EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
By and Among
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.,
GENESYS-F SUB, INC.,
AND
FORTE ADVANCED MANAGEMENT SOFTWARE, INC.
AND ITS SHAREHOLDERS
December 31, 1997
TABLE OF CONTENTS
Page
ARTICLE I. THE MERGER......................................................... 1
1.1 The Merger; Effective Time......................................... 1
1.2 Closing............................................................ 2
1.3 Effect of the Merger............................................... 2
1.4 Articles of Incorporation; Bylaws.................................. 2
1.5 Directors and Officers............................................. 2
1.6 Effect on Capital Stock............................................ 3
(a) Conversion of Forte Common Stock............................ 3
(b) Cancellation of Forte Common Stock Owned by Genesys or
Forte....................................................... 3
(c) Forte Stock Option Plan..................................... 3
(d) Capital Stock of Merger Sub................................. 3
(e) Certain Adjustments to Exchange Ratio....................... 4
(f) Fractional Shares........................................... 4
(g) Limitation on Shares Issuable............................... 4
(h) Private Placement........................................... 4
1.7 Surrender of Certificates.......................................... 4
(a) Exchange Agent.............................................. 4
(b) Genesys to Provide Common Stock and Cash.................... 4
(c) Delivery of Certificates for Forte Common Stock............. 4
(d) Issuance, Delivery and Deposit of Escrow Shares............. 4
(e) Issuance and Delivery of Shares; Payment in Lieu of
Fractional Shares........................................... 5
(f) Transfer Restrictions; Legends.............................. 5
1.9 Taking of Necessary Action; Further Action......................... 6
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF FORTE AND THE
FORTE SHAREHOLDERS................................................. 6
2.1 Organization, Standing and Power................................... 6
2.2 Capital Structure.................................................. 7
2.3 Authority.......................................................... 7
2.4 Financial Statements............................................... 8
2.5 Absence of Certain Changes......................................... 8
2.6 Absence of Undisclosed Liabilities................................. 9
2.7 Litigation......................................................... 9
2.8 Restrictions on Business Activities................................ 9
2.9 Governmental Authorization......................................... 9
2.10 Title to Property.................................................. 10
2.11 Intellectual Property.............................................. 10
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2.12 Software.......................................................... 12
2.13 Environmental Matters............................................. 13
2.14 Taxes............................................................. 14
2.15 Additional Tax Representations.................................... 15
2.16 Employee Benefit Plans............................................ 18
2.17 Certain Agreements Affected by the Merger......................... 20
2.18 Employee Matters.................................................. 20
2.19 Interested Party Transactions..................................... 20
2.20 Insurance......................................................... 20
2.21 Compliance with Laws.............................................. 21
2.22 Minute Books...................................................... 21
2.23 Brokers' and Finders' Fees........................................ 21
2.24 Vote Required..................................................... 21
2.25 Board Approval.................................................... 21
2.26 Customers and Suppliers........................................... 21
2.27 Employee Nondisclosure Agreements................................. 22
2.28 Representations Complete.......................................... 22
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE FORTE
SHAREHOLDERS...................................................... 22
3.1 Accredited Investors.............................................. 22
3.2 Investment Risk................................................... 22
3.3 Available Information............................................. 23
3.4 Tax Representations............................................... 23
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF GENESYS AND
MERGER SUB........................................................ 24
4.1 Organization, Standing and Power.................................. 25
4.2 Capital Structure................................................. 25
4.3 Authority......................................................... 25
4.4 SEC Documents; Financial Statements............................... 26
4.5 Absence of Certain Changes........................................ 27
4.6 Absence of Undisclosed Liabilities................................ 27
4.7 Additional Tax Representations.................................... 27
4.8 Governmental Authorization........................................ 30
4.9 Compliance With Laws.............................................. 30
4.10 Broker's and Finders' Fees........................................ 30
4.11 Board Approval.................................................... 30
4.12 Representations Complete.......................................... 31
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ARTICLE V. CONDUCT PRIOR TO THE EFFECTIVE TIME................................ 31
5.1 Conduct of Business of Forte and Genesys........................... 31
(a) Charter Documents........................................... 31
(b) Dividends; Changes in Capital Stock......................... 31
(c) Other....................................................... 32
5.2 Conduct of Business of Forte....................................... 32
(a) Material Contracts.......................................... 32
(b) Issuance of Securities...................................... 32
(c) Stock Option Plans, Etc..................................... 32
(d) Intellectual Property....................................... 32
(e) Exclusive Rights............................................ 32
(f) Dispositions................................................ 33
(g) Indebtedness................................................ 33
(h) Leases...................................................... 33
(i) Payment of Obligations...................................... 33
(j) Capital Expenditures........................................ 33
(k) Insurance................................................... 33
(l) Employee Benefit Plans; New Hires; Pay Increases............ 33
(m) Severance Arrangements...................................... 33
(n) Lawsuits.................................................... 33
(o) Acquisitions................................................ 34
(p) Taxes....................................................... 34
(q) Notices..................................................... 34
(r) Revaluation................................................. 34
(s) Other....................................................... 34
5.3 No Solicitation.................................................... 34
ARTICLE VI. ADDITIONAL AGREEMENTS.............................................. 36
6.1 Shareholders' Consent.............................................. 36
6.2 Access to Information.............................................. 36
6.3 Confidentiality.................................................... 36
6.4 Public Disclosure.................................................. 36
6.5 Consents; Cooperation.............................................. 37
6.6 Legal Requirements................................................. 37
6.7 Blue Sky Laws...................................................... 37
6.8 Treatment of Employees; Benefit Plans.............................. 38
6.9 Form S-8........................................................... 39
6.10 Listing of Additional Shares....................................... 39
6.11 SBA Loan........................................................... 39
6.12 Forte Tax Returns.................................................. 39
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ARTICLE VII. INDEMNIFICATION.................................................... 39
7.1 Indemnification.................................................... 39
(a) Survival of Representations, Etc............................ 39
(b) Indemnifiable Losses........................................ 39
(c) Claims; Threshold Amount.................................... 40
(d) Escrow...................................................... 40
(e) Remedies.................................................... 40
(f) Claim Procedure............................................. 40
(g) Escrow Distributions........................................ 42
7.2 Indemnification by Genesys......................................... 42
7.3 Assignments........................................................ 43
7.4 Reasonable Best Efforts and Further Assurances..................... 43
ARTICLE VIII. CONDITIONS TO THE MERGER........................................... 43
8.1 Conditions to Obligations of Each Party to Effect the Merger....... 43
(a) Shareholder Approval........................................ 43
(b) Opinions.................................................... 43
(c) No Injunctions or Restraints; Illegality.................... 43
(d) Governmental Approval....................................... 43
(e) Escrow Agreement............................................ 44
8.2 Additional Conditions to Obligations of Forte...................... 44
(a) Representations, Warranties and Covenants................... 44
(b) Certificate of Genesys...................................... 44
(c) No Material Adverse Changes................................. 44
(d) Injunctions or Restraints on Conduct of Business............ 45
(e) Registration Rights Agreement............................... 45
(f) Tax Free Reorganization..................................... 45
8.3 Additional Conditions to the Obligations of Genesys and Merger Sub. 45
(a) Representations, Warranties and Covenants................... 45
(b) Certificate of Forte........................................ 45
(c) Injunctions or Restraints on Conduct of Business............ 45
(d) No Material Adverse Changes................................. 46
(e) Delivery of Forte Stock Certificates........................ 46
(f) Investor Questionnaire; Investment Representation Letter and 46
(g) Pooling Letter.............................................. 46
(h) Non-Competition and Non-Interference Agreements............. 46
ARTICLE IX. TERMINATION, AMENDMENT AND WAIVER.................................. 46
9.1 Termination........................................................ 46
9.2 Effect of Termination.............................................. 47
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9.3 Expenses.......................................................... 47
9.4 Amendment......................................................... 48
9.5 Extension; Waiver................................................. 48
ARTICLE X. GENERAL PROVISIONS................................................ 48
10.1 Holders' Agent.................................................... 48
10.2 Notices........................................................... 49
10.3 Interpretation.................................................... 50
10.4 Counterparts...................................................... 50
10.5 Entire Agreement; Nonassignability; Parties in Interest........... 51
10.6 Severability...................................................... 51
10.7 Remedies Cumulative............................................... 51
10.8 Governing Law..................................................... 51
10.9 Arbitration....................................................... 51
10.10 Rules of Construction............................................. 52
Exhibits
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Exhibit A - Agreement of Merger
Exhibit B - Escrow Agreement
Exhibit C - Opinion of Xxxx Xxxx Xxxx Freidenrich, a Professional Corporation
Exhibit D - Opinion of Xxxxxxx, Phleger & Xxxxxxxx LLP
Exhibit E - Registration Rights Agreement
Exhibit F - Investor Questionnaire
Exhibit G - Investment Representation Letter
Exhibit H - Form of Affiliate Agreement
Exhibit I - Executive Non-Competition and Non-Interference Agreement
Exhibit J - Employee Non-Competition and Non-Interference Agreement
Schedules
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Schedule 8.3(i)-1 - Party to Executive Non-Competition and Non-Interference
Agreement
Schedule 8.3(i)-2 - Parties to Employee Non-Competition and Non-Interference
Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made
and entered into as of December 31, 1997, by and among Genesys
Telecommunications Laboratories, Inc., a California corporation ("Genesys"),
Genesys-F Sub, Inc., a California corporation and direct wholly owned subsidiary
of Genesys ( "Merger Sub"), and Forte Advanced Management Software, Inc., a
California corporation ("Forte") and, with respect to Articles II, III and VII
and other specific provisions herein, the shareholders of Forte listed on the
signature pages to this Agreement (the "Forte Shareholders").
