EXHIBIT 99.1
AGREEMENT AND PLAN OF REORGANIZATION
dated as of
March 12, 2000
by and among
i2 TECHNOLOGIES, INC.,
HOYA MERGER CORP.
and
ASPECT DEVELOPMENT, INC.
TABLE OF CONTENTS
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Page
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ARTICLE I. THE MERGER.................................................................... 2
Section 1.01 Effective Time Of The Merger......................................... 2
Section 1.02 Closing.............................................................. 2
Section 1.03 Effects Of The Merger................................................ 2
Section 1.04 Directors And Officers............................................... 2
ARTICLE II. CONVERSION OF SECURITIES..................................................... 3
Section 2.01 Conversion Of Capital Stock.......................................... 3
Section 2.02 Exchange Of Certificates............................................. 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF COMPANY................................... 7
Section 3.01 Organization Of Company.............................................. 7
Section 3.02 Company Capital Structure............................................ 8
Section 3.03 Authority; No Conflict; Required Filings And Consents................ 9
Section 3.04 SEC Filings; Financial Statements.................................... 10
Section 3.05 No Undisclosed Liabilities........................................... 11
Section 3.06 Absence Of Certain Changes Or Events................................. 11
Section 3.07 Taxes................................................................ 11
Section 3.08 Properties........................................................... 13
Section 3.09 Intellectual Property................................................ 13
Section 3.10 Agreements, Contracts And Commitments................................ 14
Section 3.11 Litigation........................................................... 14
Section 3.12 Environmental Matters................................................ 14
Section 3.13 Employee Benefit Plans............................................... 15
Section 3.14 Compliance With Laws................................................. 16
Section 3.15 Tax Matters.......................................................... 16
Section 3.16 Labor Matters........................................................ 17
Section 3.17 Insurance............................................................ 17
Section 3.18 No Existing Discussions.............................................. 17
Section 3.19 Interested Party Transactions........................................ 17
Section 3.20 Registration Statement; Joint Proxy Statement/Prospectus............. 17
Section 3.21 Payments Resulting From Merger....................................... 18
Section 3.22 Opinion Of Financial Advisor......................................... 18
Section 3.23 Section 203 Of The DGCL Not Applicable; Company Rights Plan.......... 18
Section 3.24 Voting Requirements.................................................. 18
Section 3.25 Brokers.............................................................. 19
Section 3.26 Certain Contracts.................................................... 19
Section 3.27 Company Voting Agreements............................................ 19
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB...................... 19
Section 4.01 Organization Of Parent And Merger Sub................................ 19
Section 4.02 Parent Capital Structure............................................. 19
Section 4.03 Authority; No Conflict; Required Filings And Consents................ 21
Section 4.04 SEC Filings; Financial Statements.................................... 22
Section 4.05 No Undisclosed Liabilities........................................... 22
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Section 4.06 Absence Of Certain Changes Or Events................................... 23
Section 4.07 Taxes.................................................................. 23
Section 4.08 Agreements, Contracts And Commitments.................................. 23
Section 4.09 Litigation............................................................. 23
Section 4.10 Environmental Matters.................................................. 24
Section 4.11 Employee Benefit Plans................................................. 24
Section 4.12 Compliance With Laws................................................... 24
Section 4.13 Tax Matters............................................................ 24
Section 4.14 Registration Statement; Joint Proxy Statement/Prospectus............... 25
Section 4.15 Opinion Of Financial Advisor........................................... 25
Section 4.16 Voting Requirements.................................................... 25
Section 4.17 Brokers................................................................ 25
Section 4.18 Parent Voting Agreements............................................... 25
Section 4.19 Intellectual Property.................................................. 25
Section 4.20 No Ownership Of Company Stock.......................................... 26
Section 4.21 Section 203 Of The DGCL Not Applicable................................. 26
Section 4.22 Certain Contracts...................................................... 26
ARTICLE V. CONDUCT OF BUSINESS............................................................. 27
Section 5.01 Covenants Of Company................................................... 27
Section 5.02 Covenants Of Parent.................................................... 30
Section 5.03 Cooperation............................................................ 31
Section 5.04 Advice Of Changes...................................................... 31
ARTICLE VI. ADDITIONAL AGREEMENTS.......................................................... 31
Section 6.01 Joint Proxy Statement/Prospectus; Registration Statement............... 31
Section 6.02 No Solicitation By Company............................................. 32
Section 6.03 Nasdaq Quotation....................................................... 35
Section 6.04 Access To Information.................................................. 35
Section 6.05 Stockholders Meetings.................................................. 35
Section 6.06 Legal Conditions To Merger............................................. 38
Section 6.07 Public Disclosure...................................................... 39
Section 6.08 Tax-Free Reorganization................................................ 39
Section 6.09 Stock Plans............................................................ 40
Section 6.10 Affiliate Agreements................................................... 43
Section 6.11 Indemnification........................................................ 43
Section 6.12 Benefit Plans.......................................................... 45
Section 6.13 Registration Statement; Joint Proxy Statement/Prospectus............... 46
ARTICLE VII. CONDITIONS TO MERGER.......................................................... 46
Section 7.01 Conditions To Each Party's Obligation To Effect The Merger............. 46
Section 7.02 Additional Conditions To Obligations Of Parent And Merger Sub.......... 47
Section 7.03 Additional Conditions To Obligation Of Company......................... 48
Section 7.04 Frustration Of Closing Conditions...................................... 49
ARTICLE VIII. TERMINATION AND AMENDMENT.................................................... 49
Section 8.01 Termination............................................................ 49
Section 8.02 Effect Of Termination.................................................. 51
Section 8.03 Expenses And Termination Fees.......................................... 51
Section 8.04 Amendment.............................................................. 53
Section 8.05 Extension; Waiver...................................................... 54
ARTICLE IX. MISCELLANEOUS.................................................................. 54
Section 9.01 Nonsurvival Of Representations, Warranties, Covenants And Agreements... 54
Section 9.02 Notices................................................................ 54
Section 9.03 Definitions............................................................ 55
Section 9.04 Interpretation......................................................... 57
Section 9.05 Counterparts........................................................... 57
Section 9.06 Entire Agreement; No Third Party Beneficiaries......................... 57
Section 9.07 Governing Law; Forum; Waiver Of Jury Trial............................. 58
Section 9.08 Assignment............................................................. 58
Section 9.09 Attorneys' Fees........................................................ 58
Section 9.10 Specific Performance................................................... 58
EXHIBITS
Exhibit A Form of Company Voting Agreement
Exhibit B Form of Parent Voting Agreement
TABLE OF DEFINED TERMS
Cross-Reference
Terms in Agreement
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Agreement.................................................................... Preamble
Bankruptcy and Equity Exception.............................................. Section 3.03(a)
Certificate of Merger........................................................ Section 1.01
Closing...................................................................... Section 1.02
Closing Date................................................................. Section 1.02
Company Balance Sheet........................................................ Section 3.04(b)
Company Certificates......................................................... Section 2.02(b)
Company Common Stock......................................................... Section 2.01(b)
Company Disclosure Schedule.................................................. Article III
Company Employee Plans....................................................... Section 3.13(a)
Company ESPP................................................................. Section 3.02(c)
Company Intellectual Property Rights......................................... Section 3.09(a)
Company Insiders............................................................. Section 6.09(c)
Company Material Adverse Effect.............................................. Section 9.03(a)
Company Material Contracts................................................... Section 3.10
Company Preferred Stock...................................................... Section 3.02(a)
Company Rights Plan.......................................................... Section 3.23(b)
Company SEC Reports.......................................................... Section 3.04(a)
Company Stock Plans.......................................................... Section 3.02(a)
Company Stock Option......................................................... Section 6.09(a)
Company Stockholder Approval................................................. Section 3.24
Company Voting Agreements.................................................... Preamble
Company Stockholders Meeting................................................. Section 3.20
Company Superior Offer....................................................... Section 6.05(b)
Company Takeover Proposal.................................................... Section 6.02(d)
Confidentiality Agreement.................................................... Section 9.01
Current Premium.............................................................. Section 6.11(b)
DGCL......................................................................... Section 1.01
Effective Time............................................................... Section 1.01
Environmental Law............................................................ Section 3.12(b)
ERISA........................................................................ Section 3.13(a)
ERISA Affiliate.............................................................. Section 3.13(a)
Exchange Act................................................................. Section 3.03(c)
Exchange Agent............................................................... Section 2.02(a)
Exchange Fund................................................................ Section 2.02(a)
Exchange Ratio............................................................... Section 2.01(c)
GAAP......................................................................... Section 3.04(b)
Governmental Entity.......................................................... Section 3.03(c)
Hazardous Substance.......................................................... Section 3.12(c)
HSR Act...................................................................... Section 3.03(c)
Indemnified Party............................................................ Section 6.12(a)
Internal Revenue Code........................................................ Preamble
IRS.......................................................................... Section 3.07(b)
Joint Proxy Statement/Prospectus............................................. Section 3.20
Material Lease............................................................... Section 3.08
Merger....................................................................... Preamble
Merger Consideration......................................................... Section 2.01(c)
Merger Sub................................................................... Preamble
NASD......................................................................... Section 4.16
Order........................................................................ Section 6.06(b)
Parent Balance Sheet......................................................... Section 4.04(b)
Parent Common Stock.......................................................... Section 2.01(b)
Parent Disclosure Schedule................................................... Article IV
Parent Employee Plans........................................................ Section 6.12(d)
Parent ESPP.................................................................. Section 6.12(c)
Parent Intellectual Property Rights.......................................... Section 4.19(a)
Cross-Reference
Terms in Agreement
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Parent Material Adverse Effect............................................... Section 9.03(b)
Parent Material Contracts.................................................... Section 4.08
Parent Preferred Stock....................................................... Section 4.02(a)
Parent SEC Reports........................................................... Section 4.04(a)
Parent Stock Plans........................................................... Section 4.02(a)
Parent Voting Agreements..................................................... Preamble
Parent Stockholders Meeting.................................................. Section 3.20
Parent Voting Proposal....................................................... Section 4.03(a)
Registration Statement....................................................... Section 3.20
Representatives.............................................................. Section 6.02(a)
Repurchase Options........................................................... Section 6.09(a)
Rule 145..................................................................... Section 6.10
SEC.......................................................................... Section 3.03(c)
Securities Act............................................................... Section 3.04(a)
Specified Company Takeover Transaction....................................... Section 8.03(f)
Subsidiary................................................................... Section 3.01
Surviving Corporation........................................................ Section 1.03
Tax.......................................................................... Section 3.07(a)
Tax Return................................................................... Section 3.07(a)
Taxable...................................................................... Section 3.07(a)
Taxes........................................................................ Section 3.07(a)
Tax Authority................................................................ Section 3.07(a)
Third Party Agreements....................................................... Section 3.09(e)
Treasury Regulations......................................................... Preamble
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
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March 12, 2000, by and among i2 Technologies, Inc., a Delaware corporation
("Parent"), Hoya Merger Corp., a Delaware corporation and a direct wholly-owned
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subsidiary of Parent ("Merger Sub"), and Aspect Development, Inc., a Delaware
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corporation ("Company").
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WHEREAS, the Boards of Directors of Parent and Company deem it
advisable and in the best interests of each corporation and their respective
stockholders that Parent and Company combine in order to advance the long-term
business interests of Parent and Company;
WHEREAS, the combination of Parent and Company shall be effected by
the terms of this Agreement through a merger in which Company will become a
wholly owned subsidiary of Parent and the stockholders of Company will become
stockholders of Parent (the "Merger");
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WHEREAS, the respective Boards of Directors of Parent and Company have
each determined that the Merger and the other transactions contemplated hereby
are consistent with, and in furtherance of, the respective business strategies
and goals of Parent and Company;
WHEREAS, simultaneously with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Parent and
Merger Sub to enter into this Agreement, Parent and certain stockholders of
Company are entering into agreements (the "Company Voting Agreements") pursuant
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to which such stockholders are agreeing to vote to adopt this Agreement and to
take certain other actions in furtherance of the Merger;
WHEREAS, simultaneously with the execution and delivery of this
Agreement and as a condition and inducement to the willingness of Company to
enter into this Agreement, Company and certain stockholders of Parent are
entering into agreements (the "Parent Voting Agreements") pursuant to which such
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stockholders are agreeing to vote to approve the issuance of stock by Parent in
the Merger pursuant to this Agreement and to take certain other actions in
furtherance of the Merger;
WHEREAS, for federal income tax purposes, it is intended that (a) the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), and
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the rules and regulations promulgated thereunder (the "Treasury Regulations"),
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(b) this Agreement constitutes a "plan of reorganization" within the meaning of
Section 1.368-2(g) of the Treasury Regulations, and (c) Parent, Merger Sub and
Company will each be a party to such reorganization within the meaning of
Section 368(b) of the Internal Revenue Code; and
WHEREAS, Parent, Merger Sub and Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth below, the
parties agree as follows:
Article I. THE MERGER
1.1 Effective Time Of The Merger. Subject to the provisions of this
Agreement, a certificate of merger (the "Certificate of Merger") in such form as
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is required by the relevant provisions of the Delaware General Corporation Law
(the "DGCL") shall be duly prepared, executed and acknowledged by Company and
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thereafter delivered to the Secretary of State of the State of Delaware for
filing, as provided in the DGCL, as early as practicable on the Closing Date (as
defined in Section 1.02). The Merger shall become effective upon the filing of
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the Certificate of Merger with the Secretary of State of the State of Delaware
(the "Effective Time").
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1.2 Closing. The closing of the Merger (the "Closing") will take
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place at 10:00 a.m., local time, on a date to be specified by Parent and Company
(the "Closing Date"), which shall be no later than the second business day after
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satisfaction (or waiver) of the latest to be satisfied (or to be waived) of the
conditions set forth in Section 7.01, Section 7.02 (other than the delivery of
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the officers' certificate referred to therein) and Section 7.03 (other than the
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delivery of the officers' certificate referred to therein), at the offices of
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, Palo Alto California, unless another date,
place or time is agreed to in writing by Parent and Company.
1.3 Effects Of The Merger. At the Effective Time, (i) the separate
existence of Merger Sub shall cease and Merger Sub shall be merged with and into
Company (Company following the Merger is sometimes referred to below as the
"Surviving Corporation"), (ii) the Certificate of Incorporation of Company shall
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be amended to amend and restate Article Fourth of such Certificate of
Incorporation so as to read in its entirety as follows: "The total number of
shares of all classes of stock which the Corporation shall have authority to
issue is 1,000 shares, all of which shall consist of Common Stock, par value
$.001 per share," and, as so amended, such Certificate of Incorporation shall be
the Certificate of Incorporation of the Surviving Corporation, and (iii) the
Bylaws of Merger Sub as in effect immediately prior to the Effective Time shall
be the Bylaws of the Surviving Corporation (it being understood that such Bylaws
shall contain indemnification provisions at least as favorable to the officers
and directors of Company as the indemnification provisions contained in
Company's Bylaws as of the date of this Agreement).
1.4 Directors And Officers.
(a) The directors and officers of Merger Sub immediately
prior to the Effective Time shall be the initial directors and officers
of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and Bylaws of the Surviving
Corporation.
(b) Parent shall take such action as may be required so that,
upon the Effective Time, Xxxxxx Xxxxxxxx shall become a Class III
director of Parent.
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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 holder of any shares of
Company capital stock or capital stock of Merger Sub:
(a) Capital Stock Of Merger Sub. Each issued and
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outstanding share of the capital stock of Merger Sub shall be converted
into and become one fully paid and nonassessable share of Common Stock,
par value $.001 per share, of the Surviving Corporation.
(b) Cancellation Of Treasury Stock And Parent-Owned
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Stock. All shares of Common Stock, par value $.001 per share, of
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Company
("Company Common Stock") owned by Company as treasury stock and any
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shares of Company Common Stock owned by Parent, Merger Sub or any other
wholly owned Subsidiary (as defined in Section 3.01) of Parent shall be
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cancelled and retired and shall cease to exist and no stock of Parent
or other consideration shall be delivered in exchange therefor. Any
shares of Common Stock, par value $.00025 per share, of Parent ("Parent
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Common Stock") owned by Company shall be unaffected by the Merger.
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(c) Exchange Ratio For Company Common Stock. Subject to
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Section 2.02, each issued and outstanding share of Company Common Stock
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(excluding shares to be cancelled in accordance with Section 2.01(b)
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but including all shares issued pursuant to the 100% stock dividend to
be distributed by Company on or about March 13, 2000) shall be
converted into fifty-five hundredths (.55) of a duly authorized,
validly issued, fully paid and nonassessable share (the "Exchange
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Ratio") of Parent Common Stock (the "Merger Consideration"). As of the
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Effective Time, all such shares of Company Common Stock, as 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 which, immediately prior to the Effective Time, represented
shares of Company Common Stock (a "Company Certificate") shall cease to
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have any rights with respect thereto, except the right to receive a
certificate or certificates representing the number of fully paid and
nonassessable shares of Parent Common Stock into which such holder's
shares of Company Common Stock were converted at the Effective Time and
any cash payable pursuant to Section 2.02(e) in lieu of any fractional
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share of Parent Common Stock and distributions deliverable pursuant to
Section 2.02(c), without interest, upon the surrender of such Company
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Certificate in accordance with Section 2.02. In the event Parent or
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Company changes (or establishes a record date for changing) the number
or classes of shares of Parent Common Stock or Company Common Stock, as
the case may be, issued and outstanding prior to the Effective Time as
a result of a stock split, stock dividend, recapitalization,
subdivision, reclassification, reverse stock split, combination,
exchange of shares or similar transaction with respect to the
outstanding Parent Common Stock or Company Common Stock and the record
date therefor shall be prior to the Effective Time, the Exchange Ratio
shall be proportionately and
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equitably adjusted to reflect such stock split, stock dividend,
recapitalization, subdivision, reclassification, reverse stock split,
combination, exchange of shares or similar transaction; provided,
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however, that no adjustment to the Exchange Ratio shall be made in
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connection with the 100% stock dividend to be distributed by Company on
or about March 13, 2000.
2.2 Exchange Of Certificates. The procedures for exchanging Company
Certificates are as follows:
(a) Exchange Agent. As of the Effective Time, Parent shall
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deposit with a bank or trust company designated by Parent and Company
(the "Exchange Agent"), for the benefit of the former holders of shares
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of Company Common Stock, for exchange in accordance with this Section
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2.02, through the Exchange Agent, (i) certificates representing the
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shares of Parent Common Stock (such shares of Parent Common Stock,
together with any distributions with respect thereto deliverable by
virtue of Section 2.02(c), being hereinafter referred to as the
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"Exchange Fund") issuable pursuant to Section 2.01 in exchange for
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Company Certificates and (ii) sufficient funds to permit payment of
cash in lieu of fractional shares pursuant to Section 2.02(e).
