance with the terms and
conditions thereof. None of the Acquired Corporations has received any written
notice or other written (including electronic) communication, whether from a
Governmental Body, citizens group, Employee or otherwise, that alleges that any
of the Acquired Corporations is not in compliance with any Environmental Law,
and, to the knowledge of the Company, there are no circumstances that may
prevent or interfere with the compliance by any of the Acquired Corporations
with any Environmental Law in the future. To the knowledge of the Company, (i)
all property that is leased to, controlled by or used by any of the Acquired
Corporations, and all surface water, groundwater and soil associated with or
adjacent to such property, is free of any material environmental contamination
of any nature, (ii) none of the property leased to, controlled by or used by any
of the Acquired Corporations contains any underground storage tanks, asbestos,
equipment using PCBs, underground injection xxxxx, and (iii) none of the
property leased to, controlled by or used by any of the Acquired Corporations
contains any septic tanks in which process wastewater or any Materials of
Environmental Concern have been disposed of. To the knowledge of the Company, no
Acquired Corporation has ever sent or transported, or arranged to send or
transport, any Materials of Environmental Concern to a site that, pursuant to
any applicable Environmental Law, (1) has been placed on the "National
Priorities List" of hazardous waste sites or any similar state list, (2) is
otherwise designated or identified as a potential site for remediation, cleanup,
closure or other environmental remedial activity, or (3) is subject to a Legal
Requirement to take "removal" or "remedial" action as detailed in any applicable
Environmental Law or to make payment for the cost of cleaning up any site. (For
purposes of this Section 2.18 and Section 3.9: (A) "Environmental Law" means any
federal, state, local or foreign Legal Requirement relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata), including any law or
regulation relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern; and (B) "Materials of
Environmental Concern" include chemicals, pollutants, contaminants, wastes,
toxic substances,
20
petroleum and petroleum products and any other substance that is now or
hereafter regulated by any Environmental Law or that is otherwise a danger to
health, reproduction or the environment.)
2.19 Insurance. All material insurance policies and all material self
insurance programs and arrangements relating to the business, assets and
operations of the Acquired Corporations are in full force and effect and, when
taken together, provide adequate insurance coverage for the business, assets and
operations of the Acquired Corporations for all risks normally insured against
by a Person carrying on the same businesses as the Acquired Corporations.
2.20 Transactions with Affiliates. Between the date of the Company's
last proxy statement filed with the SEC and the date of this Agreement, no event
has occurred that would be required to be reported by the Company pursuant to
Item 404 of Regulation S-K promulgated by the SEC. Part 2.20 of the Company
Disclosure Schedule identifies each Person who is (or who may be deemed to be)
an "affiliate" (as that term is used in Rule 145 under the Securities Act) of
the Company as of the date of this Agreement.
2.21 Legal Proceedings; Orders.
(a) There is no pending Legal Proceeding, and (to the knowledge
of the Company) no Person has threatened to commence any Legal Proceeding: (i)
that involves any of the Acquired Corporations or any of the assets owned or
used by any of the Acquired Corporations; or (ii) that challenges, or that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with, the Merger or any of the other transactions contemplated by this
Agreement. To the knowledge of the Company, no event has occurred, and no claim,
dispute or other condition or circumstance exists that could reasonably be
expected to, give rise to or serve as a basis for the commencement of any such
Legal Proceeding.
(b) There is no material order, writ, injunction, judgment or
decree to which any of the Acquired Corporations, or any of the assets owned or
used by any of the Acquired Corporations, is subject. To the knowledge of the
Company, no officer or key employee of any of the Acquired Corporations is
subject to any order, writ, injunction, judgment or decree that prohibits such
officer or other employee from engaging in or continuing any conduct, activity
or practice relating to the business of any of the Acquired Corporations.
2.22 Authority; Inapplicability of Anti-takeover Statutes; Binding
Nature of Agreement. The Company has the right, power and authority to enter
into and to perform its obligations under this Agreement and under the Stock
Option Agreement. The board of directors of the Company (at a meeting duly
called and held) has (a) unanimously determined that the Merger is advisable and
fair and in the best interests of the Company and its stockholders, (b)
unanimously authorized and approved the execution, delivery and performance of
this Agreement and the Stock Option Agreement by the Company and unanimously
approved the Merger, (c) unanimously recommended the approval of this Agreement
by the holders of Company Common Stock and directed that this Agreement and the
Merger be submitted for consideration by the Company's stockholders at the
Company Stockholders' Meeting (as defined in Section 5.2), and (d) to the extent
necessary, adopted a resolution having the effect of causing the Company not to
be subject to any state takeover law or similar Legal Requirement that might
21
otherwise apply to the Merger, this Agreement or any of the other transactions
contemplated by this Agreement. This Agreement and the Stock Option Agreement
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
2.23 Inapplicability of Section 2115(b) of California Corporations
Code. The Company is not subject to Section 2115(b) of the California
Corporations Code.
2.24 Vote Required. The affirmative vote of the holders of 66 2/3% of
the shares of Company Common Stock outstanding on the record date for the
Company Stockholders' Meeting (the "Required Company Stockholder Vote") is the
only vote of the holders of any class or series of the Company's capital stock
necessary to adopt this Agreement and approve the Merger and the other
transactions contemplated by this Agreement.
2.25 Non-Contravention; Consents. Neither (1) the execution, delivery
or performance of this Agreement or the Stock Option Agreement, nor (2) the
consummation by the Company of the Merger or any of the other transactions
contemplated by this Agreement or the Stock Option Agreement, will directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of any of
the provisions of the articles or certificate of incorporation, bylaws or other
charter or organizational documents of any of the Acquired Corporations;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body the right to challenge the Merger or any of the other
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any Legal Requirement or any order, writ, injunction, judgment
or decree to which any of the Acquired Corporations, or any of the assets owned
or used by any of the Acquired Corporations, is subject;
(c) contravene, conflict with or result in a violation of any of
the terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by any of the Acquired Corporations;
(d) contravene, conflict with or result in a violation or breach
of, or result in a default under, any provision of any Acquired Corporation
Contract that constitutes a Material Contract;
(e) result in the imposition or creation of any Encumbrance upon
or with respect to any asset owned or used by any of the Acquired Corporations
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of any of the Acquired Corporations); or
(f) result in, or increase the likelihood of, the disclosure or
delivery to any escrowholder or other Person of any Acquired Corporation Source
Code, or the transfer of any material asset of any of the Acquired Corporations
to any Person.
22
Except as may be required by the Exchange Act, the MBCL, the HSR Act, any
foreign antitrust law or regulation and the NASD Bylaws (as they relate to the
Form S-4 Registration Statement and the Prospectus/Proxy Statement), none of the
Acquired Corporations was, is or will be required to make any filing with or
give any notice to, or to obtain any Consent from, any Person in connection with
(x) the execution, delivery or performance of this Agreement or the Stock Option
Agreement by the Company, or (y) the consummation by the Company of the Merger
or any of the other transactions contemplated by this Agreement or the Stock
Option Agreement.
2.26 Fairness Opinion. The Company's board of directors has received
the written opinion of Broadview International LLC, financial advisor to the
Company, dated the date of this Agreement, to the effect that the Exchange Ratio
is fair to the stockholders of the Company from a financial point of view. The
Company has furnished an accurate and complete copy of said written opinion to
Parent.
2.27 Financial Advisor. Except for Broadview International LLC, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger or any of the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of any of the Acquired Corporations. The total of all fees,
commissions and other amounts that have been paid by the Company to Broadview
International LLC and all fees, commissions and other amounts that may become
payable to Broadview International LLC by the Company if the Merger is
consummated will not exceed $7,500,000 plus expenses. The Company has furnished
to Parent accurate and complete copies of all agreements under which any such
fees, commissions or other amounts have been paid to may become payable and all
indemnification and other agreements related to the engagement of Broadview
International LLC.
2.28 Disclosure. None of the information supplied or to be supplied by
or on behalf of the Company for inclusion or incorporation by reference in the
Form S-4 Registration Statement will, at the time the Form S-4 Registration
Statement is filed with the SEC or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. None of the information supplied or to be supplied by or
on behalf of the Company for inclusion or incorporation by reference in the
Prospectus/Proxy Statement will, at the time the Prospectus/Proxy Statement is
mailed to the stockholders of the Company or at the time of the Company
Stockholders' Meeting (or any adjournment or postponement 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
the light of the circumstances under which they are made, not misleading.
23
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as follows:
3.1 Due Organization; Subsidiaries. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts. Each of
Parent and Merger Sub has all necessary power and authority: (a) to conduct its
business in the manner in which its business is currently being conducted; and
(b) to own and use its assets in the manner in which its assets are currently
owned and used.
3.2 Capitalization. The authorized capital stock of Parent consists of
500,000,000 shares of Parent Common Stock and 10,000,000 shares of Preferred
Stock, $.0.0001 par value. As of January 24, 2000, approximately 81,806,017
shares of Parent Common Stock were issued and outstanding. As of the date of
this Agreement, no shares of preferred stock of Parent are outstanding. All of
the outstanding shares of Parent Common Stock have been duly authorized and
validly issued, and are fully paid and nonassessable. As of the date of this
Agreement, 18,651,484 shares of Parent Common Stock are reserved for future
issuance pursuant to outstanding stock options.
3.3 SEC Filings; Financial Statements.
(a) Parent has delivered or made available to the Company
accurate and complete copies (excluding copies of exhibits) of each report,
registration statement and definitive proxy statement filed by Parent with the
SEC since January 1, 1998 (the "Parent SEC Documents"). All statements, reports,
schedules, forms and other documents required to have been filed by Parent with
the SEC since January 1, 1998 have been so filed on a timely basis. As of the
time it was filed with the SEC (or, if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing): (i) each of the
Parent SEC Documents complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the case may be); and
(ii) none of the Parent SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The consolidated financial statements contained in the Parent
SEC Documents: (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered (except as may be indicated in
the notes to such financial statements and, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to normal and recurring
year-end audit adjustments which will not, individually or in the aggregate, be
material in amount); and (iii) fairly present the consolidated financial
position of Parent and its consolidated subsidiaries as of the respective dates
thereof and the consolidated results of operations of Parent and its
consolidated subsidiaries for the periods covered thereby.