RECITALS
A. The Boards of Directors of Forte and Genesys believe it is in the
best interests of their respective companies and the shareholders of their
respective companies that Forte and Merger Sub combine into a single company
through the statutory merger of Merger Sub with and into Forte (the "Merger")
and, in furtherance thereof, have approved the Merger.
B. Pursuant to the Merger, among other things, the outstanding
shares of Forte Common Stock, no par value ("Forte Common Stock"), shall be
converted into shares of Genesys Common Stock, no par value ("Genesys Common
Stock"), on the terms set forth herein.
C. For federal income tax purposes, Forte and Genesys intend that
the Merger will qualify as a reorganization under the provisions of Section
368(a) of the United States Internal Revenue Code of 1986, as amended.
X. Xxxxx and Genesys intend to cause the Merger to be accounted for
as a pooling of interests pursuant to APB Opinion No. 16, Staff Accounting
Series Release 130, 135 and 146, and Staff Accounting Bulletins Topic Two.
X. Xxxxx and Genesys desire to make certain representations and
warranties and other agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the covenants and representations
set forth herein, and for other good and valuable consideration, the parties
agree as follows:
ARTICLE I.
THE MERGER
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1.1 The Merger; Effective Time. At the Effective Time (as defined in
--------------------------
Section 1.2) below and subject to and upon the terms and conditions of this
Agreement, an
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Agreement of Merger to be filed in respect of the Merger (the "Merger
Agreement") in the form attached hereto as Exhibit A and the applicable
---------
provisions of the laws of the State of California, Merger Sub shall be merged
with and into Forte, the separate corporate existence of Merger Sub shall cease
and Forte shall continue as the surviving corporation. Forte as the surviving
corporation after the Merger is hereinafter sometimes referred to as the
"Surviving Corporation." The Merger shall in all respects have the effect
provided for in Section 1107 of the California General Corporation Law (the
"CGCL") and shall be effective upon the filing of the Merger Agreement (the
"Effective Time"). At the Effective Time, the executed Merger Agreement shall
be filed with the California Secretary of State in accordance with Section 1103
of the CGCL.
1.2 Closing. The closing of the transactions contemplated hereby
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(the "Closing") shall take place on December 31, 1997, or as soon thereafter as
practicable (the "Closing Date" or the "Effective Time"). The Closing shall
take place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, Xxx Xxxxxx, Xxxxx
Xxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or at such other location as the
parties hereto agree.
1.3 Effect of the Merger. At the Effective Time, the effect of the
--------------------
Merger shall be as provided in this Agreement, the Merger Agreement and the
applicable provisions of the CGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of Forte and Merger Sub shall vest in the
Surviving Corporation, and all debts, liabilities and duties of Forte and Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
1.4 Articles of Incorporation; Bylaws.
---------------------------------
(a) At the Effective Time, the Articles of Incorporation of
Forte, as in effect immediately prior to the Effective Time, shall be the
Articles of Incorporation of the Surviving Corporation until thereafter amended
as provided by the CGCL and such Articles of Incorporation.
(b) The Bylaws of Merger Sub, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation until
thereafter amended.
1.5 Directors and Officers. At the Effective Time, the directors and
----------------------
officers of the Surviving Corporation shall be as follows, until their
respective successors are duly elected or appointed and qualified:
Directors: Xxxxxxx Xxxxxxxx
Xxxx Xxxxxxxxxxx
Xxxxxxx X. XxXxxxxxx
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Officers: Xxxxxxx Dazler Xxxxx, President
Xxxxxxx X. XxXxxxxxx, Vice President,
Chief Financial Officer and Secretary
1.6 Effect on Capital Stock. By virtue of the Merger and without any
-----------------------
action on the part of Merger Sub, Forte or the holders of any of the following
securities, subject to the provisions of this Section 1.6:
(a) Conversion of Forte Common Stock. At the Effective Time,
--------------------------------
each share of Forte Common Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Forte Common Stock to be canceled
pursuant to Section 1.6(b)) will be canceled and extinguished and be converted
automatically into the right to receive a number of shares of Genesys Common
Stock equal to the quotient obtained by dividing (a) the amount obtained by
dividing $22,630,000.00 by $29.875 (the "Genesys Stock Price"), by (b) the
number of Fully Diluted Forte Shares outstanding at the Effective Time. "Fully
Diluted Forte Shares" shall mean the sum of the (i) number of shares of Forte
Common Stock outstanding as of the Effective Time plus (ii) the number of shares
of Forte Common Stock subject to issuance pursuant to stock options outstanding
under the Forte Stock Option Plan as of the Effective Time. At the Effective
Time, all rights in respect of such shares of Forte Common Stock shall cease to
exist, other than the right to receive shares of Genesys Common Stock as
provided above. Until surrendered, each outstanding certificate, if any, which
prior to the Effective Time represented issued and outstanding shares of Forte
Common Stock shall be deemed for all corporate purposes to evidence the right to
receive such amount of Genesys Common Stock. The number of shares of Genesys
Common Stock to be issued pursuant hereto in exchange for each share of Forte
Common Stock shall be referred to as the "Exchange Ratio."
(b) Cancellation of Forte Common Stock Owned by Genesys or Forte. At
------------------------------------------------------------
the Effective Time, all shares of Forte Common Stock that are owned by Forte as
treasury stock and each share of Forte Common Stock owned by Genesys or any
direct or indirect wholly owned subsidiary of Genesys immediately prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.
(c) Forte Stock Option Plan. At the Effective Time, the 1996 Stock
-----------------------
Option Plan (the "Forte Stock Option Plan") and all options or rights to
purchase Forte Common Stock then outstanding under the Forte Stock Option Plan
shall be assumed by Genesys in accordance with Section 6.8.
(d) Capital Stock of Merger Sub. At the Effective Time, each share of
---------------------------
Common Stock, $.10 par value, of Merger Sub ("Merger Sub Common Stock") issued
and outstanding immediately prior to the Effective Time shall be converted into
and exchanged for one validly issued, fully paid and nonassessable share of
Common Stock, $.10 par value, of the Surviving Corporation. Each stock
certificate of Merger Sub evidencing ownership of any such shares shall continue
to evidence ownership of such shares of capital stock of the
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Surviving Corporation.
