AGREEMENT AND PLAN OF MERGER
BY AND AMONG
WOLTERS KLUWER U.S. CORPORATION,
OTI ACQUISITION CORP.,
AND
OVID TECHNOLOGIES, INC.
September 29, 1998
TABLE OF CONTENTS
ARTICLE I
THE OFFER AND MERGER...........................................................1
1.1 The Offer.............................................................1
1.2 Company Actions.......................................................3
1.3 Directors.............................................................4
1.4 The Merger............................................................5
1.5 Effective Time........................................................6
1.6 Closing...............................................................6
1.7 Certificate of Incorporation of the Surviving Corporation.............6
1.8 By-Laws of the Surviving Corporation..................................6
1.9 Directors and Officers of the Surviving Corporation...................6
1.10 Stockholders' Meeting.................................................6
1.11 Merger Without Meeting of Stockholders................................7
ARTICLE II
CONVERSION OF SECURITIES.......................................................7
2.1 Conversion of Capital Stock...........................................7
2.2 Dissenting Shares.....................................................8
2.3 Exchange of Certificates..............................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................10
3.1 Corporate Organization and Qualification.............................10
3.2 Capitalization.......................................................11
3.3 Authority Relative to This Agreement.................................11
3.4 Consents and Approvals; No Violation.................................12
3.5 SEC Reports; Financial Statements....................................12
3.6 Absence of Certain Changes or Events.................................13
3.7 Litigation...........................................................13
3.8 Taxes................................................................13
3.9 Employee Benefit Plans; Labor Matters................................14
3.10 Environmental Laws and Regulations...................................15
3.11 Intellectual Property; Technology....................................16
3.12 Real Property........................................................19
3.13 Compliance with Applicable Laws......................................19
3.14 Insurance............................................................19
3.15 Approvals; Antitakeover Provisions...................................19
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3.16 Voting Requirements..................................................20
3.17 Brokers and Finders..................................................20
3.18 Opinion of Financial Advisors........................................20
3.19 Information Supplied.................................................20
3.20 Confidentiality Agreements...........................................20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER........................21
4.1 Corporate Organization and Qualification.............................21
4.2 Authority Relative to This Agreement.................................21
4.3 Consents and Approvals; No Violation.................................21
4.4 Interim Operations of Purchaser......................................22
4.5 Sufficient Funds.....................................................22
4.6 Share Ownership......................................................22
4.7 Information in Proxy Statement and Schedule 14D-9....................22
4.8 Brokers and Finders..................................................22
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS...........................................23
5.1 Interim Operations of the Company....................................23
5.2 Alternative Proposals................................................25
5.3 Certain Filings......................................................26
5.4 Satisfaction of Conditions; Receipt of Necessary Approvals...........26
5.5 Access to Information................................................27
5.6 Publicity............................................................27
5.7 Directors' and Officers' Insurance and Indemnification...............27
5.8 Employees; Continuation of Benefits..................................28
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER......................................29
6.1 Conditions to Each Party's Obligation to Effect Merger...............29
ARTICLE VII
TERMINATION...................................................................30
7.1 Termination..........................................................30
7.2 Effect of Termination................................................32
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ARTICLE VIII
MISCELLANEOUS AND GENERAL.....................................................33
8.1 Payment of Expenses and Other Payments...............................33
8.2 Survival of Representations and Warranties; Survival of
Confidentiality Agreement..........................................33
8.3 Modification or Amendment............................................33
8.4 Waiver of Conditions.................................................33
8.5 Counterparts.........................................................33
8.6 Governing Law........................................................33
8.7 Notices..............................................................33
8.8 Entire Agreement; Assignment.........................................34
8.9 Parties in Interest..................................................35
8.10 Certain Definitions..................................................35
8.11 Obligation of Parent.................................................35
8.12 Joint and Several Liability..........................................36
8.13 Validity.............................................................36
8.14 Interpretations......................................................36
8.15 Captions.............................................................36
8.16 Specifc Performance .................................................36
8.17 Schedules............................................................36
ANNEX A; CONDITIONS TO THE OFFER A-1
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of September 29,
1998, by and among Wolters Kluwer U.S. Corporation, a Delaware corporation
("Parent"), OTI Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser"), and Ovid Technologies, Inc., a Delaware
corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Purchaser and the
Company have, subject to the conditions of this Agreement, determined that the
Merger (as defined below) is in the best interests of their respective
stockholders and approved this Agreement and the transactions contemplated
hereby; and
WHEREAS, Parent, Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, and in
consideration of the execution and delivery by Parent, Purchaser and the
Stockholders named therein of a stock option and tender agreement (the "Stock
Option and Tender Agreement"), Parent, Purchaser and the Company hereby agree as
follows:
ARTICLE I
THE OFFER AND MERGER
1.1 The Offer.
(a) As promptly as practicable (but in no event later than five
business days after the public announcement of the execution hereof), Purchaser
shall commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) an offer (the "Offer") to purchase
for cash all shares of the issued and outstanding Common Stock, par value $.01
per share (referred to herein as either the "Shares" or "Company Common Stock"),
of the Company, at a price per Share, based upon the representations set forth
in Section 3.2 hereof, of $24.59 net to the seller in cash (such price per
Share, or such higher price per Share as may be paid in the Offer, being
referred to herein as the "Offer Price"), subject to there being validly
tendered and not withdrawn prior to the expiration of the Offer, that number of
Shares which, together with the Shares beneficially owned by Parent or
Purchaser, represent at least a majority of the Shares outstanding on a fully
diluted basis (the "Minimum Condition") and to the other conditions set forth in
Annex A hereto. Purchaser shall, on the terms and subject to the prior
satisfaction or waiver (except that the Minimum Condition may not be waived) of
the conditions of the Offer, accept for payment and pay for Shares tendered as
soon as it is legally permitted to do so under applicable law. The obligations
of Purchaser to commence the Offer and to accept for payment and to pay for any
Shares validly tendered on or prior to the expiration of the Offer and not
withdrawn shall be subject only to the Minimum Condition and the other
conditions set forth in Annex A hereto. The Offer shall be made by means of an
offer to purchase (the "Offer to Purchase") containing the terms set forth in
this Agreement, the Minimum Condition and the other conditions set forth in
Annex A hereto. Purchaser expressly reserves the right to amend any of the terms
and conditions of the Offer; provided that Purchaser shall not amend or waive
the Minimum Condition, decrease the Offer Price or decrease the number of Shares
sought, change the form of consideration to be paid pursuant to the Offer,
impose conditions to the Offer in addition to those set forth in Annex A hereto,
or amend any other term or condition of the Offer in any manner adverse to the
holders of the Shares or extend the expiration date of the Offer without the
prior written consent of the Company (such consent to be authorized by the Board
of Directors of the Company or a duly authorized committee thereof).
Notwithstanding the foregoing, Purchaser shall, and Parent agrees to cause
Purchaser to, extend the Offer for a period of ten (10) business days following
the initial expiration date of the Offer, if any conditions to the Offer have
not been satisfied or waived at such date. In addition, following such first
extension of the Offer as provided in the preceding sentence, (i) Purchaser
shall, and Parent agrees to cause Purchaser to, extend the Offer, at any time
prior to the termination of this Agreement, for one or more periods of not more
than ten business days, if at the expiration date of the Offer, as extended, all
conditions to the Offer have not been satisfied or waived, and (ii) the Offer
Price may be increased and the Offer may be extended to the extent required by
law in connection with such increase, in each case without the consent of the
Company. In addition, Purchaser may, without the consent of the Company, extend
the Offer for a period of not more than ten (10) business days beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii) of
the immediately preceding sentence if there shall not have been tendered and not
withdrawn pursuant to the Offer at least 90% of the outstanding Shares.
(b) As soon as practicable on the date the Offer is commenced, Parent
and Purchaser shall file with the United States Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule l4D-l with respect
to the Offer (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 14D-1"). The Schedule 14D-l will include, as
exhibits, the Offer to Purchase and a form of letter of transmittal and summary
advertisement (collectively, together with any amendments and supplements
thereto, the "Offer Documents"). Parent and Purchaser represent that the Offer
Documents will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by Parent or Purchaser with
respect to information supplied by the Company in writing for inclusion in the
Offer Documents. Each of Parent and Purchaser further agrees to take all steps
necessary to cause the Offer Documents to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. Each of Parent and Purchaser, on the one
hand, and the
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Company, on the other hand, agrees promptly to correct any information provided
by it for use in the Offer Documents if and to the extent that it shall have
become false and misleading in any material respect and each of Parent and
Purchaser further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-l and the Offer Documents
before they are filed with the SEC. In addition, Parent and Purchaser agree to
provide the Company and its counsel in writing with any comments or other
communications that Parent, Purchaser or their counsel may receive from time to
time from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments or other communications, and shall provide
the Company and its counsel a reasonable opportunity to comment on the proposed
response of Parent and Purchaser to such comments.
1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors of the Company, at a meeting duly called
and held, has (i) unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (collectively, the
"Transactions"), (ii) unanimously determined that as of the date hereof the
Transactions are fair to and in the best interests of the Company's stockholders
and (iii) unanimously resolved to recommend that the stockholders of the Company
accept the Offer, tender their Shares thereunder to Purchaser and approve and
adopt this Agreement and the Merger; provided, however, that such recommendation
may be withdrawn, modified or amended if, in the opinion of the Board of
Directors of the Company, after consultation with its legal counsel, such
recommendation would be inconsistent with its fiduciary duties to the Company's
stockholders under applicable law. The Company consents to the inclusion of such
recommendation and approval in the Offer Documents. The Company has been advised
that all of its directors and executive officers intend either to tender their
Shares pursuant to the Offer or to vote their Shares in favor of the Merger.
(b) As promptly as practicable following the commencement of the
Offer, the Company shall file with the SEC a Solicitation/Recommendation
Statement Schedule 14D-9 (together with all amendments and supplements thereto
and including the exhibits thereto, the "Schedule 14D-9") which shall, subject
to the fiduciary duties of the Company's directors under applicable law and to
the provisions of this Agreement, contain the recommendations referred to in
Section 1.2(a) hereof. The Company represents that the Schedule 14D-9 will
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published, sent or
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given to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or Purchaser for inclusion in the Schedule 14D-9. The information
supplied by Parent or Purchaser for inclusion in the Schedule 14D-9 shall not,
on the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9 to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. Each of the Company, on the one hand, and
Parent and Purchaser, on the other hand, agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false and misleading in any material respect and the
Company further agrees to take all steps necessary to cause the Schedule 14D-9
as so corrected to be filed with the SEC and to be disseminated to holders of
the Shares, in each case as and to the extent required by applicable federal
securities laws. Parent and its counsel shall be given a reasonable opportunity
to review and comment on the initial Schedule 14D-9 before it is filed with the
SEC. In addition, the Company agrees to provide Parent, Purchaser and their
counsel in writing with any comments, or other communications that the Company
or its counsel may receive from time to time from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments or
other communications, and shall provide Parent, Purchaser and their counsel a
reasonable opportunity to comment on the proposed response of the Company to
such comments.