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(b) Exchange Procedures. As soon as reasonably practicable
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after the Effective Time, Parent shall cause the Exchange Agent to mail
to each holder of record of a Company Certificate or Company
Certificates whose shares of Company Common Stock were converted
pursuant to Section 2.01 into the Merger Consideration (i) a letter of
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transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to Company Certificates shall pass, only upon
delivery of such Company Certificates to the Exchange Agent and shall
be in such customary form and have such other provisions as Parent and
Company may reasonably specify) and (ii) instructions for effecting the
surrender of such Company Certificates in exchange for a certificate or
certificates representing the Merger Consideration (plus cash in lieu
of any fractional share of Parent Common Stock and distributions
deliverable as provided in Section 2.02(e)). Upon surrender of a
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Company Certificate for cancellation to the Exchange Agent, together
with such letter of transmittal, duly executed, (1) the holder of such
Company Certificate shall receive in exchange therefor a certificate
representing that number of whole shares of Parent Common Stock into
which such holder's shares of Company Common Stock were converted at
the Effective Time, certain dividends or other distributions in
accordance with Section 2.02(c), and cash in lieu of any fractional
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share of Parent Common Stock in accordance with Section 2.02(e), and
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(2) the Company Certificate so surrendered shall immediately be
cancelled. In the event of a transfer of ownership of Company Common
Stock which is not registered in the transfer records of Company, a
certificate representing the proper number of shares of Parent Common
Stock may be issued to a transferee if the Company Certificate
representing such Company Common Stock is presented to the Exchange
Agent, accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock
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transfer taxes have been paid. Until surrendered as contemplated by
this Section 2.02, each Company Certificate shall be deemed at any time
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after the Effective Time to represent only the ownership of the number
of whole shares of Parent Common Stock into which the shares of Company
Common Stock previously represented by such Company Certificate have
been converted pursuant to Section 2.01 and the right to receive upon
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such surrender the Merger Consideration and cash in lieu of any
fractional share of Parent Common Stock and distributions deliverable
as contemplated by this Section 2.02(e) and the right to receive
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certificates representing whole shares of Parent Common Stock.
(c) Distributions With Respect To Unsurrendered Certificates.
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No dividends or other distributions declared or made after the
Effective Time with respect to Parent Common Stock with a record date
after the Effective Time shall be paid to the holder of any
unsurrendered Company Certificate with respect to the shares of Parent
Common Stock represented thereby and no cash payment in lieu of
fractional shares shall be paid to any such holder pursuant to Section
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2.02(e), and all such dividends, other distributions and cash in lieu
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of fractional shares of Parent Common Stock shall be paid by Parent to
the Exchange Agent and shall be included in the Exchange Fund, in each
case until the holder of record of such Company Certificate shall
surrender such Company Certificate. Subject to the effect of
applicable escheat and unclaimed property laws, following surrender of
any such Company Certificate, there shall be paid to the record holder
of such Company Certificate, without interest, (i) at the time of such
surrender, the amount of any cash payable in lieu of a fractional share
of Parent Common Stock to which such holder is entitled pursuant to
Section 2.02(e) and the amount of dividends or other distributions with
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a record date after the Effective Time previously paid or payable with
respect to the whole shares of Parent Common Stock into which the
shares of Company Common Stock previously represented by such Company
Certificate were converted, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after
the Effective Time but prior to the surrender of such Company
Certificate and a payment date subsequent to the surrender of such
Company Certificate payable with respect to such whole shares of Parent
Common Stock.
(d) No Further Ownership Rights In Company Common Stock. The
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shares (and the certificates representing shares) of Parent Common
Stock issued in exchange for shares of Company Common Stock in
accordance with the terms hereof (and any cash paid pursuant to Section
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2.02 (c) or Section 2.02 (e)) shall be deemed to have been issued and
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paid in full satisfaction of all rights pertaining to such shares of
Company Common Stock, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions with a
record date prior to the Effective Time which may have been declared or
made by Company on or with respect to such shares of Company Common
Stock in accordance with the terms of this Agreement (to the extent
permitted under Section 5.01) prior to the date hereof and which remain
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unpaid at the Effective Time, and from and after the Effective Time
there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation
5
of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Company Certificates are presented to the Surviving Corporation or the
Exchange Agent for any reason, they shall be cancelled and exchanged as
provided in this Section 2.02.
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(e) No Fractional Shares. No certificate or scrip
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representing fractional shares of Parent Common Stock shall be issued
upon the surrender for exchange of Company Certificates, and such
fractional share interests will not entitle the owner thereof to vote
or to any other rights of a stockholder of Parent. Notwithstanding any
other provision of this Agreement, each holder of shares of Company
Common Stock converted pursuant to the Merger who would otherwise have
been entitled to receive a fraction of a share of Parent Common Stock
(after taking into account all Company Certificates representing shares
of Company Common Stock owned by or registered in the name of such
holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share of Parent Common Stock
multiplied by the average of the last reported sales prices of Parent
Common Stock, as reported on the Nasdaq National Market, on each of the
ten (10) trading days immediately preceding the date of the Effective
Time.
(f) Termination Of Exchange Fund. Any portion of the
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Exchange Fund which remains undistributed to the holders of Company
Certificates for one hundred eighty (180) days after the Effective Time
shall be delivered to Parent, upon demand, and any holders of Company
Certificates who have not previously complied with this Section 2.02
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shall thereafter look only to Parent for certificates representing
Parent Common Stock, any cash in lieu of fractional shares of Parent
Common Stock and any dividends or distributions with respect to Parent
Common Stock.
(g) No Liability. Neither Parent nor the Surviving
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Corporation shall be liable to any holder of shares of Company Common
Stock or Parent Common Stock, as the case may be, for any shares of
Company Common Stock or Parent Common Stock (or cash in lieu of any
fractional share or dividends or distributions with respect thereto)
properly delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(h) Withholding Rights. Each of Parent and the Surviving
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Corporation shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as Parent or the
Surviving Corporation is required to deduct and withhold with respect
to the making of such payment under the Internal Revenue Code or any
provision of state, local or foreign tax law. To the extent that
amounts are properly so withheld by the Surviving Corporation or
Parent, as the case may be, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the
shares of Company Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation or Parent, as the
case may be.
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(i) Lost Company Certificates. If any Company Certificate
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shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person or entity claiming such Company
Certificate to be lost, stolen or destroyed and, if required by Parent,
the posting by such person or entity of a bond in such reasonable
amount as Parent may direct as indemnity against any claim that may be
made against it with respect to the alleged loss, theft or destruction
of such Company Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Company Certificate a certificate or
certificates representing the shares of Parent Common Stock into which
the shares of Company Common Stock represented by such Company
Certificate were converted pursuant to Section 2.01, any cash in lieu
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of any fractional share, and any unpaid dividends or other
distributions on the shares of Parent Common Stock deliverable in
respect thereof pursuant to this Agreement.
Article III. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent and Merger Sub that the
statements contained in this Article III are true and correct except as set
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forth herein, in the Company SEC Reports (as defined in Section 3.04) filed
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since January 1, 1999, and in the disclosure schedule delivered by Company to
Parent on the date of this Agreement (the "Company Disclosure Schedule"). The
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Company Disclosure Schedule shall be arranged in paragraphs corresponding to the
numbered sections contained in this Article III and the disclosure in any
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paragraph shall qualify other sections in this Article III only to the extent
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that it is reasonably apparent from a reading of such disclosure that it also
qualifies or applies to such other sections.
3.1 Organization Of Company. Each of Company and its Subsidiaries
(as defined below) is a corporation duly organized, validly existing
and in good standing (with respect to jurisdictions which recognize
the concept of good standing) under the laws of the jurisdiction of
its incorporation, has all requisite corporate power and authority to
own, lease and operate its property and to carry on its business as
now being conducted and as proposed to be conducted, and is duly
qualified to do business and is in good standing (with respect to
jurisdictions which recognize the concept of good standing) as a
foreign corporation in each jurisdiction in which the failure to be so
qualified would have a Company Material Adverse Effect, as defined in
Section 9.03(a).
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Neither Company nor any Subsidiary of Company directly or indirectly
owns any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest
in, any corporation, partnership, joint venture or other business
association or entity, excluding securities in any publicly traded
company held for investment by Company or any of its Subsidiaries and
comprising less than five percent (5%) of the outstanding stock of
such company. Each and every Subsidiary of Company and its place of
incorporation or organization is listed in Section 3.01 of the Company
---------------------------
Disclosure Schedule. As used in this Agreement, the word "Subsidiary"
-------------------
or "Subsidiaries" means, with respect to any party, any corporation or
------------
other organization, whether incorporated or unincorporated, of which
(i) such party or any other Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests of
which held by such party or any Subsidiary of such
7
party do not have a majority of the voting interest in such
partnership) or (ii) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party and/or by any
one or more of its Subsidiaries.
3.2 Company Capital Structure.
(a) The authorized capital stock of Company consists of
100,000,000 shares of Common Stock, $.001 par value, and 2,000,000
shares of Preferred Stock, $.001 par value, ("Company Preferred
-----------------
Stock"). As of March 9, 2000 (without giving effect to the 100% stock
-----
dividend to be distributed by Company on or about March 13, 2000), (i)
30,599,129 shares of Company Common Stock were issued and outstanding,
all of which are validly issued, fully paid and nonassessable and (ii)
no shares of Company Common Stock were held in the treasury of Company
or by its Subsidiaries. The Company Disclosure Schedule sets forth the
number of shares of Company Common Stock reserved for future issuance
pursuant to stock options granted and outstanding as of March 9, 2000
(without giving effect to the 100% stock dividend to be distributed by
Company on or about March 13, 2000) and the plans under which such
options were granted (collectively, the "Company Stock Plans"). No
-------------------
material change in such capitalization has occurred between March 9,
2000 and the date of this Agreement, except as a result of the exercise
of stock options. As of the date of this Agreement, none of the shares
of Company Preferred Stock is issued and outstanding. All shares of
Company Common Stock subject to issuance as specified above are duly
authorized and, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, shall be validly
issued, fully paid and nonassessable. There are no obligations,
contingent or otherwise, of Company or its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of Company Common Stock or the
capital stock of any Subsidiary or to loan funds to or make any
material investment (in the form of a loan, capital contribution or
otherwise) in any Subsidiary or any other entity other than (i)
guarantees of bank obligations of its Subsidiaries entered into in the
ordinary course of business, and (ii) repurchase rights of Company
under the Company Stock Plans, or under any stock option agreements
pursuant to which options were granted under such plans. All of the
outstanding shares of capital stock of Company's Subsidiaries are duly
authorized, validly issued, fully paid and nonassessable and all such
shares (other than directors' qualifying shares in the case of foreign
Subsidiaries) are owned by Company or another Subsidiary free and clear
of all security interests, liens, claims, pledges, agreements,
limitations on Company's voting rights, charges or other encumbrances
of any nature other than security interests, liens, claims, pledges,
agreements, limitations, charges or other encumbrances that (A) relate
to any taxes or other governmental charges or levies that are not yet
due and payable, (B) relate to, were created, arose or exist in
connection with any legal proceeding that is being contested in good
faith, or (C) individually or in the aggregate would not materially
interfere
8
with the ability of Company and each of its Subsidiaries to conduct
their business as currently conducted.
(b) Except as set forth in this Section 3.02 or as reserved
------------
for future grants of options under the Company Stock Plans, as of March
9, 2000, (i) there were no equity securities of any class of Company or
its Subsidiaries, or securities exchangeable into or exercisable for
such equity securities, issued, reserved for issuance or outstanding,
and (ii) there were no options, warrants, equity securities, calls,
rights, commitments or agreements of any character to which Company or
any of its Subsidiaries was a party or by which it was bound obligating
Company or any of its Subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock of
Company or any of its Subsidiaries or obligating Company or any of its
Subsidiaries to grant, extend, accelerate the vesting of or enter into
any such option, warrant, equity security, call, right, commitment or
agreement. There are no voting trusts, proxies or other voting
agreements or understandings with respect to the shares of capital
stock of Company to which Company is a party. The terms of the Company
Stock Plans and the agreements evidencing the outstanding options
thereunder will permit the assumption of such options by Parent in the
manner contemplated in Section 6.09, without the approval or consent of
------------
the holders of such options, the Company stockholders or any other
party.
(c) The current "Offering Periods" (as defined under the
Company 1996 Employee Stock Purchase Plan (the "Company ESPP")) in
------------
effect as of the date of this Agreement began on August 16, 1998,
February 16, 1999, August 16, 1999 and February 16, 2000, and will end
on August 15, 2000, February 15, 2001, August 15, 2001 and February 15,
2002, respectively. Except for the purchase rights granted under the
Company ESPP on August 16, 1998, February 16, 1999, August 16, 1999,
and February 16, 2000 to the current participants in the Offering
Periods that commenced on those dates, there are no other purchase
rights or options outstanding as of the date of this Agreement under
the Company ESPP.
3.3 Authority; No Conflict; Required Filings And Consents.
(a) Company has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by Company of this
Agreement and the consummation of the transactions contemplated by this
Agreement by Company have been duly authorized by all necessary
corporate action on the part of Company, subject only to the adoption
of this Agreement by Company stockholders under the DGCL. This
Agreement has been duly executed and delivered by Company and, assuming
the due authorization, execution and delivery of this Agreement by
Parent and Merger Sub, constitutes the valid and binding obligation of
Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and
9
similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity (the "Bankruptcy
----------
and Equity Exception").
--------------------
(b) The execution and delivery of this Agreement by Company
do not, and assuming that this Agreement is duly adopted by Company's
stockholders and that the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in Section 3.03(c)
---------------
are duly obtained and made, the consummation by Company of the
transactions contemplated by this Agreement will not, (i) conflict
with, or result in any violation or breach of, any provision of the
Certificate of Incorporation or Bylaws of Company, (ii) result in any
violation or breach of, or constitute (with or without notice or lapse
of time, or both) a default (or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any material
benefit) under, or require a consent or waiver under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease,
contract or other agreement, instrument or obligation to which Company
or any of its Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound, or (iii) conflict with or
violate any permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
Company or any of its Subsidiaries or any of its or their properties or
assets.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality
("Governmental Entity") is required to be obtained or made by or with
-------------------
respect to Company or any of its Subsidiaries prior to the Effective
Time in connection with the execution and delivery by Company of this
Agreement or the consummation by Company of the transactions
contemplated hereby, except for (i) the filing of a pre-merger
notification and report form under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) the filing
-------
of the Certificate of Merger with the Secretary of State of the State
of Delaware, (iii) the filing of the Joint Proxy Statement/Prospectus
(as defined in Section 3.20) with the Securities and Exchange
------------
Commission (the "SEC") in accordance with the Securities Exchange Act
---
of 1934, as amended (the "Exchange Act"), and (iv) such consents,
------------
approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable state securities laws and
the laws of any foreign country.
3.4 SEC Filings; Financial Statements.
(a) Company has filed and made available to Parent all forms,
reports and documents required to be filed by Company with the SEC
(collectively, the "Company SEC Reports"). The Company SEC Reports (i)
-------------------
at the time filed, complied in all material respects with the
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act, as the case may be, and (ii)
--------------
did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then as of and on the date
so amended or superseded) contain any untrue statement of a material
fact or
10
omit to state a material fact required to be stated in such Company
SEC Reports or necessary in order to make the statements in such
Company SEC Reports, in the light of the circumstances under which
they were made, not misleading. Company's Subsidiaries are not
required to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes) contained in the Company
SEC Reports complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect
thereto. The consolidated financial statements contained in the
Company SEC Reports and the Company Balance Sheet (as defined below)
were prepared in accordance with U.S. generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
----
periods involved (except as may be indicated in the notes to such
financial statements or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) and fairly presented the
consolidated financial position of Company and its Subsidiaries as of
the dates and the consolidated results of operations and cash flows of
Company and its Subsidiaries for the periods indicated, except that
the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not
expected to be material in amount. The unaudited consolidated balance
sheet of Company and its Subsidiaries as of December 31, 1999 (the
"Company Balance Sheet") has been delivered to Parent.
---------------------
3.5 No Undisclosed Liabilities. Except for liabilities referred to in
the Company Balance Sheet and normal or recurring liabilities incurred since
December 31, 1999 in the ordinary course of business consistent with past
practices, Company and its Subsidiaries do not have any liabilities (either
accrued, contingent or otherwise) required to be reflected or disclosed in
financial statements prepared in accordance with GAAP, which individually or in
the aggregate has had or will, solely with the passage of time, imminently
result in a Company Material Adverse Effect.
3.6 Absence Of Certain Changes Or Events. Since the date of the
Company Balance Sheet, Company and its Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since such date, there has not been (a) any Company Material
Adverse Effect or any event which, individually or in the aggregate, will,
solely with the passage of time, imminently result in a Company Material Adverse
Effect; (b) any damage, destruction or loss (whether or not covered by
insurance) with respect to Company or any of its Subsidiaries having a Company
Material Adverse Effect; (c) any material change by Company in its accounting
methods, principles or practices to which Parent has not previously consented in
writing; (d) any revaluation by Company of any of its assets; or (e) any other
action or event that occurred between the date of the Company Balance Sheet and
the date of this Agreement that would have required the consent of Parent
pursuant to Section 5.01 had such action or event occurred after the date of
------------
this Agreement and that, individually or in the aggregate, has had or will,
solely with the passage of time, imminently result in a Company Material Adverse
Effect.
3.7 Taxes.
11
(a) For purposes of this Agreement, the following terms
have the following meanings: (i) "Tax" (and, with correlative meaning,
---
"Taxes" and "Taxable") means (A) any net income, alternative or add-on
----- -------
minimum tax, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll,
employment, excise, severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or any penalty, addition to tax
or additional amount imposed by any Governmental Entity (a "Tax
---
Authority") responsible for the imposition of any such tax (domestic
---------
or foreign), (B) any liability for the payment of any amounts of the
type described in clause "(A)" as a result of being a member of an
affiliated, consolidated, combined or unitary group for any Taxable
period, and (C) any liability for the payment of any amounts of the
type described in clause "(A)" or "(B)" as a result of being a
transferee of or successor to any person or as a result of any express
or implied obligation to indemnify any other person; and (ii) "Tax
---
Return" means any return, statement, report or form (including
------
estimated tax returns and reports, withholding tax returns and reports
and information reports and returns) required to be filed with respect
to Taxes.
(b) Company and each of its Subsidiaries have (i) properly
completed and timely filed all federal, state, local and foreign Tax
Returns required to be filed by them prior to the date of this
Agreement (taking into account extensions), (ii) paid or accrued all
Taxes due and payable for Taxable periods (or portions thereof)
through the date of the Company Balance Sheet and (iii) no Tax
liabilities accruing after the date of the Company Balance Sheet other
than liabilities arising from the ordinary course of business. Neither
the Internal Revenue Service (the "IRS") nor any other Taxing
---
Authority has asserted any claim for taxes, or to the knowledge of
Company and its Subsidiaries, is threatening to assert any claims for
Taxes. Company and each of its Subsidiaries have withheld or collected
and paid over to the appropriate Tax Authorities (or are properly
holding for such payment) all Taxes required by law to be withheld or
collected. Neither Company nor any of its Subsidiaries has made an
election under Section 341(f) of the Internal Revenue Code. There are
no liens for Taxes upon the assets of Company or its Subsidiaries
(other than liens for Taxes that are not yet due). Neither Company nor
any of its Subsidiaries is a party to any Tax sharing or Tax
allocation agreement with an unaffiliated party, nor does Company or
any of its Subsidiaries have any liability or potential liability to
another party under any such agreement. Neither Company nor any of its
Subsidiaries has ever been a member of a consolidated, combined or
unitary group of which Company was not the ultimate parent
corporation.