(e) Certain Adjustments to Exchange Ratio. The Exchange Ratio shall
-------------------------------------
be adjusted to reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities convertible into
Genesys Common Stock or Forte Common Stock), reorganization, recapitalization or
other like change with respect to Genesys Common Stock or Forte Common Stock
occurring after the date hereof and prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Genesys Common Stock
-----------------
will be issued in the Merger. In lieu of any fractional shares that would
otherwise be issuable in the Merger in exchange for shares of Forte Common
Stock, Genesys shall pay in cash the proportionate amount of such fractional
share.
(g) Limitation on Shares Issuable. In no event shall the aggregate
-----------------------------
value of Genesys Common Stock which Genesys is obligated to issue (1) upon the
assumption of outstanding options under the Forte Stock Option Plan and (2) in
exchange for outstanding shares of Forte Common Stock pursuant to this Agreement
exceed $22,630,000.00 calculated on the basis of the Genesys Stock Price.
(h) Private Placement. The Genesys Common Stock to be issued in the
-----------------
Merger are intended to be exempt from registration requirements of the
Securities Act of 1933 (the "Securities Act") pursuant to the private placement
exemption provided by Section 4(2) of the Securities Act and applicable state
securities laws. Each Forte Shareholder hereby agrees to take all reasonable
actions and execute all documents to qualify issuance of the Genesys Common
Stock for such exemptions.
1.7 Surrender of Certificates.
-------------------------
(a) Exchange Agent. Boston Equiserve shall act as exchange agent (the
--------------
"Exchange Agent") in the Merger.
(b) Genesys to Provide Common Stock and Cash. At the closing, Genesys
----------------------------------------
shall deliver to the Exchange Agent for exchange in accordance with this Article
I, (i) the shares of Genesys Common Stock issuable in exchange for shares of
Forte Common Stock and (ii) cash in an amount sufficient to permit payment of
cash in lieu of fractional shares pursuant to Section 1.6(f).
(c) Delivery of Certificates for Forte Common Stock. At the Closing,
-----------------------------------------------
each Forte Shareholder shall deliver to the Exchange Agent the certificate or
certificates for all shares of Forte Common Stock owned by such Forte
Shareholder to be exchanged for certificates for shares of Genesys Common Stock
issuable in the Merger.
(d) Issuance, Delivery and Deposit of Escrow Shares. At the
-----------------------------------------------
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Closing, the Exchange Agent shall cause to be issued in the name of each Forte
Shareholder a certificate for ten percent (10%) of the aggregate number of
shares of Genesys Common Stock to be received by such Forte Shareholder in the
Merger (the "Escrow Shares"), and shall cause such Escrow Shares to be
deposited, on behalf of such Forte Shareholders, with State Street Bank and
Trust Company, in its capacity as escrow agent ("Escrow Agent") pursuant to the
Escrow Agreement attached as Exhibit B hereto (the "Escrow Agreement"), to be
---------
held in escrow in accordance with the terms and conditions of the Escrow
Agreement.
(e) Issuance and Delivery of Shares; Payment in Lieu of Fractional
--------------------------------------------------------------
Shares. At the Closing, the Exchange Agent shall cause to be issued in the name
------
of each Forte Shareholder a certificate for ninety percent (90%) of the
aggregate number of shares of Genesys Common Stock to be received by such Forte
Shareholder in the Merger, and shall cause such shares to be delivered to such
Forte Shareholder, and shall pay to such Forte Shareholder the amount which such
Forte Shareholder has the right to receive in lieu of fractional shares, if any,
pursuant to Section 1.6.
(f) Transfer Restrictions; Legends. The shares of Genesys Common Stock
------------------------------
issued in the Merger shall not be transferable in the absence of an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or an exemption therefrom. In the absence of an effective
registration statement under the Securities Act, neither such shares of Genesys
Common Stock nor any interest therein shall be sold, transferred, assigned or
otherwise disposed of, unless Genesys shall have previously received an opinion
of counsel knowledgeable in federal securities law, in form and substance
reasonably satisfactory to Genesys and accompanied by such supporting documents
as Genesys may reasonably request, to the effect that registration under the
Securities Act is not required in connection with such disposition. Genesys
shall be entitled to give stop transfer instructions to its transfer agent with
respect to such shares of Genesys Common Stock in order to enforce the foregoing
restrictions.
The certificate or certificates representing the shares of Genesys
Common Stock issued in the Merger shall bear the following legend restricting
the transfer thereof, in addition to any other legend required by applicable
law:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
1.8 No Further Ownership Rights in Forte Common Stock. All shares of
-------------------------------------------------
Genesys Common Stock issued upon the surrender for exchange of shares of Forte
Common Stock in accordance with the terms hereof (including any cash paid in
lieu of fractional
5
shares) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Forte Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of shares
of Forte Common Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Article I.
1.9 Taking of Necessary Action; Further Action. If, at any time
------------------------------------------
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of Forte and Merger Sub, the officers and directors of
Forte and Merger Sub are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
action, so long as such action is not inconsistent with this Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF FORTE
---------------------------------------
AND THE FORTE SHAREHOLDERS
--------------------------
In this Agreement, any reference to any event, change, condition or
effect being "material" with respect to any entity or group of entities means
any material event, change, condition or effect related to the condition
(financial or otherwise), properties, assets (including intangible assets),
liabilities, business, operations or results of operations of such entity or
group of entities. In this Agreement, any reference to a "Material Adverse
Effect" with respect to any entity or group of entities means any event, change
or effect that is materially adverse to the condition (financial or otherwise),
properties, assets, liabilities, business, operations or results of operations
of such entity and its subsidiaries, taken as a whole.
Except as disclosed in a document of even date herewith and delivered
by Forte to Genesys prior to the execution and delivery of this Agreement and
referring to the applicable representations and warranties in this Agreement
(the "Forte Disclosure Schedule"), Forte and the Forte Shareholders represent
and warrant to Genesys and Merger Sub as follows:
2.1 Organization, Standing and Power. Forte is a corporation duly
--------------------------------
organized, validly existing and in good standing under the laws of its
jurisdiction of organization. Forte has the corporate power to own its
properties 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 in
each jurisdiction in which the failure to be so qualified and in good standing
would have a Material Adverse Effect on Forte. Forte has delivered to Genesys a
true and correct copy of the Articles of Incorporation and Bylaws of Forte, each
as amended
6
to date. Forte is not in material violation of any of the provisions of its
Articles of Incorporation or Bylaws. Forte does not directly or indirectly own
any equity or similar interest in, or any interest convertible or exchangeable
or exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity.