(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to Parent and Purchaser mailing labels, security position
listings and any available listing or computer file(s) containing the names and
addresses of the record holders of the Shares as of a recent date, and shall
furnish Parent with such information and assistance as Parent or its agents may
reasonably request in communicating the Offer to the stockholders of the
Company. Except for such steps as are necessary to disseminate the Offer
Documents, Parent and Purchaser shall hold in confidence the information
contained in any of such labels and lists and the additional information
referred to in the preceding sentence, will use such information only in
connection with the Offer, and, if this Agreement is terminated, will upon
request of the Company deliver or cause to be delivered to the Company all
copies of such information then in its possession or the possession of its
agents or representatives.
1.3 Directors.
(a) Promptly upon the purchase of and payment for Shares by Parent or
any of its Subsidiaries (as defined in Section 8.10) which represent at least a
majority of the outstanding shares of Company Common Stock (on a fully diluted
basis), Parent shall be entitled to designate such number of directors, rounded
up to the next whole number, on the Board of Directors of the Company as is
equal to the product of the total number of directors on such Board (giving
effect to the directors designated by Parent pursuant to this sentence)
multiplied by the percentage that the aggregate number of Shares beneficially
owned by Purchaser, Parent and any of their affiliates bears to the total number
of shares of Company Common Stock then outstanding. The Company shall take all
action necessary to cause Parent's designees to be elected or appointed to the
Company's Board of Directors and to secure the resignations of such number of
its incumbent directors as is necessary to enable Parent's designees to be so
elected to the Company's Board, and shall cause Parent's designees to be so
elected. At such times, the Company will take all
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action necessary to cause individuals designated by Parent to constitute the
same percentage as such individuals represent on the Company's Board or
Directors of (A) each committee of the Board and (B) each board of directors
(and committee thereof) of each Subsidiary in each case to the extent permitted
by the National Association of Securities Dealers (the "NASD") rules.
Notwithstanding the foregoing, until the Effective Time (as defined in Section
1.5 hereof), the Company shall retain as members of its Board of Directors at
least two (2) directors that are directors of the Company on the date hereof
(the "Company Designees"), and Parent and Purchaser shall not vote their Shares
of Company Common Stock or take any other action inconsistent with this
provision; provided, that subsequent to the purchase of and payment for Shares
pursuant to the Offer, Parent shall always have its designees represent at least
a majority of the entire Board of Directors.
(b) The Company's obligations under Section 1.3(a) shall be subject to
Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder. The
Company shall promptly take all actions required pursuant to such Section 14(f)
and Rule 14f-l in order to fulfill its obligations under Section 1.3(a),
including mailing to stockholders the information required by such Section 14(f)
and Rule 14f-l as is necessary to enable Parent's designees to be elected to the
Company's Board of Directors. Parent or Purchaser will supply the Company any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-l.
(c) From and after the time, if any, that Parent's designees constitute a
majority of the Company's Board of Directors and prior to the Effective Time,
any amendment of this Agreement, any termination of this Agreement by the
Company, any extension of time for performance of any of the obligations of
Parent or Purchaser hereunder, any waiver of any condition or any of the
Company's rights hereunder, any other action by the Company hereunder or any
action that would adversely affect the rights of the stockholders of the Company
or the holders of Options (as defined in Section 2.1(d)) with respect to the
transactions contemplated hereby may be effected only by the action of a
majority of the Company Designees then in office, which action shall be deemed
to constitute the action of the full Board of Directors; provided, that if the
number of Company Designees shall be reduced below two for any reason
whatsoever, any remaining Company Designee shall be entitled to designate a
person to fill such vacancy who shall be deemed to be a Company Designee for
purposes of this Agreement or, if no Company Designee then remains, the other
directors shall designate two persons to fill such vacancies who shall not be
stockholders, affiliates or associates of Purchaser or Parent and such persons
shall be deemed to be Company Designees for purposes of this Agreement.
1.4 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time, the Company and Purchaser shall consummate a merger (the
"Merger") pursuant to which (a) Purchaser shall be merged with and into the
Company and the separate corporate existence of Purchaser shall thereupon cease,
(b) the Company shall be the successor or surviving corporation in the Merger
and shall continue to be governed by the laws of the State of Delaware and (c)
the separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue immediately after the Merger.
The corporation surviving the Merger is sometimes hereinafter referred to as the
"Surviving Corporation." The
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Merger shall have the effects set forth in the General Corporation Law of the
State of Delaware (the "DGCL").
1.5 Effective Time. Parent, Purchaser and the Company will cause a
Certificate of Merger, or if applicable, a Certificate of Ownership and Merger
(each, the "Certificate of Merger"), to be executed and filed on the date of the
Closing (as defined in Section 1.6) (or on such other date as Parent and the
Company may agree) with the Secretary of State of the State of Delaware as
provided in the DGCL. The Merger shall become effective at the time at which the
Certificate of Merger has been duly filed with the Secretary of State of the
State of Delaware or at such time as is agreed upon by the parties and specified
in the Certificate of Merger, and such time is hereinafter referred to as the
"Effective Time."
1.6 Closing. The closing of the Merger (the "Closing") shall take place (a)
at the offices of Fulbright & Xxxxxxxx L.L.P., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 as soon as practicable following the satisfaction or waiver of all of
the conditions set forth in Article VI hereof or (b) at such other place, time
and date as Parent and the Company may agree.
1.7 Certificate of Incorporation of the Surviving Corporation. The
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by law and such Certificate of
Incorporation.
1.8 By-Laws of the Surviving Corporation. The By-Laws of Purchaser, as in
effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by law, the
Certificate of Incorporation of the Surviving Corporation and such By-Laws.
1.9 Directors and Officers of the Surviving Corporation. The directors and
officers of Purchaser at the Effective Time shall, from and after the Effective
Time, be the initial directors and officers, respectively, of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-Laws.
1.10 Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger,
the Company, acting through its Board of Directors, shall, in accordance with
applicable law;
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Special Meeting") as soon as practicable
following the acceptance for payment and purchase of Shares by
Purchaser pursuant to the Offer for the purpose of considering and
taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and
shall (x) obtain and furnish the
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information required to be included by the SEC in the Proxy Statement
(as hereinafter defined) and, after consultation with Parent, to
respond promptly to any comments made by the SEC with respect to the
preliminary proxy or information statement and cause a definitive
proxy or information statement (the "Proxy Statement") to be mailed to
its stockholders and (y) obtain the necessary approvals of the Merger
and this Agreement by its stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law as determined by the Board after consultation with its
legal counsel, include in the Proxy Statement the recommendation of
the board that the stockholders of the Company vote in favor of the
approval of the Merger and the adoption of this Agreement.
(b) Parent agrees that it will provide the Company with the
information concerning Parent and Purchaser required to be included in the Proxy
Statement and will vote, or cause to be voted, all of the Shares then owned by
it, Purchaser or any of its other Subsidiaries and affiliates in favor of the
approval of the Merger and the adoption of this Agreement.
(c) If at any time prior to the Effective Time any event with respect
to the Company or any of its Subsidiaries should occur which is required to be
described in a supplement to the Proxy Statement, such event shall be so
described, and such supplement shall be promptly filed with the SEC and, as
required by law, disseminated to the stockholders of the Company. With respect
to the information relating to the Company, the Proxy Statement will comply as
to form and substance in all material respects with the requirements of the
Exchange Act.
1.11 Merger Without Meeting of Stockholders. Notwithstanding Section 1.10
hereof, in the event that Parent, Purchaser or any other Subsidiary of Parent
shall acquire at least 90% of the Shares, pursuant to the Offer or otherwise,
the parties hereto agree to take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after such acquisition,
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL.
ARTICLE II
CONVERSION OF SECURITIES
2.1 Conversion of Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holders of any shares of
Company Common Stock or common stock, par value $.01 per share, of Purchaser
("Purchaser Common Stock"):
(a) Purchaser Common Stock. Each issued and outstanding share of
Purchaser Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation with the same
rights, powers and privileges
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as the shares so converted and shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. All shares
of Company Common Stock that are owned by the Company as treasury stock and any
shares of Company Common Stock owned by Parent, Purchaser or any other wholly
owned Subsidiary of Parent shall be cancelled and retired and shall cease to
exist and no consideration shall be delivered in exchange therefor.
(c) Exchange of Shares. Each share of Company Common Stock issued and
outstanding (other than Shares to be cancelled in accordance with Section 2.1(b)
hereof and other than Dissenting Shares (as defined in Section 2.2 below)),
shall be converted into the right to receive, in the manner provided in Section
2.3, the Offer Price, payable to the holder thereof, without interest (the
"Merger Consideration"). All such shares of Company Common Stock, when so
converted, shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration therefor upon the
surrender of such certificate in accordance with Section 2.3.
(d) Stock Options. As of the Effective Time, each outstanding stock
option (an "Option" and, collectively, the "Options") granted under the Ovid
Technologies, Inc. Stock Plan, effective July 1, 1990, and the Ovid
Technologies, Inc. 1993 Stock Plan, effective October 4, 1993 (collectively, the
"Option Plans"), whether or not then vested or exercisable, shall be converted
into the right to receive from the Company an amount of cash equal to the
product of (i) the number of shares of Company Common Stock subject to the
Option and (ii) the excess, if any, of the Merger Consideration over the
exercise price per share of Company Common Stock of such option (the "Option
Consideration"). Prior to the Effective Time, the Company shall take all steps
necessary to give written notice to each holder of an Option that (i) all
Options shall be canceled effective as of the Effective Time and (ii) upon the
execution and delivery to the Company by such holder of an instrument
acknowledging cancellation of all Options held by such holder effective as of
the Effective Time ("Cancellation Instrument"), the Company shall pay such
holder, promptly following the Effective Time, the Option Consideration for all
Options held by such holder. The Board or any committee thereof responsible for
the administration of the Option Plans shall take any and all action necessary
to effectuate the matters described in this Section 2.1(d) on or before the
Effective Time. Section 3.2 sets forth the number of shares of Company Common
Stock reserved for issuance upon exercise of outstanding Options. Any amounts
payable pursuant to this Section 2.1(d) shall be subject to any required
withholding of taxes and shall be paid without interest. Parent agrees to
provide the Company with sufficient funds to permit the Company to satisfy its
obligations under this Section 2.1(d).
2.2 Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, Shares outstanding immediately prior to the Effective Time and held by
a holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Shares in accordance with
Section 262 of the DGCL, if such Section 262 provides for
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appraisal rights for such Shares in the Merger ("Dissenting Shares"), shall not
be converted into the right to receive the Merger Consideration as provided in
Section 2.1(c), unless and until such holder fails to perfect or withdraws or
otherwise loses his right to appraisal and payment under the DGCL. If, after the
Effective Time, any such holder fails to perfect or withdraws or loses his right
to appraisal, such Dissenting Shares shall thereupon be treated as if they had
been converted as of the Effective Time into the right to receive the Merger
Consideration, if any, to which such holder is entitled, without interest or
dividends thereon. The Company shall give Parent prompt notice of any demands
received by the Company for appraisal of Shares and, prior to the Effective
Time, Parent shall have the right to participate in all negotiations and
proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, except with the prior written consent of Parent, make any
payment with respect to, or settle or offer to settle, any such demands.