24
3.4 Absence of Changes. Between September 30, 1999 and the date of
this Agreement, there has not been any material adverse change in the business,
financial condition, capitalization, assets, liabilities, operations or results
of operations of Parent, and no event has occurred or circumstance has arisen
that, in combination with any other events or circumstances, could reasonably be
expected to result in any material adverse change in the business, financial
condition, capitalization, assets, liabilities, operations or results of
operations of Parent.
3.5 Liabilities. Parent does not have any accrued, contingent or other
liabilities of any nature, either matured or unmatured, except for: (a)
liabilities reflected in the Unaudited Parent Interim Balance Sheet or the notes
thereto; (b) normal and recurring current liabilities that have been incurred by
Parent since September 30, 1999 in the ordinary course of business and
consistent with past practices; or (c) liabilities arising out of this Agreement
and the transactions contemplated herein.
3.6 Compliance with Legal Requirements. Parent is, and has at all
times since January 1, 1998 been, in compliance with all applicable Legal
Requirements, except where the failure to comply with such Legal Requirements
has not had and would not reasonably be expected to have a Material Adverse
Effect on Parent. Since September 30, 1999, Parent has not received any written
notice or other written (including electronic) communication from any
Governmental Body or other Person regarding any actual or possible violation of,
or failure to comply with, any Legal Requirement.
3.7 Tax Matters.
(a) Each of the material Tax Returns required to be filed by or
on behalf of Parent with any Governmental Body with respect to any taxable
period ending on or before the Closing Date (the "Parent Returns") (i) has been
or will be filed on or before the applicable due date (including any extensions
of such due date), and (ii) has been, or will be when filed, prepared in all
material respects in compliance with all applicable Legal Requirements. All
amounts shown on the Parent Returns to be due on or before the Closing Date have
been or will be paid on or before the Closing Date.
(b) The Unaudited Parent Interim Balance Sheet accrues all actual
and contingent liabilities for Taxes with respect to all periods through
September 30, 1999 in accordance with generally accepted accounting principles.
(c) No claim or Legal Proceeding is pending or, to the knowledge
of Parent, has been threatened in writing against or with respect to Parent in
respect of any material Tax. There are no unsatisfied liabilities for material
Taxes (including liabilities for interest, additions to tax and penalties
thereon and related expenses) with respect to any notice of deficiency or
similar document received by Parent with respect to any material Tax (other than
liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by Parent and with respect to
which reserves in accordance with generally accepted accounting principles for
payment have been established on the Unaudited Parent Interim Balance Sheet).
25
3.8 Environmental Matters. Parent (a) is in compliance in all material
respects with all applicable Environmental Laws, and (b) possesses all permits
and other Governmental Authorizations required under applicable Environmental
Laws, and is in compliance with the terms and conditions thereof. Parent has not
received any written notice or other written (including electronic)
communication, whether from a Governmental Body, citizens group, Employee or
otherwise, that alleges that Parent is not in compliance with any Environmental
Law, and, to the knowledge of Parent, there are no circumstances that may
prevent or interfere with the compliance by Parent with any Environmental Law in
the future. To the knowledge of Parent, (i) all property that is leased to,
controlled by or used by Parent, and all surface water, groundwater and soil
associated with or adjacent to such property, is free of any material
environmental contamination of any nature, (ii) none of the property leased to,
controlled by or used by Parent contains any underground storage tanks,
asbestos, equipment using PCBs, underground injection xxxxx, and (iii) none of
the property leased to, controlled by or used by Parent contains any septic
tanks in which process wastewater or any Materials of Environmental Concern have
been disposed of. To the knowledge of Parent, Parent has not ever sent or
transported, or arranged to send or transport, any Materials of Environmental
Concern to a site that, pursuant to any applicable Environmental Law, (1) has
been placed on the "National Priorities List" of hazardous waste sites or any
similar state list, (2) is otherwise designated or identified as a potential
site for remediation, cleanup, closure or other environmental remedial activity,
or (3) is subject to a Legal Requirement to take "removal" or "remedial" action
as detailed in any applicable Environmental Law or to make payment for the cost
of cleaning up any site.
3.9 Legal Proceedings. There is no pending Legal Proceeding, and (to
the knowledge of Parent) no Person has threatened to commence any Legal
Proceeding: (a) that involves Parent or any of the assets owned or used by
Parent; or (b) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, the Merger or any of the
other transactions contemplated by this Agreement. To the knowledge of Parent,
no event has occurred, and no claim, dispute or other condition or circumstance
exists that could reasonably be expected to, give rise to or serve as a basis
for the commencement of any such Legal Proceeding.
3.10 Authority; Binding Nature of Agreement. Parent and Merger Sub
have the right, power and authority to perform their obligations under this
Agreement and the Stock Option Agreement; and the execution, delivery and
performance by Parent and Merger Sub of this Agreement and the Stock Option
Agreement have been duly authorized by all necessary action on the part of
Parent and Merger Sub and their respective boards of directors. This and the
Stock Option Agreement constitute the legal, valid and binding obligations of
Parent and Merger Sub, enforceable against them in accordance with its terms,
subject to (a) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies.
3.11 No Vote Required. No vote of the holders of Parent Common Stock
is required to authorize the Merger.
3.12 Non-Contravention; Consents. Neither the execution and delivery
of this Agreement by Parent and Merger Sub nor the consummation by Parent and
Merger Sub of
26
the Merger will (a) conflict with or result in any breach of any provision of
the certificate of incorporation or bylaws of Parent or Merger Sub, (b) result
in a default by Parent or Merger Sub under any Contract to which Parent or
Merger Sub is a party, except for any default that has not had and will not have
a Material Adverse Effect on Parent, or (c) result in a violation by Parent or
Merger Sub of any order, writ, injunction, judgment or decree to which Parent or
Merger Sub is subject, except for any violation that has not had and will not
have a Material Adverse Effect on Parent. Except as may be required by the
Securities Act, the Exchange Act, state securities or "blue sky" laws, the MBCL,
the HSR Act, any foreign antitrust law or regulation, the NASD Bylaws (as they
relate to the S-4 Registration Statement and the Prospectus/Proxy Statement) and
the Frankfurt Stock Exchange, Parent is not and will not be required to make any
filing with or give any notice to, or to obtain any Consent from, any Person in
connection with the execution, delivery or performance of this Agreement or the
consummation of the Merger.
3.13 Valid Issuance. The Parent Common Stock to be issued in the
Merger will, when issued in accordance with the provisions of this Agreement, be
validly issued, fully paid and nonassessable.
3.14 Financial Advisor. Except for Xxxxxxx Sachs & Co., no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the Merger or any of the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent.
3.15 Disclosure. None of the information to be supplied by or on
behalf of Parent for inclusion in the Form S-4 Registration Statement will, at
the time the Form S-4 Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. None of the information to be supplied by or on behalf of
Parent for inclusion in the Prospectus/Proxy Statement will, at the time the
Prospectus/Proxy Statement is mailed to the stockholders of the Company or at
the time of the Company Stockholders' Meeting (or any adjournment or
postponement 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 the light of the circumstances under which
they are made, not misleading. The Prospectus/Proxy Statement will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations promulgated by the SEC thereunder, except that no
representation or warranty is made by Parent with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference in the Prospectus/Proxy Statement.
SECTION 4. CERTAIN COVENANTS OF THE PARTIES
4.1 Access and Investigation. During the period from the date of this
Agreement through the Effective Time (the "Pre-Closing Period"), the Company
shall, and shall cause the respective Representatives of the Acquired
Corporations to: (a) provide Parent and Parent's Representatives with reasonable
access to the Acquired Corporations' Representatives, personnel and assets and
to all existing books, records, Tax Returns, work papers and other documents and
information relating to the Acquired Corporations; and (b) provide Parent and
27
Parent's Representatives with such copies of the existing books, records, Tax
Returns, work papers and other documents and information relating to the
Acquired Corporations, and with such additional financial, operating and other
data and information regarding the Acquired Corporations, as Parent may
reasonably request. Parent shall coordinate all requests for access or copies
with the Company's Chief Financial Officer or General Counsel or Company
personnel designated by them. Without limiting the generality of the foregoing,
during the Pre-Closing Period, the Company shall promptly provide Parent with
copies of:
(i) all unaudited monthly financial statements regularly
prepared by the Company as of the date of this Agreement;
(ii) any written materials or communications sent by or on
behalf of the Company to its stockholders;
(iii) any material notice, document or other communication
sent by or on behalf of any of the Acquired Corporations to any party to any
Acquired Corporation Contract that constitutes a Material Contract or sent to
any of the Acquired Corporations by any party to any Acquired Corporation
Contract that constitutes a Material Contract (other than any communication that
relates solely to routine commercial transactions between the Company and the
other party to any such Acquired Corporation Contract and that is of the type
sent in the ordinary course of business and consistent with past practices); and
(iv) any material notice, report or other document received
by any of the Acquired Corporations from any Governmental Body.