2.2 Capital Structure. The authorized capital stock of Forte
-----------------
consists of 10,000,000 shares of Common Stock, no par value, of which there were
3,419,529 issued and outstanding as of the date hereof. There are no other
outstanding shares of capital stock or voting securities and no outstanding
commitments to issue any shares of capital stock or voting securities other than
pursuant to the exercise of options outstanding as of such date under the Forte
Stock Option Plan. All outstanding shares of Forte Common Stock are duly
authorized, validly issued, fully paid and non-assessable and are free of any
liens or encumbrances created by, or resulting from the actions of, Forte
(assuming for purposes hereof that the holders of such shares acquired such
shares without notice of any adverse claims), and are not subject to preemptive
rights or rights of first refusal created by statute, the Articles of
Incorporation or Bylaws of Forte or any agreement to which Forte is a party or
by which it is bound. As of the date hereof Forte has outstanding, unexercised
options under the Forte Stock Option Plan entitling the shareholders thereof to
purchase an aggregate of 463,315 shares of Forte Common Stock. Except for (i)
the rights created pursuant to this Agreement or the Forte Stock Option Plan and
(ii) Forte's right to repurchase any unvested shares under the Forte Stock
Option Plan, there are no other options, warrants, calls, rights, commitments or
agreements of any character to which Forte is a party or by which it is bound
obligating Forte to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of capital stock of
Forte or obligating Forte to grant, extend, accelerate the vesting of, change
the price of, or otherwise amend or enter into any such option, warrant, call,
right, commitment or agreement. There are no contracts, commitments or
agreements relating to voting, purchase or sale of Forte's capital stock (i)
between or among Forte and any of its shareholders and (ii) to the best of
Forte's knowledge, between or among any of Forte's shareholders. The terms of
the Forte Stock Option Plan permit the assumption or substitution of options to
purchase Genesys Common Stock as provided in this Agreement, without the consent
or approval of the holders of such securities, the Forte Shareholders, or
otherwise and without any acceleration of the exercise schedule or vesting
provisions in effect for those options. True and complete copies of all forms
of agreements and instruments relating to or issued under the Forte Stock Option
Plan have been made available to Genesys and such agreements and instruments
have not been amended, modified or supplemented, and there are no agreements to
amend, modify or supplement such agreements or instruments in any case from the
form made available to Genesys.
2.3 Authority. Forte has all requisite corporate power and authority
---------
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Forte, subject only to the approval of the
Merger by the Forte Shareholders as contemplated by Section 8.1(a).
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This Agreement has been duly executed and delivered by Forte and constitutes the
valid and binding obligation of Forte enforceable against Forte in accordance
with its terms, except to the extent enforceability may be limited by the effect
of bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights and remedies of
creditors generally. The execution and delivery of this Agreement by Forte does
not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default under (with or without
notice or lapse of time, or both), or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of any benefit under (i)
any provision of the Articles of Incorporation or Bylaws of Forte, as amended,
or (ii) any mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Forte or any of its
properties or assets, except where such conflict, violation, default,
termination, cancellation or acceleration with respect to the foregoing
provisions of (ii) would not have had and would not reasonably be expected to
have a Material Adverse Effect on Forte. 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 by or with respect to Forte
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby and thereby, except for (i)
the filing of the Merger Agreement as provided in Section 1.1, (ii) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable state securities laws and the
securities laws of any foreign country; and (iii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not have a Material Adverse Effect on Forte and would not prevent,
or materially alter or delay any of the transactions contemplated by this
Agreement.
2.4 Financial Statements. Forte has furnished to Genesys a true and
--------------------
complete copy of the unaudited balance sheets of Forte as of December 31, 1995
and 1996 and the related unaudited statements of operations and shareholders'
equity for the periods then ended, including notes thereto, and the unaudited
balance sheets of Forte as of November 30, 1997 and the related unaudited
statement of operations and shareholders' equity for the eleven (11) month
period then ended (collectively, the "Forte Financial Statements"). The Forte
Financial Statements were complete and correct in all material respects as of
their respective dates, complied as to form in all material respects with
applicable accounting requirements as of their respective dates, and have been
prepared in accordance with generally accepted accounting principles applied on
a basis consistent throughout the periods indicated and consistent with each
other (except as may be indicated in the notes thereto). The Forte Financial
Statements fairly present the consolidated financial condition and operating
results of Forte at the dates and during the periods indicated therein. There
has been no change in Forte accounting policies since December 31, 1994.
2.5 Absence of Certain Changes. Since November 30, 1997 (the
--------------------------
"Forte Balance Sheet Date"), Forte has conducted its business in the ordinary
course consistent with past practice, and except as contemplated by this
Agreement, and there has not occurred:
8
(i) any change, event or condition (whether or not covered by insurance) that
has resulted in, or might reasonably be expected to result in, a Material
Adverse Effect to Forte; (ii) any acquisition, sale or transfer of any material
asset of Forte, other than in the ordinary course of business; (iii) any change
in accounting methods or practices (including any change in depreciation or
amortization policies or rates) by Forte or any revaluation by Forte of any of
its assets; (iv) any declaration, setting aside, or payment of a dividend or
other distribution with respect to the shares of Forte, or any direct or
indirect redemption, purchase or other acquisition by Forte of any of its shares
of capital stock; (v) any material contract entered into by Forte, other than in
the ordinary course of business and as provided to Genesys, or any material
amendment or termination of, or default under, any material contract to which
Forte is a party or by which it is bound; or (vi) any negotiation or agreement
by Forte to do any of the things described in the preceding clauses (i) through
(v) (other than negotiations with Genesys and its representatives regarding the
transactions contemplated by this Agreement).
2.6 Absence of Undisclosed Liabilities. Forte has no material
----------------------------------
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (i) those incurred in the ordinary course of business and
not required to be set forth in the Forte Balance Sheet under generally accepted
accounting principles, (ii) those incurred in the ordinary course of business
since the Forte Balance Sheet Date and consistent with past practice; and (iii)
those incurred in connection with the execution of this Agreement.
2.7 Litigation. There is no private or governmental action, suit,
----------
proceeding, claim, arbitration or investigation pending before any agency, court
or tribunal, foreign or domestic, or, to the knowledge of Forte, threatened
against (nor does Forte have any reasonable basis for believing there exists a
basis for any such action, suit, proceeding, claim, arbitration or investigation
against) Forte or any of its properties or any of its officers or directors (in
their capacities as such) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on Forte. There is no
judgment, decree or order against Forte or, to the knowledge of Forte, any of
its directors or officers (in their capacities as such), that could prevent,
enjoin, alter or materially delay any of the transactions contemplated by this
Agreement, or that could reasonably be expected to have a Material Adverse
Effect on Forte.
2.8 Restrictions on Business Activities. There is no material
-----------------------------------
agreement, judgment, injunction, order or decree binding upon Forte which has or
reasonably could be expected to have the effect of prohibiting or materially
impairing any current or future business practice of Forte, any acquisition of
property by Forte or the conduct of business by Forte as currently conducted or
as proposed to be conducted by Forte.
2.9 Governmental Authorization. Forte has obtained each federal,
--------------------------
state, county, local or foreign governmental consent, license, permit, grant, or
other authorization of a Governmental Entity (i) pursuant to which Forte
currently operates or holds any interest in any of its properties or (ii) that
is required for the operation of Forte's business or the holding of any such
interest ((i) and (ii) herein collectively called "Forte Authorizations"), and
all of
9
such Forte Authorizations are in full force and effect, except where the failure
to obtain or have any of such Forte Authorizations could not reasonably be
expected to have a Material Adverse Effect on Forte.
2.10 Title to Property. Forte has good and valid title to all of its
-----------------
properties, interests in properties and assets, real and personal, reflected in
the Forte Balance Sheet or acquired after the Forte Balance Sheet Date (except
properties, interests in properties and assets sold or otherwise disposed of
since the Forte Balance Sheet Date in the ordinary course of business), or in
the case of leased properties and assets, valid leasehold interests therein,
free and clear of all mortgages, liens, pledges, charges or encumbrances of any
kind or character, except (i) the lien of current taxes not yet due and payable,
(ii) such imperfections of title, liens and easements as do not and will not
materially detract from or interfere with the use of the properties subject
thereto or affected thereby, or otherwise materially impair business operations
involving such properties and (iii) liens securing debt which is reflected on
the Forte Balance Sheet. The plants, property and equipment of Forte that are
used in the operations of its businesses are in good operating condition and
repair. All properties used in the operations of Forte are reflected in the
Forte Balance Sheet to the extent generally accepted accounting principles
require the same to be reflected. Schedule 2.10 identifies each parcel of real
-------------
property owned or leased by Forte or any of its subsidiaries.