(c) There is no agreement, contract or arrangement to which
Company is a party that would reasonably be expected, individually or
collectively, as a result of the Merger, this Agreement and subsequent
events, to result in the payment of any amount that would not be
deductible by reason of Section 280G of the Internal Revenue Code.
12
3.8 Properties. Neither Company nor any of its Subsidiaries owns any
real property. Neither Company nor any of its Subsidiaries is in default in any
material respect under any lease of material real property to which it is a
party ("Material Lease"). Copies of all Material Leases have been made
--------------
available by Company to Parent.
3.9 Intellectual Property.
(a) Company and its Subsidiaries own, or are licensed or
otherwise possess legally enforceable rights to use, all patents,
trademarks, trade names, service marks, copyrights, Internet domain
names and mask works, any applications for and registrations of such
patents, trademarks, trade names, service marks, copyrights and mask
works, and all processes, formulae, methods, schematics, technology,
know how, computer software programs or applications and tangible or
intangible proprietary information or material that are necessary to
conduct the business of Company and its Subsidiaries as currently
conducted by Company and its Subsidiaries (the "Company Intellectual
--------------------
Property Rights").
---------------
(b) Neither Company nor any of its Subsidiaries is, or will
be as a result of the execution and delivery of this Agreement by
Company or the performance of Company's obligations under this
Agreement, in breach of (i) any material license, sublicense or other
agreement relating to the Company Intellectual Property Rights or (ii)
any material license, sublicense or other agreement pursuant to which
Company or any of its Subsidiaries is authorized to use any third
party patents, trademarks or copyrights, including software, which are
incorporated in or form a part of any product of Company or any of its
Subsidiaries that is material to the business of Company and its
Subsidiaries, taking Company and its Subsidiaries together as a whole.
(c) (i) All patents, copyrights, registered trademarks and
registered service marks which are held by Company or any of its
Subsidiaries, and which are material to the business of Company and
its Subsidiaries, taking Company and its Subsidiaries together as a
whole, are valid and subsisting; (ii) since January 1, 1997 Company
has not been sued in any suit, action or proceeding which involves a
claim of infringement of any patents, trademarks, service marks,
copyrights or violation of any trade secret or other proprietary right
of any third party; and (iii) the manufacturing, marketing, licensing
or sale of Company's products does not infringe any patent, trademark,
service xxxx or copyright, trade secret or other proprietary right of
any third party.
(d) Company has taken all actions necessary and appropriate
to assure that there shall be no material adverse change in the
delivery of Company's products and services by reason of the advent of
the year 2000, and warrants that all of its products (including
products currently under development) will, without interruption or
manual intervention, continue to consistently, predictably and
accurately record, store, process, calculate and present calendar
dates falling on and after (and if applicable, spans of time
including) January 1, 2000, and will consistently, predictably and
accurately calculate any information dependent on or
13
relating to such dates in the same manner, and with the same
functionality, data integrity and performance, as such products
record, store, process, calculate and present calendar dates on or
before December 31, 1999, or calculate any information dependent on or
relating to such dates.
(e) Neither Company nor any of its Subsidiaries is a party
to any agreement ("Third Party Agreement") in which another party to
---------------------
such Third Party Agreement has, or will have, as a result of the
execution and delivery of this Agreement by Company or the performance
of Company's obligations under this Agreement, the right to terminate
such Third Party Agreement or the right to obtain the Company's source
code under such Third Party Agreement.
3.10 Agreements, Contracts And Commitments. Neither Company nor any of
its Subsidiaries is in breach of, or has since January 1, 1997 received in
writing any claim or notice that it has breached, in any material respect, any
material term or condition of any material agreement, contract or commitment to
which it is a party or by which any of its assets and properties are bound
("Company Material Contracts"). Each Company Material Contract that has not
--------------------------
expired by its terms or otherwise been terminated is in full force and effect
and is not subject to any material default thereunder of which Company is aware
by any party obligated to Company or any of its Subsidiaries pursuant to such
Company Material Contract.
3.11 Litigation. There is no action, suit or proceeding, claim,
arbitration or investigation against Company or any of its Subsidiaries pending
or as to which Company or any of its Subsidiaries has received any written
notice of assertion, which, individually or in the aggregate seeks a material
amount of damages or other relief material to the business or assets of Company
and its Subsidiaries (taking Company and its Subsidiaries together as a whole)
or which could reasonably be expected to materially impair or delay the ability
of Company to consummate the transactions contemplated by this Agreement. To
the knowledge of Company and its Subsidiaries, there is no claim, action, suit,
proceeding or investigation described in Section 6.11 pending as of the date of
------------
this Agreement. No officer or director has provided notice to Company of the
existence of any claim with respect to any such claim, action, suit, proceeding
or investigation.
3.12 Environmental Matters.
(a) (i) Company and its Subsidiaries have complied with all
applicable Environmental Laws (as defined in Section 3.12(b)); (ii)
---------------
the properties currently owned or operated by Company and its
Subsidiaries (including soils, groundwater, surface water, buildings
or other structures) are not contaminated with any Hazardous
Substances (as defined in Section 3.12(c)); (iii) the properties
---------------
formerly owned or operated by Company or any of its Subsidiaries were
not contaminated with Hazardous Substances during the period of
ownership or operation by Company or its Subsidiaries; (iv) neither
Company nor any of its Subsidiaries is subject to liability for any
Hazardous Substance disposal or contamination on any third party
property; (v) neither Company nor any of its Subsidiaries has caused
or contributed to any release or threat of release of any Hazardous
Substance in violation of any Environmental Law; (vi) neither
14
Company nor any of its Subsidiaries has received in writing from any
Governmental Entity any notice, demand, letter, claim or request for
information alleging that Company or any of its Subsidiaries may be in
violation of or liable under any Environmental Law; (vii) neither
Company nor any of its Subsidiaries is subject to any orders, decrees,
injunctions or other arrangements with any Governmental Entity (other
than those of general applicability), or is subject to any indemnity
or other agreement with any third party relating in either case to
liability under any Environmental Law for release of Hazardous
Substances; and (viii) to the knowledge of Company, there are no
circumstances or conditions involving Company or any of its
Subsidiaries that will, solely with the passage of time, imminently
result in a Company Material Adverse Effect pursuant to any
Environmental Law.
(b) As used herein, the term "Environmental Law" means any
-----------------
federal, state, local or foreign law, regulation, order, decree,
permit, authorization, opinion, common law or agency requirement
relating to: (i) the protection, investigation or restoration of the
environment, health and safety, or natural resources, (ii) the
handling, use, presence, disposal, release or threatened release of
any Hazardous Substance, or (iii) noise, odor, wetlands, pollution or
contamination.
(c) As used herein, the term "Hazardous Substance" means:
-------------------
(i) any substance that is listed, classified or regulated pursuant to
any Environmental Law, (ii) any petroleum product or by-product,
asbestos-containing material, lead-containing paint or plumbing,
polychlorinated biphenyls, radioactive materials or radon, or (iii) any
other substance which is the subject of regulatory action by any
Governmental Entity pursuant to any Environmental Law.
3.13 Employee Benefit Plans.
(a) Company has listed in Section 3.13 of the Company
---------------------------
Disclosure Schedule all employee benefit plans (as defined in Section
-------------------
3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) in effect as of, or under which benefits may be
-----
payable on or after, the date of this Agreement, and all bonus, stock
option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar employee benefit plans in
effect as of, or under which benefits may be payable on or after, the
date of this Agreement, and all unexpired severance agreements in
effect as of the date of this Agreement, written or otherwise, in each
case for the benefit of, or relating to, any current or former
employee of Company or any trade or business (whether or not
incorporated) which is a member of a controlled group with, or which
is under common control with Company (an "ERISA Affiliate") within the
---------------
meaning of Section 414 of the Internal Revenue Code, or any Subsidiary
of Company (together, the "Company Employee Plans").
----------------------
(b) With respect to each Company Employee Plan, Company has
made available to Parent a true and correct copy of (i) the most
recent annual
15
report (Form 5500) filed with the IRS, (ii) such Company Employee
Plan, (iii) each trust agreement and group annuity contract, if any,
relating to such Company Employee Plan, and (iv) the most recent
actuarial report or valuation relating to such Company Employee Plan,
if such Company Employee Plan is subject to Title IV of ERISA.
(c) With respect to the Company Employee Plans,
individually and in the aggregate, Company is not subject to any
material unsatisfied liability (i) for violation of ERISA, the
Internal Revenue Code or any other applicable law, (ii) for an excise
or other penalty tax or penalty under any such law, or (iii) under
Title IV of ERISA and, to the knowledge of Company, no event has
occurred and there exists no condition or set of circumstances which
constitutes a basis for any such liability.
(d) With respect to the Company Employee Plans,
individually and in the aggregate, there are no material funded
benefit obligations for which required contributions have not been
made or properly accrued and there are no material unfunded benefit
obligations which have not been accounted for by reserves, or
otherwise properly footnoted in accordance with GAAP, on the financial
statements of Company.
(e) Neither Company nor any of its Subsidiaries is a party
to any oral or written (i) agreement with any officer or other key
employee of Company or any of its Subsidiaries, the benefits of which
are contingent, or the terms of which are materially altered, upon the
occurrence of the Merger, (ii) agreement with any officer of Company
or any of its Subsidiaries providing any term of employment or
compensation guarantee extending for a period longer than one year
from the date hereof and for the payment of compensation in excess of
two hundred fifty thousand dollars ($250,000) per year, or (iii)
agreement or plan relating to employees or directors of Company or any
of its Subsidiaries, including any stock option plan, stock
appreciation right plan, restricted stock plan or stock purchase plan,
any of the benefits of which will be increased, or the vesting of the
benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.
3.14 Compliance With Laws. Company and each of its Subsidiaries is in
substantial compliance with each, is not in violation in any material respect of
any, and has not received any written notices of violation with respect to any,
federal, state or local statute, law or regulation with respect to the conduct
of its business, or the ownership or operation of its business, which by its
terms could reasonably be expected to subject Company and its Subsidiaries to
material financial or other penalties or criminal liability.
3.15 Tax Matters. To the knowledge of Company after good faith
consultation with its independent accountants, neither Company nor any of its
Affiliates has taken or agreed
16
to take any action which would prevent the Merger from constituting a
transaction qualifying as a reorganization under Section 368(a) of the Internal
Revenue Code.
3.16 Labor Matters. Neither Company nor any of its Subsidiaries is a
party to or otherwise bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor,
as of the date hereof, is Company or any of its Subsidiaries the subject of any
material proceeding asserting that Company or any of its Subsidiaries has
committed an unfair labor practice or is seeking to compel Company or any of its
Subsidiaries to bargain with any labor union or labor organization nor, as of
the date of this Agreement, is there pending or, to the knowledge of Company,
threatened, any material labor strike, dispute, walkout, work stoppage, slow-
down or lockout involving Company or any of its Subsidiaries.
3.17 Insurance. All material fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance policies maintained by Company or any of its Subsidiaries are with
reputable insurance carriers, and copies or a summary of such policies have been
made available to Parent.
3.18 No Existing Discussions. As of the date hereof, Company is not
engaged, directly or indirectly, in any discussions or negotiations with any
party (other than Parent) with respect to a Company Takeover Proposal (as
defined in Section 6.02(d)).
---------------
3.19 Interested Party Transactions. Except in connection with the
Merger, no event has occurred that would be required to be reported currently by
Company as a Certain Relationship or Related Transaction pursuant to Item 404 of
Regulation S-K promulgated by the SEC.
3.20 Registration Statement; Joint Proxy Statement/Prospectus. The
information supplied by Company for inclusion in the registration statement of
Parent on Form S-4 pursuant to which shares of Parent Common Stock issued in the
Merger will be registered with the SEC (the "Registration Statement") shall not,
----------------------
at the time the Registration Statement is declared effective by the SEC, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated in the Registration Statement or necessary in order to
make the statements in the Registration Statement, in light of the circumstances
under with they were made, not misleading. The information supplied by Company
for inclusion in the joint proxy statement/prospectus (the "Joint Proxy
-----------
Statement/Prospectus") to be sent to the stockholders of Company in connection
--------------------
with the special meeting of Company stockholders to consider this Agreement (the
"Company Stockholders Meeting") and to the stockholders of Parent in connection
----------------------------
with the special meeting of Parent stockholders to consider the issuance of
Parent Common Stock in connection with the Merger (the "Parent Stockholders
-------------------
Meeting") shall not, on the date the Joint Proxy Statement/Prospectus is first
-------
mailed to stockholders of Parent and Company, or at the time of the Company
Stockholders Meeting, or at the time of the Parent Stockholders Meeting (if one
is held) contain any statement which, at such time and in light of the
circumstances under which it was made, is false or misleading with respect to
any material fact, or omit to state any material fact necessary in order to make
the statements made in the Joint Proxy Statement/Prospectus not false or
misleading or omit to state any material fact necessary to correct any statement
made by Company in any earlier communication by Company
17
with respect to the solicitation of proxies for the Company Stockholders Meeting
which has become false or misleading. Notwithstanding the foregoing, Company
makes no representation or warranty with respect to any information supplied or
to be supplied by Parent or Merger Sub which is or will be contained in any of
the foregoing documents.
3.21 Payments Resulting From Merger. The consummation or announcement
of any transaction contemplated by this Agreement will not (either alone or upon
the occurrence of any additional or further facts or acts) result in any (i)
payment (whether of severance pay or otherwise) becoming due from Company or any
of its Subsidiaries to any officer, employee, former employee or director
thereof or to the trustee under any "rabbi trust" or similar arrangement
pursuant to any management, employment, deferred compensation, severance
(including any payment, right or benefit resulting from a change in control),
bonus or other contract for personal services with any officer, director or
employee or any plan agreement or understanding similar to any of the foregoing,
or (ii) benefit under any Company benefit plan being established or becoming
accelerated, vested or payable.
3.22 Opinion Of Financial Advisor. The financial advisor of Company,
Credit Suisse First Boston Corporation, has delivered to Company an opinion
(based on the assumptions and subject to the qualifications set forth therein)
dated the date of this Agreement to the effect that the Exchange Ratio is fair
to the holders of Company Common Stock from a financial point of view.
3.23 Section 203 Of The DGCL Not Applicable; Company Rights Plan.
(a) Assuming that the Board of Directors of Parent duly
approved this Agreement and the Merger (or duly approved the Parent
Voting Agreements and the transactions contemplated thereby) prior to
the execution of the Parent Voting Agreements, the restrictions on
"business combinations" contained in Section 203 of the DGCL will not
be applicable to the Merger. No other "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute or
regulation is applicable to the Merger or the other transactions
contemplated by this Agreement as a result of any action taken by
Company.
(b) The execution, delivery and performance of this
Agreement and the consummation of the Merger will not cause any
change, effect or result under the Company's Restated Rights Agreement
dated as of October 10, 1998 (as amended on March 12, 2000) or any
other stockholder rights plan which is or will as of the Effective
Time be in effect (a "Company Rights Plan") which would impede the
-------------------
consummation of the Merger or which is otherwise adverse to the
interests of Parent.
3.24 Voting Requirements. The affirmative vote at the Company
Stockholders Meeting of the holders of a majority of the voting power of all
outstanding shares of Company Common Stock as of the record date for persons and
entities entitled to notice of, and to vote at, the Company Stockholders Meeting
(the "Company Stockholder Approval") is the only vote of the holders of any
----------------------------
class or series of Company's capital stock necessary to adopt this Agreement.
18
3.25 Brokers. No broker, investment banker, financial advisor or
other person, other than Credit Suisse First Boston Corporation, the fees and
expenses of which will be paid by Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Company. Company has furnished to Parent true and
complete copies of all agreements under which any such fees or expenses are
payable to Credit Suisse First Boston Corporation and all indemnification and
other agreements related to the engagement of Credit Suisse First Boston
Corporation by Company.
3.26 Certain Contracts. Neither Company nor any of its Subsidiaries is
a party to or bound by any non-competition agreement or any other similar
agreement or obligation which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of the
business of Company and its Subsidiaries (taking Company and its Subsidiaries
together as a whole) is conducted.
3.27 Company Voting Agreements. Certain stockholders of Company have
executed and delivered to Parent Company Voting Agreements, substantially in the
form of Exhibit A hereto.
---------
Article IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to Company that the
statements contained in this Article IV are true and correct, except as set
----------
forth herein, in the Parent SEC Reports (as defined in Section 4.04) filed since
------------
January 1, 1999, and in the disclosure schedule delivered by Parent to Company
on the date of this Agreement (the "Parent Disclosure Schedule"). The Parent
--------------------------
Disclosure Schedule shall be arranged in paragraphs corresponding to the
numbered sections contained in this Article IV and the disclosure in any
----------
paragraph shall qualify other sections in this Article IV only to the extent
----------
that it is reasonably apparent from a reading of such document that it also
qualifies or applies to such other sections.
4.1 Organization Of Parent And Merger Sub. Each of Parent and Merger
Sub and Parent's other Subsidiaries is a corporation duly organized, validly
existing and in good standing (with respect to jurisdictions which recognize the
concept of good standing) under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own, lease and
operate its property and to carry on its business as now being conducted and as
proposed to be conducted, and is duly qualified to do business and is in good
standing (with respect to jurisdictions which recognize the concept of good
standing) as a foreign corporation in each jurisdiction in which the failure to
be so qualified would have a Parent Material Adverse Effect, as defined in
Section 9.03(b). Neither Parent nor any of its Subsidiaries directly or
---------------
indirectly owns any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity,
excluding securities in any publicly traded company held for investment by
Parent or any of its Subsidiaries and comprising less than five percent (5%) of
the outstanding stock of such company.
4.2 Parent Capital Structure.
19
(a) The authorized capital stock of Parent consists of
500,000,000 shares of Common Stock, $.00025 par value, and 5,000,000
shares of Preferred Stock, $.001 par value ("Parent Preferred Stock").
----------------------
As of March 3, 2000, (i) 156,835,002 shares of Parent Common Stock
were issued and outstanding, all of which are validly issued, fully
paid and nonassessable, and (ii) no shares of Parent Common Stock were
held in the treasury of Parent or by Subsidiaries of Parent. The
Parent Disclosure Schedule sets forth the number of shares of Parent
Common Stock reserved for future issuance pursuant to stock options
granted and outstanding as of March 10, 2000 under Parent stock option
and stock purchase plans (collectively, the "Parent Stock Plans"). No
------------------
material change in such capitalization has occurred between December
31, 1999 and the date of this Agreement, except as a result of the
exercise of stock options. As of the date of this Agreement, no Parent
Preferred Stock is issued and outstanding. All shares of Parent Common
Stock subject to issuance as specified above are duly authorized and,
upon issuance on the terms and conditions specified in the instruments
pursuant to which they are issuable, shall be validly issued, fully
paid and nonassessable. There are no obligations, contingent or
otherwise, of Parent to repurchase, redeem or otherwise acquire any
shares of Parent Common Stock or the capital stock of any of its
Subsidiaries or to loan funds to or make any material investment (in
the form of a loan, capital contribution or otherwise) in any such
Subsidiary or any other entity other than (i) guarantees of bank
obligations of Subsidiaries entered into in the ordinary course of
business, and (ii) repurchase rights of Parent under the Parent Stock
Plans, or under any stock option agreements pursuant to which options
were granted under these plans. All of the outstanding shares of
capital stock of each of Parent's Subsidiaries are duly authorized,
validly issued, fully paid and nonassessable and all such shares other
than directors' qualifying shares in the case of foreign Subsidiaries)
are owned by Parent or another Subsidiary free and clear of all
security interests, liens, claims, pledges, agreements, limitations on
Parent's voting rights, charges or other encumbrances of any nature
other than security interests, liens, claims, pledges, agreements,
limitations, charges or other encumbrances that (A) relate to any
taxes or other governmental charges or levies that are not yet due and
payable, (B) relate to, were created, arose or exist in connection
with any legal proceeding that is being contested in good faith, or
(C) individually or in the aggregate would not materially interfere
with the ability of Parent and each of its Subsidiaries to conduct
their business as currently conducted.