4.2 Operation of the Company's Business.
(a) During the Pre-Closing Period: (i) the Company shall ensure
that each of the Acquired Corporations conducts its business and operations in
the ordinary course and in accordance with past practices and; (ii) the Company
shall use all commercially reasonable efforts to ensure that each of the
Acquired Corporations preserves intact its current business organization, keeps
available the services of its current officers and employees and maintains its
relations and goodwill with all suppliers, customers, landlords, creditors,
licensors, licensees, employees and other Persons having business relationships
with the respective Acquired Corporations; (iii) the Company shall provide all
notices, assurances and support required by any Acquired Corporation Contract
relating to any Proprietary Asset in order to ensure that no condition under
such Acquired Corporation Contract occurs that could result in, or could
increase the likelihood of, (A) any transfer or disclosure by any Acquired
Corporation of any Acquired Corporation Source Code, or (B) a release from any
escrow of any Acquired Corporation Source Code that has been deposited or is
required to be deposited in escrow under the terms of such Acquired Corporation
Contract; and (iv) the Company shall promptly notify Parent of (A) any notice or
other communication from any Person alleging that the Consent of such Person is
or may be required in connection with the transactions contemplated by this
Agreement, and (B) any Legal Proceeding commenced, or, to its knowledge
threatened against, relating to or involving or otherwise affecting any of the
Acquired Corporations that relates to the consummation of the transactions
contemplated by this Agreement.
28
(b) During the Pre-Closing Period, the Company shall not (without
the prior written consent of Parent), and shall not permit any of the other
Acquired Corporations to:
(i) declare, accrue, set aside or pay any dividend or make
any other distribution in respect of any shares of capital stock, or repurchase,
redeem or otherwise reacquire any shares of capital stock or other securities
other than dividends, distributions, repurchases, redemptions or other
acquisitions between Parent and/or any of its wholly owned Subsidiaries;
(ii) sell, issue, grant or authorize the issuance or grant
of (A) any capital stock or other security, (B) any option, call, warrant or
right to acquire any capital stock or other security, or (C) any instrument
convertible into or exchangeable for any capital stock or other security (except
that (1) the Company may issue shares of Company Common Stock (x) upon the valid
exercise of Company Options outstanding as of the date of this Agreement, (y)
pursuant to the ESPP and (z) pursuant to the Company Warrants (or upon
conversion of the securities issuable pursuant thereto), and (2) the Company
may, in the ordinary course of business and consistent with past practices,
grant to employees of the Company options (having an exercise price equal to the
fair market value of the Company Common Stock covered by such options determined
as of the time of the grant of such options) under its stock option plans to
purchase no more than a total of 250,000 shares of Company Common Stock);
(iii) amend or waive any of its rights under, or, except in
accordance with their existing terms, accelerate the vesting under, any
provision of any of the Company's stock option plans, any provision of any
agreement evidencing any outstanding stock option or any restricted stock
purchase agreement, or otherwise modify any of the terms of any outstanding
option, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its
certificate of incorporation or bylaws or other charter or organizational
documents, or effect or become a party to any merger, consolidation, share
exchange, business combination, recapitalization, reclassification of shares,
stock split, reverse stock split, consolidation of shares or similar
transaction, except as permitted pursuant to Section 4.3;
(v) form any Subsidiary or acquire any equity interest or
other interest in any other Entity;
(vi) make any capital expenditure (except that the Acquired
Corporations may make capital expenditures that, when added to all other capital
expenditures made on behalf of the Acquired Corporations during the Pre-Closing
Period, do not exceed $1,000,000 in the aggregate);
(vii) enter into or become bound by, or permit any of the
assets owned or used by it to become bound by, any Material Contract other than
in the ordinary course of business and in accordance with past practices, or
amend or terminate, or waive or exercise any material right or remedy under, any
Material Contract;
(viii) acquire, lease or license any right or other asset
from any other Person or sell or otherwise dispose of, or lease or license, any
right or other asset to any
29
other Person (except in each case for rights or assets acquired, leased,
licensed or disposed of by the Company in the ordinary course of business and
consistent with past practices), or waive or relinquish any material right;
(ix) lend money to any Person, or incur or guarantee any
indebtedness (except that the Company may make routine borrowings in the
ordinary course of business and in accordance with past practices under its
credit facilities with BankBoston, NA, dated July 10, 0000, Xxxxxxxx Xxxx, XXX,
dated April 1, 1997 and Toronto-Dominion Bank, dated March 18, 1999);
(x) establish, adopt or amend (except to the extent required
by any applicable Legal Requirement) any employee benefit plan, pay any bonus or
make any profit-sharing or similar payment to, or increase the amount of the
wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees (except
that the Company may make routine, reasonable salary increases in connection
with the Company's customary employee review process and may pay customary
bonuses consistent with past practices payable in accordance with existing bonus
plans referred to in Part 2.17(a) of the Company Disclosure Schedule);
(xi) hire any employee at the level of director or above or
with an annual base salary in excess of $125,000, or promote any employee except
in order to fill a position vacated after the date of this Agreement;
(xii) change any of its pricing policies, product return
policies, product maintenance polices, service policies, product modification or
upgrade policies, personnel policies or other business policies, other than
changes that do not and could not reasonably be excepted to have a material
adverse effect on the revenues or results of operations of the Acquired
Corporations, or any of its methods of accounting or accounting practices in any
respect;
(xiii) make any material Tax election not required to be
made by any applicable Legal Requirement;
(xiv) commence or settle any Legal Proceeding, except
settlement of any Legal Proceeding set forth in Items 1-3, 5 and 6 of Part 2.21
of the Company Disclosure Schedule; or
(xv) agree or commit to take any of the actions described in
clauses "(i)" through "(xiv)" of this Section 4.2(b).
(c) During the Pre-Closing Period, the Company shall promptly
notify Parent in writing of: (i) the discovery by the Company of any event,
condition, fact or circumstance that occurred or existed on or prior to the date
of this Agreement and that caused or constitutes a material inaccuracy in any
representation or warranty made by the Company in this Agreement; (ii) any
event, condition, fact or circumstance that occurs, arises or exists after the
date of this Agreement and that would cause or constitute a material inaccuracy
in any representation or warranty made by the Company in this Agreement if (A)
such representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event,
30
condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement; (iii) any material breach of any covenant or obligation of the
Company in this Agreement or the Stock Option Agreement; and (iv) any event,
condition, fact or circumstance that would make the timely satisfaction of any
of the conditions set forth in Section 6 or Section 7 impossible or unlikely or
that has had or could reasonably be expected to have a Material Adverse Effect
on the Acquired Corporations. Without limiting the generality of the foregoing,
the Company shall promptly advise Parent in writing of any Legal Proceeding or
material claim threatened, commenced or asserted against or with respect to any
of the Acquired Corporations. No notification given to Parent pursuant to this
Section 4.2(c) shall limit or otherwise affect any of the representations,
warranties, covenants or obligations of the Company contained in this Agreement.
4.3 No Solicitation.
(a) The Company shall not directly or indirectly, and shall not
authorize or permit any of the other Acquired Corporations or any Representative
of any of the Acquired Corporations directly or indirectly to, (i) solicit,
initiate, encourage, induce or facilitate the making, submission or announcement
of any Acquisition Proposal or take any action that could reasonably be expected
to lead to an Acquisition Proposal, (ii) furnish any information regarding any
of the Acquired Corporations to any Person in connection with or in response to
an Acquisition Proposal or an inquiry or indication of interest that could lead
to an Acquisition Proposal, (iii) engage in discussions or negotiations with any
Person with respect to any Acquisition Proposal, (iv) approve, endorse or
recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any Contract contemplating or otherwise relating to any
Acquisition Transaction; provided, however, that, at any time prior to the
approval of this Agreement by the Required Company Stockholder Vote, this
Section 4.3(a) shall not prohibit the Company from:
(A) furnishing nonpublic information regarding the Acquired
Corporations to, or entering into discussions with, any Person in response to an
unsolicited, bona fide written Acquisition Proposal that is submitted to the
Company by such Person after the date of this Agreement (and not withdrawn) if
(1) neither the Company nor any Representative of any of the Acquired
Corporations shall have violated any of the restrictions set forth in this
Section 4.3, (2) the Company's board of directors determines in good faith,
after having taken into account the advice of its outside legal counsel, that
such action is required in order for such board of directors to comply with its
fiduciary obligations to the Company's stockholders under applicable law, (3) at
least two business days prior to furnishing any such nonpublic information to,
or entering into discussions with, such Person, the Company gives Parent written
notice of the identity of such Person and of the Company's intention to furnish
nonpublic information to, or enter into discussions with, such Person, and the
Company receives from such Person an executed confidentiality agreement
containing customary
31
limitations on the use and disclosure of all nonpublic written and oral
information furnished to such Person by or on behalf of the Company, and (4) at
least two business days prior to furnishing any such nonpublic information to
such Person, the Company furnishes such nonpublic information to Parent (to the
extent such nonpublic information has not been previously delivered or made
available (at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP or Xxxxx
Xxxxxxxx) by the Company to Parent); or
(B) approving, endorsing or recommending, or entering into
any letter of intent or similar document or any Contract contemplating or
otherwise relating to, a Superior Offer if (1) neither the Company nor any
Representative of any of the Acquired Corporations shall have violated any of
the restrictions set forth in this Section 4.3, (2) the Company provides Parent
with written notice at least five business days prior to any meeting of the
Company's board of directors at which such board of directors will consider
whether an Acquisition Proposal constitutes a Superior Offer, (3) the Company's
board of directors makes the determination necessary for such Acquisition
Proposal to constitute a Superior Offer, (4) the Company does not enter into any
letter of intent or similar document or any Contract contemplating or otherwise
relating to, such Superior Offer at any time within two business days after
Parent receives written notice from the Company confirming that the Company's
board of directors has determined that such Acquisition Proposal constitutes a
Superior Offer, and (5) simultaneously with the execution of any such letter of
intent, Contract or other document, the Company makes the payments called for by
Sections 8.3(a) and 8.3(b).
Without limiting the generality of the foregoing, the Company acknowledges and
agrees that any violation of any of the restrictions set forth in the preceding
sentence by any Representative of any of the Acquired Corporations, whether or
not such Representative is purporting to act on behalf of any of the Acquired
Corporations, shall be deemed to constitute a breach of this Section 4.3 by the
Company.