2.3 Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust company
reasonably acceptable to the Company to act as agent for the holders of shares
of Company Common Stock in connection with the Merger (the "Paying Agent") to
receive the funds to which holders of shares of Company Common Stock shall
become entitled pursuant to Section 2.1(c) hereof. Parent shall take all steps
necessary to deposit or cause to be deposited with the Paying Agent such funds
as needed for timely payment hereunder in accordance with this Article II. Such
funds shall be invested by the Paying Agent as directed by Parent or the
Surviving Corporation. Parent shall pay all charges and expenses of the Paying
Agent.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time but in no event more than three (3) business days thereafter, the
Paying Agent shall mail to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the "Certificates"), whose shares
were converted pursuant to Section 2.1 hereof into the right to receive the
Merger Consideration (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Paying Agent and shall be in
such form and have such other provisions as Parent and the Company may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for payment of the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent or to such other
agent or agents as may be appointed by Parent, together with such letter of
transmittal, duly executed, the Paying Agent shall promptly pay the person
entitled thereto the Merger Consideration for each share of Company Common Stock
formerly represented by such Certificate and the Certificate so surrendered
shall forthwith be cancelled. If payment of the Merger Consideration is to be
made to a person other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the person requesting such payment shall have paid any
transfer and other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered
9
as contemplated by this Section 2.3, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive the Merger
Consideration in cash as contemplated by this Section 2.3.
(c) Transfer Books; No Further Ownership Rights in Company Common
Stock. At the Effective Time, the stock transfer books of the Company shall be
closed and thereafter there shall be no further registration of transfers of
shares of Company Common Stock on the records of the Company. From and after the
Effective Time, the holders of Certificates evidencing ownership of shares of
Company Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such Shares, except as otherwise
provided for herein or by applicable law. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they
shall be cancelled and exchanged as provided in this Article II.
(d) Termination of Fund Liability. At any time following one (1) year
after the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any funds (including any interest received
with respect thereto) which had been made available to the Paying Agent and
which have not been disbursed to holders of Certificates, and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) Lost or Stolen Certificates. If any Certificate shall have been
lost, stolen, mislaid or destroyed then upon receipt of (i) an affidavit of that
fact from the holder claiming such Certificate to be lost, mislaid, stolen or
destroyed, (ii) such bond, security or indemnity, as Parent or the Paying Agent
may reasonably require, and (iii) any other documentation to evidence and effect
the bona fide exchange thereof, the Merger Consideration with respect to the
shares of Company Common Stock represented by such Certificate may be paid. Each
such lost, stolen, mislaid or destroyed Certificate with respect to which any
Merger Consideration shall be paid in accordance with the provisions of this
Section 2.3(e) shall forthwith be deemed surrendered and cancelled.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Parent and Purchaser that:
3.1 Corporate Organization and Qualification. Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and is
qualified and in good standing as a foreign
10
corporation in each jurisdiction where the properties owned, leased or operated,
or the business conducted, by it require such qualification, except where the
failure to so qualify or be in good standing would not have a Company Material
Adverse Effect (as defined in Section 8.10). Each of the Company and its
Subsidiaries has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now being
conducted, except where the failure to have such power and authority would not
have a Company Material Adverse Effect. The Company has heretofore made
available to Parent complete and correct copies of its Certificate of
Incorporation and By-Laws, and the certificate of incorporation and by-laws (or
comparable governing instruments) of each of its Subsidiaries, each as in effect
as of the date hereof.
3.2 Capitalization. The authorized capital stock of the Company consists
of: (i) 10,000,000 Shares, of which, as of the date hereof 6,183,512 Shares were
issued and outstanding and 1,950,779 Shares are reserved for issuance pursuant
to outstanding Options, and (ii) 1,000,000 shares of preferred stock, par value
$.01 per share, none of which, as of the date hereof, were issued and
outstanding. All of the outstanding Shares have been duly authorized and validly
issued and are fully paid and nonassessable. Schedule 3.2 lists each Subsidiary
of the Company. Except as set forth on Schedule 3.2, as of the date hereof all
outstanding shares of capital stock of the Company's Subsidiaries are owned by
the Company or a direct or indirect wholly owned subsidiary of the Company, free
and clear of all liens, charges, encumbrances, claims and options of any nature.
Except as set forth on Schedule 3.2, there are not as of the date hereof any
outstanding or authorized options, warrants, calls, rights (including preemptive
rights), commitments or any other agreements of any character which the Company
or any of its Subsidiaries is a party to, or may be bound by, requiring it to
issue, transfer, sell, purchase, redeem or acquire any shares of capital stock
or any securities or rights convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of capital stock of the Company or any of
its Subsidiaries. Except for the capital stock of its Subsidiaries and except as
otherwise set forth on Schedule 3.2, the Company does not own, directly or
indirectly, any capital stock or other ownership interest in any corporation,
partnership, joint venture or other entity.
3.3 Authority Relative to This Agreement. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and, subject
to approval of this Agreement by the holders of a majority of the outstanding
Shares in accordance with the DGCL, to consummate the transactions contemplated
hereby. This Agreement and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval of this Agreement by the holders of a majority of the outstanding
Shares in accordance with the DGCL). This Agreement has been duly and validly
executed and delivered by the Company and, assuming this Agreement constitutes
the valid and binding agreement of Parent and Purchaser, constitutes the valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that the enforcement hereof may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors'
11
rights generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
3.4 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by the Company nor the consummation by the Company of
the transactions contemplated hereby will (a) conflict with or result in any
breach of any provision of the respective certificate of incorporation,
respective By-Laws or comparable governing instruments of the Company or any of
its Subsidiaries, (b) except as set forth on Schedule 3.4(b), require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, except (i) in connection with the
applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (ii) pursuant to the applicable requirements
of the Exchange Act, (iii) the filing of the Certificate of Merger pursuant to
the DGCL and appropriate documents with the relevant authorities of other states
in which the Company or any of its Subsidiaries is authorized to do business,
all of which states are set forth on Schedule 3.4(b)(iii), (iv) as may be
required by any applicable state corporation, securities or "blue sky" laws or
state takeover laws or (v) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
have a Company Material Adverse Effect, (c) except as set forth on Schedule
3.4(c), result in a violation or breach of, or constitute (with or without due
notice or lapse or time or both) a default (or give rise to any right of
termination, cancellation or acceleration or lien or other charge or
encumbrance) under any of the terms, conditions or provisions of any note,
license, agreement or other instrument or obligation to which the Company or any
of its Subsidiaries is a party or by which any of them or any of their
respective assets may be bound, except for such violations, breaches and
defaults (or rights of termination, cancellation or acceleration or liens or
other charges or encumbrances) as to which requisite waivers or consents have
been obtained or which would not have a Company Material Adverse Effect, or (d)
assuming the consents, approvals, authorizations or permits and filings or
notifications referred to in this Section 3.4 are duly and timely obtained or
made and the approval of this Agreement by the Company's stockholders has been
obtained, violate any order, writ, injunction, decree, statute, rule or
regulation in effect as of the date of this Agreement and applicable to the
Company or any of its Subsidiaries or any of their respective assets, except for
violations which would not have a Company Material Adverse Effect.
3.5 SEC Reports; Financial Statements.
(a) The Company has filed all reports required to be filed by it with
the SEC since January 1, 1997 pursuant to the federal securities laws and the
SEC rules and regulations thereunder, all of which as of their respective dates
complied in all material respects with applicable requirements of the Exchange
Act (collectively, the "Company SEC Reports"). None of the Company SEC Reports,
including, without limitation, any financial statements or schedules included
therein, as of their respective dates 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 light of the
circumstances under which they were made, not misleading.
12
(b) The consolidated balance sheets and the related consolidated
statements of operations, stockholders' equity and cash flows (including the
related notes thereto) of the Company included in the Company SEC Reports comply
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in conformity with generally accepted accounting principles ("GAAP")
applied on a basis consistent with prior periods (except as otherwise noted
therein), and present fairly the financial position of the Company as of their
respective dates, and the consolidated results of its operations and its cash
flows for the periods presented therein (subject, in the case of the unaudited
interim financial statements, to normal year-end adjustments).
(c) Except as set forth in the Company SEC Reports, and except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice, neither the Company nor any of its Subsidiaries
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on a consolidated
balance sheet of the Company and its Subsidiaries or in the notes thereto which,
individually or in the aggregate, could reasonably be expected to have a Company
Material Adverse Effect.
3.6 Absence of Certain Changes or Events. As of the date of this Agreement,
except as set forth on Schedule 3.6 or as a consequence of, or as contemplated
by, this Agreement, since December 31, 1997, (a) the business of the Company has
been carried on only in the ordinary and usual course, and other than in the
ordinary course of business, there has not occurred any change (other than a
change affecting the Company's industry generally) which has resulted or is
reasonably likely to result in a Company Material Adverse Effect and (b) except
as specifically set forth in the Company SEC Reports or otherwise specifically
disclosed in this Agreement or the Schedules hereto, neither the Company nor any
of its Subsidiaries has taken or omitted to take any action, nor has any event
occurred, which (if taken, omitted or occurring after the date hereof) would
constitute a breach of any of clause (i) through (xiii) of Section 5.1of this
Agreement.
3.7 Litigation. As of the date of this Agreement, except as set forth on
Schedule 3.7, there is no action, claim, suit, proceeding or governmental
investigation pending or, to the knowledge of the Company, threatened against
the Company or its Subsidiaries by or before any court, governmental or
regulatory authority or by any third party.
3.8 Taxes.
(a) The Company and its Subsidiaries have filed (or have obtained
extensions to file) all Tax Returns (as defined below) required to be filed by
the Company and its Subsidiaries for taxable periods ending on or prior to the
date of this Agreement, other than those Tax Returns the failure of which to
file would not have a Company Material Adverse Effect. Such Tax Returns are
true, correct and complete in all material respects.
(b) All Taxes (as defined below) shown as due on such Tax Returns have
been paid in full or adequate provision has been made to reflect such items on
the Company's or its Subsidiaries' balance sheet (in accordance with GAAP).
13
(c) There are no material liens for Taxes upon the assets of either
the Company or its Subsidiaries except for statutory liens for current Taxes not
yet due.
(d) Except as described on Schedule 3.8(d), as of the date of this
Agreement, there are no ongoing Audits (as defined below) of the Company or any
of its Subsidiaries, and neither the Company nor any of its Subsidiaries has
been notified in writing by any Tax Authority (as defined below) that any such
Audit is contemplated, threatened or pending.
(e) Except as described on Schedule 3.8(d), as of the date of this
Agreement, there are no claims, investigations (to the knowledge of the
Company), actions or proceedings pending or, to the knowledge of the Company,
threatened, against the Company or any of its Subsidiaries by any Tax Authority
for any past due Taxes with respect to which the Company or such Subsidiary
would be liable. There has been no waiver of any applicable statute of
limitations nor any consent for the extension of the time for the assessment of
any Tax against the Company or any of its Subsidiaries.