2.11 Intellectual Property.
---------------------
(a) Schedule 2.11 sets forth an accurate and complete description
-------------
of (i) all patents, trademarks and copyrights of Forte which are registered or
issued or for which registration or issuance is pending with any governmental
authority specifying as to each such item, as applicable, the jurisdiction(s) by
or in which such patent, trademark or copyright has been issued or registered or
in which an application for such issuance or registration has been filed or
proposed, including the registration or application number; (ii) all franchises,
licenses, sublicenses, contracts and agreements pursuant to which any Person
other than Forte is authorized to use any patents, trademarks, trade names,
service marks, copyrights, and any applications therefor, maskworks, net lists,
schematics, technology, know-how, trade secrets, inventory, ideas, algorithms,
processes, computer software programs or applications (in both source code and
object code form), and tangible or intangible proprietary information or
material ("Intellectual Property") owned by Forte; and (iii) the franchises,
licenses, sublicenses, contracts and agreements, other than shrink-wrap software
licenses, pursuant to which Forte is authorized to use any such Intellectual
Property not owned by Forte ("Third Party Intellectual Property Rights")
including, with respect to (ii) or (iii), the identity of all parties thereto, a
description of the nature and subject matter thereof, the royalty provided and
the term thereof.
(b) Except as set forth on Schedule 2.11, Forte owns or has the
-------------
right to use, pursuant to franchise, license, sublicense, contract, agreement,
or permission, all of the Intellectual Property necessary for the conduct of its
business (as currently conducted). All applicable fees, royalties and other
amounts due and payable by Forte to any Person or to
10
Forte by any Person in respect of such Intellectual Property have been paid.
Forte has taken all reasonably necessary and desirable action to maintain and
protect the Intellectual Property that it owns or has the right to use.
(c) Except for third party licenses listed on Schedule 2.11, Forte is
-------------
the sole and exclusive owner of its Intellectual Property including, but not
limited to, those listed or described on the Forte Disclosure Schedule, or has
the right to the use thereof for the material covered thereby in connection with
the services or products in respect to which they have been or are now being
used.
(d) Except as set forth on Schedule 2.11, Forte (i) is not the subject
-------------
of any pending litigation or, to Forte's knowledge, any claim regarding
infringement of or misappropriation or misuse of any Intellectual Property of
Forte or other tangible right of any other Person, (ii) has no knowledge of any
such infringement, whether or not claimed by any other Person, which
infringement might have a Material Adverse Effect, (iii) has no knowledge of any
infringement by any other Person of the Intellectual Property of Forte, and (iv)
has no knowledge of any facts or circumstances which would reasonably be
anticipated to result in any such litigation or claim or which would reasonably
lead Forte to conclude that the continued operation and conduct of any aspect of
its business would result in any such litigation or claim. To the knowledge of
Forte, except as set forth on Schedule 2.11, there is no other Person that is
-------------
operating under or otherwise using any name confusingly similar with any trade
names, trademarks, service names, service marks or logos included in Forte's
Intellectual Property. To Forte's knowledge, no Intellectual Property licensed
by Forte from a third party is subject to any outstanding order, judgment,
decree, stipulation or agreement restricting the use thereof by Forte. Except
as set forth on Schedule 2.11, no Intellectual Property of Forte is subject to
-------------
any outstanding order, judgment, decree, stipulation or agreement restricting
the use thereof by Forte. Except as set forth on Schedule 2.11, Forte has not
-------------
entered into any written agreement to indemnify any other Person against any
charge of infringement by any Intellectual Property.
(e) To Forte's knowledge, there has been no unauthorized use,
disclosure, infringement or misappropriation of any Intellectual Property rights
of Forte, any trade secret material to Forte, or any Intellectual Property right
of any third party to the extent licensed by or through Forte, by any third
party.
(f) Forte is not, nor will it be as a result of the execution and
delivery of this Agreement or the performance of its obligations under this
Agreement, in breach of any license, sublicense or other agreement relating to
the Intellectual Property or Third Party Intellectual Property Rights.
(g) Except as set forth on Schedule 2.11, to the best of Forte's
-------------
knowledge after reasonable inquiry, no material trade secrets included in
Forte's Intellectual Property have been disclosed by Forte to any Person other
than employees, agents and representatives of Forte and its Affiliates or
Genesys. Forte has taken such reasonable
11
measures as is appropriate to protect all of its trade secrets, including
securing valid written assignments from all consultants and employees who
contributed to the creation or development of Intellectual Property of the
rights to such contributions that Forte does not already own by operation of
law. As used in this Agreement, "Affiliate" of any person or corporation means
any corporation, partnership, or other entity, person, or enterprise which,
directly or indirectly, is controlled by, controls, or is under common control
with that person or corporation. For the purposes of the preceding sentence,
the words "controlled," "controls," and "control" shall include the possession,
directly or indirectly, of the power to direct or cause the direction of the
actions or management and policies of the person, corporation, or other entity,
whether through the ownership of voting securities, by agreement or contract, or
otherwise.
(h) Except for obligations that arise under the common law of the
appropriate jurisdiction, to the best of Forte's knowledge, neither Forte nor
any of its employees, has, other than confidentiality and other agreements
assigning inventions made prior to their employment with Forte, any written
agreements or arrangements with former employers of such employees relating to
trade secrets of such employers, the assignment of inventions of such employers,
or such employee's engagement in activities competitive with such employers.
Except for obligations that arise under the common law of the appropriate
jurisdiction, to the best of Forte's knowledge, the activities of such employees
on behalf of Forte do not violate any agreements or arrangements known to Forte
which any such employees have with former employers.
2.12 Software.
--------
(a) The computer software and software in process of Forte
included in the Intellectual Property (the "Software") performs in accordance
with the documentation and other written material used in connection with the
Software and is free of defects in programming and operation, is in machine-
readable form, contains all current revisions of such software and includes all
computer programs, materials, know-how and processes related to the Software.
Forte has delivered to Genesys complete and correct copies of all user and
technical documentation related to the Software.
(b) Neither Forte nor any employee or agent thereof has developed
or assisted in the enhancement of the Software except for enhancements included
in the Software as transferred to Genesys on the Closing Date or the development
of any program or product based on the Software or any part thereof.
(c) No employee of Forte is, or is now expected to be, in default
under any term of any employment contract, agreement or arrangement relating to
the Software or non-competition arrangement, or any other contract or any
restrictive covenant relating to the Software or its development or
exploitation. The Software was developed entirely by the employees of Forte
during the time they were employees only of Forte and such Software does not
include any inventions of the employees made prior to the time such
12
employees became employees of Forte nor any intellectual property of any
previous employer of such employee.
(d) Except as noted on Schedule 2.12, all right, title and
-------------
interest in and to the Software is owned by Forte, free and clear of all liens,
claims, charges or encumbrances, are fully transferable to Genesys, and no party
other than Forte has any interest in the Software, including, without
limitation, any security interest, license, contingent interest or otherwise.
Forte's development, use, sale or exploitation of the Software does not violate
any rights of any other person or entity and Forte has not received any
communication alleging such a violation. Forte does not have any obligation to
compensate any person for the development, use, sale or exploitation of the
Software nor has Forte granted to any other person or entity any license, option
or other rights to develop, use, sell or exploit in any manner the Software,
whether requiring the payment of royalties or not.
(e) Forte has kept secret and has not disclosed the source code
for the Software to any person or entity other than certain employees of Forte
who are subject to the terms of a binding confidentiality agreement with respect
thereto or in connection with software escrows with third parties which are set
forth on Schedule 2.12. Forte has taken all appropriate measures to protect the
-------------
confidential and proprietary nature of the Software, including, without
limitation, the use of confidentiality agreements with all of its employees
having access to the Software source and object code. There have been no patents
applied for and no copyrights registered for any part of the Software.
2.13 Environmental Matters.
---------------------
(a) The following terms shall be defined as follows:
(i) "Environmental and Safety Laws" shall mean any federal,
state or local laws, ordinances, codes, regulations, rules, policies and orders
that are intended to assure the protection of the environment, or that classify,
regulate, call for the remediation of, require reporting with respect to, or
list or define air, water, groundwater, solid waste, hazardous or toxic
substances, materials, wastes, pollutants or contaminants, or which are intended
to assure the safety of employees, workers or other persons, including the
public.