(b) Except as set forth in this Section 4.02 or as reserved
------------
for future grants of options under the Parent Stock Plans as of March
10, 2000, (i) there were no equity securities of any class of Parent
or any of its Subsidiaries, or any securities exchangeable into or
exercisable for such equity securities, issued, reserved for issuance
or outstanding, and (ii) there were no options, warrants, equity
securities, calls, rights, commitments or agreements of any character
to which Parent was a party or by which it was bound obligating Parent
to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock of Parent or obligating Parent to
grant, extend, or enter into any such option, warrant, equity
security, call, right, commitment or agreement. There are no
voting trusts, proxies or other voting agreements or understandings
with respect to the shares of capital stock of Parent and to which
Parent is a party.
(c) The shares of Parent Common Stock to be issued in
connection with the Merger (including shares of Parent Common Stock to
be issued upon exercise of Company Stock Options assumed by Parent
pursuant to this Agreement) have been authorized by all necessary
corporate action and, when issued in accordance with this Agreement,
will be validly issued, fully paid and nonassessable and not subject
to preemptive rights.
4.3 Authority; No Conflict; Required Filings And Consents.
(a) Each of Parent and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery by Parent of this Agreement and, assuming that the consents,
approvals, orders, authorizations, registrations, declarations and
filings referred to in Section 4.03(c) are duly obtained and made, the
---------------
consummation of the transactions contemplated by this Agreement by
Parent and Merger Sub have been duly authorized by all necessary
corporate action on the part of each of Parent and Merger Sub
(including the adoption of this Agreement by Parent as the sole
stockholder of Merger Sub), subject only to the approval of the
issuance of Parent Common Stock in the Merger (the "Parent Voting
-------------
Proposal") by Parent stockholders. This Agreement has been duly
--------
executed and delivered by each of Parent and Merger Sub and, assuming
the due authorization, execution, and delivery of this Agreement by
Company, constitutes the valid and binding obligation of each of
Parent and Merger Sub, enforceable in accordance with its terms,
subject to the Bankruptcy and Equity Exception.
(b) The execution and delivery of this Agreement by each of
Parent and Merger Sub do not, and the consummation by Parent and
Merger Sub of the transactions contemplated by this Agreement will
not, (i) conflict with, or result in any violation or breach of, any
provision of the Certificate of Incorporation or Bylaws of Parent or
the Certificate of Incorporation or Bylaws of Merger Sub, (ii) result
in any violation or breach of, or constitute (with or without notice
or lapse of time, or both) a default (or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of
any material benefit) under, or require a consent or waiver under, any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or
obligation to which Parent or any of its Subsidiaries is a party or by
which any of them or any of their properties or assets may be bound,
or (iii) conflict with or violate any permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or any of its Subsidiaries or any of
its or their properties or assets.
(c) No material consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental
Entity is required to be
21
obtained or made by or with respect to Parent or any of its
Subsidiaries prior to the Effective Time in connection with the
execution and delivery by Parent and Merger Sub of this Agreement or
the consummation by Parent and Merger Sub of the transactions
contemplated hereby, except for (i) the filing of a pre-merger
notification and report form under the HSR Act, (ii) the filing of the
Registration Statement with the SEC in accordance with the Securities
Act, (iii) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware, (iv) the filing of the Joint Proxy
Statement/Prospectus with the SEC in accordance with the Exchange Act,
and (v) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under
applicable state securities laws and the laws of any foreign country.
4.4 SEC Filings; Financial Statements.
(a) Parent has filed and made available to Company all
forms, reports and documents required to be filed by Parent with the
SEC (collectively, the "Parent SEC Reports"). The Parent SEC Reports
------------------
(i) at the time filed, complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as
the case may be, and (ii) did not at the time they were filed (or if
amended or superseded by a filing prior to the date of this Agreement,
then as of and on the date so amended or superseded) contain any
untrue statement of a material fact or omit to state a material fact
required to be stated in such Parent SEC Reports or necessary in order
to make the statements in such Parent SEC Reports, in the light of the
circumstances under which they were made, not misleading. Parent's
Subsidiaries are not required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements
(including, in each case, any related notes) contained in the Parent
SEC Reports complied as to form in all material respects with the
applicable published rules and regulations of the SEC with respect
thereto. The consolidated financial statements contained in the Parent
SEC Reports and the Parent Balance Sheet (as defined below) were
prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved (except as may be indicated in the
notes to such financial statements or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) and fairly presented
the consolidated financial position of Parent and its Subsidiaries as
of the dates and the consolidated results of operations and cash flows
of Parent and its Subsidiaries for the periods indicated, except that
the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not
expected to be material in amount. The unaudited consolidated balance
sheet of Parent and its Subsidiaries as of December 31, 1999 (the
"Parent Balance Sheet") has been delivered to Company.
--------------------
4.5 No Undisclosed Liabilities. Except for liabilities referred to in
the Parent Balance Sheet and normal or recurring liabilities incurred since
December 31, 1999 in the ordinary course of business consistent with past
practices, Parent and its Subsidiaries do not have any liabilities (either
accrued, contingent or otherwise (required to be reflected or disclosed in
22
financial statements in accordance with GAAP), and whether due or to become due,
which individually or in the aggregate, has had or will, solely with the passage
of time, imminently result in a Parent Material Adverse Effect.
4.6 Absence Of Certain Changes Or Events. Since the date of the
Parent Balance Sheet, Parent and its Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since such date, there has not been (i) any Parent Material
Adverse Effect or any event that will, solely with the passage of time,
imminently result in a Parent Material Adverse Effect; (ii) any damage,
destruction or loss (whether or not covered by insurance) with respect to Parent
or any of its Subsidiaries having a Parent Material Adverse Effect; (iii) any
material change by Parent in its accounting methods, principles or practices to
which Company has not previously consented in writing; (iv) any revaluation by
Parent of any of its assets; or (v) any other action or event that occurred
between the date of the Parent Balance Sheet and the date of this Agreement that
would have required the consent of Company pursuant to Section 5.02 had such
------------
action or event occurred after the date of this Agreement and that, individually
or in the aggregate, has had or will, solely with the passage of time,
imminently result in a Parent Material Adverse Effect.
4.7 Taxes. Parent and each of its Subsidiaries have (i) properly
completed and timely filed all federal, state, local and foreign tax returns and
reports required to be filed by them prior to the date of this Agreement (taking
into account extensions), (ii) paid or accrued all Taxes due and payable for
Taxable periods (or portions thereof) through the date of the Parent Balance
Sheet, and (iii) no Tax liabilities accruing after the date of the Parent
Balance Sheet other than liabilities arising in the ordinary course of business.
Neither the IRS nor any other Tax Authority has asserted any claim for Taxes, or
to the knowledge of Parent and its Subsidiaries, is threatening to assert any
claims for Taxes. Parent and each of its Subsidiaries have withheld or collected
and paid over to the appropriate Tax Authorities (or are properly holding for
such payment) all Taxes required by law to be withheld or collected. Neither
Parent nor any of its Subsidiaries has made an election under Section 341(f) of
the Internal Revenue Code. There are no liens for Taxes upon the assets of
Parent or any of its Subsidiaries (other than liens for Taxes that are not yet
due). Neither Parent nor any of its Subsidiaries is a party to any Tax sharing
or Tax allocation agreement with an unaffiliated party, nor does Parent or any
of its Subsidiaries have any liability or potential liability to another party
under any such agreement. Neither Parent nor any of its Subsidiaries has ever
been a member of a consolidated, combined or unitary group of which Parent was
not the ultimate parent corporation.
4.8 Agreements, Contracts And Commitments. Neither Parent nor any of
its Subsidiaries has breached, or received in writing any claim or notice that
it has breached, in any material respect, any material term or condition of any
material agreement, contract or commitment to which it is a party or by which
any of its assets or properties are bound ("Parent Material Contracts"). Each
-------------------------
Parent Material Contract that has not expired by its terms is in full force and
effect and is not subject to any material default thereunder of which Parent is
aware by any party obligated to Parent or any of its Subsidiaries pursuant to
such Parent Material Contract.
4.9 Litigation. There is no action, suit or proceeding, claim,
arbitration or investigation against Parent or any of its Subsidiaries pending
or as to which Parent or any of its Subsidiaries has received any written notice
of assertion, which, individually or in the aggregate,
23
seeks a material amount of damages or other relief material to the business or
assets of Parent and its Subsidiaries taken as a whole or which could reasonably
be expected to materially impair or delay the ability of Parent to consummate
the transactions contemplated by this Agreement.
4.10 Environmental Matters. Parent and its Subsidiaries have complied
in all material respects with all applicable Environmental Laws. The properties
currently owned or operated by Parent and its Subsidiaries (including soils,
groundwater, surface water, buildings or other structures) are not contaminated
with any Hazardous Substances. The properties formerly owned or operated by
Parent or any of its Subsidiaries were not contaminated with Hazardous
Substances during the period of ownership or operation by Parent or its
Subsidiaries. Neither Parent nor any of its Subsidiaries is subject to material
liability for any Hazardous Substance disposal or contamination on any third
party property. Neither Parent nor any of its Subsidiaries has caused or
contributed to any release or threat of release of any Hazardous Substance in
violation of any Environmental Law. Neither Parent nor any of its Subsidiaries
has received in writing from any Governmental Entity any notice, demand, letter,
claim or request for information alleging that Parent or any of its Subsidiaries
may be in violation of or liable under any Environmental Law. Neither Parent nor
any of its Subsidiaries is subject to any orders, decrees, injunctions or other
arrangements with any Governmental Entity (other than those of general
applicability), or is subject to any indemnity or other agreement with any third
party, relating in either case to liability under any Environmental Law for
release of Hazardous Substances. To the knowledge of Parent, there are no
circumstances or conditions involving Parent or any of its Subsidiaries that
will, solely with the passage of time, imminently result in a Parent Material
Adverse Effect pursuant to any Environmental Law.
4.11 Employee Benefit Plans. With respect to the Parent Employee
Plans (as defined in Section 6.12(d)), individually and in the aggregate, Parent
is not subject to any material unsatisfied liability for (i) violation of ERISA,
the Internal Revenue Code or any other applicable law, (ii) for an excise or
other penalty tax or penalty under any such law, or (iii) under Title IV of
ERISA and, to the knowledge of Parent, no event has occurred and there exists no
set of circumstances which could reasonably be expected to result in any such
liability. With respect to the Parent Employee Plans, individually and in the
aggregate, there are no funded benefit obligations for which contributions have
not been made or properly accrued and there are no unfunded benefit obligations
which have not been accounted for by reserves, or otherwise properly footnoted
in accordance with GAAP, on the financial statements of Parent.
4.12 Compliance With Laws. Parent and each of its Subsidiaries is in
substantial compliance with, is not in violation in any material respect of and
has not received any written notice of violation with respect to, any federal,
state or local statute, law or regulation with respect to the conduct of its
business, or the ownership or operation of its business which by its terms could
reasonably be expected to subject Parent and its Subsidiaries to material
financial or other penalties or criminal liability.
4.13 Tax Matters. To the knowledge of Parent after good faith
consultation with its independent accountants, neither Parent nor any of its
Affiliates has taken or agreed to take any action which would prevent the Merger
from constituting a transaction qualifying as a reorganization under Section
368(a) of the Internal Revenue Code.
24
4.14 Registration Statement; Joint Proxy Statement/Prospectus. The
information supplied by Parent for inclusion in the Registration Statement shall
not contain, at the time the Registration Statement is declared effective by the
SEC, any untrue statement of a material fact or omit to state any material fact
required to be stated in the Registration Statement or necessary in order to
make the statements in the Registration Statement, in light of the circumstances
under with they were made, not misleading. The information supplied by Parent
for inclusion in the Joint Proxy Statement/Prospectus to be sent to the
stockholders of Company in connection with the Company Stockholders Meeting and
to the stockholders of Parent in connection with the Parent Stockholders Meeting
shall not, on the date the Joint Proxy Statement/Prospectus is first mailed to
stockholders of Parent and Company, at the time of the Company Stockholders
Meeting, or at the time of the Parent Stockholders Meeting (if one is held)
contain any statement which, at such time and in light of the circumstances
under which it was made, is false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements made in the Joint Proxy Statement/Prospectus not false or misleading
or omit to state any material fact necessary to correct any statement made by
Parent in any earlier communication by Parent with respect to the solicitation
of proxies for the Parent Stockholders Meeting or the Company Stockholders
Meeting which has become false or misleading. Notwithstanding the foregoing,
Parent makes no representation or warranty with respect to any information
supplied or to be supplied by Company which is or will be contained in any of
the foregoing documents.
4.15 Opinion Of Financial Advisor. The financial advisor of Parent,
Xxxxxxx, Xxxxx & Co., has delivered to Parent an opinion (based on the
assumptions and subject to the qualifications set forth therein) dated the date
of this Agreement to the effect that the Exchange Ratio is fair to Parent from a
financial point of view.
4.16 Voting Requirements. No vote of the holders of shares of Parent
Common Stock or any other class or series of capital stock of Parent is
necessary to approve the Merger or the issuance of Parent Common Stock in
connection therewith other than the approval of the Parent Voting Proposal. The
Parent stockholder vote required to approve the Parent Voting Proposal is that
vote prescribed by applicable Nasdaq Stock Market voting requirements
promulgated by the National Association of Securities Dealers (the "NASD").
----
4.17 Brokers. No broker, investment banker, financial advisor or
other person, other than Xxxxxxx, Sachs & Co., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent.
4.18 Parent Voting Agreements. Certain stockholders of Parent have
executed and delivered to Company Parent Voting Agreements, substantially in the
form of Exhibit B hereto.
---------
4.19 Intellectual Property.
(a) Parent and its Subsidiaries own, or are licensed or
otherwise possess legally enforceable rights to use, all patents,
trademarks, trade
25
names, service marks, copyrights, Internet domain names, and mask
works, any applications for and registrations of such patents,
trademarks, trade names, service marks, copyrights and mask works, and
all processes, formulae, methods, schematics, technology, know how,
computer software programs or applications and tangible or intangible
proprietary information or material that are necessary to conduct the
business of Parent and its Subsidiaries as currently conducted by
Parent and its Subsidiaries (the "Parent Intellectual Property
----------------------------
Rights").
------
(b) Neither Parent nor any of its Subsidiaries is, or will
be as a result of the execution and delivery of this Agreement of the
performance of its obligations under this Agreement, in breach of any
material license, sublicense or other agreement relating to the Parent
Intellectual Property Rights or any material license, sublicense or
other agreement pursuant to which Parent or any of its Subsidiaries is
authorized to use any third party patents, trademarks or copyrights,
including software, which are incorporated in or form a part of any
product of Parent or any of its Subsidiaries that is material to the
business of Parent and its Subsidiaries, taking Parent and its
Subsidiaries together as a whole.
(c) (i) All patents, copyrights, registered trademarks and
registered service marks which are held by Parent or any of its
Subsidiaries, and which are material to the business of Parent and its
Subsidiaries, taking Parent and its Subsidiaries together as a whole,
are valid and subsisting; (ii) since January 1, 1997 Parent has not
been sued in any suit, action or proceeding which involves a claim of
infringement of any patents, trademarks, service marks, copyrights or
violation of any trade secret or other proprietary right of any third
party where such proceeding would have a Parent Material Adverse
Effect; and (iii) the manufacturing, marketing, licensing or sale of
Parent's products does not infringe any patent, trademark, service
xxxx, copyright, trade secret or other proprietary right of any third
party.
4.20 No Ownership Of Company Stock. Neither Parent nor any of its
Subsidiaries owns, beneficially or of record, any shares of Company Common Stock
as of the date of this Agreement.
4.21 Section 203 Of The DGCL Not Applicable. Assuming that the Board of
Directors of Company duly approved this Agreement and the Merger (or duly
approved the Company Voting Agreements and the transactions contemplated
thereby) prior to the execution of the Company Voting Agreements, the
restrictions on "business combinations" contained in Section 203 of the DGCL
will not be applicable to the Merger. No other "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute or regulation
is applicable to the Merger or the other transactions contemplated by this
Agreement as a result of any action taken by Parent.
4.22 Certain Contracts. Neither Parent nor any of its Subsidiaries is a
party to or bound by any non-competition agreement or any other similar
agreement or obligation which purports to limit in any material respect the
manner in which, or the localities in which, all or any
26
material portion of the business of Parent and its Subsidiaries, taking Parent
and its Subsidiaries together as a whole, is conducted.