(f) For the purpose of this Agreement, (i) "Audit" shall mean any
audit, assessment of Taxes, any other examination or claim by any Tax Authority,
judicial, administrative or other proceeding or litigation (including any appeal
of any such judicial, administrative or other proceeding or litigation) relating
to Taxes and/or Tax Returns, (ii) "Taxes" shall mean all taxes, charges, fees,
levies, penalties or other assessments imposed by any United States federal,
state, local, or foreign taxing authority, including, but not limited to income,
excise, property, sales, transfer, franchise, payroll, withholding, social
security or other taxes, including any interest, penalties or additions
attributable thereto, (iii) "Tax Authority" shall mean the Internal Revenue
Service and any other domestic or foreign authority responsible for the
administration of any Taxes, and (iv) "Tax Return" shall mean any return,
declaration, report, information return or other document (including any related
or supporting information) with respect to Taxes.
3.9 Employee Benefit Plans; Labor Matters.
(a) Schedule 3.9 sets forth a true and complete list of all collective
bargaining agreements, employment, consulting, severance, deferred compensation
and non-competition agreements, executive compensation plans, stock purchase,
stock award and stock option plans and agreements, restricted stock awards,
bonus and incentive plans, directors fee arrangements, both tax qualified and
non-qualified and statutory and non-statutory employee pension plans, employee
profit sharing plans, 401(k) savings plans, multiemployer plans, employee
welfare plans, group life insurance, hospitalization insurance and other similar
plans or arrangements (either written or oral but only to the extent an oral
plan provides material benefits) providing for benefits to any employees,
consultants or directors of the Company or any Subsidiaries or affiliates of the
Company. With respect to the employee benefit plans, stock option plans,
restricted stock award programs and other programs and arrangements maintained
or contributed to by the Company or any of its Subsidiaries (the "Company
Plans"), except as specifically set forth on Schedule 3.9: (i) each Company Plan
intended to be qualified under Section 401(a) of
14
the Internal Revenue Code of 1986, as amended (the "Code"), has received a
favorable determination letter from the Internal Revenue Service (the "IRS")
that it is so qualified and nothing has occurred since the date of such letter
that could reasonably be expected to affect the qualified status of such Company
Plan, (ii) each Company Plan has been operated in all material respects in
accordance with its terms and the requirements of applicable law; (iii) neither
the Company nor any of its Subsidiaries has incurred any direct or indirect
liability under, arising out of or by operation of Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), in connection with
the termination of, or withdrawal from, any Company Plan or other retirement
plan or arrangement, and no fact or event exists that could reasonably be
expected to give rise to any liability. No benefit plan that is a group health
plan provides or is required to provide post employment or post retirement
medical or health benefits to any current or former employee of the Company or
any of its Subsidiaries other than medical continuation requirements mandated by
the Code.
(b) The Company is not subject to any collective bargaining or other
labor union contracts applicable to persons employed by the Company or its
Subsidiaries as of the date of this Agreement. As of the date of this Agreement,
there is no pending or threatened in writing labor dispute, strike or work
stoppage against the Company or any of its Subsidiaries which may interfere with
the respective business activities of the Company or its Subsidiaries
(c) As of the date of this Agreement, there are no more than 1,950,779
Options issued and outstanding under the Company's stock option plans. No
Options have been issued to employees or directors of the Company or its
Subsidiaries since the date of the Board of Directors meeting on July 28, 1998.
There are no restricted stock awards which have been issued by the Company that
are currently outstanding.
(d) Except as disclosed on Schedules 3.6 and 3.9, the consummation of
the transactions contemplated by this Agreement will not give rise to an
obligation on behalf of the Company to make severance or change of control
payments to any individuals, except such as may arise from actions of the
Company taken at the direction of Parent following the Effective Time.
(e) Except as described on Schedule 3.9(e), no payments made to any
individual by the Company or any Subsidiary as a result of the consummation of
the transactions contemplated by this Agreement would be non-deductible under
either Section 162(m) of the Code or Section 280G of the Code.
(f) Neither the Company nor any Subsidiary has taken any action or
failed to take any action which would result in the imposition of a material
excise tax on the Company pursuant to Sections 4975, 4980B and 4999 of the Code.
3.10 Environmental Laws and Regulations. As of the date of this Agreement,
except as set forth on Schedule 3.10, (i) the Company and each of its
Subsidiaries is in compliance with all applicable federal, state and local laws
and regulations relating to pollution or protection of human health or the
environment including, without limitation, ambient air, surface water,
15
ground water, land surface or subsurface strata) (collectively, "Environmental
Laws"), except for non-compliance that would not have a Company Material Adverse
Effect; (ii) neither the Company nor any of its Subsidiaries (a) has received
written notice of any action, cause of action, claim, investigation, demand or
notice by any person or entity alleging liability under or non-compliance with
any Environmental Law (an "Environmental Claim") or (b) to the knowledge of the
Company is subject to any Environmental Claim which is reasonably likely to have
a Company Material Adverse Effect; (iii) there has not been a Release of
Hazardous Materials by the Company or any of its Subsidiaries or any predecessor
in interest, or to the knowledge of the Company, by any other person at any
property currently operated by the Company, any of its Subsidiaries or
predecessor in interest except where such Release would not have a Company
Material Adverse Effect; (iv) to the knowledge of the Company there has not been
a Release of Hazardous Materials at any disposal or treatment facility that
received Hazardous Materials generated by the Company, its Subsidiaries or a
predecessor in interest. For purposes of this Section, "Hazardous Materials"
means (a) any element, compound, or chemical that is defined, listed or
otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or
hazardous substance, extremely hazardous substance or chemical, hazardous waste,
special waste, or solid waste under Environmental Laws; (b) petroleum,
petroleum-based or petroleum-derived products; (c) polychlorinated biphenyls;
(d) any substance exhibiting a hazardous waste characteristic including but not
limited to corrosivity, ignitability, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) any asbestos-containing materials.
The term "Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, dumping or disposing of
Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into the
environment.
3.11 Intellectual Property; Technology. (a) Schedule 3.11(a) contains a
true, correct and complete list of all Intellectual Property (as defined below),
which constitute applications and registrations by the Company and each
Subsidiary with or in any governmental agency, foreign or domestic, having
jurisdiction over such subject matter. All such applications and registrations
have been duly filed, and those registrations which have issued are validly
existing and in full force and effect. With respect to all U.S. registered
service and trademarks, Section 8 and 15 declarations, where applicable, have
been timely filed and accepted. Except as set forth on Schedule 3.11(a), no
service or trademarks listed on Schedule 3.11(a) have been abandoned.
(b) Except for proprietary material of persons other than the Company
which is licensed to the Company and which is generally commercially available
on a non-exclusive basis, material which is publicly available without
restriction, or material held under licenses referred to in Section 3.11(c)
without regard to the $100,000 limitation (collectively, the "Non-Owned
Intellectual Property"), the Company has good and marketable title to all
Intellectual Property and Technology, free and clear of all liens, claims,
security interests, restrictions and encumbrances and without payment of any
royalties, license fees or other amounts.
(c) The Company has provided Purchaser with a true and complete list
of all licenses, agreements, obligations or other commitments by which the
Company or any of its Subsidiaries may be bound with third parties under which
the Company or such Subsidiary uses,
16
has the right to use or exercises any rights with respect to any Intellectual
Property or Technology (as defined below) and pursuant to which the Company has
paid or is obligated to pay at least $100,000 per year.
(d) Neither the Company nor any of its Subsidiaries has received (nor
does the Company have any knowledge of) any notice, claim or allegation from any
other party challenging the right of the Company or any of its Subsidiaries to
use, possess, transfer, convey or otherwise dispose of any Intellectual Property
or Technology. There is no interference, opposition, cancellation, reexamination
or other contest proceeding, action, claim, dispute or claim of infringement,
misappropriation or other violation of any intellectual property or other
proprietary rights of any other party. The Company's use of the Intellectual
Property and Technology, past and present, other than the Non-Owned Intellectual
Property, has not and does not, to the Company's knowledge, violate or infringe
upon the rights of any other party nor does such use constitute a breach of any
agreement, obligation, promise or commitment by which the Company or any of its
Subsidiaries may be bound or constitute a violation of any laws, regulations,
ordinances codes or statutes in any jurisdiction.
(e) Except for standard customer license agreements, copies of the
forms of which have previously been provided to Purchaser, or as set forth on
Schedule 3.11(e), no licenses or other rights have been granted by the Company
or any of its Subsidiaries and neither the Company nor any of its Subsidiaries
has any obligation to grant licenses with respect to any Intellectual Property
or Technology. No claims have been made by or against the Company or any of its
Subsidiaries of any violation or infringement by others of any rights with
respect to any Intellectual Property or Technology. Neither the Company nor any
of its Subsidiaries is aware of any such claim which the Company or any of its
Subsidiaries may have the right or a reasonable basis to make or assert.
(f) Except as set forth on Schedule 3.11(f), (i) the Intellectual
Property and Technology includes all rights and interests necessary to conduct
the business of the Company and its Subsidiaries as it is currently conducted
and as proposed to be conducted and (ii) such rights will not be adversely
affected by the Company or any of its Subsidiaries or any other party claiming
under or through the Company or any of its Subsidiaries or otherwise in
connection with or arising from the execution and delivery of this Agreement,
the Closing or the consummation of any of the transactions contemplated hereby.
(g) All statements and representations made by the Company or any of
its Subsidiaries in any pending Intellectual Property applications, filings and
registrations were true in all material respects as of the time they were made.
(h) As to the Intellectual Property and Technology to which the
Company has good and marketable title (the "Owned Intellectual Property"), the
documentation, source code with its embedded commentary, descriptions and
indicated authorships, Core Class specifications and other informational
materials which describe the operation, functions and technical characteristics
applicable to the Owned Intellectual Property are complete in all material
respects, have been faithfully and accurately compiled in accordance with
standards generally practiced by
17
companies whose principal business is software development and which are listed
on the New York Stock Exchange or the NASDAQ National Market and are sufficient
to permit the Company to support and maintain its products and services. The
Company has taken all actions which a reasonably prudent person in the Company's
business would take to maintain its source code as confidential and proprietary
and to protect against the loss, theft or unauthorized use of such source code.
(i) The Company has taken all actions which a reasonably prudent
person in the Company's business would take to protect against the existence of
(I) any protections, encryption, security or lock-out devices, whether triggered
by the passage of time, the use or operation of the Intellectual Property and
Technology, remotely or otherwise which might in any way interrupt, discontinue
or otherwise adversely affect the Intellectual Property and Technology or
Purchaser's use thereof; and (II) any so-called computer viruses, worms, trap or
back doors, Trojan horses or any other instructions, codes, programs, data or
materials which could improperly, wrongfully and/or without the authorization of
Purchaser, interfere with the operation or use of the Intellectual Property and
Technology.
(j) The Company has delivered to Purchaser a description of the
Company's "Year 2000 Project." Since January 1, 1998, the Company has used
reasonable efforts to implement the Year 2000 Project. The anticipated cost to
the Company of implementing the Year 2000 Project is $530,000.