(b) The Company shall promptly (and in no event later than 24
hours after receipt of any Acquisition Proposal or any inquiry, indication of
interest or request for nonpublic information that could lead or relate to an
Acquisition Proposal) advise Parent orally and in writing of any Acquisition
Proposal or any inquiry, indication of interest or request for nonpublic
information that could lead or relate to an Acquisition Proposal (including the
identity of the Person making or submitting such Acquisition Proposal, inquiry,
indication of interest or request, information on any previous communication
between such Person and the Company leading to such Acquisition Proposal,
inquiry, indication of interest or request, and the terms thereof) that is made
or submitted by any Person during the Pre-Closing Period. The Company shall keep
Parent fully informed with respect to the status of any such Acquisition
Proposal, inquiry, indication of interest or request and any modification or
proposed modification thereto.
(c) The Company shall immediately cease and cause to be
terminated any existing discussions with any Person that relate to any
Acquisition Proposal.
32
(d) The Company agrees not to release or permit the release of
any Person from, or to waive or permit the waiver of any provision of, any
confidentiality, "standstill" or similar agreement to which any of the Acquired
Corporations is a party, and will use its best efforts to enforce or cause to be
enforced each such agreement at the request of Parent. The Company also will
promptly request each Person that has executed, within 12 months prior to the
date of this Agreement, a confidentiality agreement in connection with its
consideration of a possible Acquisition Transaction or equity investment to
return all confidential information heretofore furnished to such Person by or on
behalf of any of the Acquired Corporations.
(e) Nothing contained in this Section 4.3 or in Section 5.2 shall
prohibit the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or 14e-2(a) promulgated under the Exchange Act;
provided that, except in compliance with Sections 4.3(a)(B) and 5.2(c), the
Company shall not approve or recommend, or propose to approve or recommend, an
Acquisition Proposal or withdraw or modify, or propose to withdraw or modify,
the Company Board Recommendation.
4.4 Operation of Parent's Business.
(a) During the Pre-Closing Period: (i) Parent shall conduct its
business and operations in the ordinary course and in accordance with past
practices and; (ii) Parent shall use all commercially reasonable efforts to
preserve intact its current business organization, keeps available the services
of its current officers and employees and maintains its relations and goodwill
with all suppliers, customers, landlords, creditors, licensors, licensees,
employees and other Persons having business relationships with it.
(b) During the Pre-Closing Period, Parent shall promptly notify
the Company in writing of: (i) the discovery by Parent of any event, condition,
fact or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes a material inaccuracy in any
representation or warranty made by Parent in this Agreement; (ii) any event,
condition, fact or circumstance that occurs, arises or exists after the date of
this Agreement and that would cause or constitute a material inaccuracy in any
representation or warranty made by Parent in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement; (iii) any material breach of any
covenant or obligation of Parent in this Agreement; and (iv) any event,
condition, fact or circumstance that would make the timely satisfaction of any
of the conditions set forth in Section 6 or Section 7 impossible or unlikely or
that has had or could reasonably be expected to have a Material Adverse Effect
on Parent. Without limiting the generality of the foregoing, Parent shall
promptly advise the Company in writing of any Legal Proceeding or material claim
threatened, commenced or asserted against or with respect to Parent. No
notification given to the Company pursuant to this Section 4.4(b) shall limit or
otherwise affect any of the representations, warranties, covenants or
obligations of Parent contained in this Agreement.
33
SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 Registration Statement; Prospectus/Proxy Statement.
(a) As promptly as practicable after the date of this Agreement,
Parent and the Company shall prepare and cause to be filed with the SEC the
Prospectus/Proxy Statement and Parent shall prepare and cause to be filed with
the SEC the Form S-4 Registration Statement, in which the Prospectus/Proxy
Statement will be included as a prospectus. Each of Parent and the Company shall
use all reasonable efforts to cause the Form S-4 Registration Statement and the
Prospectus/Proxy Statement to comply with the rules and regulations promulgated
by the SEC, to respond promptly to any comments of the SEC or its staff and to
have the Form S-4 Registration Statement declared effective under the Securities
Act as promptly as practicable after it is filed with the SEC. The Company will
use all reasonable efforts to cause the Prospectus/Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable after the Form S-4
Registration Statement is declared effective under the Securities Act. The
Company shall promptly furnish to Parent all information concerning the Acquired
Corporations and the Company's stockholders that may be required or reasonably
requested in connection with any action contemplated by this Section 5.1. If any
event relating to any of the Acquired Corporations occurs, or if the Company
becomes aware of any information, that should be disclosed in an amendment or
supplement to the Form S-4 Registration Statement or the Prospectus/Proxy
Statement, then the Company shall promptly inform Parent thereof and shall
cooperate with Parent in filing such amendment or supplement with the SEC and,
if appropriate, in mailing such amendment or supplement to the stockholders of
the Company. If any event relating to Parent occurs, or if Parent becomes aware
of any information, that should be disclosed in an amendment or supplement to
the Form S-4 Registration Statement or the Prospectus/Proxy Statement, then
Parent shall promptly inform the Company thereof and shall file such amendment
or supplement with the SEC and, if appropriate, cooperate with the Company in
mailing such amendment or supplement to the stockholders of the Company.
(b) Prior to the Effective Time, Parent shall use reasonable
efforts to obtain all regulatory approvals needed to ensure that the Parent
Common Stock to be issued in the Merger will be registered or qualified under
the securities law of every jurisdiction of the United States in which any
registered holder of Company Common Stock has an address of record on the record
date for determining the stockholders entitled to notice of and to vote at the
Company Stockholders' Meeting; provided, however, that Parent shall not be
required (i) to qualify to do business as a foreign corporation in any
jurisdiction in which it is not now qualified or (ii) to file a general consent
to service of process in any jurisdiction.
34
5.2 Company Stockholders' Meeting.
(a) The Company shall take all action necessary under all
applicable Legal Requirements to call, give notice of and hold a meeting of the
holders of Company Common Stock to vote on the approval of this Agreement (the
"Company Stockholders' Meeting"). The Company Stockholders' Meeting shall be
held (on a date selected by the Company in consultation with Parent) as promptly
as practicable (and in any event within 45 days, so long as such Form S-4
Registration Statement remains in effect and not subject to any stop order
during such 45-day period) after the Form S-4 Registration Statement is declared
effective under the Securities Act. The Company shall ensure that all proxies
solicited in connection with the Company Stockholders' Meeting are solicited in
compliance with all applicable Legal Requirements.
(b) Subject to Section 5.2(c): (i) the Proxy Statement shall
include a statement to the effect that the board of directors of the Company
recommends that the Company's stockholders vote to adopt this Agreement at the
Company Stockholders' Meeting (the recommendation of the Company's board of
directors that the Company's stockholders vote to adopt this Agreement being
referred to as the "Company Board Recommendation"); and (ii) the Company Board
Recommendation shall not be withdrawn or modified in a manner adverse to Parent,
and no resolution by the board of directors of the Company or any committee
thereof to withdraw or modify the Company Board Recommendation in a manner
adverse to Parent shall be adopted or proposed.
(c) Notwithstanding anything to the contrary contained in Section
5.2(b), the Company Board Recommendation may be withdrawn or modified in a
manner adverse to Parent if (1) the Company's board of directors has determined
in compliance with the requirements set forth in Section 4.3(a)(B) to accept an
Acquisition Proposal that constitutes a Superior Offer, (2) the Company's board
of directors determines in good faith, after having taken into account the
advice of its outside legal counsel, that the withdrawal or modification of the
Company Board Recommendation is required in order for such board of directors to
comply with its fiduciary obligations to the Company's stockholders under
applicable law, (3) the Company Board Recommendation is not withdrawn or
modified in a manner adverse to Parent at any time within two business days
after Parent receives written notice from the Company confirming that the
Company's board of directors has determined to accept such Superior Offer, and
(4) simultaneously with the withdrawal or modification of the Company Board
Recommendation, the Company makes the payments called for by Sections 8.3(a) and
8.3(b).
5.3 Regulatory Approvals. Each party shall use all reasonable efforts
to file, as soon as practicable after the date of this Agreement, all notices,
reports and other documents required to be filed by such party with any
Governmental Body with respect to the Merger and the other transactions
contemplated by this Agreement, and to submit promptly any additional
information requested by any such Governmental Body. Without limiting the
generality of the foregoing, the Company and Parent shall, promptly after the
date of this Agreement, prepare and file the notifications required under the
HSR Act and any applicable foreign antitrust laws or regulations in connection
with the Merger. The Company and Parent shall respond as promptly as practicable
to (i) any inquiries or requests received from the Federal Trade Commission or
the Department of Justice for additional information or documentation and (ii)
any inquiries or
35
requests received from any state attorney general, foreign antitrust authority
or other Governmental Body in connection with antitrust or related matters. Each
of the Company and Parent shall (1) give the other party prompt notice of the
commencement or threat of commencement of any Legal Proceeding by or before any
Governmental Body 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 Legal Proceeding or threat, and (3) promptly inform the other
party of any communication to or from the Federal Trade Commission, the
Department of Justice or any other Governmental Body regarding the Merger.
Except as may be prohibited by any Governmental Body or by any Legal
Requirement, 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 Legal Proceeding under or
relating to the HSR Act or any other foreign, federal or state antitrust or fair
trade law. In addition, except as may be prohibited by any Governmental Body or
by any Legal Requirement, in connection with any Legal Proceeding under or
relating to the HSR Act or any other foreign, federal or state antitrust or fair
trade law or any other similar Legal Proceeding, 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 Body in connection with any such Legal Proceeding.