Article V. CONDUCT OF BUSINESS
5.1 Covenants Of Company. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, Company agrees, as to itself and its Subsidiaries, except
to the extent that Parent shall otherwise consent in writing (which consent
shall not be unreasonably withheld or delayed), and except as required by this
Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, to
-----------------------------------------------
carry on its business in the usual, regular and ordinary course in substantially
the same manner as previously conducted, to pay its debts and taxes when due
(subject to good faith disputes over such debts or taxes), to pay or perform its
other obligations when due (subject to good faith disputes over such
obligations), and, to the extent consistent with such business, use all
reasonable efforts consistent with past practices and policies to preserve
intact its present business organization, keep available the services of its
present officers and key employees and preserve its relationships with
customers, suppliers, distributors, and others having business dealings with it,
except in each case where the failure to do so would not have a Company Material
Adverse Effect. Except as required by this Agreement or as set forth in Section
-------
5.01 of the Company Disclosure Schedule, Company shall not (and shall not permit
---------------------------------------
its Subsidiaries to), without the written consent of Parent (which consent shall
not be unreasonably withheld or delayed):
(a) accelerate, amend or change the period of
exercisability of options or restricted stock granted under any
employee stock plan of Company or any of its Subsidiaries or authorize
cash payments in exchange for any options granted under any of such
plans except as required by the terms of such plans or any related
agreements in effect as of the date of this Agreement;
(b) other than distributions from a Subsidiary of Company
to Company, and except for the issuance of shares pursuant to the 100%
stock dividend to be distributed by Company on or about March 13,
2000, declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any of its capital
stock (other than dividends on Company Common Stock payable solely in
shares of Company Common Stock), or split, combine or reclassify any
of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock, or purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock except from former
employees, directors and consultants in accordance with agreements
providing for the repurchase of shares in connection with any
termination of service to Company or any of its Subsidiaries;
(c) transfer or license to any person or entity or
otherwise extend, amend or modify in any material respect any rights
to the Company Intellectual Property Rights other than on a non-
exclusive basis in the ordinary course of business consistent with
past practices;
27
(d) issue, deliver or sell, or authorize the issuance,
delivery or sale of, any shares of its capital stock or securities
convertible into shares of its capital stock, or subscriptions,
rights, warrants or options to acquire, or other agreements or
commitments of any character obligating it to issue any such shares or
other convertible securities, other than (i) the grant of options to
purchase up to six million (6,000,000) shares (net of cancellations
and giving effect to the 100% stock dividend to be distributed by
Company on or about March 13, 2000), in the aggregate consistent with
past practices to existing or newly hired employees (which options
will not be entitled to accelerated vesting as a result of the
Merger), or (ii) the issuance of shares of Company Common Stock
pursuant to the exercise of options outstanding on the date of this
Agreement or granted in accordance with this Agreement, (iii) the
issuance of shares of Company Common Stock to participants in the
Company ESPP in accordance with the terms thereof, (iv) the issuance
of rights pursuant to the Company Rights Plan in connection with the
issuance of shares of Company Common Stock, and (v) the issuance of
shares pursuant to the 100% stock dividend to be distributed by
Company on or about March 13, 2000;
(e) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership or other business organization or division,
or otherwise acquire or agree to acquire any assets other than
inventory and other assets in the ordinary course of business;
(f) sell, lease, license or otherwise dispose of a material
property or asset or a material amount of properties or assets, except
for transactions in the ordinary course of business, or enter into any
agreement, option or other arrangements (including any joint venture)
involving the exclusive licensing of Company's name or system outside
of the ordinary course of business or inconsistent with past practice;
(g) (i) increase or agree to increase the compensation
payable or to become payable to its officers or employees, except for
increases in compensation of employees (other than officers) in
accordance with past practices, (ii) grant any additional severance or
termination pay to, or enter into any employment or severance
agreements with, any employee or officer, (iii) enter into any
collective bargaining agreement (other than as required by law or
extensions to existing agreements in the ordinary course of business),
(iv) establish, adopt, enter into or amend in any material respect any
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, trust, fund, policy or
arrangement for the benefit of any director, officer or employee,
other than, with respect to employees who are not officers, in the
ordinary course of business, or (v) take any action (other than action
required or contemplated by this Agreement) that causes (or which
together with the consummation of the Merger will cause) the
acceleration of any options;
28
(h) amend or propose to amend its Certificate of
Incorporation or Bylaws, except as contemplated by this Agreement;
(i) enter into or amend in any material respect any OEM
agreement or any other agreements pursuant to which any third party is
granted exclusive marketing, manufacturing or other rights with
respect to any material Company product, process or technology;
(j) amend or prematurely terminate any material contract,
agreement or license to which it is a party except in the ordinary
course of business;
(k) waive or release any material right or claim, except in
the ordinary course of business;
(l) initiate any material litigation or arbitration
proceeding;
(m) incur any indebtedness in excess of five million
dollars ($5,000,000) for borrowed money other than in the ordinary
course of business;
(n) make or agree to make any new capital expenditure or
expenditures, or enter into any agreement or agreements providing for
capital expenditures which, individually, are in excess of one million
dollars ($1,000,000) or, in the aggregate, are in excess of ten
million dollars ($10,000,000) (except that Company and its
Subsidiaries may make capital expenditures in the amounts contemplated
by the budget previously delivered by Company to Parent);
(o) make any material Tax election or settle or compromise
any material Tax liability;
(p) pay, discharge, settle or satisfy any material disputed
claims, liabilities, obligations or litigation (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than in the
ordinary course of business;
(q) amend or propose to amend the Company Rights Plan in
any manner which would impede the consummation of the Merger or which
is otherwise adverse to the interests of Parent, other than any
amendment in connection with a termination of this Agreement pursuant
to Section 8.01(h); or
---------------
(r) agree in writing or otherwise to take any of the
actions described in Section 5.01(a) through Section 5.01(q).
--------------- ---------------
Notwithstanding anything to the contrary in this Section 5.01, if Company makes
------------
a request in writing to Parent (delivered in accordance with Section 9.02)
------------
seeking Parent's consent to any equity-based customer transaction or other
business partnership or alliance that would otherwise be prohibited by this
Section 5.01, and describing the material terms of such proposed transaction,
------------
partnership, or alliance, Parent shall respond to such request within ten (10)
days after such request is deemed given pursuant to Section 9.02. If Parent
------------
does not object in writing
29
to such request within ten (10) days after such request is deemed given pursuant
to Section 9.02, Parent shall be deemed to have consented to such request, on
------------
the terms substantially as described in such request.
5.2 Covenants Of Parent. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, Parent agrees, as to itself and its Subsidiaries, except
to the extent that Company shall otherwise consent in writing (which consent
shall not be unreasonably withheld or delayed) and except as required by this
Agreement or as set forth in Section 5.02 of the Parent Disclosure Schedule, to
----------------------------------------------
carry on its business in the usual, regular and ordinary course in substantially
the same manner as previously conducted (it being acknowledged that the
foregoing shall not limit the ability of Parent to make or pursue corporate
acquisitions that will not violate any of the restrictions set forth in clause
(d) of this Section 5.02 or in clause (e) of this Section 5.02 as it relates to
------------ ------------
clause (d) of this Section 5.02), to pay its debts and taxes when due subject to
------------
good faith disputes over such debts or taxes, to pay or perform its other
obligations when due subject to good faith disputes over such obligations, and,
to the extent consistent with such business, use all reasonable efforts
consistent with past practices and policies to preserve substantially intact its
present business organization, keep available the services of its present
officers and key employees and preserve its relationships with customers,
suppliers, distributors, and others having business dealings with it and except
in each case where the failure to do so would not have a Parent Material Adverse
Effect. Except as required by this Agreement or as set forth in Section 5.02 of
---------------
the Parent Disclosure Schedule, Parent shall not (and shall not permit any of
------------------------------
its Subsidiaries to), without the written consent of Company (which consent
shall not be unreasonably withheld or delayed):
(a) declare or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any
of its capital stock, or split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock, or purchase or otherwise acquire, directly or
indirectly, any shares of its capital stock except from former
employees, directors and consultants in accordance with agreements
providing for the repurchase of shares in connection with any
termination of service to Parent or any of its Subsidiaries;
(b) sell, lease, license or otherwise dispose of a material
property or asset or a material amount of properties or assets, except
for transactions in the ordinary course of business;
(c) transfer or license to any person or entity or
otherwise extend, amend or modify in any material respect any rights
to the Parent Intellectual Property Rights other than on a non-
exclusive basis in the ordinary course of business consistent with
past practices;
(d) engage in any action or enter into any transaction or
permit any action to be taken or transaction to be entered into that
could reasonably be expected to delay the consummation of, or
otherwise adversely affect, any of the transactions contemplated by
this Agreement; or
30
(e) agree in writing or otherwise to take any of the actions
described in Section 5.02(a) through Section 5.02(d).
--------------- ---------------
5.3 Cooperation. Subject to compliance with applicable law, from
the date hereof until the Effective Time, each of Parent and Company shall
confer on a regular and frequent basis with one or more Representatives (as
defined in Section 6.02(a)) of the other party to report on the general status
---------------
of ongoing operations and shall promptly provide the other party or its counsel
with copies of all filings made by such party with any Governmental Entity in
connection with this Agreement, the Merger, the Company Voting Agreements, the
Parent Voting Agreements, and the transactions contemplated hereby and thereby.
5.4 Advice Of Changes. Each of Company and Parent shall promptly
advise the other party orally and in writing to the extent it has knowledge of
(i) any representation or warranty made by it (or, in the case of Parent, made
by it or Merger Sub) contained in this Agreement becoming untrue or incorrect in
any respect where the failure of such representation or warranty to be true and
correct, individually or in the aggregate, has had or is reasonably likely
imminently to have a Company Material Adverse Effect or a Parent Material
Adverse Effect, as the case may be, (ii) the failure by it (or, in the case of
Parent, by it or Merger Sub) to comply in any material respect with or satisfy
in any material respect any covenant, condition or agreement to be complied with
or satisfied by it (or in the case of Parent, by it or Merger Sub) under this
Agreement, and (iii) any change or event relating to it having, or which is
reasonably likely imminently to have, a Company Material Adverse Effect (in the
case of Company) or a Parent Material Adverse Effect (in the case of Parent or
Merger Sub) or which will likely render it impossible for one or more of the
conditions set forth in Article VII to be satisfied; provided, however, that no
----------- -------- -------
such notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement.
Article VI. ADDITIONAL AGREEMENTS
6.1 Joint Proxy Statement/Prospectus; Registration Statement.
(a) As promptly as reasonably practicable after the
execution of this Agreement, Company and Parent will prepare, and file
with the SEC, the Joint Proxy Statement/Prospectus, and Parent will
prepare and file with the SEC the Registration Statement, in which the
Joint Proxy Statement/Prospectus will be included as a prospectus. Each
of Parent and Company shall provide promptly to the other such
information concerning its business and financial statements and
affairs as, in the reasonable judgment of the providing party or its
counsel, may be required or appropriate for inclusion in the Joint
Proxy
31
Statement/Prospectus and the Registration Statement, or in any
amendments or supplements thereto, and to cause its counsel and
auditors to cooperate with the other's counsel and auditors in the
preparation of the Joint Proxy Statement/Prospectus and the
Registration Statement. Each of Company and Parent will respond to any
comments of the SEC, and will use its commercially reasonable efforts
to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing, and
Company and Parent will cause the Joint Proxy Statement/Prospectus to
be mailed to their respective stockholders at the earliest practicable
time after the Registration Statement is declared effective by the SEC.
As promptly as practicable after the date of this Agreement, each of
Company and Parent will prepare and file any other filings required to
be filed by it under the Exchange Act, the Securities Act or any other
federal, foreign or Blue Sky or related securities laws or NASD or
National Market System rules, regulations or bylaws in order to
consummate the Merger and the transactions contemplated by this
Agreement. Each of Company and Parent will notify the other promptly
upon the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the
Registration Statement or the Joint Proxy Statement/Prospectus and will
supply the other with copies of all correspondence between such party
or any of its Representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Registration Statement,
the Joint Proxy Statement/Prospectus or the Merger. Each of Company
and Parent will cause all documents that it is responsible for filing
with the SEC under this Section 6.01 to comply in all material respects
------------
with all applicable requirements of law and the rules and regulations
promulgated thereunder. Notwithstanding any other provision of this
Agreement, nothing herein shall require Parent to qualify to do
business in any jurisdiction in which it is not now so qualified or to
file a general consent to service of process under any applicable state
securities laws in connection with the issuance of Parent Common Stock
in the Merger.
(b) If eligible, Parent shall use commercially reasonable
efforts (i) to obtain an exemption from compliance with applicable
Nasdaq Stock Market stockholder voting requirements promulgated by the
NASD in connection with the Merger, or (ii) otherwise to make
arrangements such that Parent need not solicit the vote or hold a
meeting of its stockholders in connection with the Merger or the
issuance of shares of Parent Common Stock pursuant thereto. If Parent
obtains such an exemption or otherwise makes such arrangements, all
references to "Joint Proxy Statement/Prospectus" in this Agreement
shall be deemed to be changed to "Proxy Statement/Prospectus" and all
other appropriate changes shall be deemed to be made to this Agreement
to reflect the fact that a meeting of Parent's stockholders is not
required.
6.2 No Solicitation By Company.
(a) Until the earlier of the Effective Time or a valid
termination of this Agreement pursuant to Article VIII, Company will
------------
not, and will not authorize, direct or knowingly permit any of its
officers, directors, employees, affiliates, investment bankers,
attorneys, accountants or other agents, advisors or representatives
(collectively, "Representatives") to, directly or indirectly, (i)
---------------
solicit, initiate, knowingly encourage or induce the making, submission
or announcement of any Company Takeover Proposal (as defined below),
(ii) participate in any discussions or negotiations with any person
regarding, or furnish to any person any information with respect to, or
take any other action that would reasonably be expected to facilitate
any inquiry or
32
proposal that constitutes or would reasonably be expected to lead to,
any Company Takeover Proposal, (iii) authorize, approve or recommend
any Company Takeover Proposal, or (iv) enter into any letter of intent
or similar document or any contract, agreement or commitment accepting
or providing for any Company Takeover Proposal; provided, however, that
-------- -------
nothing in this Section 6.02 or elsewhere in this Agreement or in the
------------
Confidentiality Agreement (as defined in Section 9.01) shall prohibit
------------
Company's Board of Directors from complying with Rules 14d-9 and 14e-2
under the Exchange Act with regard to a tender or exchange offer not
made in violation of this Section 6.02; and provided, further, that
------------ -------- -------
nothing in this Section 6.02 or elsewhere in this Agreement or in the
------------
Confidentiality Agreement shall prohibit Company, before the adoption
of this Agreement by the stockholders of Company, from furnishing
information regarding Company or entering into negotiations or
discussions with, any person in response to a Company Takeover Proposal
made, submitted or announced by such person (and not withdrawn) or,
subject to the provisions of Section 6.05, endorsing and/or
------------
recommending, or, simultaneously with a termination of this Agreement
pursuant to Section 8.01(h), entering into an agreement accepting or
---------------
providing for, a Company Superior Offer (as defined in Section
-------
6.05(b)), and any such actions enumerated in this proviso shall not be
--------
considered a breach of this Agreement if and to the extent that each of
the following conditions is satisfied: (1) such Company Takeover
Proposal is not attributable to a material breach by Company of this
Section 6.02(a) or Section 6.05; (2) the Board of Directors of Company
--------------- ------------
concludes in good faith, after consultation with its outside legal
counsel, that failure to take such action would be inconsistent with
the fiduciary obligations of the Board of Directors of Company to
Company stockholders under applicable law; (3) prior to furnishing any
such information to, or entering into discussions or negotiations with,
such person, Company gives Parent written notice of the identity of
such person, the terms and conditions of such Company Takeover Proposal
and Company's intention to furnish information to, or enter into
discussions or negotiations with, such person; (4) Company receives
from such person an executed confidentiality agreement which shall not
in any way restrict Company from complying with its disclosure
obligations under this Agreement and which shall contain customary
limitations on the use and disclosure of all nonpublic written and oral
information furnished to such person by or on behalf of Company and
other terms no less favorable to Company than those set forth in the
Confidentiality Agreement; and (5) contemporaneously with furnishing
any such information to such person, Company furnishes such information
to Parent (to the extent that such information has not been previously
furnished by Company to Parent).
(b) Company and its Representatives shall immediately cease
and cause to be terminated any and all existing discussions,
negotiations, exchanges of information and other activities with
respect to any Company Takeover Proposal pending as of the date of this
Agreement. Promptly following the execution and delivery of this
Agreement, Company shall (i) inform each of its directors and officers
and financial, legal, accounting and other advisors retained or
involved in the transactions contemplated by this Agreement of the
obligations undertaken in this Section 6.02 and in the Confidentiality
------------
Agreement and (ii)
33
request each person that has heretofore executed a confidentiality or
non-disclosure agreement in connection with its consideration of
acquiring Company or any of its Subsidiaries to return to Company or
otherwise dispose of all confidential information furnished to such
person by or on behalf of Company or any of its Subsidiaries during the
one-year period prior to the date of this Agreement in connection with
such person's consideration of acquiring or engaging in a merger or
other business combination transaction with Company or any of its
Subsidiaries. Company shall immediately notify Parent if any proposals
or offers constituting a Company Takeover Proposal are received by, any
non-public information in connection with any Company Takeover Proposal
is requested from, or any discussions or negotiations with respect to a
Company Takeover Proposal are sought to be initiated or continued with,
Company's officers or directors or other individuals involved on behalf
of Company in the negotiation of the transactions contemplated by this
Agreement, or, to the knowledge of the foregoing persons, any of
Company's other Representatives, indicating, in connection with such
notice, the name of the person making the inquiry, proposal or offer
and the material terms and conditions of any such proposals or offers.
Thereafter (i) Company shall provide Parent with a true and complete
copy of such Company Takeover Proposal or communication (if it is in
writing) and (ii) Company shall otherwise keep Parent informed, on a
current basis, with respect to the status and terms of any such
proposal or offer and the status of any such negotiations or
discussions.
(c) Company and Parent agree that irreparable damage would
occur in the event that the provisions of this Section 6.02 are not
------------
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed by the parties hereto that Parent
shall be entitled to seek an injunction or injunctions to prevent
breaches of this Section 6.02 and to enforce specifically the terms and
------------
provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which the
parties may be entitled at law or in equity.
(d) For purposes of this Agreement, "Company Takeover
----------------
Proposal" means any offer or proposal (other than an offer or proposal
--------
by Parent or an affiliate of Parent) for (i) a merger or other business
combination involving Company after which the stockholders of Company
immediately prior to such merger or business combination would own less
than eighty percent (80%) of the voting securities of the surviving
company in such merger or business combination and would own less than
eighty percent (80%) of the voting securities of the parent of the
surviving company in such merger or business combination, or (ii) the
acquisition by a person or "group" as defined under Section 13(d) of
the Exchange Act (other than an acquisition by Parent or an affiliate
of Parent) of twenty percent (20%) or more of the outstanding shares of
capital stock of Company, or (iii) the acquisition (other than an
acquisition by Parent or an affiliate of Parent) of all or
substantially all of the assets of Company.
34
6.3 Nasdaq Quotation. Each of Company and Parent agrees to use all
requisite commercially reasonable efforts to continue the quotation of Company
Common Stock and Parent Common Stock, respectively, on the Nasdaq National
Market, during the term of this Agreement so that appraisal rights will not be
available to stockholders of Company under Section 262 of the DGCL. Parent
shall use all requisite commercially reasonable efforts to cause the shares of
Parent Common Stock to be issued in the Merger to be approved for quotation on
the Nasdaq National Market, subject to official notice of issuance, prior to the
Closing Date, to the extent such approval is then required under applicable law,
SEC regulations and Nasdaq National Market rules.
6.4 Access To Information. From and after the date of this Agreement
and continuing until the earlier of the Effective Time or the termination of
this Agreement in accordance with its terms, upon reasonable notice and subject
to (a) contractual confidentiality obligations and the requirements of
applicable antitrust and other laws, rules and regulations, and (b) other
reasonable restrictions to minimize interference with or disruption of the
other's business and operations, Company and Parent shall each (and shall cause
each of their respective Subsidiaries to) afford to the officers, employees,
accountants, counsel and other Representatives of the other, access, during
normal business hours, to all its properties, books, contracts, commitments and
records, including all Tax Returns and all work papers and other documentation
relating to Taxes, and, during such period, each of Company and Parent shall
(and shall cause each of their respective Subsidiaries to) furnish promptly to
the other (x) 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 (y) all other existing information concerning its
business, properties and personnel as such other party may reasonably request.
Unless otherwise required by law, the parties will hold any such information
which is nonpublic in confidence in accordance with the Confidentiality
Agreement. No information or knowledge obtained in any investigation pursuant
to this Section 6.04 shall affect or be deemed to modify any representation or
------------
warranty contained in this Agreement or the conditions to the obligations of the
parties to consummate the Merger.