(ii) "Hazardous Materials" shall mean any toxic or hazardous
substance, material or waste or any pollutant or contaminant, or infectious or
radioactive substance or material, including without limitation, those
substances, materials and wastes defined in or regulated under any Environmental
and Safety Laws.
(iii) "Property" shall mean all real property leased or owned
by Forte or its subsidiaries either currently or in the past.
(iv) "Facilities" shall mean all buildings and improvements
on the Property of Forte or its subsidiaries.
13
(b) Forte represents and warrants as follows: (i) to Forte's
knowledge, no methylene chloride or asbestos is contained in or has been used at
or released from the Facilities; (ii) all Hazardous Materials and wastes
disposed of by Forte have been disposed of in accordance with all Environmental
and Safety Laws; (iii) Forte has received no notice (oral or written) of any
noncompliance of the Facilities or its past or present operations with
Environmental and Safety Laws; (iv) no notices, administrative actions or suits
are pending or, to Forte's knowledge, threatened relating to a violation of any
Environmental and Safety Laws; (v) Forte has not been notified that it is a
potentially responsible party under the federal Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), or state analog statute,
arising out of events occurring prior to the Closing Date; (vi) to Forte's
knowledge, there have not been in the past, and are not now, any Hazardous
Materials on, under or migrating to or from the Facilities or Property; (vii) to
Forte's knowledge, there have not been in the past, and are not now, any
underground tanks or underground improvements at, on or under the Property
including without limitation, treatment or storage tanks, pumps, or water, gas
or oil xxxxx; (viii) to Forte's knowledge, there are no polychlorinated
biphenyls ("PCBs") deposited, stored, disposed of or located on the Property or
Facilities or any equipment on the Property containing PCBs at levels in excess
of 50 parts per million; (ix) to Forte's knowledge, there is no formaldehyde on
the Property or in the Facilities, nor any insulating material containing urea
formaldehyde in the Facilities; (x) Forte's uses of and activities within the
Facilities have at all times complied with all Environmental and Safety Laws;
and (xi) Forte has all the permits and licenses required to be issued and is in
full compliance with the terms and conditions of those permits, except where the
failure to have or comply with such permits would not, individually or in the
aggregate, have a Material Adverse Effect of Forte.
2.14 Taxes. Forte, and any consolidated, combined, unitary or
-----
aggregate group for Tax purposes of which Forte is or has been a member, have
timely filed all Tax Returns required to be filed by it, have paid all Taxes
shown hereon to be due and has provided adequate accruals in accordance with
generally accepted accounting principles in its financial statements for any
Taxes that have not been paid, whether or not shown as being due on any Tax
returns. (i) No claim for Taxes has become a lien against the property of Forte
or is being asserted against Forte other than liens for Taxes not yet due and
payable, (ii) no audit of any Tax Return of Forte is being conducted by a Tax
authority, (iii) no extension of the statute of limitations on the assessment of
any Taxes has been granted by Forte and is currently in effect, and (iv) there
is no agreement, contract or arrangement to which Forte is a party that may
result in the payment of any amount that would not be deductible by reason of
Sections 280G, 162 or 404 of the Code. Forte has not been and will not be
required to include any material adjustment in Taxable income for any Tax period
(or portion thereof) pursuant to Section 481 or 263A of the Code or any
comparable provision under state or foreign Tax laws as a result of
transactions, events or accounting methods employed prior to the Merger. Forte
is not a party to any tax sharing or tax allocation agreement nor does Forte owe
any amount under any such agreement. For purposes of this Agreement, the
following terms have the following meanings: "Tax" (and, with correlative
meaning, "Taxes" and "Taxable") means (i) any net income, alternative or add-on
minimum tax, gross income, gross
14
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), (ii) any liability for the
payment of any amounts of the type described in (i) as a result of being a
member of an affiliated, consolidated, combined or unitary group for any Taxable
period and (iii) any liability for the payment of any amounts of the type
described in (i) or (ii) as a result of any express or implied obligation to
indemnify any other person. As used herein, "Tax Return" shall mean any return,
statement, report or form (including, without limitation,) estimated Tax returns
and reports, withholding Tax returns and reports and information reports and
returns required to be filed with respect to Taxes. Forte is in full compliance
with all terms and conditions of any Tax exemptions or other Tax-sharing
agreement or order of a foreign government and the consummation of the Merger
shall not have any adverse effect on the continued validity and effectiveness of
any such Tax exemptions or other Tax-sharing agreement or order.
2.15 Additional Tax Representations.
------------------------------
(a) The assets transferred to Forte pursuant to the Merger will
represent at least ninety percent (90%) of the fair market value of the net
assets and at least seventy percent (70%) of the fair market value held by
Merger Sub immediately prior to the Merger. In addition, at least ninety
percent (90%) of the fair market value of the net assets and at least seventy
percent (70%) of the fair market value of the gross assets held by Forte
immediately prior to the Merger will continue to be held by Forte immediately
after the Merger. For the purpose of determining the percentage of Forte's and
Merger Sub's net and gross assets held by Forte immediately following the
Merger, the following assets will be treated as property held by Merger Sub or
Forte, as the case may be, immediately prior to but not subsequent to the
Merger: (i) assets used by Forte or Merger Sub (other than assets transferred
from Genesys to Merger Sub for such purpose) to pay shareholders perfecting
dissenters' rights or other expenses or liabilities incurred in connection with
the Merger and (ii) assets used to make distributions, redemptions or other
payments in respect of stock of Forte (except for regular, normal distributions)
or in respect of rights to acquire such stock (including payments treated as
such for tax purposes) that are made in contemplation of the Merger or that are
related thereto.
(b) Other than in the ordinary course of business or pursuant to its
obligations under the Agreement, Forte has made no transfer of its assets
(including any distribution of assets with respect to, or in redemption of,
stock) in contemplation of this Merger or during the period beginning with the
commencement of the negotiations (whether formal or informal) with Genesys
regarding the Merger and ending at the Effective Time.
(c) The Merger is being undertaken by Forte for valid business
purposes and not for the purpose of tax avoidance, and the terms of the Merger
are the
15
product of arm's length negotiations.
(d) In the Merger, shares of Forte Common Stock representing "Control"
of Forte will be exchanged solely for shares of voting Genesys Common Stock.
For purposes of this paragraph, shares of Forte Common Stock exchanged in the
Merger for cash and other property (including, without limitation, cash paid to
shareholders of Forte perfecting dissenters' rights or in lieu of fractional
shares of Genesys Common Stock) originating with Genesys will be treated as
shares of Forte Common Stock outstanding on the date of the Merger. As used in
this Section, "Control" shall consist of direct ownership of shares of stock
possessing at least eighty percent (80%) of the total combined voting power of
shares of all classes of stock entitled to vote and at least eighty percent
(80%) of the total number of shares of all other classes of stock of the
corporation. For purposes of determining Control, a person shall not be
considered to own shares of voting stock if rights to vote such shares (or to
restrict or otherwise control the voting of such shares) are held by a third
party (including a voting trust) other than an agent of such person.
(e) At the time of the Merger, Forte will have no outstanding
warrants, options, convertible securities or any other type of right to acquire
Forte Common Stock (or any other equity interest in Forte) or to vote (or
restrict or otherwise control the vote of) shares of Forte Common Stock, which,
if exercised, would affect Genesys' acquisition and retention of Control of
Forte.
(f) Except with respect to cash payments made to holders of Dissenting
Shares or in lieu of issuing fractional shares of Genesys Common Stock, 100% of
the Forte Common Stock outstanding immediately prior to the Merger will be
exchanged solely for Genesys Common Stock. Thus, except as set forth in the
preceding sentences, Forte intends that no consideration be paid or received
(directly or indirectly, actually or constructively) for Forte Common Stock
other than Genesys Common Stock.