5.4 Stock Options.
(a) At the Effective Time, all rights with respect to Company
Common Stock under each Company Option then outstanding shall be converted into
and become rights with respect to Parent Common Stock, and Parent shall assume
each such Company Option in accordance with the terms (as in effect as of the
date of this Agreement) of the stock option plan under which it was issued and
the terms of the stock option agreement by which it is evidenced as set forth
herein. From and after the Effective Time, (i) each Company Option assumed by
Parent may be exercised solely for shares of Parent Common Stock, (ii) the
number of shares of Parent Common Stock subject to each such Company Option
shall be equal to the number of shares of Company Common Stock subject to such
Company Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounding down to the nearest whole share, (iii) the per share
exercise price under each such Company Option shall be adjusted by dividing the
per share exercise price under such Company Option by the Exchange Ratio and
rounding up to the nearest cent and (iv) any restriction on the exercise of any
such Company Option shall continue in full force and effect and the term,
exercisability, vesting schedule and other provisions of such Company Option
shall otherwise remain unchanged, except to the extent that any restriction on
exercise, term, exercisability, vesting schedule and other provisions of such
Company Option are automatically waived in connection with the transactions
contemplated by this Agreement; provided, however, that each Company Option
assumed by Parent in accordance with this Section 5.4(a) shall, in accordance
with its terms, be subject to further adjustment as appropriate to reflect any
stock split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction subsequent to the Effective Time.
Parent shall file with the SEC, no later than 30 days after the date on which
the Merger becomes effective, a registration statement on Form S-8 relating to
the shares of Parent Common Stock issuable with respect to the Company Options
assumed by Parent in accordance
36
with this Section 5.4(a). Notwithstanding any of the foregoing to the contrary,
in lieu of assuming outstanding Company Options, Parent may, at its election,
cause such outstanding Company Options to be replaced by issuing replacement
stock options in substitution therefor (each, a "Substitute Option"). Each
Substitute Option shall (i) be exercisable solely for shares of Parent Common
Stock, (ii) cover a number of shares of Parent Common Stock equal to the number
of shares of Company Common Stock covered by the Company Option for which it is
substituted, multiplied by the Exchange Ratio, rounded down to the nearest whole
share, (iii) have a per share exercise price equal to the per share exercise
price of the Company Option for which it is substituted, divided by the Exchange
Ratio, rounded up to the nearest whole cent and (iv) have substantially
identical terms as the Company Option for which it is substituted including,
without limitation, any restriction on the exercise of any such Company Option,
the term, exercisability, vesting schedule and other provisions of such Company
Option, except to the extent that any restriction on exercise, term,
exercisability, vesting schedule and other provisions of such Company Option are
automatically waived in connection with the transactions contemplated by this
Agreement; provided, however, that each Substituted Option shall be subject to
further adjustment as appropriate to reflect any stock split, stock dividend,
reverse stock split, reclassification, recapitalization or other similar
transaction subsequent to the Effective Time.
(b) All actions taken by the Company and Parent pursuant to
Sections 5.4(a) and (b) above with respect to Company Options that are incentive
stock options within the meaning of Section 422 of the Code shall not adversely
affect the tax status of such Company Options.
(c) Prior to the Effective Time, the Company shall take all
action that may be necessary (under the plans pursuant to which Company Options
are outstanding and otherwise) to effectuate the provisions of this Section 5.4
and to ensure that, from and after the Effective Time, holders of Company
Options have no rights with respect thereto other than those specifically
provided in this Section 5.4.
5.5 Employee Benefits. Parent agrees that all employees of the
Acquired Corporations who are employed by Parent, the Surviving Corporation or
any Subsidiary of the Surviving Corporation immediately after the Effective Time
("Continuing Employees") shall be eligible to continue to participate in the
Surviving Corporation's health and/or welfare benefit plans in accordance with
the terms of such plans, which plans shall provide benefits not materially less
favorable in the aggregate to those provided to such employees immediately prior
to the Effective Time; provided, however, that (a) nothing in this Section 5.5
or elsewhere in this Agreement shall limit the right of Parent or the Surviving
Corporation to amend or terminate any such health and/or welfare benefit plan at
any time, and (b) if Parent or the Surviving Corporation terminates any such
health and/or welfare benefit plan, then, subject to any appropriate transition
period, the Continuing Employees shall be eligible to participate in Parent's
health, vacation and other non-equity based employee benefit plans, to
substantially the same extent as similarly situated employees of Parent. Nothing
in this Section 5.5 or elsewhere in this Agreement shall be construed to create
a right in any employee to employment with Parent, the Surviving Corporation or
any other Subsidiary of the Surviving Corporation and, subject to any other
binding agreement between an employee and Parent, the Surviving Corporation or
any Subsidiary of the Surviving Corporation, the employment of each Continuing
37
Employee shall be "at will" employment. The Company agrees to take (or cause to
be taken) all actions necessary or appropriate to terminate, effective
immediately prior to the Effective Time, any employee benefit plan sponsored by
any of the Acquired Corporations (or in which any of the Acquired Corporations
participate) that contains a cash or deferred arrangement intended to qualify
under section 401(k) of the Code. To the extent permitted by Legal Requirements,
following the Effective Time, Continuing Employees shall be eligible to
participate in any employee benefit plan sponsored by the Parent that contains a
cash or deferred arrangement intended to qualify under section 401(k) of the
Code to the same extent as other similarly situated employees of Parent.
Following the Effective Time, with respect to each plan in which any Continuing
Employee participates, for purposes of determining eligibility to participate,
vesting, and entitlement to benefits, including for severance benefits and
vacation entitlement (but not for accrual of pension benefits), service with the
Acquired Corporations (or predecessor employers to the extent the Acquired
Corporations provided past service credit) shall be treated as service with
Parent, the Surviving Corporation or any affiliate of either; provided, however,
that such service shall not be recognized to the extent that such recognition
would result in a duplication of benefits. To the extent permitted by the
applicable insurance carrier, such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitations. To the extent permitted by
the applicable insurance carrier, each such plan shall waive pre-existing
condition limitations to the same extent waived under the applicable plan of the
Acquired Corporation. To the extent permitted by the applicable insurance
carrier, Continuing Employees shall be given credit under the applicable plan of
Parent, the Surviving Corporation or any affiliate of either for amounts paid
under a corresponding benefit plan during the same period for purposes of
applying deductibles, copayments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the
successor or replacement plan.
5.6 Indemnification of Officers and Directors.
(a) All rights to indemnification existing in favor of any Person
who is now, or had been at any time prior to the date of this Agreement or who
becomes prior to the Effective Time, a director and officer of the Company (the
"Indemnified Persons") for acts and omissions occurring prior to the Effective
Time, as provided in the Company's bylaws (as in effect as of the date of this
Agreement) and as provided in the indemnification agreements between the Company
and said Indemnified Persons (as in effect as of the date of this Agreement) in
the forms disclosed by the Company to Parent prior to the date of this
Agreement, shall survive the Merger and shall be observed by the Surviving
Corporation to the fullest extent available under Massachusetts law for a period
of six years from the Effective Time. Parent hereby guarantees the observance of
such rights to indemnification by the Surviving Corporation.
(b) From the Effective Time until the third anniversary of the
Effective Time, the Surviving Corporation shall maintain in effect, for the
benefit of the Indemnified Persons with respect to acts or omissions occurring
prior to the Effective Time, the existing policy of directors' and officers'
liability insurance maintained by the Company as of the date of this Agreement
in the form disclosed by the Company to Parent prior to the date of this
Agreement (the "Existing Policy"); provided, however, that (i) the Surviving
Corporation may substitute for the Existing Policy a policy or policies of
comparable coverage, and (ii) the
38
Surviving Corporation shall not be required to pay annual premiums for the
Existing Policy (or for any substitute policies) in excess of $300,000 in the
aggregate. In the event any future annual premiums for the Existing Policy (or
any substitute policies) exceeds $300,000 in the aggregate, the Surviving
Corporation shall be entitled to reduce the amount of coverage of the Existing
Policy (or any substitute policies) to the amount of coverage that can be
obtained for an annual premium equal to $300,000.
(c) This Section 5.6 shall survive the consummation of the Merger
and is intended to benefit and may be enforced by the Indemnified Persons and
shall be binding on all successors and assigns of Parent and Surviving
Corporation.
5.7 Additional Agreements.
(a) Subject to Section 5.7(b), Parent and the Company shall use
all reasonable efforts to take, or cause to be taken, all actions necessary to
consummate the Merger and make effective the other transactions contemplated by
this Agreement. Without limiting the generality of the foregoing, but subject to
Section 5.7(b), each party to this Agreement (i) shall make all filings (if any)
and give all notices (if any) required to be made and given by such party in
connection with the Merger and the other transactions contemplated by this
Agreement, (ii) shall use all reasonable efforts to obtain each Consent (if any)
required to be obtained (pursuant to any applicable Legal Requirement or
Contract, or otherwise) by such party in connection with the Merger or any of
the other transactions contemplated by this Agreement, and (iii) shall use all
reasonable efforts to lift any restraint, injunction or other legal bar to the
Merger. The Company shall promptly deliver to Parent a copy of each such filing
made, each such notice given and each such Consent obtained by the Company
during the Pre-Closing Period.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Parent shall not have any obligation under this Agreement: (i) to
dispose of or transfer or cause any of its Subsidiaries to dispose of or
transfer any assets, or to commit to cause any of the Acquired Corporations to
dispose of any assets; (ii) to discontinue or cause any of its Subsidiaries to
discontinue offering any product or service, or to commit to cause any of the
Acquired Corporations to discontinue offering any product or service; (iii) to
license or otherwise make available, or cause any of its Subsidiaries to license
or otherwise make available, to any Person, any technology, software or other
Proprietary Asset, or to commit to cause any of the Acquired Corporations to
license or otherwise make available to any Person any technology, software or
other Proprietary Asset; (iv) to hold separate or cause any of its Subsidiaries
to hold separate any assets or operations (either before or after the Closing
Date), or to commit to cause any of the Acquired Corporations to hold separate
any assets or operations; or (v) to make or cause any of its Subsidiaries to
make any commitment (to any Governmental Body or otherwise) regarding its future
operations or the future operations of any of the Acquired Corporations.