6.5 Stockholders Meetings.
(a) Subject in each case to applicable laws, rules and
regulations: (i) Company will take all action reasonably necessary in
accordance with the DGCL and its Certificate of Incorporation and
Bylaws and applicable Nasdaq Stock Market rules to cause the Company
Stockholders Meeting to be held for the purpose of voting upon the
adoption of this Agreement, and to cause a vote of the Company's
stockholders on the adoption of this Agreement to be taken, in each
case as promptly as practicable after the date hereof, and (ii) subject
further to the provisions of Section 6.01(b), Parent will take all
---------------
action reasonably necessary in accordance with the DGCL and its
Certificate of Incorporation and Bylaws and applicable Nasdaq Stock
Market rules to cause the Parent Stockholders Meeting to be held for
the purpose of voting upon the Parent Voting Proposal, and to cause a
vote of Parent's stockholders on the Parent Voting Proposal to be
taken, in each case as promptly as practicable after the date hereof.
Unless otherwise mutually agreed by Parent and Company, Parent and
Company shall coordinate and cooperate with respect to the timing of
such meetings and
35
shall use their commercially reasonable efforts to hold such meetings
at the same time and on the same day and as promptly as practicable
after the date hereof. Parent and, subject to Company's rights under
Section 8.01(h), Company shall solicit from their respective
---------------
stockholders proxies in favor of the adoption of this Agreement (in the
case of Company stockholders) and approval of the Parent Voting
Proposal (in the case of Parent stockholders), and will take all other
action necessary or advisable to secure the vote or consent of their
respective stockholders required under NASD rules and the DGCL, as
applicable; provided, however, that neither Company nor Parent shall be
-------- -------
required to take any action that its respective Board of Directors
determines in good faith after consultation with outside legal counsel
would be inconsistent with its fiduciary duties to its stockholders
under applicable law. Notwithstanding anything to the contrary
contained in this Agreement, Company may adjourn or postpone the
Company Stockholders Meeting, and Parent may adjourn or postpone the
Parent Stockholders Meeting, to the extent that (x) such adjournment or
postponement is necessary to ensure that any necessary supplement or
amendment to the Joint Proxy Statement/Prospectus is provided to such
party's stockholders in advance of the applicable vote or (y)
additional time is reasonably required to solicit proxies in favor of
the approvals required by Section 7.01(a) or (z) as of the time for
---------------
which such stockholders meeting is originally scheduled (as set forth
in the Joint Proxy Statement/Prospectus) there are insufficient shares
represented (either in person or by proxy) to constitute a quorum
necessary to conduct the business of such stockholders meeting. Company
shall ensure that the Company Stockholders Meeting is called, noticed,
convened, held and conducted, and that all proxies solicited by Company
in connection with the Company Stockholders Meeting are solicited, and
Parent shall ensure that Parent Stockholders Meeting is called,
noticed, convened, held and conducted, and that all proxies solicited
by Parent in connection with the Parent Stockholders Meeting are
solicited, in compliance with the DGCL, applicable charter documents,
Nasdaq Stock Market rules and all other applicable legal requirements.
(b) (i) The Board of Directors of Company has recommended
that Company's stockholders vote in favor of the adoption of this
Agreement at the Company Stockholders Meeting; (ii) the Joint Proxy
Statement/Prospectus shall include a statement to the effect that the
Board of Directors of Company has recommended that Company stockholders
vote in favor of the adoption of this Agreement at the Company
Stockholders Meeting; and (iii) neither the Board of Directors of
Company nor any committee thereof shall withdraw, amend or modify, or
resolve to withdraw, amend or modify, in a manner adverse to Parent,
the recommendation of the Board of Directors of Company that Company
stockholders vote in favor of the adoption of this Agreement; provided,
--------
however, that nothing in this Agreement or in the Confidentiality
-------
Agreement shall prevent the Board of Directors of Company from omitting
such recommendation from the Joint Proxy Statement/Prospectus or from
withholding, withdrawing, amending or modifying such recommendation if:
(A) a Company Superior Offer is made and is not withdrawn, (B) such
Company Superior Offer is not attributable to a breach by Company in
any material respect of any of the restrictions set forth in Section
-------
36
6.02, (C) forty-eight (48) hours elapse following delivery by Company
----
to Parent of written notice advising Parent that the Board of Directors
of Company intends to withhold, withdraw, amend or modify such
recommendation, and (D) the Board of Directors of Company concludes in
good faith, after consultation with its outside legal counsel, that
inclusion of such recommendation, or the failure to withhold, withdraw,
amend or modify such recommendation, would be inconsistent with the
fiduciary duties of the Board of Directors of Company to Company
stockholders under applicable law. For purposes of this Agreement,
"Company Superior Offer" shall mean a bona fide written offer made by a
-----------------------
third party to consummate any of the following transactions: (x) a
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Company
pursuant to which the stockholders of Company immediately preceding
such transaction hold less than fifty percent (50%) of the equity
interest in the surviving, resulting or acquiring entity of such
transaction; (y) a sale or other disposition by Company of assets
(excluding inventory and used equipment sold in the ordinary course of
business) representing a majority of Company's assets; or (z) the
acquisition by any person or group (including by way of a tender offer
or an exchange offer or issuance by Company), directly or indirectly,
of beneficial ownership or a right to acquire beneficial ownership of
shares representing fifty percent (50%) or more of the voting power of
the then outstanding shares of capital stock of Company, in each case
on terms that, in the good faith judgment of the Board of Directors of
Company (after consultation with an investment bank of nationally
recognized reputation) are more favorable (in a manner that, in the
totality of such terms, is not immaterial) to Company stockholders than
the Merger (after taking into account all relevant factors, including
any conditions to the Company Superior Offer, the timing of the
consummation of the transaction pursuant to the Company Superior Offer,
the risk of nonconsummation thereof and the need for any required
governmental or other consents, filings and approvals); provided,
--------
however, that an offer shall only be a Company Superior Offer if any
-------
financing required to consummate the transaction contemplated by such
offer is committed or is otherwise reasonably likely, in the good faith
judgment of Company's Board of Directors, to be obtained on a timely
basis.
(c) (i) The Board of Directors of Parent has recommended that
Parent stockholders vote in favor of the Parent Voting Proposal at the
Parent Stockholders Meeting; (ii) the Joint Proxy Statement/Prospectus
shall include a statement to the effect that the Board of Directors of
Parent has recommended that Parent stockholders vote in favor of the
Parent Voting Proposal at the Parent Stockholders Meeting; and (iii)
neither the Board of Directors of Parent nor any committee thereof
shall withdraw, amend or modify, or resolve to withdraw, amend or
modify, in a manner adverse to Company, the recommendation of the Board
of Directors of Parent that Parent stockholders vote in favor of the
Parent Voting Proposal. Parent, as the sole stockholder of Merger Sub,
will vote its shares of Merger Sub voting stock in favor of adoption of
this Agreement.
37
(d) Subject to the right of Company to terminate this
Agreement pursuant to Section 8.01(h), nothing contained in Section
--------------- -------
6.05 shall limit Company's obligation to call, give notice of, convene
----
and hold the Company Stockholders Meeting (regardless of whether the
recommendation of the Board of Directors of Company shall have been
withdrawn, amended or modified and regardless of whether any Company
Takeover Proposal has been commenced, disclosed, or announced).
Nothing contained in this Agreement or in the Confidentiality Agreement
shall operate to preclude Company or any officer or director of Company
from complying with all disclosure obligations it or he may have under
any applicable federal or state law.
6.6 Legal Conditions To Merger.
(a) Company and Parent shall each use all requisite
commercially reasonable efforts to (i) take, or cause to be taken, all
appropriate action, and do, or cause to be done, all things necessary
and proper under applicable law to consummate and make effective the
transactions contemplated hereby as promptly as practicable, (ii)
obtain from any Governmental Entity or any other third party any
consents, licenses, permits, waivers, approvals, authorizations, or
orders required to be obtained by Company or Parent or any of their
Subsidiaries in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby including the Merger, and (iii) as promptly as
practicable, make all necessary filings, and thereafter make any other
required submissions, with respect to this Agreement and the Merger
required under (A) the Securities Act and the Exchange Act, and any
other applicable federal or state securities laws, (B) the HSR Act and
any related governmental request thereunder, and (C) any other
applicable law. Company and Parent shall cooperate with each other in
connection with the making of all such filings, including providing
copies of all such filings to the non-filing party and its advisors
prior to filing and, if requested, shall accept all reasonable
additions, deletions or changes suggested in connection therewith.
Company and Parent shall use commercially reasonable efforts to furnish
to each other all information required for any application or other
filing to be made pursuant to the rules and regulations of any
applicable law (including all information required to be included in
the Joint Proxy Statement/Prospectus and the Registration Statement) in
connection with the transactions contemplated by this Agreement.
(b) Parent and Company shall, and shall cause each of their
respective Subsidiaries to, cooperate and use their respective
commercially reasonable efforts to obtain any government clearances
required for the transactions contemplated by this Agreement (including
through compliance with the HSR Act and any applicable foreign
governmental reporting requirements), to respond to any government
requests for information, and to contest and resist any action,
including any legislative, administrative or judicial action, and to
have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or permanent)
(an "Order") that restricts,
-----
38
prevents or prohibits the consummation of the Merger or any other
transactions contemplated by this Agreement, including by vigorously
pursuing all available avenues of administrative and judicial appeal
and all available legislative action. The parties hereto will consult
and cooperate with one another, and consider in good faith the views of
one another, in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments, opinions and proposals
made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to the HSR Act or any other federal,
state or foreign antitrust or fair trade law. Subject to the
requirements of applicable law, Parent shall be entitled to direct any
proceedings or negotiations with any Governmental Entity relating to
any such analyses, appearances, presentations, memoranda, briefs,
arguments, opinions or proposals, provided that Parent shall afford
--------
Company a reasonable opportunity to participate therein.
Notwithstanding anything to the contrary in this Section 6.06, neither
------------
Parent nor Company nor any of their respective Subsidiaries shall be
required to sell or otherwise dispose of, or hold separate (through the
establishment of a trust or otherwise), any assets or categories of
assets, or businesses of Parent, Company or any of their affiliates, or
to withdraw from doing business in a particular jurisdiction or to take
any other action that would, in any case, reasonably be expected to
have a Parent Material Adverse Effect or a Company Material Adverse
Effect.
(c) Each of Company and Parent shall give (or shall cause
their respective Subsidiaries to give) any notices to third parties,
and use, and cause their respective Subsidiaries to use, commercially
reasonable efforts to obtain any third party consents related to or
required in connection with the Merger that are (i) necessary to
consummate the transactions contemplated hereby, (ii) disclosed or
required to be disclosed in the Company Disclosure Schedule or the
Parent Disclosure Schedule, as the case may be, or (iii) required to
prevent a Company Material Adverse Effect or a Parent Material Adverse
Effect from occurring.
6.7 Public Disclosure. Parent and Company shall consult with each
other before issuing any press release or otherwise making any public statement
with respect to the Merger or this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by law.
6.8 Tax-Free Reorganization. At or prior to the filing of the
Registration Statement, Company and Parent shall execute and deliver to Xxxxxx
Godward LLP and Xxxxxxx, Phleger & Xxxxxxxx LLP tax representation letters in
customary form. To the extent requested by Parent or Company, Parent, Merger
Sub and Company shall each confirm to Xxxxxx Godward LLP and to Xxxxxxx, Xxxxxxx
& Xxxxxxxx LLP the accuracy and completeness as of the Effective Time of the tax
representation letters delivered pursuant to the immediately preceding sentence.
Parent and Company shall each use all requisite commercially reasonable efforts
to cause the Merger to be treated as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code. Following delivery of the tax
representation letters pursuant to the first sentence of this Section 6.08, each
------------
of Parent and Company shall use all requisite commercially reasonable efforts to
cause Xxxxxxx, Phleger & Xxxxxxxx LLP and Xxxxxx Godward LLP, respectively, to
deliver to it a tax opinion satisfying the requirements of Item 601 of
Regulation S-K promulgated
39
under the Securities Act. In rendering such opinions, each of such counsel shall
be entitled to rely on the tax representation letters referred to in this
Section 6.08.
------------
6.9 Stock Plans.
(a) Company has provided Parent with a true and complete list
as of March 9, 2000 of all holders of outstanding options under the
Company Stock Plans, including the number of shares of Company Common
Stock subject to each such option, the exercise or vesting schedule,
the exercise price and term of each such option (in each case, without
giving effect to the 100% stock dividend being distributed by Company
on or about March 13, 2000. On the Closing Date, Company shall deliver
to Parent an updated list current as of such Closing Date. At the
Effective Time, each outstanding option to purchase shares of Company
Common Stock (a "Company Stock Option") under the Company Stock Plans,
--------------------
whether vested or unvested, shall be assumed and shall constitute an
option to acquire, on the same terms and conditions as were applicable
under such Company Stock Option, the same number of shares of Parent
Common Stock as the holder of such Company Stock Option would have been
entitled to receive pursuant to the Merger had such holder exercised
such option (including any unvested portion thereof) in full
(disregarding any limitation on exercisability thereof) immediately
prior to the Effective Time (rounded downward to the nearest whole
number), at a price per share (rounded upward to the nearest whole
cent) equal to (y) the aggregate exercise price for the shares of
Company Common Stock purchasable pursuant to such Company Stock Option
immediately prior to the Effective Time divided by (z) the number of
full shares of Parent Common Stock deemed purchasable pursuant to such
Company Stock Option in accordance with the foregoing. All outstanding
rights of Company that it may hold immediately prior to the Effective
Time to repurchase unvested shares of Company Common Stock issued or
issuable under any of the Company Stock Plans (the "Repurchase
----------
Options") shall be assigned to Parent and shall thereafter be
-------
exercisable by Parent upon the same terms and conditions in effect
immediately prior to the Effective Time, except that the shares
purchasable pursuant to the Repurchase Options and the purchase price
per shall be adjusted to reflect the Exchange Ratio.
(b) Except as otherwise provided in the Company Stock Plans,
the documents governing the outstanding Company Stock Options under the
Company Stock Plans, and offer letters and other agreements affecting
such Company Stock Options, the Merger shall not result in the
termination or acceleration of any outstanding Company Stock Options
under the Company Stock Plans that are so assumed by Parent. It is the
intention of the parties that the Company Stock Options so assumed by
Parent qualify following the Effective Time as incentive stock options
as defined in Section 422 of the Internal Revenue Code to the extent
such Company Stock Options qualified as incentive stock options prior
to the Effective Time. As promptly as reasonably practicable and in any
event within thirty (30) business days after receipt of all option
documentation it requires relating to the outstanding Company Stock
Options, Parent will issue to
40
each person who, immediately prior to the Effective Time, is a holder
of an outstanding Company Stock Option under the Company Stock Plans
that is to be assumed by Parent hereunder, a document evidencing the
foregoing assumption of such Company Stock Option by Parent.
(c) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common
Stock for delivery under Company Stock Options assumed in accordance
with this Section 6.09. As promptly as reasonably practicable and in
------------
any event within fifteen (15) business days after receipt of all option
documentation it requires relating to the outstanding Company Stock
Options, Parent shall file a registration statement on Form S-8 (or any
successor form) covering shares of Parent Common Stock issuable
pursuant to such Company Stock Options assumed by Parent provided that
such Company Stock Options qualify for registration on such Form S-8
(or any such successor form). Company shall cooperate with and assist
Parent in the preparation of such registration statements.
(d) The Board of Directors of Company shall, prior to or as
of the Effective Time, take all necessary actions, pursuant to and in
accordance with the terms of the Company Stock Plans and the
instruments evidencing the Company Stock Options, to provide for the
conversion of the Company Stock Options into options to acquire Parent
Common Stock in accordance with this Section 6.09, and to provide that
------------
no consent of the holders of the Company Stock Options is required in
connection with such conversion.
(e) Assuming that the Company delivers to Parent the Section
16 Information (as defined below) in a timely fashion, the Board of
Directors of Parent, or a committee of two or more "non-employee
------------
directors" (as such term is defined for purposes of Rule 16b-3 under
---------
the Exchange Act) thereof, shall adopt resolutions prior to the
Effective Time providing that, and shall take other appropriate action
such that, the deemed grant to Company Insiders (as defined below) of
options to purchase Parent Common Stock under the Company Stock Options
(as converted into options to acquire Parent Common Stock pursuant to
this Section 6.09), and the receipt by Company Insiders of Parent
------------
Common Stock in exchange for Company Common Stock pursuant to the
Merger, are intended to be exempt from liability pursuant to Section
16(b) of the Exchange Act. Such resolutions shall comply with the
approval conditions of Rule 16b-3 under the Exchange Act for purposes
of such Section 16(b) exemption, including specifying the name of each
Company Insider, the number of equity securities to be acquired or
disposed of by each Company Insider, the material terms of any
derivative securities, and that the approval is intended to make the
receipt of such securities exempt pursuant to Rule 16b-3(d) under the
Exchange Act. "Section 16 Information" shall mean the names of the
----------------------
Company Insiders, the number of shares of Company Common Stock held by
each Company Insider and expected to be exchanged for Parent Common
Stock in the Merger and the number and a description of Company Stock
Options held by each Company Insider and expected to be converted into
options to acquire Parent Common Stock in
41
connection with the Merger. "Company Insiders" shall mean those
----------------
officers and directors of Company who will be subject to the reporting
requirements of Section 16(b) of the Exchange Act with respect to
Parent and whose names are included in the Section 16 Information.
(f) At the Effective Time, Parent shall assume, with respect
to each Company employee who agrees to waive the exercise of any
Purchase Right (as defined in the Company ESPP) on any Purchase Date
(as defined in the Company ESPP) after February 15, 2001, the Company
ESPP and all Purchase Rights held by employees of Company or any of its
Subsidiaries who are participating in the Company ESPP, and Parent
shall continue the assumed Company ESPP and the related offering and
purchase periods thereunder (for the benefit of all persons who are
employees of Company or any of its Subsidiaries as of the Closing and
who have waived any Purchase Rights on any Purchase Date after February
15, 2001); provided, however, that: (i) each such assumed Purchase
Right shall pertain to Parent Common Stock; (ii) the "Per Offering
Share Limit" set forth in Section 8.1 of the Company ESPP shall be
-----------
equal to the product of (A) five thousand (5,000) (without giving
effect to the 100% stock dividend to be distributed by Company on or
about March 13, 2000) multiplied by (B) the Exchange Ratio, rounded
down to the nearest whole share; (iii) the maximum number of shares of
Parent Common Stock issuable under the Company ESPP set forth in
Section 4.1 of the Company ESPP shall be equal to the product of (A)
-----------
three hundred thousand (300,000) (without giving effect to the 100%
stock dividend to be distributed by Company on or about March 13, 2000)
multiplied by (B) the Exchange Ratio, rounded down to the nearest whole
share, and (iv) the fair market value per share of Company Common Stock
at the beginning of each Offering Period in effect at the Effective
Time shall be equal to the fair market value per share of Company
Common Stock at the beginning of such Offering Period divided by the
Exchange Ratio, rounded up to the nearest whole cent. On the Closing
Date, Company shall deliver to Parent a list of all holders of Purchase
Rights who have consented to the waiver of all Purchase Rights on any
Purchase Date after February 15, 2001 and the percentage of
compensation to be deducted for each such holder. As promptly as
reasonably practicable and in any event within fifteen (15) business
days after receipt of all Company ESPP documentation it requires
relating to outstanding assumed Purchase Rights, Parent shall file with
the SEC a registration statement on Form S-8 relating to the shares of
Parent Common Stock issuable pursuant to Purchase Rights exercised
under the assumed Company ESPP.