(k) For purposes hereof, "Intellectual Property" shall mean all
intellectual property rights, common law, statutory or otherwise, domestic and
foreign, including, without limitation, patents (including all reissues,
divisions, continuations and extensions), service marks, trademarks, tradenames,
brand, product and service names, and all logos and distinctive identifications
of the Company and its Subsidiaries, their products and services, copyrights as
well as all applications for any and all of the foregoing, licenses and other
contractual rights and other such property and intangible rights owned, used or
held for use by the Company and its Subsidiaries, together with the goodwill of
the business of the Company and its Subsidiaries in connection with all of the
foregoing.
(l) For purposes hereof, "Technology" shall mean all formulae,
algorithms, processes, procedures, designs, ideas, strategic and other business
plans, research records, inventions and all records of the foregoing, test,
engineering and technical data, know-how, proprietary information and
methodologies, trade secrets, technology, communications and associated
peripheral devices and resources, computer software, programs and code, both
object and source, in whatever form and media, all databases, specifications and
other information processing tangible and intangible items, owned, used or held
for use by the Company and its Subsidiaries with respect to the business of the
Company and its Subsidiaries.
3.12 Real Property. Neither the Company nor any of its Subsidiaries owns
any real property. Each of the leases for real property to which the Company or
any of its Subsidiaries is a party (the "Leases") and all amendments,
modifications and/or extensions thereto are listed on Schedule 3.12 hereto.
Schedule 3.12 hereto also lists, with respect to each Lease, the name of the
18
tenant(s), landlord(s), whether the Lease is a lease or a sublease, the current
expiration dates and remaining options to extend the Leases, and the minimum
monthly rent and additional rent under the Leases. With respect to the Leases,
(i) the Leases are in full force and effect, are unmodified (other than as
listed on Schedule 3.12 hereto) and are binding and enforceable in accordance
with their terms; (ii) all rental and other charges payable pursuant to the
terms and conditions of the Leases have been paid and no rent has been paid in
advance more than 30 days; (iii) there are no charges, offsets or defenses
against the enforcement by the lessors thereunder of any agreement, covenant or
condition on the part of the Company or any of its Subsidiaries, as the case may
be, to be performed or observed pursuant to the terms of the Leases; (iv) there
are no defaults by the Company or any of its Subsidiaries, as the case may be,
of any agreement, covenant or condition on the part of the Company or such
Subsidiary, as the case may be, to be performed or observed pursuant to the
terms of the Leases which with the giving of notice or the lapse of time would
give rise to the termination of any such Leases; (v) there are no actions or
proceedings pending or to the best of the Company's knowledge, threatened, by
any lessor under the Leases; (vi) the consummation of the Offer and the Merger
will not constitute a prohibited transfer or assignment under any of the Leases;
and (vii) to the knowledge of the Company, there are no material defaults by any
of the respective lessors of any agreement, covenant or condition on the part of
the lessor to be performed or observed pursuant to the terms of the Leases.
3.13 Compliance with Applicable Laws. Except as set forth on Schedule 3.13,
since January 1, 1996 neither the Company nor any of its Subsidiaries has
violated or failed to comply with any statute, law, regulation, rule, judgment,
decree or order of any governmental entity applicable to its business or
operations, except for violations and failures to comply that would not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect The conduct of the business of the Company and its
Subsidiaries is in conformity with all federal, state and local governmental and
regulatory requirements applicable to its business and operations, except where
such nonconformities would not, in the aggregate, reasonably be expected to
result in a Company Material Adverse Effect. The Company and its Subsidiaries
have all permits, licenses and franchises from governmental agencies required to
conduct their businesses as now being conducted, except for such permits,
licenses and franchises the absence of which would not, in the aggregate,
reasonably be expected to result in a Company Material Adverse Effect.
3.14 Insurance. Schedule 3.14 identifies all insurance policies maintained
by the Company and its Subsidiaries. The Company and its Subsidiaries have
obtained and maintained in full force and effect insurance with such insurance
companies or associations in such amounts, on such terms and covering such
risks, including fire and other risks insured against by extended coverage, as
is reasonably prudent, and each has maintained in full force and effect public
liability insurance, insurance against claims for personal injury or death or
property damage occurring in connection with the activities of the Company or
its Subsidiaries or any properties owned, occupied or controlled by the Company
or its Subsidiaries, in such amount as reasonably deemed necessary by the
Company or its Subsidiaries.
3.15 Approvals; Antitakeover Provisions. The Board of Directors of the
Company has approved this Agreement for all purposes under Section 203 of the
DGCL and the Company has
19
heretofore furnished to Parent a true and correct copy of resolutions duly
adopted by the unanimous vote of such board on September 29, 1998 and such
resolutions are in full force and effect on the date hereof. Such action is the
only action necessary so that the restrictions on business combinations
contained in Section 203 of the DGCL will not apply with respect to or as a
result of the Merger Agreement or any of the transactions contemplated hereby.
3.16 Voting Requirements. The affirmative vote of the holders of a majority
of the outstanding shares of Company Common Stock is the only vote of the
holders of any class of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated by this Agreement.
3.17 Brokers and Finders. Other than Xxxxxxx, Xxxxx & Co., which has been
retained by the Company's Board of Directors, the Company has not employed any
investment banker, broker, finder, advisor, consultant or intermediary in
connection with the transactions contemplated by this Agreement which would be
entitled to any investment banking, brokerage, finder's, advisory or similar fee
or commission in connection with this Agreement or the transactions contemplated
hereby.
3.18 Opinion of Financial Advisors. The Board of Directors has received the
opinion of Xxxxxxx, Sachs & Co., dated as of the date of this Agreement, to the
effect that, as of the date of such opinion, the $24.59 in cash per Share to be
received by the holders of Shares in the Offer and the Merger is fair from a
financial point of view to such holders.
3.19 Information Supplied. None of the information supplied or to be
supplied by the Company for inclusion or incorporation by reference in (i) the
Offer Documents, (ii) the Schedule 14D-9 or (iii) the information to be filed by
the Company in connection with the Offer pursuant to Rule 14f-1 promulgated
under the Exchange Act (the "Information Statement") will, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. If at any time prior to the Effective Time any event with
respect to the Company or its Subsidiaries should occur which is required to be
described in a supplement to (i) the Offer Documents, (ii) the Schedule 14D-9 or
(iii) the Information Statement such event shall be so described, and such
supplement shall be promptly filed with the SEC and, as required by law,
disseminated to the stockholders of the Company and to Parent. The Schedule
14D-9 and the Information Statement will comply in all material respects with
the requirements of the Exchange Act and the rules and regulations thereunder.
3.20 Confidentiality Agreements. Except as set forth on Schedule 3.20, the
confidentiality agreements entered into with any other potential purchasers are
in substantially the same form as the Confidentiality Agreement (as defined in
Section 5.5) and all benefits under such agreements shall inure to the Company
as of the Effective Time.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
AND PURCHASER
Each of Parent and Purchaser represents and warrants jointly and severally
to the Company that:
4.1 Corporate Organization and Qualification. Each of Parent and Purchaser
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of Parent and Purchaser is qualified and in
good standing as a foreign corporation in each jurisdiction where the properties
owned, leased or operated, or the business conducted, by it require such
qualification, except where the failure to so qualify or be in good standing
would not have a Parent Material Adverse Effect.
4.2 Authority Relative to This Agreement. Each of Parent and Purchaser has
the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and the consummation by Parent and Purchaser of the transactions contemplated
hereby have been duly and validly authorized by the respective Boards of
Directors of Parent and Purchaser and by Parent as the sole stockholder of
Purchaser, and no other corporate proceedings on the part of Parent and
Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Purchaser and, assuming this
Agreement constitutes the valid and binding agreement of the Company,
constitutes the valid and binding agreement of each of Parent and Purchaser,
enforceable against each of them in accordance with its terms, except that the
enforcement hereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
4.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Parent or Purchaser nor the consummation by Parent
or Purchaser of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the Certificate of Incorporation or the
By-laws, respectively, of Parent or Purchaser; (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, except (i) in connection with the
applicable requirements of the HSR Act, (ii) pursuant to the applicable
requirements of the Exchange Act, (iii) the filing of the Certificate of Merger
pursuant to the DGCL and appropriate documents with the relevant authorities of
other states in which Parent or Purchaser is authorized to do business, (iv) as
may be required by any applicable state corporation, securities or "blue sky"
laws or state takeover laws, (v) informational filings with the Bureau of
Economic Analysis of the United States Department of Commerce or (vi) where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications would not have a Parent Material Adverse
Effect; (c) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or
21
acceleration or liens or other charges or encumbrances) under any of the terms,
conditions or provisions of any note, license, agreement or other instrument or
obligation to which Parent or any of its Subsidiaries is a party or by which any
of them or any of their respective assets may be bound, except for such
violations, breaches and defaults (or rights of termination, cancellation or
acceleration or lien or other charge or encumbrance) as to which requisite
waivers or consents have been obtained or which would not have a Parent Material
Adverse Effect; or (d) assuming the consents, approvals, authorizations or
permits and filings or notifications referred to in this Section 4.3 are duly
and timely obtained or made, violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent or any of its Subsidiaries or
to any of their respective assets, except for violations which would not have a
Parent Material Adverse Effect.
4.4 Interim Operations of Purchaser. Purchaser was formed solely for the
purpose of engaging in the transactions contemplated hereby and has not engaged
in any business activities or conducted any operations other than in connection
with the transactions contemplated hereby.
4.5 Sufficient Funds. Either Parent or Purchaser has sufficient funds
available (through existing credit arrangements or otherwise) to purchase, in
accordance with the terms hereof, all of the Shares outstanding on a fully
diluted basis and to pay all fees, expenses and payments related to the
Transactions.
4.6 Share Ownership. None of Parent and Purchaser nor any of their
respective "affiliates" or Associates (as such terms are defined in Rule 12b-2
under the Exchange Act) beneficially own any Shares.
4.7 Information in Proxy Statement and Schedule 14D-9. None of the
information supplied by Parent or Purchaser for inclusion or incorporation by
reference in the Proxy Statement or the Schedule 14D-9 will, at the date mailed
to stockholders and at the time of the Special Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to Parent or any of its
Subsidiaries should occur which is required to be described in a supplement to
the Proxy Statement or the Schedule l4D-9, such event shall be so described, and
such supplement shall be promptly filed with the SEC and, as required by law,
disseminated to the stockholders of the Company and Parent. With respect to
information relating to Parent or Purchaser, the Proxy Statement will comply in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
4.8 Brokers and Finders. Other than Credit Suisse First Boston Corporation,
whose fees will be paid by Parent, Parent and Purchaser have not employed any
investment banker, broker, finder, advisor, consultant or intermediary in
connection with the transactions contemplated by this Agreement which would be
entitled to any investment banking, brokerage, finder's, advisory or similar fee
or commission in connection with this Agreement or the transactions contemplated
hereby.