5.8 Disclosure. Parent and the Company shall consult with each other
before issuing any press release or otherwise making any public statement with
respect to the Merger or any of the other transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, the Company shall
not, and shall not permit any of its Representative to, make any disclosure
regarding the Merger or any of the other transactions contemplated by this
Agreement unless (a) Parent shall have approved such disclosure or (b) the
Company shall
39
reasonably determine after consultation with outside legal counsel that such
disclosure is required by applicable law.
5.9 Tax Matters. At or prior to the filing of the Form S-4
Registration Statement, the Company, Merger Sub and Parent shall execute and
deliver to Xxxxxx Godward LLP and to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
tax representation letters in forms reasonably requested by the respective
counsels. Parent, Merger Sub and the Company shall each confirm to Xxxxxx
Godward LLP and to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP the accuracy and
completeness as of the Effective Time of the tax representation letters
delivered pursuant to the immediately preceding sentence. Parent and the Company
shall use all reasonable efforts prior to and following the Effective Time to
cause the Merger to qualify as a tax free reorganization under Section 368(a)(1)
of the Code. Following delivery of the tax representation letters pursuant to
the first sentence of this Section 5.9, each of Parent and the Company shall use
its reasonable efforts to cause Xxxxxx Godward LLP and Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, respectively, to deliver to it a tax opinion satisfying the
requirements of Item 601 of Regulation S-K promulgated under the Securities Act.
In rendering such opinions, each of such counsel shall be entitled to rely on
the tax representation letters referred to in this Section 5.9.
5.10 Listing and Frankfurt Stock Exchange. Parent shall use all
reasonable efforts to cause the shares of Parent Common Stock being issued in
the Merger to be approved for listing (subject to notice of issuance) on the
Nasdaq National Market and to obtain the requisite approval for the consummation
of the Merger by the Frankfurt Stock Exchange.
5.11 Resignation of Officers and Directors. The Company shall use all
reasonable efforts to obtain and deliver to Parent on or prior to the Closing
the resignation of each officer and director of each of the Acquired
Corporations to the extent requested by Parent.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB
The obligations of Parent and Merger Sub to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
6.1 Accuracy of Representations. The representations and warranties of
the Company contained in this Agreement shall be accurate in all respects as of
the date of this Agreement and as of the Closing Date as if made on and as of
the Closing Date; provided, however, that (a) this condition shall be deemed
satisfied unless all inaccuracies in such representations and warranties
(considered collectively) are deemed to have a Material Adverse Effect on the
Acquired Corporations and (b) for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the Company
Disclosure Schedule made or purported to have been made after the date of this
Agreement shall be disregarded.
40
6.2 Performance of Covenants. Each covenant or obligation that the
Company is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects.
6.3 Effectiveness of Registration Statement. The Form S-4 Registration
Statement shall have become effective in accordance with the provisions of the
Securities Act, and no stop order shall have been issued, and no proceeding for
that purpose shall have been initiated or be threatened, by the SEC with respect
to the Form S-4 Registration Statement.
6.4 Stockholder Approval . This Agreement shall have been duly adopted
by the Required Company Stockholder Vote.
6.5 Consents. All Consents required to be obtained in connection with
the Merger and the other transactions contemplated by this Agreement shall have
been obtained and shall be in full force and effect, except for such Consents
the failure of which to obtain (both individually and in the aggregate) could
not reasonably be expected to have a Material Adverse Effect on the Acquired
Corporations.
6.6 Agreements and Documents. Parent and the Company shall have
received the following agreements and documents, each of which shall be in full
force and effect:
(a) Noncompetition Agreements in the form of Exhibit C, executed
by the individuals listed on Schedule 6.7(a);
(b) a legal opinion of Xxxxxx Godward LLP dated as of the Closing
Date and addressed to Parent, substantially to the effect that, on the basis of
facts, representations and assumptions set forth in such opinion, which are
consistent with the state of facts existing as of the Effective Time, for
federal income tax purposes the Merger will constitute a reorganization within
the meaning of Section 368 of the Code (it being understood that (i) in
rendering such opinion, Xxxxxx Godward LLP may rely upon the tax representation
letters referred to in Section 5.9, and (ii) if Xxxxxx Godward LLP does not
render such opinion or withdraws or modifies such opinion, this condition shall
nonetheless be deemed to be satisfied if Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP renders such opinion);
(c) a certificate executed on behalf of the Company by its Chief
Executive Officer confirming that the conditions set forth in Sections 6.1, 6.2,
6.4, 6.5, and 6.13 have been duly satisfied and that, to his knowledge, the
conditions set forth in Sections 6.7 and 6.8 have been duly satisfied; and
(d) the written resignations of all officers and directors of
each of the Acquired Corporations requested by Parent, effective as of the
Effective Time.
6.7 Employees. Unless Parent shall have expressed an intention not to
continue a particular individual's employment, none of the individuals
identified on Schedule 6.7(a) shall have ceased to be employed by the Company,
or shall have expressed an intention to Parent to terminate his employment with
the Company; and not more than 40% of the individuals identified on Schedule
6.7(b) shall have ceased to be employed by the Company, or
41
shall have expressed an intention to Parent to terminate his or her employment
with the Company.
6.8 No Material Adverse Effect. Since the date of this Agreement,
there shall not have occurred or arisen any event, violation, inaccuracy,
circumstance or other matter that is deemed to have a Material Adverse Effect on
the Acquired Corporations.
6.9 HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated and any Consent
required under any applicable foreign antitrust law or regulation shall have
been obtained.
6.10 Frankfurt Stock Exchange. The requisite approval for the
consummation of the Merger by the Frankfurt Stock Exchange shall have been
obtained.
6.11 Listing. The shares of Parent Common Stock to be issued in the
Merger shall have been approved for listing (subject to notice of issuance) on
the Nasdaq National Market.
6.12 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
6.13 No Governmental Litigation. There shall not be pending any Legal
Proceeding in which a Governmental Body is a party or is otherwise involved: (a)
challenging or seeking to restrain or prohibit the consummation of the Merger or
any of the other transactions contemplated by this Agreement; (b) relating to
the Merger and seeking to obtain from Parent or any of its Subsidiaries, any
damages or other relief that may be material to Parent; (c) seeking to prohibit
or limit in any material respect Parent's ability to vote, receive dividends
with respect to or otherwise exercise ownership rights with respect to the stock
of the Surviving Corporation; (d) which would materially and adversely affect
the right of Parent, the Surviving Corporation or any Subsidiary of Parent to
own the assets or operate the business of the Acquired Corporations; or (e)
seeking to compel Parent or the Company, or any Subsidiary of Parent or the
Company, to dispose of or hold separate any material assets, as a result of the
Merger or any of the other transactions contemplated by this Agreement.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY
The obligation of the Company to effect the Merger and otherwise consummate
the transactions contemplated by this Agreement are subject to the satisfaction,
at or prior to the Closing, of the following conditions:
7.1 Accuracy of Representations. The representations and warranties of
Parent and Merger Sub contained in this Agreement shall be accurate in all
respects as of the date of this Agreement and as of the Closing Date as if made
on and as of the Closing Date, provided, however, that this condition shall be
deemed satisfied unless all inaccuracies in such
42
representations and warranties (considered collectively) are deemed to have a
Material Adverse Effect on Parent.
7.2 Performance of Covenants. All of the covenants and obligations
that Parent and Merger Sub are required to comply with or to perform at or prior
to the Closing shall have been complied with and performed in all material
respects.
7.3 Effectiveness of Registration Statement. The Form S-4 Registration
Statement shall have become effective in accordance with the provisions of the
Securities Act, and no stop order shall have been issued, and no proceeding for
that purpose shall have been initiated or be threatened, by the SEC with respect
to the Form S-4 Registration Statement.
7.4 Stockholder Approval. This Agreement shall have been duly adopted
by the Required Company Stockholder Vote.
7.5 Documents. The Company shall have received the following
documents:
(a) a legal opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
dated as of the Closing Date and addressed to the Company, substantially to the
effect that, on the basis of facts, representations and assumptions set forth in
such opinion, which are consistent with the state of facts existing as of the
Effective Time, for federal income tax purposes the Merger will constitute a
reorganization within the meaning of Section 368 of the Code (it being
understood that, in rendering such opinion, (i) Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP may rely upon the tax representation letters referred to in Section
5.9, and (ii) if Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP does not render such
opinion or withdraws or modifies such opinion, this condition shall nonetheless
be deemed to be satisfied if Xxxxxx Godward LLP renders such opinion); and
(b) a certificate executed on behalf of Parent by an executive
officer of Parent, confirming that conditions set forth in Sections 7.1, 7.2 and
7.3 have been duly satisfied and that, to his knowledge, the condition set forth
in Section 7.6 has been duly satisfied.
7.6 No Material Adverse Effect. Since the date of this Agreement,
there shall not have occurred or arisen any event, violation, inaccuracy,
circumstance or other matter that is deemed to have a Material Adverse Effect on
Parent.
7.7 HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated and any Consent
required under any applicable foreign antitrust law or regulation shall have
been obtained.
7.8 Listing. The shares of Parent Common Stock to be issued in the
Merger shall have been approved for listing (subject to notice of issuance) on
the Nasdaq National Market.
7.9 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger by
the Company shall have been issued by any court of competent jurisdiction and
remain in effect, and there shall not be
43
any Legal Requirement enacted or deemed applicable to the Merger that makes
consummation of the Merger by the Company illegal.