(g) Company shall take, or cause to be taken, all action
necessary to provide that no additional Offering Periods under the
Company ESPP shall commence after the date of this Agreement, other
than the Offering Period beginning on August 16, 2000, if applicable.
(h) Within five (5) business days following the date of this
Agreement, Company shall make available to Parent a list of all persons
who Company reasonably believes (i) are, with respect to Company and as
of the date
42
of this Agreement, "disqualified individuals" (within the meaning of
Section 280G of the Internal Revenue Code and the regulations
promulgated thereunder), and (ii) will be receiving payments or
benefits (including acceleration of options) in connection with the
Merger including any payments or benefits as a result of termination of
service following the Merger. Within five (5) business days prior to
the Closing Date, Company shall revise such list to reflect any
additional information that Company reasonably believes would impact
the determination of persons who (A) are, with respect to Company, such
"disqualified individuals," and (B) will be receiving payments or
benefits (including acceleration of options) in connection with the
Merger including any payments or benefits as a result of termination of
service following the Merger.
6.10 Affiliate Agreements. Promptly after the execution of this
Agreement, Company will provide Parent with a list of those persons who are, in
Company's reasonable judgment, "affiliates" of Company, within the meaning of
Rule 145 (each such person who is an "affiliate" of Company within the meaning
of Rule 145 is referred to as an "Affiliate") promulgated under the Securities
---------
Act ("Rule 145"). Company shall provide Parent such information and documents
--------
as Parent shall reasonably request for purposes of reviewing such list and shall
notify Parent in writing regarding any change in the identity of its Affiliates
prior to the Closing Date. Company shall use commercially reasonable efforts to
cause each of its Affiliates to promptly deliver an executed affiliate
agreement, in form and substance reasonably satisfactory to Parent and Company.
6.11 Indemnification.
(a) From and after the Effective Time, (i) Parent will, and
Parent will cause the Surviving Corporation to, indemnify and hold
harmless each person who is or was a director or officer of Company or
any of its Subsidiaries at or at any time prior to the Effective Time
(an "Indemnified Party") against any costs or expenses (including
-----------------
attorneys' fees), judgments, fines, losses, claims, damages,
liabilities or amounts paid in settlement incurred in connection with
any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining
to any action or omission (or alleged action or omission) in his or her
capacity as a director, officer, employee, principal stockholder,
fiduciary or agent of Company or any of its Subsidiaries or benefit
plans whether asserted or claimed prior to, at or after the Effective
Time and (ii) Parent will cause the Surviving Corporation to fulfill
and honor in all respects the obligations of Company pursuant to any
indemnification agreements between Company and any of the Indemnified
Parties in effect immediately prior the Effective Time (and Parent and
the Surviving Corporation shall also advance expenses as incurred to
the fullest extent permitted under applicable law, provided that the
--------
Indemnified Party to whom expenses are advanced provides an undertaking
to repay such advances if it is ultimately determined that such
Indemnified Party is not entitled to indemnification).
(b) For a period of six (6) years after the Effective Time,
Parent shall cause the Surviving Corporation to maintain (to the extent
available in
43
the market) in effect a directors' and officers' liability insurance
policy covering those persons who currently or in the future are
covered by Company's directors' and officers' liability insurance
policy (a copy of which has been heretofore delivered to Parent) with
coverage in amount and scope at least as favorable as the coverage
currently planned by Company and described on Schedule 6.11(b);
----------------
provided, however, that in no event shall Parent or the Surviving
-------- -------
Corporation be required to expend for any given year for such coverage
in excess of one hundred fifty percent (150%) of the annual premium
quoted to Company for such coverage as disclosed by Company to Parent
on Schedule 6.11(b) (the "Current Premium"); and if the annual premium
---------------- ---------------
for such coverage would at any time exceed one hundred fifty percent
(150%) of the Current Premium, then the Surviving Corporation shall
maintain insurance policies which provide the maximum and best coverage
available at an annual premium equal to one hundred fifty percent
(150%) of the Current Premium.
(c) Without limiting any of the rights of any of the
Indemnified Parties set forth in the other provisions of this Section
-------
6.11, for a period of six years after the Effective Time, to the extent
----
there is any claim, action, suit, proceeding or investigation (whether
arising before or after the Effective Time) against or involving any
Indemnified Party that arises out of or pertains to any action or
omission (or alleged action or omission) in his or her capacity as a
director, officer, employee, principal stockholder, fiduciary or agent
of Company or any of its Subsidiaries or benefit plans occurring prior
to the Effective Time, such Indemnified Party shall be entitled to be
represented by counsel and following the Effective Time (i) any counsel
retained by the Indemnified Parties shall be reasonably satisfactory to
the Surviving Corporation and Parent, (ii) the Surviving Corporation
and Parent shall pay as incurred the reasonable fees and expenses of
such counsel, promptly after statements therefor are received, and
(iii) the Surviving Corporation and Parent will cooperate in the
defense of any such matter; provided, however, that neither the
-------- -------
Surviving Corporation nor Parent shall be liable for any settlement
effected without its written consent (which consent shall not be
unreasonably withheld, conditioned or delayed); and provided, further,
-------- -------
that, in the event that any claim or claims for indemnification are
asserted or made within such six-year period, all rights to
indemnification in respect to any such claim or claims shall continue
until the final disposition of any and all such claims. The Indemnified
Parties as a group may retain only one law firm to represent them with
respect to any single action unless such law firm determines that there
is, under applicable standards of professional conduct, a material risk
of conflict on any significant issue between the positions of any two
or more Indemnified Parties.
(d) Parent and the Surviving Corporation jointly and
severally agree to pay all expenses, including reasonable attorneys'
fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.11 to
------------
the extent that such Indemnified Party is determined to be entitled to
indemnification under this Section 6.11.
------------
44
(e) The provisions of this Section 6.11 are intended to be in
------------
addition to the rights otherwise available to the Indemnified Parties
by law, charter, statute, bylaw or agreement, and shall operate for the
benefit of, and shall be enforceable by, each of the Indemnified
Parties, and their heirs, representatives, successors and assigns.
6.12 Benefit Plans.
(a) Parent agrees that, during the period commencing at the
Effective Time and continuing for a reasonable period thereafter, the
employees of Company and its Subsidiaries will continue to be provided
with benefits under employee benefit plans (other than stock option or
other plans involving the potential issuance of securities) which on
average are substantially as favorable in the aggregate as those
currently provided by Company and its Subsidiaries to such employees
(except with respect to the 401(k) plan as provided below).
(b) Unless Parent consents otherwise in writing, Company
shall take all action necessary to terminate, or cause to be
terminated, before the Effective Time, any Company Employee Plan that
is a 401(k) plan or other defined contribution retirement plan. Parent
shall permit the rollover of the accounts of participants in the
Company 401(k) plans to the Parent 401(k) plan (including outstanding
loans of those participants who became employees of Parent or any of
its Subsidiaries, or who remain employees of the Surviving Corporation
or any of its Subsidiaries).
(c) Upon the termination of the Company welfare plans, Parent
shall include Company employees in Parent's welfare plans (within the
meaning of Section 3(1) of ERISA) and fringe benefit plans on the same
basis and terms as similarly situated Parent employees currently
participate. All welfare benefit plans of Parent or the Surviving
Corporation in which employees of Company or any of its Subsidiaries
participate after the Effective Time shall (i) recognize expenses and
claims that were incurred by such employees in the year in which the
Effective Time occurs toward applicable co-payments, out of pocket
maximums and deductibles, and (ii) provide coverage for preexisting
health conditions to the extent covered under the applicable plans or
programs of Company or any of its Subsidiaries as of the Effective
Time. In addition, for eligibility purposes (including waiting period
and evidence of insurability), under plans of the Surviving Corporation
or Parent, service by an employee for Company or any of its
Subsidiaries and any predecessor prior to the Effective Time shall be
taken into account to the same extent as service for Parent; provided,
--------
however, that nothing herein shall require the inclusion of any such
-------
employee in any such plan prior to the Effective Time, and provided
--------
further, that in determining the amount of vacation pay owed to any
-------
such employee from and after the Effective Time under the applicable
terms of the vacation pay plan of the Surviving Corporation or Parent
(which terms need not be comparable to the terms of the vacation plan
or policy of Company or any of its Subsidiaries and any predecessor,
corporation or entity), credit shall be given for such employee's
45
service for Company or any of its Subsidiaries and any predecessor,
corporation or entity prior to the Effective Time. Without limiting the
effect of Section 6.09(f), employees of Company or any of its
---------------
Subsidiaries and any predecessor corporation or entity as of the
Effective Time shall be permitted to participate in Parent's Employee
Stock Purchase Plan (the "Parent ESPP") commencing on the first
-----------
enrollment date following the Effective Time, subject to compliance
with the eligibility provisions of such plan (with employees receiving
credit, for purposes of such eligibility provisions, for service with
Company or any of its subsidiaries and any predecessor corporation or
entity.
(d) With respect to each benefit plan, program, practice,
policy or arrangement maintained by Parent (the "Parent Employee
---------------
Plans") in which employees of Company or its Subsidiaries subsequently
-----
participate, Parent will recognize such employee's cumulative prior
service to Company and its Subsidiaries (and any predecessor
corporation or entity) for purposes of determining eligibility to
participate in and for the vesting of benefits under such Parent
Employee Plans to the same extent as service for Parent; provided, that
--------
such recognition shall not be for the purpose of determining retirement
benefits and accrual. Notwithstanding the foregoing, for a period of no
less than one year after the Effective Time, Parent shall provide
severance and termination benefits (other than acceleration of option
vesting) to employees of Company and its Subsidiaries that are no less
favorable than those provided by Company or its Subsidiaries to such
Company employees as of the date hereof.
6.13 Registration Statement; Joint Proxy Statement/Prospectus. If at
any time prior to the Effective Time any event relating to Company or any of its
Affiliates, officers or directors should be discovered by Company which should
be set forth in an amendment to the Registration Statement or a supplement to
the Joint Proxy Statement/Prospectus, Company shall promptly inform Parent. If
at any time prior to the Effective Time any event relating to Parent or any of
its Affiliates, officers or directors should be discovered by Parent which
should be set forth in an amendment to the Registration Statement or a
supplement to the Joint Proxy Statement/Prospectus, Parent shall promptly inform
Company.
Article VII. CONDITIONS TO MERGER
7.1 Conditions To Each Party's Obligation To Effect The Merger. The
respective obligations of each party to this Agreement to effect the Merger are
subject to the satisfaction of each of the following conditions:
(a) Stockholder Approval. This Agreement shall have been
--------------------
adopted by the Company Stockholder Vote, and, if the exemption or
arrangements described in Section 6.01(b) shall not have been obtained
---------------
or made, the Parent Voting Proposal shall have been approved by the
vote prescribed by applicable Nasdaq Stock Market stockholder voting
requirements promulgated by the NASD.
46
(b) HSR Act. The waiting period applicable to the
-------
consummation of the Merger under the HSR Act shall have expired or been
terminated.
(c) Approvals. Other than the filing provided for by Section
--------- -------
1.01, all authorizations, consents, orders or approvals of, or
----
declarations or filings with, or expirations of waiting periods imposed
by, any Governmental Entity required to be obtained or made or to have
expired prior to the Effective Time shall have been obtained or made or
shall have expired, other than those, the absence of which (i) would
not reasonably be expected to have a Parent Material Adverse Effect or
a Company Material Adverse Effect and (ii) would not prohibit or render
unlawful the consummation of the Merger under U.S. law or under any law
providing for criminal penalties against any director or officer of
Company or Parent.
(d) Registration Statement. The Registration Statement shall
----------------------
have become effective under the Securities Act and shall not be the
subject of any stop order or proceedings seeking a stop order.
(e) No Legal Impediment. No Governmental Entity or federal,
-------------------
state or foreign court of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any Order, statute, rule or
regulation which is in effect and which has the effect of making the
Merger unlawful or otherwise prohibiting consummation of the Merger
under U.S. law or under any law providing for criminal penalties
against any director or officer of Company or Parent.
(f) Nasdaq. The shares of Parent Common Stock to be issued
------
in the Merger shall have been approved for quotation on the Nasdaq
National Market, or shall be exempt from such quotation requirement
under then applicable laws and regulations and Nasdaq National Market
rules.
7.2 Additional Conditions To Obligations Of Parent And Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger are subject to the
satisfaction of each of the following conditions, any of which may be waived in
writing exclusively by Parent and Merger Sub:
(a) Representations And Warranties. The representations and
------------------------------
warranties of Company set forth in this Agreement shall be true and
correct as of the Closing Date as though made on and as of the Closing
Date or, in the case of representations and warranties of Company which
speak as of an earlier date, shall have been true and correct as of
such earlier date, except in each case (i) for changes contemplated by
this Agreement and (ii) where the failure to be true and correct,
individually or in the aggregate, has not had and will not, solely with
the passage of time, imminently result in a Company Material Adverse
Effect or (in the case of the representations and warranties in Section
-------
3.02(a) and Section
------- -------
47
3.02(b) and Section 3.21) a material adverse effect on the cost of the
------- ------------
Merger to Parent.
(b) Performance Of Obligations Of Company. Company shall
-------------------------------------
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date.
(c) Certificate. Parent shall have received a certificate
-----------
signed on behalf of Company by the chief executive officer and the
chief financial officer of Company to the effect that the conditions
set forth in Section 7.02(a) and Section 7.02(b) are satisfied.
--------------- ---------------
(d) Employee Retention. The two Company employees listed in
------------------
Schedule 7.02(f) shall have entered into employment and noncompetition
----------------
agreements with Parent providing for such employees to be employed by
Parent (or to continue to be employed by the Surviving Corporation)
after the Effective Time; both such employment agreements shall be in
full force and effect; and neither of such employees shall have ceased
employment with Company or given notice to the Board of Directors of
Parent or the Board of Directors of Company of his intention to cease
employment with Parent or Company after the Effective Time.
7.3 Additional Conditions To Obligation Of Company. The obligation of
Company to effect the Merger is subject to the satisfaction of each of the
following conditions, any of which may be waived, in writing, exclusively by
Company:
(a) Representations And Warranties. The representations and
------------------------------
warranties of Parent and Merger Sub set forth in this Agreement shall
be true and correct as of the Closing Date as though made on and as of
the Closing Date, or, in the case of representations and warranties of
Parent or Merger Sub which speak as of an earlier date, shall have been
true and correct as of such earlier date, except in each case (i) for
changes contemplated by this Agreement and (ii) where the failure to be
true and correct, individually or in the aggregate, has not had and
will not, solely with the passage of time, imminently result in a
Parent Material Adverse Effect.
(b) Performance Of Obligations Of Parent And Merger Sub.
---------------------------------------------------
Parent and Merger Sub shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or
prior to the Closing Date.
(c) Certificate. Company shall have received a certificate
-----------
signed on behalf of Parent by the chief executive officer and the chief
financial officer of Parent to the effect that the conditions set forth
in Section 7.03(a) and Section 7.03(b) are satisfied.
--------------- ---------------
48
(d) Registration Statement Tax Opinion. Company shall have
----------------------------------
received an appropriate written tax opinion from Xxxxxx Godward LLP,
counsel to Company, for filing as an exhibit to the Registration
Statement.
(e) Closing Tax Opinion. Company shall have received the
-------------------
opinion of Xxxxxx Godward LLP, counsel to Company, to the effect that
the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code for federal income tax
purposes.
7.4 Frustration Of Closing Conditions. Neither Parent, Merger Sub nor
Company may rely on the failure of any condition set forth in Section 7.01, 7.02
------------ ----
or 7.03, as the case may be, to be satisfied if such failure was caused by such
----
party's failure to take any action required by this Agreement.
Article VIII. TERMINATION AND AMENDMENT
8.1 Termination. At any time prior to the Effective Time, whether
before or after the receipt of stockholder approvals, this Agreement may be
terminated:
(a) by mutual consent duly authorized by the Boards of
Directors of Parent and Company;
(b) by either Parent or Company, if the Closing shall not
have occurred on or before September 15, 2000 (provided, however, that
-------- -------
(i) the right to terminate this Agreement under this Section 8.01(b)
---------------
shall not be available to any party whose action or failure to act has
been the cause of, or resulted in, the failure of the Merger to occur
on or before such date and such action or failure to act constitutes a
material breach of this Agreement, and (ii) if (A) on September 15,
2000 the condition to closing set forth in Section 7.01(b) or Section
--------------- -------
7.01(c) has not been satisfied or waived or the Closing cannot
-------
otherwise occur due to any action taken or threatened to be taken or
any failure to act by a Governmental Entity or federal, state or
foreign court of competent jurisdiction, and (B) there is a reasonable
likelihood that the conditions to closing set forth in Section 7.01(b)
---------------
and Section 7.01(c) can be satisfied and the Closing can otherwise
---------------
occur notwithstanding any action taken or threatened to be taken or
any failure to act by a Governmental Entity or federal, state or
foreign court of competent jurisdiction, then either party may, in its
sole discretion, extend the date referred to in this paragraph by up
to 90 days);
(c) by Parent, if (i) Company shall have breached any
representation or warranty in this Agreement, or shall breach any
obligation or agreement hereunder, in a manner that, if uncured, would
cause any condition precedent to the Closing set forth in Article VII
-----------
not to be satisfied, and such breach shall not have been cured within
twenty (20) business days of receipt by Company of written notice of
such breach and a description of the principal details of such breach;
provided, however, that the right to terminate this Agreement under
-------- -------
this Section 8.01(c)(i) shall not be available to Parent where Parent
------------------
is at that
49
time in material breach of this Agreement; or (ii) the Board of
Directors of Company shall have omitted its recommendation in favor of
adoption of this Agreement from the Joint Proxy Statement/Prospectus
or shall have withdrawn or modified its recommendation in favor of
adoption of this Agreement in a manner adverse to Parent or
recommended, endorsed, accepted or agreed to accept a Company Takeover
Proposal or resolved to do any of the foregoing;
(d) by Company, if Parent shall have breached any
representation or warranty this Agreement, or shall breach any
obligation or agreement hereunder, in a manner that, if uncured, would
cause any condition precedent to the Closing set forth in Article VII
--------------
not to be satisfied, and such breach shall not have been cured within
twenty (20) business days following receipt by Parent of written notice
of such breach and a description of the principal details of such
breach; provided, however, that the right to terminate this Agreement
-----------------
under this Section 8.01(d) shall not be available to Company where
---------------
Company is at that time in material breach of this Agreement;
(e) by Parent if (i) any permanent injunction or other order
of a court or other competent authority preventing the consummation of
the Merger shall have become final and nonappealable, (ii) any required
approval of the stockholders of Company with respect to this Agreement
or the Merger shall not have been obtained by reason of the failure to
obtain the required vote upon a vote taken at a duly held meeting of
Company stockholders (or at any adjournment or postponement thereof
permitted by Section 6.05(a)), or (iii) the exemption described in
---------------
Section 6.01(b) shall not have been obtained (or shall be unavailable),
---------------
the arrangements described in Section 6.01(b) shall not have been made
---------------
(or shall be unavailable), and the approval of the Parent Voting
Proposal shall not have been obtained by reason of the failure to
obtain the required vote upon a vote taken at a duly held meeting of
Parent stockholders (or at any adjournment or postponement thereof
permitted by Section 6.05(a)) (provided, however, that the right to
--------------- -------- -------
terminate this Agreement pursuant to this Section 8.01(e)(iii) shall
--------------------
not be available to Parent if the failure to obtain such exemption, the
failure to make such arrangements and the failure to obtain such Parent
stockholder approval, is attributable to an action or omission by
Parent in material breach of this Agreement;
(f) by Company if (i) any permanent injunction or other order
of a court or other competent authority preventing the consummation of
the Merger shall have become final and nonappealable, (ii) any required
approval of the stockholders of Company with respect to this Agreement
or the Merger shall not have been obtained by reason of the failure to
obtain the required vote upon a vote taken at a duly held meeting of
Company stockholders (or at any adjournment or postponement thereof
permitted by Section 6.05(a)), or (iii) the exemption described in
---------------
Section 6.01(b) shall not have been obtained (or shall be unavailable),
---------------
the arrangements described in Section 6.01(b) shall not have been made
---------------
(or shall be unavailable) and the approval of the Parent Voting
Proposal shall not have been obtained by reason of the failure to
obtain the required vote upon a vote taken at a
50
duly held meeting of Parent stockholders (or at any adjournment or
postponement thereof permitted by Section 6.05(a)) (provided, however,
---------------- -----------------
that the right to terminate this Agreement pursuant to this Section
-------
8.01(f)(iii) shall not be available to Company if the failure to obtain
------------
such Company stockholder approval is attributable to an action or
omission by Company in material breach of this Agreement);
(g) by Parent if (i) Company actively and directly solicits,
initiates, encourages or induces the making, submission or announcement
of any Company Takeover Proposal (whether or not any Company Takeover
Proposal in fact results therefrom), and (ii) such action on the part
of Company constitutes a willful and material breach by Company of
Section 6.02(a)(i); provided, however, that Parent shall not be
------------------ -------- -------
permitted to terminate this Agreement pursuant to this Section 8.01(g)
---------------
if, in each instance, more than ten (10) business days shall have
elapsed since any of Parent's directors or executive officers first
obtained confirmation of such willful and material breach by Company of
Section 6.02(a)(i) or if Parent shall then be in material breach of
------------------
this Agreement; or
(h) by Company, in response to a Company Superior Offer which
was not solicited by Company in violation of this Agreement; provided,
--------
however, that Company shall not be permitted to terminate this
-------
Agreement pursuant to this Section 8.01(h) if such Company Superior
---------------
Offer is attributable to a violation by Company of its obligations
under Sections 6.02 and 6.05; and provided further, that no termination
---------------------- -------- -------
pursuant to this Section 8.01(h) shall be effective until after (i)
---------------
seventy-two (72) hours following Parent's receipt of written notice
advising Parent that the Board of Directors of Company is prepared to
accept a Company Superior Offer, specifying the material terms and
conditions of such Company Superior Offer and identifying the person
making such Company Superior Offer and (ii) the payment of any
applicable Termination Fee pursuant to Section 8.03.