22
ARTICLE V
ADDITIONAL COVENANTS AND AGREEMENTS
5.1 Interim Operations of the Company. Except as set forth on Schedule 5.1,
during the period from the date of this Agreement to the Effective Time (unless
Parent shall otherwise agree in writing and except as otherwise contemplated by
this Agreement), the Company will conduct its operations according to its
ordinary and usual course of business consistent with past practice and seek to
preserve intact its current business organization, keep available the services
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end that
their goodwill and ongoing businesses shall be unimpaired in any material
respect at the Effective Time. Without limiting the generality of the foregoing,
and except as otherwise contemplated by this Agreement or as set forth on
Schedule 5.1, the Company will not, and will not permit any of its Subsidiaries
to, prior to the Effective Time, without the prior written consent of Parent:
(i) except for the issuance of Shares upon the exercise of Options
outstanding on the date of this Agreement and in accordance with their
present terms, issue, sell, grant, dispose of, pledge or otherwise
encumber, or authorize or propose the issuance, sale, disposition or pledge
or other encumbrance of (A) any additional shares of capital stock of any
class (including the Shares), or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for any shares of
capital stock, or any rights, warrants, options, calls, commitments or any
other agreements of any character to purchase or acquire any shares of
capital stock or any securities or rights convertible into, exchangeable
for, or evidencing the right to subscribe for, any shares of capital stock
or (B) any other securities in respect of, in lieu of, or in substitution
for, Shares outstanding on the date hereof;
(ii) redeem, purchase or otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its outstanding Shares;
(iii) split, combine, subdivide or reclassify any Shares or declare,
set aside for payment or pay any dividend, or make any other actual,
constructive or deemed distribution in respect of any Shares or otherwise
make any payments to stockholders in their capacity as such, other than
dividends by a direct or indirect wholly owned Subsidiary of the Company,
(iv) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its direct or indirect Subsidiaries
(other than the Merger),
(v) adopt any amendments to its Certificate of Incorporation or
By-laws or alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any direct
or indirect Subsidiary of the Company;
23
(vi) make any acquisition, by means of merger, consolidation or
otherwise, or disposition, of assets or securities (other than the Merger),
in each case other than in the ordinary course of business consistent with
past practice;
(vii) sell, lease, license, mortgage or otherwise encumber or subject
to any Lien or otherwise dispose of any of its properties or assets, except
sales in the ordinary course of business consistent with past practice and
Liens existing as of the date of this Agreement;
(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, or issue or sell any debt securities
or warrants or other rights to acquire any debt securities of the Company
or any of its Subsidiaries, or (B) make any loans or advances, other than
in the ordinary course of business consistent with past practice, or any
capital contributions to, or investments in, any other person, other than
the Company or any direct or indirect wholly owned Subsidiary of the
Company;
(ix) make or agree to make any new capital expenditure or expenditures
which, individually, is in excess of $100,000 or, in the aggregate, are in
excess of $600,000;
(x) make any material tax election or settle or compromise any
material income tax liability;
(xi) pay, discharge, settle or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction,
in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved against
in, or contemplated by, the most recent consolidated financial statements
(or the notes thereto) included in the Company SEC Reports or incurred in
the ordinary course of business consistent with past practice, or waive any
benefits of, or agree to modify in any respect, any confidentiality,
standstill or similar agreements to which the Company, or any of its
Subsidiaries is a party;
(xii) except in the ordinary course of business, modify, amend or
terminate any contract or agreement to which the Company or any of its
Subsidiaries is a party, or waive, release or assign any rights or claims;
(xiii) except as required to comply with applicable law, (A) adopt,
enter into, terminate or amend any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability,
death benefit, hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) providing benefits to any
current or former employee, officer or director of the Company or any of
its
24
Subsidiaries (collectively, "Benefit Plans"), other than arrangements or
understandings adopted, entered into, terminated or amended in the ordinary
course of business consistent with past practice, (B) increase in any
manner the compensation or fringe benefits of, or pay any bonus to, any
director, officer or employee (except for normal increases or bonuses in
the ordinary course of business consistent with past practice), (C) pay any
benefit not provided for under any Benefit Plan, other than in the ordinary
course of business consistent with past practice, (D) except as permitted
in clause (B) above, or for options included in the representation set
forth in Section 3.2, grant any awards under any bonus, incentive,
performance or other compensation plan or arrangement or Benefit Plan
(including the grant of stock options, stock appreciation rights, stock
based or stock related awards, performance units or restricted stock, or
the removal of existing restrictions in any Benefit Plans or agreement or
awards made thereunder) or (E) other than in the ordinary course of
business consistent with past practice, take any action to fund or in any
other way secure the payment of compensation or benefits under any employee
plan, agreement, contract or arrangement or Benefit Plan; or
(xiv) (A) take, or agree or commit to take, any action that would make
any representation or warranty of the Company hereunder inaccurate at the
Effective Time (except for representations and warranties which speak as of
a particular date, which need be accurate only as of such date), (B) omit,
or agree or commit to omit, to take any action necessary to prevent any
such representation or warranty from being inaccurate in any material
respect at the Effective Time (except for representations and warranties
which speak as of a particular date, which need be accurate only as of such
date), provided however that the Company shall be permitted to take or omit
to take such action which can be cured, and in fact is cured, at or prior
to the Effective Time or (C) take, or agree or commit to take, any action
that would result in, or is reasonably likely to result in, any of the
conditions of the Merger set forth in Article VI not being satisfied except
that, with respect to the condition set forth in Section 6.1(a), such
action shall be permitted if it is consistent with the fiduciary duties of
the Company's Board of Directors to the Company's stockholders under
applicable law; or
(xv) authorize, recommend, propose or announce an intention to do any
of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
5.2 Alternative Proposals. Subject to the last sentence of this Section
5.2, from and after the date hereof and prior to the Effective Time, the Company
(a) will not, nor shall it authorize or permit its officers, directors,
employees, representatives and agents to, initiate, solicit or encourage,
directly or indirectly, any Alternative Proposal (as defined in Section 8.10) or
engage in any negotiations or enter into any agreement or provide any
confidential information or data to any person in connection with or relating to
any Alternative Proposal; (b) will immediately cease any existing discussions or
negotiations, if any, with any parties conducted heretofore with respect to any
Alternative Proposal; and (c) will notify Parent as soon as practicable if any
such inquiries or proposals are received by, any such information is requested
from, or any such negotiations and/or discussions are sought to be initiated or
25
continued with, the Company. Notwithstanding the foregoing, nothing in this
Section 5.2 shall require the Board of Directors of the Company on behalf of the
Company to act, or refrain from acting with respect to unsolicited Alternative
Proposals, in any manner which, in the opinion of the Board of Directors of the
Company after consultation with its counsel, could reasonably be deemed
inconsistent with its fiduciary duties to the Company's stockholders under
applicable law, including without limitation disclosing to its stockholders a
position required by Rule 14e-2(a) under the Exchange Act.
5.3 Certain Filings. The Company and Purchaser shall reasonably cooperate
with one another (a) in connection with the preparation of the Proxy Statement
and the Schedule 14D-9, and (b) in determining whether any action by or in
respect of, or filing with, any governmental body, agency or official, or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement and (c)
in seeking any such actions, consents, approvals, or waivers or making any such
filings, furnishing information required in connection therewith or with the
Proxy Statement and the Schedule 14D-9 and seeking timely to obtain any such
actions, consents, approvals or waivers.
5.4 Satisfaction of Conditions; Receipt of Necessary Approvals.
(a) Subject to the terms and conditions herein provided, each of the
parties hereto agrees to (i) promptly effect all necessary registrations,
submissions and filings, including, but not limited to, filings under the HSR
Act and submissions of information requested by governmental authorities, which
may be necessary or required in connection with the consummation of the
transactions contemplated by this Agreement, (ii) use all reasonable efforts to
secure federal antitrust clearance (including taking steps to avoid or set aside
any preliminary or permanent injunction or other order of any federal or state
court of competent jurisdiction or other governmental authority), (iii) use all
reasonable efforts to take all other action and to do all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and (iv) use all
reasonable efforts to obtain all other necessary or appropriate waivers,
consents and approvals (including but not limited to such filings, consents,
approvals, orders, registrations and declarations as may be required under the
laws of any foreign country in which the Company or any of its Subsidiaries or
Parent or any of its Subsidiaries conducts any business or owns any assets) and
to lift any injunction or other legal bar to the Merger (and, in such case, to
proceed with the Merger as expeditiously as possible), subject, however, to the
requisite vote of the stockholders of the Company. Parent represents and
warrants to the Company that Parent's affiliates have full power and authority
to effect the transactions contemplated by this Section 5.4.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to use all reasonable efforts or take any action pursuant to this Section 5.4 if
in the opinion of the Board of Directors after consultation with its counsel
such actions could reasonably be deemed inconsistent with its fiduciary duties
to the Company's stockholders under applicable law.
26
5.5 Access to Information. To the extent permitted by applicable law, upon
reasonable notice, the Company shall (and shall cause each of its Subsidiaries
to) afford to the officers, employees, accountants, counsel, financing sources
and other representatives of Parent, access, during normal business hours during
the period prior to the Effective Time, to all its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its Subsidiaries to) furnish promptly to the Parent (a) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of federal
securities laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Parent will hold any
such information which is nonpublic in confidence in accordance with the
provisions of the Confidentiality Agreement between the Company and Parent,
dated as of May 11, 1998 (the "Confidentiality Agreement").
5.6 Publicity. The initial press release with respect to the execution of
this Agreement shall be a joint press release acceptable to Parent and the
Company. Thereafter, so long as this Agreement is in effect, neither the
Company, Parent nor any of their respective affiliates shall issue or cause the
publication of any press release or other announcement with respect to the
Merger, this Agreement or the other transactions contemplated hereby without
prior consultation with the other party, except as may be required by law, the
rules and regulations of any national securities exchange or over the counter
market or by any listing agreement with a national securities exchange.
5.7 Directors' and Officers' Insurance and Indemnification.
(a) From and after the consummation of the Offer, Parent shall, and
shall cause the Company (or, if after the Effective Time, the Surviving
Corporation) to, indemnify, defend and hold harmless any person who is now, or
has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, an officer or director (the "Company Indemnified Party") of the
Company and its Subsidiaries against all losses, claims, damages, liabilities,
costs and expenses (including attorney's fees and expenses), judgments, fines,
losses, and amounts paid in settlement in connection with any actual or
threatened action, suit, claim, proceeding or investigation (each a "Claim") to
the extent that any such Claim is based on, or arises out of, the fact that such
person is or was a director or officer of the Company or any of its
Subsidiaries, and to the extent that any such Claim pertains to any matter or
fact arising out of any act or omission prior to or at the Effective Time,
regardless of whether such Claim is asserted or claimed prior to, at or after
the Effective Time, to the full extent permitted under applicable law or the
Company's Articles of Incorporation, By-laws or indemnification agreements in
effect at the date hereof identified on Schedule 5.7, or otherwise as permitted
by contracts identified on Schedule 5.7, including provisions relating to
advancement of expenses incurred in the defense of any action or suit. Without
limiting the foregoing, in the event any Company Indemnified Party becomes
involved in any capacity in any Claim, then from and after consummation of the
Offer Parent shall, or shall cause the Company (or the Surviving Corporation if
after the Effective Time) to, periodically advance to such Company Indemnified
Party its legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the provision by such
Company Indemnified Party
27
of an undertaking to reimburse the amounts so advanced in the event of a final
non-appealable determination by a court of competent jurisdiction that such
Company Indemnified Party is not entitled thereto.