(g) The payment of cash in lieu of fractional shares of Genesys Common
Stock is solely for the purpose of avoiding the expense and inconvenience to
Genesys of issuing fractional shares and does not represent separately bargained
for consideration. The total cash consideration that will be paid in the Merger
to Forte shareholders in lieu of fractional shares of Genesys Common Stock will
not exceed one percent (1%) of the total consideration that will be issued in
the Merger to Forte shareholders in exchange for their shares of Forte Common
Stock. The fractional share interest of each Forte shareholder will be
aggregated, and no Forte shareholder will receive cash in an amount equal to or
greater than the value of one full share of Genesys Common Stock.
(h) Forte has no plan or intention to issue additional shares of stock
after the Merger, or take any other action, that would result in Genesys losing
Control of Forte.
(i) Forte has no reason to believe that, following the Merger,
16
Genesys will not cause Forte to continue its historic business or use a
significant portion of its historic business assets in a business.
(j) Merger Sub will have no liabilities assumed by Forte, and Merger
Sub will not transfer to Forte any assets subject to liabilities in the Merger.
(k) The fair market value of Forte's assets will, at the Effective
Time of the Merger, exceed the aggregate liabilities of Forte plus the amount of
liabilities, if any, to which such assets are subject.
(l) Forte is not and will not be at the Effective Time an "investment
company" within the meaning of Sections 368(a)(2)(F)(iii) and (iv) of the Code.
(m) Forte is not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
(n) After due inquiry with its officers and directors, Forte has no
knowledge of, and believes that there does not exist, any plan or intention on
the part of any shareholders of Forte to engage in a sale, exchange, transfer,
distribution (including, without limitation, a distribution by a partnership to
its partners or by a corporation to its shareholders), pledge, disposition or
any other transaction which results in a reduction in the risk of ownership or a
direct or indirect disposition of shares by Genesys Common Stock received in the
Merger.
(o) The fair market value of the shares of Genesys Common Stock
received by each shareholder of Forte will be approximately equal to the fair
market value of the shares of Forte Common Stock surrendered in exchange
therefor and the aggregate consideration received by shareholders of Forte in
exchange for their Forte Common Stock will be approximately equal to the fair
market value of all of the outstanding shares of Forte Common Stock immediately
prior to the Merger.
(p) Forte and the shareholders of Forte will pay separately its or
their own expenses relating to the Merger and Forte will not pay any expenses of
Genesys or Merger Sub with respect to the Merger.
(q) There is no intercorporate indebtedness existing between Genesys
and Forte or between Merger Sub and Forte that was issued, acquired, or will be
settled at a discount as a result of the Merger.
(r) The liabilities of Forte, and any liabilities to which the assets
of Forte are subject, have been incurred by Forte in the ordinary course of its
business.
(s) To the best of the knowledge of Forte, Genesys will not assume any
liability of any Forte shareholder in connection with the Merger.
17
(t) None of the compensation received by any shareholder-employees of
Forte will be separate consideration for, or allocable to, any of their shares
of stock of Forte; none of the shares of Genesys Common Stock received by any
shareholder-employees of Forte will be separate consideration for, or allocable
to, any employment agreement; and the compensation paid to any shareholder-
employees of Forte will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's length for
similar services.
(u) To the knowledge of Forte, during the past five (5) years, none of
the outstanding shares of capital stock of Forte, including the right to acquire
or vote any such shares, have directly or indirectly been owned by Genesys.
2.16 Employee Benefit Plans.
----------------------
(a) Schedule 2.16 lists, with respect to Forte and any trade or
-------------
business (whether or not incorporated) which is treated as a single employer
with Forte (an "ERISA Affiliate") within the meaning of Section 414(b), (c), (m)
or (o) of the Code, (i) all material employee benefit plans (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), (ii) each loan to a non-officer employee in excess of $10,000, loans
to officers and directors and any stock option, stock purchase, phantom stock,
stock appreciation right, supplemental retirement, severance, sabbatical,
medical, dental, vision care, disability, employee relocation, cafeteria benefit
(Code section 125) or dependent care (Code Section 129), life insurance or
accident insurance plans, programs or arrangements, (iii) all bonus, pension,
profit sharing, savings, deferred compensation or incentive plans, programs or
arrangements, (iv) other fringe or employee benefit plans, programs or
arrangements that apply to senior management of Forte and that do not generally
apply to all employees, and (v) any current or former employment or executive
compensation or severance agreements, written or otherwise, as to which
unsatisfied obligations of Forte of greater than $10,000 remain for the benefit
of, or relating to, any present or former employee, consultant or director of
Forte (together, the "Forte Employee Plans").
(b) Forte has furnished to Genesys a copy of each of the Forte
Employee Plans and related plan documents (including trust documents, insurance
policies or contracts, employee booklets, summary plan descriptions and other
authorizing documents, and, to the extent still in its possession, any material
employee communications relating thereto) and has, with respect to each Forte
Employee Plan which is subject to ERISA reporting requirements, provided copies
of the Form 5500 reports filed for the last three plan years. Any Forte
Employee Plan intended to be qualified under Section 401(a) of the Code has
either obtained from the Internal Revenue Service a favorable determination
letter as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has applied to the Internal Revenue Service for such a determination letter
prior to the expiration of the requisite period under applicable Treasury
Regulations or Internal Revenue Service pronouncements in which to
18
apply for such determination letter and to make any amendments necessary to
obtain a favorable determination. Forte has also furnished Genesys with the
most recent Internal Revenue Service determination letter issued with respect to
each such Forte Employee Plan, and nothing has occurred since the issuance of
each such letter which could reasonably be expected to cause the loss of the
tax-qualified status of any Forte Employee Plan subject to Code Section 401(a).
(c) (i) Except as disclosed on Schedule 2.16, none of the Forte
-------------
Employee Plans promises or provides retiree medical or other retiree welfare
benefits to any person; (ii) there has been no "prohibited transaction," as such
term is defined in Section 406 of ERISA and Section 4975 of the Code, with
respect to any Forte Employee Plan; (iii) each Forte Employee Plan has been
administered substantially in accordance with its terms and in compliance with
the requirements prescribed by any and all statutes, rules and regulations
(including ERISA and the Code), and Forte and each subsidiary or ERISA Affiliate
have performed all obligations required to be performed by them under, are not
in any respect in default under or violation of, and have no knowledge of any
default or violation by any other party to, any of the Forte Employee Plans;
(iv) neither Forte nor any subsidiary or ERISA Affiliate is subject to any
liability or penalty under Sections 4976 through 4980 of the Code or Title I of
ERISA with respect to any of the Forte Employee Plans, other than obligations
for the payment of benefits in the normal operation of the Plan; (v) all
material contributions required to be made by Forte or ERISA Affiliate to any
Forte Employee Plan have been made on or before their due dates and any accruals
required by general accepted accounting principles ("GAAP") for contributions to
each Forte Employee Plan for the current plan years are reflected on the
financial statements of Forte; (vi) with respect to each Forte Employee Plan, no
"reportable event" within the meaning of Section 4043 of ERISA (excluding any
such event for which the thirty (30) day notice requirement has been waived
under the regulations to Section 4043 of ERISA) nor any event described in
Section 4062, 4063 or 4041 or ERISA has occurred; and (vii) neither Forte nor
any ERISA Affiliate has incurred or expects to incur any liability under Title
IV of ERISA or Section 412 of the Code. With respect to each Forte Employee
Plan subject to ERISA as either an employee pension plan within the meaning of
Section 3(2) of ERISA or an employee welfare benefit plan within the meaning of
Section 3(1) of ERISA, Forte has prepared in good faith and timely filed all
requisite governmental reports (which were true and correct as of the date
filed) and has properly and timely filed and distributed or posted all notices
and reports to employees required to be filed, distributed or posted with
respect to each such Forte Employee Plan. No suit, administrative proceeding,
action or other litigation has been brought, or to the best knowledge of Forte
is threatened, against or with respect to any such Forte Employee Plan,
including any audit or inquiry by the IRS or United States Department of Labor.