------------
8.2 Effect Of Termination. In the event of termination of this
Agreement as provided in Section 8.01, this Agreement shall forthwith become
------------
void and there shall be no liability or obligation on the part of Parent or
Company or their respective officers, directors, securityholders or affiliates,
except as provided in Section 8.03 and except to the extent of a breach by a
------------
party hereto of any of its representations, warranties, covenants or agreements
set forth in this Agreement involving fraud, intentional misrepresentation or
willful misconduct. The provisions of Section 8.03 and this Section 8.02 shall
------------ ------------
remain in full force and effect and survive any termination of this Agreement.
8.3 Expenses And Termination Fees.
(a) Subject to Sections 8.03(b) through 8.03(g), whether or
--------------------------------
not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement, any related agreements and documents
and the transactions contemplated hereby and thereby (including the
fees and expenses of advisers, accountants and legal counsel) shall be
paid by the party incurring such expense.
51
(b) In the event that this Agreement is terminated by Parent
pursuant to Section 8.01(c)(ii) or Section 8.01(g) or by Company
------------------- ---------------
pursuant to Section 8.01(h), then Company shall pay to Parent the sum
---------------
of two hundred twenty five million dollars ($225,000,000) upon
termination of this Agreement by Company pursuant to Section 8.01(h) or
---------------
within five business days after termination of this Agreement by Parent
pursuant to Section 8.01(c)(ii) or Section 8.01(g). The payment
------------------- ---------------
referred to in this Section 8.03(b) shall be made by wire transfer of
---------------
same-day funds to an account specified by Parent.
(c) In the event that (i) a bona fide offer by a third party
(other than Parent or an affiliate of Parent) for a Specified Company
Takeover Transaction (as defined below) becomes known publicly or
becomes known to Company stockholders generally prior to the date on
which a vote of Company stockholders on the proposal to adopt this
Agreement is taken by the Company stockholders, and (ii) such offer has
not been definitively withdrawn at least seven (7) days prior to the
date on which a vote of Company stockholders on the proposal to adopt
this Agreement is taken by the Company stockholders, and (iii) prior to
the time that a vote of Company stockholders on the proposal to adopt
this Agreement is taken by the Company stockholders, no Parent Material
Adverse Effect has occurred and no Parent Material Adverse Effect will,
solely with the passage of time, imminently occur, and (iv) this
Agreement is validly terminated by Parent pursuant to Section
-------
8.01(e)(ii) or by Company pursuant to Section 8.01(f)(ii), then Company
----------- -------------------
shall pay to Parent the sum of fifteen million dollars ($15,000,000)
upon termination of this Agreement by Company or within five business
days after termination of this Agreement by Parent. The payment
referred to in this Section 8.03(c) shall be made by wire transfer of
---------------
same-day funds to an account specified by Parent.
(d) In the event that (i) a bona fide offer by a third party
(other than Parent or an affiliate of Parent) for a Specified Company
Takeover Transaction becomes known publicly or becomes known to Company
stockholders generally, and (ii) this Agreement is validly terminated
by Company pursuant to Section 8.01(b), and (iii) the offer referred to
---------------
in clause "(i)" of this Section 8.03(d) is pending at the time this
---------------
Agreement is terminated by Company pursuant to Section 8.01(b), and
---------------
(iv) the failure of the Merger to occur on or before the date referred
to in Section 8.01(b) is not attributable to a material breach of this
---------------
Agreement by Parent or to any challenge to, or any investigation or
review of, the Merger by any Governmental Entity, and (v) prior to the
termination of this Agreement by Company pursuant to Section 8.01(b),
---------------
no Parent Material Adverse Effect has occurred and no Parent Material
Adverse Effect will, solely with the passage of time, imminently occur,
and (vi) prior to the termination of this Agreement by Company pursuant
to Section 8.01(b) the Company Stockholders Meeting shall not have been
---------------
held and no vote of Company stockholders shall have been taken on the
proposal to adopt this Agreement, then Company shall pay to Parent the
sum of fifteen million dollars ($15,000,000) upon termination of this
Agreement by Company pursuant to Section 8.01(b). The
---------------
52
payment referred to in this Section 8.03(d) shall be made by wire
---------------
transfer of same-day funds to an account specified by Parent.
(e) In the event that (x) all of the conditions referred to
in clauses "(i)," "(ii)," "(iii)" and "(iv)" of Section 8.03(c) or all
---------------
of the conditions referred to in clauses "(i)," "(ii)," "(iii),"
"(iv)," "(v)" and "(vi)" of Section 8.03(d) shall have been satisfied,
---------------
and (y) on or before the one hundred eightieth (180/th/) day following
termination of this Agreement, Company enters into and publicly
announces a letter of intent or preliminary agreement or enters into a
definitive acquisition agreement with a third party (other than Parent
or an affiliate of Parent) providing for the consummation of a
Specified Company Takeover Transaction or a tender or exchange offer is
commenced or announced that would reasonably be expected to result in a
Specified Company Takeover Transaction, and (z) on or before the first
anniversary of the termination of this Agreement, a Specified Company
Takeover Transaction is consummated, then Company shall pay to Parent
the sum of two hundred ten million dollars ($210,000,000) upon such
consummation. The payment referred to in this Section 8.03(e) shall be
---------------
made by wire transfer of same-day funds to an account specified by
Parent.
(f) For purposes of this Agreement, "Specified Company
-----------------
Takeover Transaction" means (i) a merger or other business combination
--------------------
involving Company and a third party (other than Parent or an affiliate
of Parent) after which the stockholders of Company immediately prior to
such merger or business combination would own sixty percent (60%) or
less of the voting power or equity securities of the surviving
corporation in such merger or business combination and would own sixty
percent (60%) or less of the voting power or equity securities of the
parent of the surviving corporation in such merger or business
combination, (ii) the acquisition by a third party (other than Parent
or an affiliate of Parent), in one transaction or a series of related
transactions, of forty percent (40%) or more of the outstanding shares
of capital stock of Company, or (iii) the acquisition by a third party
(other than Parent or an affiliate of Parent), in one transaction or a
series of related transactions, of all or substantially all of the
assets of Company.
(g) Company acknowledges that the agreements contained in
this Section 8.03 are an integral part of the transactions contemplated
------------
by this Agreement, and that, without these agreements, Parent would not
enter into this Agreement. Accordingly, if Company fails promptly to
pay the amount due pursuant to this Section 8.03 and, in order to
------------
obtain such payment, Parent commences a suit which results in a
judgment or settlement for the fee set forth in this Section 8.03,
------------
Company shall pay to Parent its costs and expenses (including
reasonable attorneys' fees and expenses) in connection with such suit,
together with interest on the amount of the fee at the prime rate of
Citibank, N.A. in effect on the date such payment was required to be
made.
8.4 Amendment. This Agreement may be amended by the parties hereto,
by action taken or authorized by their respective Boards of Directors, at any
time before or after
53
approval of the matters presented in connection with the Merger by the
stockholders of Company or of Parent, but, after any such approval, no amendment
shall be effective which by law requires further approval by such stockholders
without such further approval. This Agreement may not be amended except by a
written instrument signed on behalf of each of the parties hereto.
8.5 Extension; Waiver. At any time prior to the Effective Time any
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto or (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party.
Article IX. MISCELLANEOUS
9.1 Nonsurvival Of Representations, Warranties, Covenants And
Agreements. None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for the agreements contained in Section 1.04,
------------
Section 2.01, Section 2.02, Section 6.08, Section 6.09, Section 6.11, Section
------------ ------------ ------------ ------------ ------------ -------
6.12, and Article IX. The Confidentiality Agreement between Parent and Company
---- ----------
dated as of March 2, 2000 (the "Confidentiality Agreement") shall survive the
-------------------------
execution and delivery of this Agreement.
9.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given (a) when delivered, if delivered
personally or (b) one business day after transmitted, if transmitted by a
nationally recognized express overnight courier service, (c) when telecopied, if
telecopied (and the receipt of such telecopy is confirmed), and (d) three
business days after mailing, if mailed by registered or certified mail (return
receipt requested), to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
i2 Technologies, Inc.
One i2 Place
00000 Xxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn.: Chief Executive Officer
54
with a copy to:
Xxx X. Xxxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
and to:
Xxx Xxxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
(b) if to Company, to:
Aspect Development, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn.: Chief Executive Officer
with a copy to:
Xxxxxxx Xxxxxx, Xxxxx Xxxxx, and Xxxxx Xxxxx, Esqs.
Cooley Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
9.3 Definitions. For purposes of this Agreement:
(a) "Company Material Adverse Effect" means any change,
-------------------------------
effect, event, occurrence, state of facts or development that is
materially adverse to the business, financial condition or results of
operations of Company and its Subsidiaries, taking Company and its
Subsidiaries together as a whole; provided, however, that none of the
-------- -------
following shall be deemed in themselves, either alone or in
combination, to constitute, and none of the following shall be taken
into account in determining whether there has been or will be, a
Company Material Adverse Effect: (a) any change in the market price or
trading volume of Company's stock after the date hereof; (b) any
failure by Company to meet internal projections or forecasts or
published revenue or earnings predictions for any period ending (or
for which revenues or earnings are released) on or after the date of
this Agreement; (c) any adverse change, effect, event, occurrence,
state of facts or development to the extent attributable to the
announcement or pendency of the Merger (including any cancellations of
or delays in customer orders, any reduction in sales, any disruption in
supplier, distributor, partner or similar relationships or any loss of
employees); (d) any adverse change, effect, event, occurrence, state of
facts or
55
development attributable to conditions affecting the industries in
which Company participates, the U.S. economy as a whole or foreign
economies in any locations where Company or any of its Subsidiaries has
material operations or sales; (e) any adverse change, effect, event,
occurrence, state of facts or development attributable or relating to
(i) out-of-pocket fees and expenses (including legal, accounting,
investment banking and other fees and expenses) incurred in connection
with the transactions contemplated by this Agreement, or (ii) the
payment of any amounts due to, or the provision of any other benefits
(including benefits relating to acceleration of stock options) to, any
officers or employees under employment contracts, non-competition
agreements, employee benefit plans, severance arrangements or other
arrangements in existence as of the date of this Agreement; (f) any
adverse change, effect, event, occurrence, state of facts or
development resulting from or relating to compliance with the terms of,
or the taking of any action required by, this Agreement; (g) any
adverse change, effect, event, occurrence, state of facts or
development arising from or relating to any change in accounting
requirements or principles or any change in applicable laws, rules or
regulations or the interpretation thereof; or (h) any adverse change,
effect, event, occurrence, state of facts or development arising from
or relating to actions required to be taken under applicable laws,
rules, regulations, contracts or agreements.
(b) "Parent Material Adverse Effect" means any change,
------------------------------
effect, event, occurrence, state of facts or development that is,
materially adverse to the business, financial condition or results of
operations of Parent and its Subsidiaries, taking Parent and its
Subsidiaries together as a whole; provided, however, that none of the
-------- -------
following shall be deemed in themselves, either alone or in
combination, to constitute, and none of the following shall be taken
into account in determining whether there has been or will be, a Parent
Material Adverse Effect: (a) any change in the market price or trading
volume of Parent's stock after the date hereof; (b) any failure by
Parent to meet internal projections or forecasts or published revenue
or earnings predictions for any period ending (or for which revenues or
earnings are released) on or after the date of this Agreement; (c) any
adverse change, effect, event, occurrence, state of facts or
development to the extent attributable to the announcement or pendency
of the Merger (including any cancellations of or delays in customer
orders, any reduction in sales, any disruption in supplier,
distributor, partner or similar relationships or any loss of
employees); (d) any adverse change, effect, event, occurrence, state of
facts or development attributable to conditions affecting the
industries in which Parent participates, the U.S. economy as a whole or
the foreign economies as a whole in any locations where Parent or any
of its Subsidiaries has material operations or sales; (e) any adverse
change, effect, event, occurrence, state of facts or development
attributable or relating to (i) out-of-pocket fees and expenses
(including legal, accounting, investment banking and other fees and
expenses)
56
incurred in connection with the transactions contemplated by this
Agreement, or (ii) the payment of any amounts due to, and the provision
of any other benefits (including benefits relating to acceleration of
stock options) to any officers or employees under employment contracts,
non-competition agreements, employee benefit plans, severance
arrangements and other arrangements in existence as of the date of this
Agreement; (f) any adverse change, effect, event, occurrence, state of
facts or development arising from or relating to compliance with the
terms of, or the taking of any action required by, this Agreement; (g)
any adverse change, effect, event, occurrence, state of facts or
development arising from or relating to any change in accounting
requirements or principles or any change in applicable laws, rules or
regulations or the interpretation thereof; or (h) any adverse change,
effect, event, occurrence, state of facts or development arising from
or relating to actions required to be taken under applicable laws,
rules, regulations, contracts or agreements.
9.4 Interpretation. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the word "include,"
"includes" or "including" is used in this Agreement it shall be deemed to be
followed by the words "without limitation." The 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. The
phrases "the date of this Agreement", "the date hereof," and terms of similar
import, unless the context otherwise requires, shall be deemed to refer to March
12, 2000.
9.5 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.
9.6 Entire Agreement; No Third Party Beneficiaries. This Agreement
and the other documents and the instruments referred to herein (a) constitute
the entire agreement and supersede all prior agreements and understandings, both
written and oral, among or between any of the parties with respect to the
subject matter hereof and thereof, and (b) except as provided in Article II or
----------
Section 6.12 (indemnification) are not intended to confer upon any person other
------------
than the parties hereto, the Company stockholders and the Indemnified Parties
any rights or remedies hereunder; provided, however, that the Confidentiality
-------------------
Agreement shall remain in full force and effect until the Effective Time. Each
party hereto agrees that, except for the representations and warranties
contained in this Agreement and except for any representations and warranties of
such party contained in the Confidentiality Agreement and the Company Voting
Agreements or the Parent Voting Agreements, as the case may be, neither Company
nor Parent makes any representations or warranties, and each hereby disclaims
any representations and warranties made by itself or any of its officers,
directors, employees, agents, financial and legal advisors or other
Representatives, with respect to the execution and delivery of this Agreement or
the transactions contemplated hereby, notwithstanding the delivery or disclosure
to the other or the
57
other's Representatives of any documentation or other information with respect
to any one or more of the foregoing.
9.7 Governing Law; Forum; Waiver Of Jury Trial. This Agreement shall
be governed and construed in accordance with the laws of the State of Delaware,
including matters relating to merger procedure, corporate governance and
fiduciary duty without regard to any applicable conflicts of law. Subject to
the provisions of Section 6.02(c), all actions, suits, proceedings, disputes or
---------------
controversies by any or between any of the parties hereto with respect to this
Agreement, the Merger or the transactions contemplated hereby shall be
determined in the Delaware Court of Chancery (to the extent it shall have
jurisdiction thereof) and otherwise in the U.S. District Court for the District
of Delaware (to the extent it shall have jurisdiction thereof) and otherwise in
the applicable state courts of the State of Delaware, and each party irrevocably
and unconditionally consents and submits to the jurisdiction of such courts for
any actions, suits or proceedings arising out of or relating to this Agreement,
the Merger and the transactions contemplated hereby.
THE PARTIES HERETO IRREVOCABLY WAIVE THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY ACTIONS, SUITS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE MERGER OR THE TRANSACTIONS CONTEMPLATED HEREBY.
9.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether 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 successors and assigns.
9.9 Attorneys' Fees. In any action at law or suit in equity to
enforce this Agreement or the rights of any of the parties hereunder, the
prevailing party in such action or suit shall be entitled to receive a
reasonable sum for its attorneys' fees and all other reasonable costs and
expenses incurred in such action or suit.
9.10 Specific Performance. The parties to this Agreement agree that,
in the event of any breach or threatened breach by any party hereto of any
provision of this Agreement, the other parties shall be entitled (in addition to
any other remedy that may be available to them) to (i) a decree or order of
specific performance or mandamus to enforce the observance and performance of
such provision and (ii) an injunction restraining such breach or threatened
breach. No person or entity shall be required to provide any bond or other
security in connection with any such decree, order or injunction or in
connection with any related action or proceeding.
[SIGNATURE PAGE FOLLOWS]
58
IN WITNESS WHEREOF, Parent, Merger Sub and Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
i2 TECHNOLOGIES, INC. HOYA MERGER CORP.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
--------------------------- ------------------------------------
Name: /s/ Xxxxxx X. Xxxxx Name: /s/ Xxxxxx X. Xxxxx
-------------------------- -----------------------------------
ASPECT DEVELOPMENT, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
----------------------------------
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION]