SECTION 8. TERMINATION
8.1 Termination. This Agreement may be terminated prior to the
Effective Time (whether before or after the adoption of this Agreement by the
Required Company Stockholder Vote):
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the Merger shall not have
been consummated by July 31, 2000 (unless the failure to consummate the
Merger is attributable to a failure on the part of the party seeking to
terminate this Agreement to perform any material obligation required to be
performed by such party at or prior to the Effective Time);
by either Parent or the Company if a court of competent
jurisdiction or other Governmental Body shall have issued a final and
nonappealable order, decree or ruling, or shall have taken any other
action, having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger;
by either Parent or the Company if (i) the Company Stockholders'
Meeting (including any adjournments and postponements thereof) shall have
been held and completed and the Company's stockholders shall have taken a
final vote on a proposal to adopt this Agreement, and (ii) this Agreement
shall not have been adopted at such meeting by the Required Company
Stockholder Vote (and shall not have been adopted at any adjournment or
postponement thereof); provided, however, that (A) a party shall not be
permitted to terminate this Agreement pursuant to this Section 8.1(d) if
the failure to obtain such stockholder approval is attributable to a
failure on the part of such party to perform any material obligation
required to be performed by such party at or prior to the Effective Time,
and (B) the Company shall not be permitted to terminate this Agreement
pursuant to this Section 8.1(d) unless the Company shall have made the
payment required to be made to Parent pursuant to Section 8.3(a) and shall
have paid to Parent any fee required to be paid to Parent prior to such
termination pursuant to Section 8.3(c);
by Parent (at any time prior to the adoption of this Agreement by
the Required Company Stockholder Vote) if a Triggering Event shall have
occurred;
by Parent if (i) any of the Company's representations and
warranties contained in this Agreement shall be inaccurate as of the date
of this Agreement, or shall have become inaccurate as of a date subsequent
to the date of this Agreement (as if made on such subsequent date), such
that the condition set forth in Section 6.1 would not be satisfied, or (ii)
any of the Company's covenants contained in this Agreement shall have been
breached such that the condition set forth in Section 6.2 would not be
satisfied; provided, however, that if an inaccuracy in the Company's
representations and warranties
44
or a breach of a covenant by the Company is curable by the Company and the
Company is continuing to exercise all reasonable efforts to cure such
inaccuracy or breach, then Parent may not terminate this Agreement under
this Section 8.1(f) on account of such inaccuracy or breach;
by the Company if (i) any of Parent's representations and
warranties contained in this Agreement shall be inaccurate as of the date
of this Agreement, or shall have become inaccurate as of a date subsequent
to the date of this Agreement (as if made on such subsequent date), such
that the condition set forth in Section 7.1 would not be satisfied, or (ii)
if any of Parent's covenants contained in this Agreement shall have been
breached such that the condition set forth in Section 7.2 would not be
satisfied; provided, however, that if an inaccuracy in Parent's
representations and warranties or a breach of a covenant by Parent is
curable by Parent and Parent is continuing to exercise all reasonable
efforts to cure such inaccuracy or breach, then the Company may not
terminate this Agreement under this Section 8.1(g) on account of such
inaccuracy or breach; or
by the Company if the board of directors of the Company shall
have approved a Superior Offer in compliance with Section 4.3(a)(B),
including having made the payments called for by Sections 8.3(a) and
8.3(b).
8.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 8.1, this Agreement shall be of no further
force or effect; provided, however, that (a) this Section 8.2, Section 8.3 and
Section 9 (and the Confidentiality Agreement) shall survive the termination of
this Agreement and shall remain in full force and effect, and (b) except as set
forth in Section 8.3(d), the termination of this Agreement shall not relieve any
party from any liability for any breach of any representation, warranty or
covenant contained in this Agreement.
8.3 Expenses; Termination Fees.
(a) Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Merger is consummated; provided, however, that (i)
Parent and the Company shall share equally all fees and expenses, other than
attorneys' fees, incurred in connection with (A) the filing, printing and
mailing of the Form S-4 Registration Statement and the Prospectus/Proxy
Statement and any amendments or supplements thereto and (B) the filing by the
parties hereto of the premerger notification and report forms relating to the
Merger under the HSR Act and the filing of any notice or other document under
any applicable foreign antitrust law or regulation; and (ii) if this Agreement
is terminated by Parent or the Company pursuant to Section 8.1(d) or by Parent
pursuant to Section 8.1(e) or if Section 4.3(a)(B) or Section 5.2(c) so
requires, then the Company shall make a nonrefundable cash payment to Parent (in
addition to any fee that may be payable pursuant to Section 8.3(b) or 8.3(c)),
at the time specified in the next sentence or in Section 4.3(a)(B) or Section
5.2(c) as applicable, in an amount equal to the aggregate amount of all fees and
expenses (including all attorneys' fees, accountants' fees, financial advisory
fees and filing fees) that have been paid or that may become payable by or on
behalf of Parent in connection with the
45
preparation and negotiation of this Agreement and the Stock Option Agreement and
otherwise in connection with the Merger in an aggregate amount not to exceed
$2,000,000. In the case of termination of this Agreement by the Company pursuant
to Section 8.1(d), the nonrefundable payment referred to in clause "(ii)" of the
proviso to the first sentence of this Section 8.3(a) shall be made by the
Company prior to such termination; and in the case of termination of this
Agreement by Parent pursuant to Section 8.1(d) or 8.1(e), the nonrefundable
payment referred to clause "(ii)" of the proviso to the first sentence of this
Section 8.3(a) shall be made by the Company within two business days after such
termination.
(b) If this Agreement is terminated by Parent pursuant to Section
8.1(e) or if Section 4.3(a)(B) or Section 5.2(c) so requires, then the Company
shall pay to Parent, within two business days after such termination or at the
time specified in Section 4.3(a)(B) or Section 5.2(c) as applicable, a
nonrefundable cash fee in the amount of $30,000,000. Any fee required to be paid
pursuant to this Section 8.3(b) shall be in addition to any payment required to
be made pursuant to Section 8.3(a).
(c) If this Agreement is terminated by Parent or the Company
pursuant to Section 8.1(d) and at the time of the Company Stockholders' Meeting
an Acquisition Proposal disclosed, announced, commenced, submitted or made prior
thereto shall remain outstanding (each such Acquisition Proposal a "Competing
Proposal"), then the Company shall pay to Parent, at the time specified in the
next sentence, a nonrefundable cash fee in the amount of $10,000,000. In the
case of termination of this Agreement by the Company pursuant to Section 8.1(d),
the fee referred to in the preceding sentence shall be paid by the Company prior
to such termination, and in the case of termination of this Agreement by Parent
pursuant to Section 8.1(d), the fee referred to in the preceding sentence shall
be paid by the Company within two business days after such termination. Any fee
required to be paid pursuant to this Section 8.3(c) shall be in addition to any
payment required to be made pursuant to Section 8.3(a). Immediately upon the
earlier of entering into a definitive agreement with respect to or consummation
of, at any time within six months after the termination of this Agreement, any
transaction contemplated by any Competing Proposal, the Company shall pay to
Parent an additional nonrefundable cash fee in the amount of $20,000,000. Any
fee required to be paid pursuant to this Section 8.3(c) shall be in addition to
any payment required to be made pursuant to Section 8.3(a).
(d) If this Agreement is terminated pursuant to Section 8.1(g)
because of a breach by Parent of any representation, warranty or covenant,
Parent shall pay to the Company, within two business days after such
termination, a cash fee in the amount of $30,000,000 as liquidated damages and
as the sole and exclusive remedy to the Company as a result of such breach.
Parent and the Company agree that it would be extremely difficult or
impracticable to determine the Company's actual damages in the event of such
breach and that the cash fee required to be paid pursuant to this Section 8.3(d)
is a reasonable estimate of the Company's damages and not a penalty.
SECTION 9. MISCELLANEOUS PROVISIONS
9.1 Amendment. This Agreement may be amended with the approval of the
respective boards of directors of the Company and Parent at any time (whether
before or after the approval of this Agreement by the stockholders of the
Company); provided, however, that after
46
any such approval of this Agreement by the Company's stockholders, no amendment
shall be made which by law requires further approval of the stockholders of the
Company without the further approval of such stockholders. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
9.2 Waiver.
(a) No failure on the part of any party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
party in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(b) No party shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such party; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
9.3 No Survival of Representations and Warranties. None of the
representations and warranties contained in this Agreement or in any certificate
delivered pursuant to this Agreement shall survive the Merger.
9.4 Entire Agreement; Counterparts. This Agreement and the Stock
Option Agreement constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among or between any of
the parties with respect to the subject matter hereof and thereof; provided,
however, that the Confidentiality Agreement shall not be superseded and shall
remain in full force and effect. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument
9.5 Applicable Law; Jurisdiction. The Merger shall be governed by the
MBCL and this Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof. In any action
between any of the parties arising out of or relating to this Agreement or any
of the transactions contemplated by this Agreement: (a) each of the parties
irrevocably and unconditionally consents and submits to the exclusive
jurisdiction and venue of the state and federal courts located in the State of
Delaware; (b) if any such action is commenced in a state court, then, subject to
applicable law, no party shall object to the removal of such action to any
federal court located in such state; (c) each of the parties irrevocably waives
the right to trial by jury; and (d) each of the parties irrevocably consents to
service of process by first class certified mail, return receipt requested,
postage prepaid, to the address at which such party is to receive notice in
accordance with Section 9.8.
9.6 Attorneys' Fees. In any action at law or suit in equity to enforce
this Agreement or the rights of any of the parties hereunder, the prevailing
party in such action or suit
47
shall be entitled to receive a reasonable sum for its attorneys' fees and all
other reasonable costs and expenses incurred in such action or suit.
9.7 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure solely to the benefit of, the parties hereto and their
respective successors and assigns; provided, however, that neither this
Agreement nor any of the rights hereunder may be assigned by the Company or
Parent without the prior written consent of the other party, and any attempted
assignment of this Agreement or any of such rights by the Company or Parent
without such consent shall be void and of no effect. Except as set forth in
Section 5.6(c), nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person (other than the parties hereto) any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
9.8 Notices. Any notice or other communication required or permitted
to be delivered to any party under this Agreement shall be in writing and shall
be deemed properly delivered, given and received (a) when delivered by hand, or
(b) two business days after sent by registered mail or, by courier or express
delivery service or by facsimile to the address or facsimile telephone number
set forth beneath the name of such party below (or to such other address or
facsimile telephone number as such party shall have specified in a written
notice given to the other parties hereto):
if to Parent or Merger Sub:
BroadVision, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company:
Interleaf, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
48
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
9.9 Cooperation. The Company agrees to cooperate fully with Parent and
to execute and deliver such further documents, certificates, agreements and
instruments and to take such other actions as may be reasonably requested by
Parent to evidence or reflect the transactions contemplated by this Agreement
and to carry out the intent and purposes of this Agreement.