(b) Parent and the Company agree that all rights to indemnification
and all limitations on liability existing in favor of a Company Indemnified
Party as provided in the Company's Certificate of Incorporation and By-laws as
in effect as of the date hereof shall survive the Merger and shall continue in
full force and effect, without any amendment thereto, for a period of six years
from the Effective Time to the extent such rights are consistent with the DGCL;
provided, that in the event any claim or claims are asserted or made within such
six year period, all rights to indemnification in respect of any such claim or
claims shall continue until disposition of any and all such claims; provided
further, that nothing in this Section 5.7 shall impair any rights or obligations
of any present or former directors or officers of the Company.
(c) Parent shall cause to be maintained in effect for the Indemnified
Parties (as defined below) for not less than six years after the Effective Time
policies of directors' and officers' liability insurance and fiduciary liability
insurance with respect to matters occurring at or prior to the Effective Time
(including without limitation, the transaction, contemplated by this Agreement)
providing substantially the same coverage and containing terms and conditions
which are no less advantageous, in any material respect, to those currently
maintained by the Company for the benefit of the Company's present or former
directors, officers, employees or agents covered by such insurance policies
prior to the Effective Time (the "Indemnified Parties").
(d) In the event Parent or Purchaser or any of their successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, to the extent necessary
to effectuate the purposes of this Section 5.7, proper provision shall be made
so that the successors and assigns of Parent and Purchaser assume the
obligations set forth in this Section 5.7 and none of the actions described in
clauses (i) or (ii) shall be taken until such provision is made.
5.8 Employees; Continuation of Benefits. (a) Following the Effective Time,
the Surviving Corporation will provide pension, health and welfare benefits
(other than stock option, stock purchase or similar plans) to employees of the
Company and its Subsidiaries who continue their employment after the Effective
Time (each, a "Continuing Employee") on terms which are generally no less
favorable to such Continuing Employee than the benefits being provided to such
Continuing Employee immediately prior to the Effective Time.
(b) If at any time Parent shall make a determination that any
Continuing Employee is eligible to participate in any of Parent's benefit plans
after the Effective Time, then, for purposes of eligibility and vesting with
respect to any such plans, Parent will cause the Surviving Corporation to
recognize the service of the Continuing Employees through the Effective Time as
if such service had been performed with Parent.
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ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
6.1 Conditions to Each Party's Obligation to Effect Merger. The respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. If approval of the Merger by the
stockholders of the Company is required by applicable law, this Agreement shall
have been duly approved by the stockholders of the Company entitled to vote with
respect thereto in accordance with applicable law and the Certificate of
Incorporation and By-laws of the Company; provided, that Parent and Purchaser
shall vote (or cause to be voted, if applicable) all shares of Company Common
Stock then owned or controlled by them, directly or indirectly, in favor of the
Merger.
(b) Injunction. There shall not be in effect any statute, rule,
regulation, executive order, decree, ruling or injunction or other order or a
court or governmental or regulatory agency of competent jurisdiction directing
that the transactions contemplated herein not be consummated or otherwise
materially limiting or restricting ownership or the operation of the business of
the Surviving Corporation; provided, however, that, subject to the terms and
provisions herein provided (including but not limited to Section 5.4 of this
Agreement), prior to invoking this condition each party shall use its reasonable
efforts to have any such decree, ruling, injunction or order vacated.
(c) Governmental Filings and Consents. Subject to the terms and
provisions herein provided (including but not limited to Section 5.4 hereof),
all governmental consents, orders and approvals legally required for the
consummation of the Merger and the transactions contemplated hereby shall have
been obtained and be in effect at the Effective Time, other than those consents,
orders or approvals which would not reasonably be expected to have a Company
Material Adverse Effect or which would prohibit or materially limit or restrict
the consummation of the transactions contemplated herein or the ownership or
operation of the business of the Surviving Corporation, and the waiting periods
under the HSR Act and under antitrust laws of applicable jurisdictions outside
the United States shall have expired or been terminated.
ARTICLE VII
TERMINATION
7.1 Termination. This Agreement may be terminated and the Merger
contemplated herein may be abandoned at any time prior to the Effective Time,
whether before or after stockholder approval thereof:
(a) By the mutual consent of Parent, Purchaser and the Company.
29
(b) By either the Company or Parent:
(i) if shares of Company Common Stock shall not have been
purchased pursuant to the Offer on or prior to three (3) months from
the execution of this Agreement; provided, however, that the passage
of the period referred to in the foregoing clause shall be tolled
during (A) the period during which any party shall be subject to a
non-final order, decree, ruling or action restraining, enjoining or
otherwise prohibiting the purchase of shares of Company Common Stock
pursuant to the Offer or the consummation of the Merger, but not later
than six (6) months from the execution of this Agreement, or (B) any
additional waiting period under the HSR Act resulting from a second
request; provided, further, however, that the right to terminate this
Agreement under this Section 7.1(b) (i) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of Parent or Purchaser,
as the case may be, to purchase shares of Company Common Stock
pursuant to the Offer on or prior to such date; or
(ii) if any governmental entity of competent jurisdiction in the
United States or other country in which the Company directly or
indirectly has material assets or operations shall have issued an
order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties hereto shall use their
respective reasonable efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and non-appealable.
(c) By the Board of Directors of the Company:
(i) if, prior to the purchase of shares of Company Common Stock
pursuant to the Offer, (a) the Board of Directors of the Company shall
have entered into or shall have publicly announced its intention to
enter into an agreement or an agreement in principle with respect to
any Alternative Proposal that the Board of Directors determines, in
good faith after consultation with its financial advisors, is a
Superior Proposal (as defined in Section 8.10); (b) the Board of
Directors of the Company shall have withdrawn, or modified or changed
in a manner adverse to Parent or Purchaser its approval or
recommendation of the Offer, this Agreement or the Merger or shall
have recommended a Superior Proposal or shall have executed, or shall
have announced its intention to enter into, an agreement in principle
or definitive agreement relating to a Superior Proposal with a person
or entity other than Parent, Purchaser or their affiliates (or the
Board of Directors of the Company resolves to do any of the
foregoing); (c) any person or group (as defined in Section 13(d) (3)
of the Exchange Act) (other than Parent, Purchaser or any affiliate
thereof or Xxxx X. Xxxxxx) shall have become, after the date of this
Agreement, the beneficial owner (as defined in Rule 13d-3 promulgated
under the Exchange Act) of a majority of the outstanding Shares, or
(d) any representation or warranty made by Parent or Purchaser in this
Agreement shall not have been true and correct in all material
respects when made, or Parent or Purchaser shall have failed to
30
observe or perform in any material respect any of its material
obligations under this Agreement, provided that prior to exercising
such right of termination, the Company shall give prompt written
notice to Parent of such misrepresentation or breach of warranty or
failure to observe or perform; provided, further, that the Company
shall not have such right of termination if the condition resulting in
such misrepresentation or breach of warranty or failure to observe or
perform is cured (i) in the event such notice is delivered on or prior
to the fourth business day prior to the then-scheduled expiration date
of the Offer, not later than the earlier of (A) such expiration date
and (B) ten business days following delivery of such notice and (ii)
in the event such notice is delivered on or after the third business
day prior to such expiration date, not later than three business days
following such delivery (it being agreed that in such event the Offer
shall be extended as necessary at least until the end of such cure
period); or
(ii) if Parent or Purchaser shall have terminated the Offer, or
the Offer shall have expired, without Parent or Purchaser, as the case
may be, purchasing any shares of Company Common Stock pursuant
thereto; provided that the Company may not terminate this Agreement
pursuant to this Section 7.1(c)(ii) if the Company is in material
breach of this Agreement; or
(iii) if Parent, Purchaser or any of their affiliates shall have
failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the Offer or
shall have failed to pay for the Shares in accordance with the terms
of the Offer; provided, that the Company may not terminate this
Agreement pursuant to this Section 7.1(c)(iii) if the Company is in
material breach of this Agreement.
(d) By Parent or Purchaser:
(i) if, due to an occurrence that if occurring after the
commencement of the Offer would result in a failure to satisfy any of
the conditions set forth in Annex A hereto, Parent, Purchaser, or any
of their affiliates shall have failed to commence the Offer on or
prior to five business days following the date of the initial public
announcement of the Offer; provided that Parent may not terminate this
Agreement pursuant to this Section 7.1(d)(i) if Parent or Purchaser is
in material breach of this Agreement; or
(ii) prior to the purchase of shares of Company Common Stock
pursuant to the Offer, if (a) the Company shall have received any
Alternative Proposal which the Board of Directors of the Company has
determined to designate as a Superior Proposal; (b) the Board of
Directors of the Company shall have withdrawn, or modified or changed
in a manner adverse to Parent or Purchaser its approval or
recommendation of the Offer, this Agreement or the Merger or shall
have recommended an Alternative Proposal or shall have executed, or
shall have announced its intention to enter into, an agreement in
principle or definitive agreement relating to an Alternative Proposal
with a person or entity other than Parent, Purchaser or their
affiliates (or the Board of Directors
31
of the Company resolves to do any of the foregoing); (c) any person or
group (as defined in Section 13(d) (3) of the Exchange Act) (other
than Parent, Purchaser or any affiliate thereof or Xxxx X. Xxxxxx)
shall have become, after the date of this Agreement, the beneficial
owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of
50% or more of the outstanding Shares, or (d) any representation or
warranty made by the Company in this Agreement shall not have been
true and correct in all material respects when made and shall have
resulted in, or is reasonably likely to result in, a Company Material
Adverse Effect, or the Company shall have failed to observe or perform
in any material respect any of its material obligations under this
Agreement; provided that prior to exercising such right of
termination, Parent and Purchaser shall give prompt written notice to
the Company of such misrepresentation or breach of warranty or failure
to observe or perform; provided, further, that Parent and Purchaser
shall not have such right of termination if the condition resulting in
such misrepresentation or breach of warranty or failure to observe or
perform is cured (i) in the event such notice is delivered on or prior
to the fourth business day prior to the then-scheduled expiration date
of the Offer, not later than the earlier of (A) such expiration date
and (B) ten business days following delivery of such notice and (ii)
in the event such notice is delivered on or after the third business
day prior to such expiration date, not later than three business days
following such delivery (it being agreed that in such event the Offer
shall be extended as necessary at least until the end of such cure
period).
7.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 7.1, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall forthwith become null
and void, and there shall be no liability on the part of Parent, Purchaser or
the Company or their respective directors, officers, employees, representatives,
agents, advisors or stockholders other than the obligations pursuant to this
Section 7.2, except that the agreements contained in Sections 8.1, 8.2, 8.3,
8.4, 8.6, 8,7, 8.8, 8.9, 8.16 and the last sentence of Section 5.5 shall survive
the termination hereof, provided, however, that if this Agreement is terminated
by the Board of Directors of the Company pursuant to Section 7.1(c)(i)(a), (b)
or (c) hereof or by Parent or Purchaser pursuant to Section 7.1(d)(ii)(a), (b)
or (c) hereof, then immediately following such termination the Company shall pay
to Parent in full satisfaction of the obligations of the Company under this
Agreement a termination fee of $7,000,000, plus Parent's and Purchaser's
reasonable out-of-pocket fees and expenses, not to exceed $500,000, incurred in
connection with the due diligence investigation, the Offer, the Merger, this
Agreement and the consummation (or proposed consummation) of the transactions
contemplated hereby. Nothing contained in this Section 7.2 shall relieve any
party from liability for fraud or for willful breach of this Agreement.
32
ARTICLE VIII
MISCELLANEOUS AND GENERAL
8.1 Payment of Expenses and Other Payments. Whether or not the Merger shall
be consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
8.2 Survival of Representations and Warranties; Survival of Confidentiality
Agreement. The representations and warranties made herein shall not survive
beyond the earlier of termination of this Agreement or the Effective Time. This
Section 8.2 shall not limit any covenant or agreement of the parties hereto
which by its terms contemplates performance after the Effective Time. The
Confidentiality Agreement shall survive any termination of this Agreement, and
the provisions of such Confidentiality Agreement shall apply to all information
and material delivered by any party hereunder.
8.3 Modification or Amendment. Subject to the applicable provisions of the
DGCL, at any time prior to the Effective Time, the parties hereto may modify or
amend this Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties; provided, however, that after
approval of this Agreement by the stockholders of the Company, no amendment
shall be made which reduces or changes the consideration payable in the Merger
or adversely affects the rights of the Company's stockholders hereunder without
the approval of such stockholders.
8.4 Waiver of Conditions. Except as otherwise provided in this Agreement,
any failure of any of the parties to comply with any obligation, covenant
agreement or condition herein may be waived by the party or parties entitled to
the benefits thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
8.5 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
8.6 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without giving effect to the
principles of conflicts of law thereof.
8.7 Notices. Any notice request, instruction or other document to be given
hereunder by any party to the other parties shall be in writing and delivered
personally or sent by overnight courier, registered or certified mail, postage
prepaid, or by facsimile transmission (with a confirming copy sent by overnight
courier), as follows:
33
(a) If to the Company, to
Xxxx X. Xxxxxx, President
Ovid Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
with a copy to:
Xxxx Xxxxxx, Esq.
Fulbright & Xxxxxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
(b) if to Parent or Purchaser, to
Xxxxx X. Xxxx, Executive Vice President
Wolters Kluwer United States Inc.
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
or to such other persons or addresses as may be designated in writing (by like
notice) by the party to receive such notice.
8.8 Entire Agreement; Assignment. This Agreement and the Confidentiality
Agreement (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all other prior agreements and
understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof and (b) shall not be
34
assigned by operation of law or otherwise without the prior written consent of
the other parties. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective permitted successors and assigns.
8.9 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their respective successors and
assigns. Nothing in this Agreement, express or implied, other than the right to
receive the consideration payable in the Merger pursuant to Article II hereof,
is intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement;
provided, however, that the provisions of Sections 5.7 shall inure to the
benefit of the Company Indemnified Parties and the Indemnified Parties and shall
be binding on all successors and assigns of Parent, Purchaser, the Company and
the Surviving Corporation and shall be enforceable by the Company Indemnified
Parties and the Indemnified Parties, as the case may be, after the Effective
Time.
8.10 Certain Definitions. As used herein:
(a) "Alternative Proposal" shall mean any proposal or offer for a
merger, asset acquisition or other business combination involving the Company or
any proposal or offer to acquire a significant equity interest in, or a
significant portion of the assets of, the Company other than the transactions
contemplated by this Agreement.
(b) "Company Material Adverse Effect" shall mean any adverse change in
the assets, liabilities, financial condition, or results of operations of the
Company or any of its Subsidiaries which is material to the Company and its
Subsidiaries taken as a whole, other than any change or effect arising out of
general economic conditions.
(c) "Parent Material Adverse Effect" shall mean any material adverse
change in the assets, liabilities, financial condition, or results of operations
of Parent or any of its Subsidiaries which is material to Parent and its
Subsidiaries taken as a whole other than any change or effect arising out or
general economic conditions.
(d) "Subsidiary" shall mean, when used with reference to any entity,
any corporation a majority of the outstanding voting securities of which are
owned directly or indirectly by such entity.
(e) "Superior Proposal" means any bona fide proposal to acquire,
directly or indirectly, all of the Shares then outstanding or all or
substantially all the assets of the Company, and otherwise on terms which the
Board of Directors of the Company determines in good faith (after consultation
with the Company's financial advisor) to be more favorable to the Company and
its stockholders than the Offer and the Merger.
8.11 Obligation of Parent. Whenever this Agreement requires Purchaser to
take any action, such requirement shall be deemed to include an undertaking on
the part of Parent to cause Purchaser to take such action.
35
8.12 Joint and Several Liability. Parent and Purchaser hereby agree that
they will be jointly and severally liable for all covenants, agreements,
obligations and representations and warranties made by either of them in this
Agreement.
8.13 Validity. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void, unenforceable or against its regulatory policy, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse to any
party.
8.14 Interpretation. The words "hereof", "herein", and "herewith" and words
of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified. Whenever the words "include, "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation". The words describing the singular number shall include the plural
and vice versa, and words denoting any gender shall include all genders and
words denoting natural persons shall include corporations and partnerships and
vice versa. The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. As used in this Agreement, the
term "affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act. No presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
8.15 Captions. The Article, Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
8.16 Specific Performance. Each of the parties hereto acknowledges and
agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (a) will
waive, in any action for specific performance, the defense of adequacy of a
remedy at law and (b) shall be entitled in addition to any other remedy to which
they may be entitled at law or in equity, to compel specific performance of this
Agreement in any action instituted in a court of competent jurisdiction.
8.17 Schedules. The Schedules to this Agreement shall be construed with and
as an integral part of this Agreement to the same extent as if the same had been
set forth verbatim herein. No such disclosure shall be deemed to be an admission
or representation as to the materiality of the item so disclosed.
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
OVID TECHNOLOGIES, INC.
By: /s/ XXXX X. XXXXXX
--------------------
Name: Xxxx X. Xxxxxx
Title: President
WOLTERS KLUWER U.S. CORPORATION
By: /s/ XXXXX X. VAN WEL
----------------------
Name: Xxxxx X. van Wel
Title: President
OTI ACQUISITION CORP.
By: /s/ XXXXX X. XXXX
----------------------
Name: Xxxxx X. Xxxx
Title: President
37
ANNEX A
CONDITIONS TO THE OFFER
The capitalized terms used in this Annex A shall have the meanings ascribed
to them in the Agreement and Plan of Merger to which it is attached, except that
the term "Merger Agreement" shall be deemed to refer to such Agreement and Plan
of Merger.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger Agreement),
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-l(c) under the
Exchange Act (relating to Purchaser's obligation to pay for or return tendered
Shares promptly after termination or withdrawal of the Offer), pay for, and may
delay the acceptance for payment of or, subject to the restriction referred to
above, the payment for, any tendered Shares, and may terminate the Offer if (i)
any applicable waiting period under the HSR Act or the antitrust laws of
applicable jurisdictions outside the United States has not expired or terminated
prior to the expiration of the Offer, (ii) the Minimum Condition has not been
satisfied, or (iii) at any time on or after the date hereof, and before the
expiration of the Offer any of the following conditions exist:
(a) there shall be any statute, rule, regulation, judgment, order or
injunction promulgated, entered, enforced, enacted, issued or applicable to the
Offer or the Merger by any governmental entity of competent jurisdiction in the
United States or other country in which the Company directly or indirectly has
material assets or operations which (1) prohibits the consummation of the Offer
or the Merger, (2) as a result of the Offer or the Merger, restrains or
prohibits, or imposes any material limitations on, Parent's or Purchaser's
ownership or operation of all or a material portion of the businesses or assets
of the Company and its Subsidiaries, taken as a whole, or of Parent and its
Subsidiaries, taken as a whole, or compels Parent or any of its Subsidiaries or
affiliates to dispose of or hold separate all or any material portion of the
business or assets of the Company and its Subsidiaries, taken as a whole, or of
Parent and its Subsidiaries, taken as a whole, or requires the Company, Parent
or Purchaser to pay damages that are material in relation to the Company and its
Subsidiaries, taken as a whole, (3) challenges, prohibits, or makes illegal the
acceptance for payment, payment for or purchase of Shares pursuant to, or
consummation of, the Offer or the Merger, (4) imposes material limitations on
the ability of Purchaser or Parent effectively to exercise full rights of
ownership of the Shares accepted for payment pursuant to the Offer, including,
without limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders, or (5) requires divestiture by
Parent or any of its Subsidiaries or affiliates of any Shares, provided that
Parent shall have used all reasonable efforts to cause any such judgment, order
or injunction to be vacated or lifted;
(b) there shall be instituted or pending any action, suit, or
proceeding by any governmental entity of competent jurisdiction in the United
States, or any other country in which
A-1
the Company directly or indirectly has material assets or operations, that is
reasonably likely, directly or indirectly, to result in any of the consequences
referred to in clauses (1) through (5) of paragraph (a) above; provided, that
Parent shall have used all reasonable efforts to cause any such action, suit or
proceeding to be withdrawn or dismissed;
(c) there has been since the date hereof any event, occurrence or
development or state of circumstances or facts which has had or would reasonably
be expected to have a Company Material Adverse Effect;
(d) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and accurate as of the date of consummation
of the Offer as though made on or as of such date or the Company shall have
breached or failed in any material respect to perform or comply with any
material obligation, agreement or covenant required by the Merger Agreement to
be performed or complied with by it except, (i) those representations and
warranties that address matters only as of a particular date or only with
respect to a specified period of time which need only be true and accurate as of
such date or with respect to such period or (ii) where the failure of such
representations and warranties to be true and accurate, or the breach,
non-performance or non-compliance with such obligations, agreements or
covenants, do not have, individually or in the aggregate, or would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect;
(e) the Merger Agreement shall have been terminated in accordance with
its terms;
(f) the Company shall have entered into a definitive agreement or
agreement in principle with any person with respect to an Alternative Proposal;
or
(g) the Company's Board of Directors shall have withdrawn, or modified
or changed in a manner adverse to Parent or Purchaser (including by amendment of
the Schedule 14D-9) its recommendation of the Offer, the Merger Agreement, or
the Merger, or recommended an Alternative Proposal, or shall have resolved to do
any of the foregoing;
which in the sole judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payments.
The foregoing conditions are for the sole benefit of Purchaser and Parent
and may be waived by Parent or Purchaser, in whole or in part at any time and
from time to time in the sole discretion of Parent or Purchaser.
A-2