9.10 Construction.
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections," "Exhibits" and "Schedules" are intended to refer to
Sections of this Agreement and Exhibits or Schedules to this Agreement.
(e) The bold-faced headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
49
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
BROADVISION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Title: Vice President, Finance
and Chief Financial Officer
---------------------------------
INFINITI ACQUISITION SUB, INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Title: President
---------------------------------
INTERLEAF, INC.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Title: President and CEO
---------------------------------
50
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Acquired Corporation Contract. "Acquired Corporation Contract" shall mean
any Contract: (a) to which any of the Acquired Corporations is a party or an
assignee of a party or (b) by which any of the Acquired Corporations or any
asset of any of the Acquired Corporations is or may become bound or under which
any of the Acquired Corporations has, or may become subject to, any obligation.
Acquired Corporation Proprietary Asset. "Acquired Corporation Proprietary
Asset" shall mean any Proprietary Asset owned by or licensed to any of the
Acquired Corporations or otherwise used by any of the Acquired Corporations.
Acquired Corporation Source Code. "Acquired Corporation Source Code" shall
mean any source code, or any portion, aspect or segment of any source code,
relating to any Acquired Corporation Proprietary Asset.
Acquisition Proposal. "Acquisition Proposal" shall mean any offer,
proposal, inquiry or indication of interest (other than an offer, proposal,
inquiry or indication of interest by Parent) contemplating or otherwise relating
to any Acquisition Transaction.
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction or series of transactions involving:
(a) any merger, consolidation, share exchange, business combination,
issuance of securities, acquisition of securities, recapitalization, tender
offer, exchange offer or other similar transaction (i) in which any of the
Acquired Corporations is a constituent corporation, (ii) in which a Person
or "group" (as defined in the Exchange Act and the rules promulgated
thereunder) of Persons directly or indirectly acquires beneficial or record
ownership of securities representing more than 15% of the outstanding
securities of any class of voting securities of any of the Acquired
Corporations, or (iii) in which any of the Acquired Corporations issues
securities representing more than 15% of the outstanding securities of any
class of voting securities of any of the Acquired Corporations;
(b) any sale, lease, exchange, transfer, license, acquisition or
disposition of any business or businesses or assets that constitute or
account for 15% or more of the consolidated net revenues, net income or
assets of any of the Acquired Corporations; or
(c) any liquidation or dissolution of any of the Acquired
Corporations.
Agreement. "Agreement" shall mean the Agreement and Plan of Merger and
Reorganization to which this Exhibit A is attached, as it may be amended from
time to time.
1
Company Common Stock. "Company Common Stock" shall mean the Common Stock,
$0.01 par value per share, of the Company.
Company Disclosure Schedule. "Company Disclosure Schedule" shall mean the
disclosure schedule that has been prepared by the Company and that has been
delivered by the Company to Parent on the date of the Agreement and signed by
the President of the Company.
Company Warrants. "Company Warrants" shall mean the Finpiave Warrant and
the Series D Warrants.
Confidentiality Agreement. "Confidentiality Agreement" shall mean the
confidentiality agreement, dated as of December 14, 2000, by and between Parent
and the Company.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, option, warranty,
purchase order, license, sublicense, insurance policy, benefit plan or legally
binding commitment or undertaking of any nature.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity.
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
Form S-4 Registration Statement. "Form S-4 Registration Statement" shall
mean the registration statement on Form S-4 to be filed with the SEC by Parent
in connection with issuance of Parent Common Stock in the Merger, as said
registration statement may be amended prior to the time it is declared effective
by the SEC.
Governmental Authorization. "Governmental Authorization" shall mean any
permit, license, certificate, franchise, permission, variance, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement.
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Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).
HSR Act. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body (or under the
authority of the Nasdaq National Market).
Material Adverse Effect. An event, violation, inaccuracy, circumstance or
other matter will be deemed to have a "Material Adverse Effect" on the Acquired
Corporations if such event, violation, inaccuracy, circumstance or other matter
individually, or in the aggregate with all other events or circumstances
(considered together with all other matters that would constitute exceptions to
the representations and warranties of the Company set forth in the Agreement;
provided, however, that, for purposes of determining whether such matters
constitute exceptions to the representations and warranties, all "Material
Adverse Effect" or other materiality qualifications, or any similar
qualifications, in such representations and warranties shall be disregarded),
had or could reasonably be expected to have a material adverse effect on (i) the
business, financial condition, capitalization, assets, liabilities, operations
or results of operations of the Acquired Corporations taken as a whole, or (ii)
the ability of the Company to consummate the Merger or any of the other
transactions contemplated by the Agreement or the Stock Option Agreement or to
perform any of its obligations under the Agreement or the Stock Option
Agreement. An event, violation, inaccuracy, circumstance or other matter will be
deemed to have a "Material Adverse Effect" on Parent if such event, violation,
inaccuracy, circumstance or other matter individually, or in the aggregate with
all other events or circumstances (considered together with all other matters
that would constitute exceptions to the representations and warranties of Parent
set forth in the Agreement; provided, however, that, for purposes of determining
whether such matters constitute exceptions to the representations and
warranties, all "Material Adverse Effect" or other materiality qualifications,
or any similar qualifications, in such representations and warranties shall be
disregarded), had or would reasonably be expected to have a material adverse
effect on (i) the business, financial condition, capitalization, assets,
liabilities, operations or results of operations of Parent and its Subsidiaries
taken as a whole or (ii) the ability of Parent to consummate the Merger or any
of the other transactions contemplated by the Agreement or to perform any of its
obligations under the Agreement; provided, however,
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that a decline in Parent's stock price, in and of itself, shall not be deemed to
have a Material Adverse Effect on Parent. For purposes of determining whether
there has been a Material Adverse Effect, any change, effect, event or
occurrence relating to (i) this Agreement or the transactions contemplated
hereby or the announcement thereof (including, without limitation, any employee
attrition, any cancellation, reduction or delay in orders by customers or any
cancellation, reduction or delay in shipments by suppliers resulting therefrom),
(ii) the economy or securities markets of the United States or any other region
in general, (iii) the software industry in general, and not specifically related
to any of the Acquired Corporations or Parent and its Subsidiaries or (iv) the
failure, in and of itself, to meet the predictions of equity analysts, shall be
disregarded.
Parent Common Stock. "Parent Common Stock" shall mean the Common Stock,
$0.0001 par value per share, of Parent.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service xxxx (whether
registered or unregistered), service xxxx application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, source code, algorithm, invention, design,
blueprint, engineering drawing, proprietary product, technology, proprietary
right or other intellectual property right or intangible asset; or (b) right to
use or exploit any of the foregoing.
Prospectus/Proxy Statement. "Prospectus/Proxy Statement" shall mean the
proxy statement to be sent to the Company's stockholders in connection with the
Company Stockholders' Meeting.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
Securities Act. "Securities Act" shall mean the Securities Act of 1933, as
amended.
Subsidiary. An entity shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns or purports to own,
beneficially or of record, (a) an amount of voting securities of other interests
in such Entity that is sufficient to enable such Person to elect at leased a
majority of the members of such Entity's board of directors or other governing
body, or (b) at least 50% of the outstanding equity or financial interests or
such Entity.
Superior Offer. "Superior Offer" shall mean an unsolicited, bona fide
written offer made by a third party to acquire all of the outstanding shares of
Company Common Stock on terms that the board of directors of the Company
determines, in its reasonable judgment, based upon advice of an independent
financial advisor of nationally recognized reputation, to be more favorable to
the Company's stockholders than the terms of the Merger; provided, however, that
any such offer shall not be deemed to be a "Superior Offer" if any financing
required to
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consummate the transaction contemplated by such offer is not committed and is
not reasonably capable of being obtained by such third party.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
Triggering Event. A "Triggering Event" shall be deemed to have occurred if:
(i) any of the Acquired Corporations or any Representative of any of the
Acquired Corporations violates any of the requirements or restrictions set forth
in Section 4.3 or Section 5.2; (ii) the Company's board of directors approves,
endorses or recommends any Acquisition Proposal; (iii) the Company enters into
any letter of intent or similar document or any Contract contemplating or
otherwise relating to any Acquisition Proposal; (iv) the Company's board of
directors fails to reaffirm the Company Board Recommendation, or fails to
reaffirm its determination that the Merger is in the best interests of the
Company's stockholders, within eight business days after Parent requests in
writing that such recommendation or determination be reaffirmed; or (v) an
Acquisition Proposal is publicly announced, and the Company fails to issue a
press release announcing its opposition to such Acquisition Proposal within
eight business days after such Acquisition Proposal is announced.
Unaudited Parent Interim Balance Sheet. "Unaudited Parent Interim Balance
Sheet" shall mean the unaudited consolidated balance sheet of Parent and its
consolidated subsidiaries as of September 30, 1999 included in Parent's Report
on Form 10-Q for the fiscal quarter ended September 30, 1999, as filed with the
SEC prior to the date of this Agreement.
Unaudited Interim Balance Sheet. "Unaudited Interim Balance Sheet" shall
mean the unaudited consolidated balance sheet of the Company and its
consolidated subsidiaries as of September 30, 1999 included in the Company's
Report on Form 10-Q for the fiscal quarter ended September 30, 1999, as filed
with the SEC prior to the date of this Agreement.
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EXHIBITS
Exhibit A - Certain Definitions
Exhibit B - Form of Articles of Organization of Surviving Corporation
Exhibit C - Form of Noncompetition Agreement
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