Neither Forte nor any other ERISA Affiliate is a party to, or has made any
contribution to or otherwise incurred any obligation under, any "multiemployer
plan" as defined in Section 3(37) of ERISA.
(d) With respect to each Forte Employee Plan, Forte has complied with
(i) the applicable health care continuation and notice provisions of the
Consolidated
19
Omnibus Budget Reconciliation Act of 1985 ("COBRA") and the proposed regulations
thereunder and (ii) the applicable requirements of the Family Leave Act of 1993
and the regulations thereunder.
(e) The consummation of the transactions contemplated by this
Agreement will not entitle any current or former employee or other service
provider of Forte or any other ERISA Affiliate to severance benefits or any
other payment, except as vesting, or increase the amount of compensation due any
such employee or service provider.
(f) Except as disclosed on Schedule 2.16, there has been no amendment
-------------
to, written interpretation or announcement (whether or not written) by Forte or
other ERISA Affiliate relating to, or change in participation or coverage under,
any Forte Employee Plan which would materially increase the expense of
maintaining such Plan above the level of expense incurred with respect to that
Plan for the most recent fiscal year included in Forte's financial statements.
2.17 Certain Agreements Affected by the Merger. Neither the execution and
-----------------------------------------
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute, bonus or otherwise) becoming due to
any director or employee of Forte, (ii) materially increase any benefits
otherwise payable by Forte or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
2.18 Employee Matters. Forte is in compliance in all respects with all
----------------
currently applicable laws and regulations respecting employment, discrimination
in employment, terms and conditions of employment, wages, hours and occupational
safety and health and employment practices, and is not engaged in any unfair
labor practice, except where the failure to be in compliance or the engagement
in such unfair labor practices would not have a Material Adverse Effect on
Forte. There are no pending claims against Forte under any workers' compensation
plan or policy or for long-term disability. Forte does not have any obligations
under COBRA with respect to any former employees or qualifying beneficiaries
thereunder, except for obligations that would not have a Material Adverse Effect
on Forte. There are no controversies pending or, to the knowledge of Forte,
threatened, between Forte and any of its employees, which controversies have or
could reasonably be expected to have a Material Adverse Effect on Forte. Forte
is not a party to any collective bargaining agreement or other labor union
contract nor does Forte know of any activities or proceedings of any labor union
to organize any such employees.
2.19 Interested Party Transactions. Forte is not indebted to any director,
-----------------------------
officer, employee or agent of Forte (except for amounts due as normal salaries
and bonuses and in reimbursement of ordinary expenses), and no such person is
indebted to Forte.
2.20 Insurance. Forte has policies of insurance and bonds of the type and
---------
in amounts customarily carried by persons conducting businesses or owning assets
similar to
20
those of Forte. There is no material claim pending under any of such policies
or bonds as to which coverage has been questioned, denied or disputed by the
underwriters of such policies or bonds. All premiums due and payable under all
such policies and bonds have been paid and Forte is otherwise in compliance in
all material respects with the terms of such policies and bonds. Forte has no
knowledge of any threatened termination of, or material premium increase with
respect to, any of such policies.
2.21 Compliance with Laws. Forte has complied with, is not in
--------------------
violation of, and has not received any notices of violation with respect to, any
federal, state, local or foreign statute, law or regulation with respect to the
conduct of its business, or the ownership or operation of its business, except
for such violations or failures to comply as could not be reasonably expected to
have a Material Adverse Effect on Forte.
2.22 Minute Books. The minute books of Forte made available to
------------
Genesys contain a complete and accurate summary of all meetings of directors and
shareholders or actions by written consent since the time of incorporation of
Forte through the date of this Agreement, and reflect all transactions referred
to in such minutes accurately in all material respects.
2.23 Brokers' and Finders' Fees. Forte has not incurred, nor will it
--------------------------
incur without Genesys's prior written consent, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or investment
bankers' fees or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
2.24 Vote Required. The affirmative vote of the holders of a majority
-------------
of the shares of Forte Common Stock outstanding on the record date set for the
Forte Shareholders Consent (as defined below) is the only vote of the holders of
any of Forte's capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
2.25 Board Approval. The Board of Directors of Forte has (i)
--------------
unanimously approved this Agreement and the Merger and all transactions
contemplated hereby, (ii) determined that the Merger is in the best interests of
the shareholders of Forte and is on terms that are fair to such shareholders and
(iii) recommended that the shareholders of Forte approve this Agreement and
consummation of the Merger.
2.26 Customers and Suppliers. As of the date hereof, no customer
-----------------------
which individually accounted for more than 1% of Forte's gross revenues during
the 12 month period preceding the date hereof has indicated to Forte that it
will stop, or decrease the rate of, buying services or products of Forte, or has
at any time on or after January 1, 1997 decreased materially its usage of the
services or products of Forte. As of the date hereof, no material supplier of
Forte has indicated to Forte that it will stop, or decrease the rate of,
supplying materials, products or services to Forte. Forte has not knowingly
breached, so as to provide a benefit to Forte that was not intended by the
parties, any agreement with, or engaged in any fraudulent conduct with respect
to, any customer or supplier of Forte.
21
2.27 Employee Nondisclosure Agreements. Each employee of Forte has
---------------------------------
executed and delivered to Forte the Standard Key Employee Nondisclosure
Agreement in the form previously delivered to Genesys.
2.28 Representations Complete. None of the representations or
------------------------
warranties made by Forte herein or in any Schedule hereto, including the Forte
Disclosure Schedule, or certificate furnished by Forte pursuant to this
Agreement, when all such documents are read together in their entirety, contains
or will contain at the Effective Time any untrue statement of a material fact,
or omits or will omit at the Effective Time to state any material fact necessary
in order to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE FORTE SHAREHOLDERS
Except as disclosed in the Forte Disclosure Schedule, the Forte
Shareholders, severally and not jointly, represent and warrant to Genesys and
Merger Sub as follows:
3.1 Accredited Investors. Except as noted on Schedule 3.1, each
-------------------- ------------
Forte Shareholder is an "accredited investor" within the meaning of Rule 501(a)
of the Securities Act.
3.2 Investment Risk. Each Forte Shareholder is aware that the
---------------
Genesys Common Stock (which term, for purposes of this Section 3.2, shall
include the shares of Genesys Common Stock to be issued pursuant to Section
1.6(a)) have not been registered under the Securities Act or any applicable
state securities laws, and agrees that the Genesys Common Stock will not be
offered or sold in the absence of registration under the Securities Act and any
applicable state securities laws or an exemption from the registration
requirements of the Securities Act and any applicable state securities laws.
Each Forte Shareholder will not transfer the Genesys Common Stock in violation
of the provisions of any applicable federal or state securities laws. In this
connection, each Forte Shareholder represents that he or she is familiar with
SEC Rule 144 promulgated pursuant to the Securities Act ("Rule 144"), as
presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act. Each Forte Shareholder understands that the offering and
sale of the Genesys Common Stock is intended to be exempt from registration
under the Securities Act, by virtue of Section 4(2) and/or Section 4(6) of the
Securities Act, based, in part, upon the representations, warranties and
agreements contained in this Agreement and Genesys may rely on such
representations, warranties and agreements in connection therewith. Each Forte
Shareholder is acquiring the Genesys Common Stock for his or her own account and
for investment, and not with a view to the distribution thereof or with any
present intention of distributing or selling any of the Genesys Common Stock
except in compliance with the Securities Act. Each Forte Shareholder represents
that by reason of his or her
22
business and financial experience, and the business and financial experience of
those persons, if any, retained by him or her to advise him or her with respect
to his or her investment in the Genesys Common Stock, such Forte Shareholder
together with such advisors have knowledge, sophistication and experience in
business and financial matters as to be capable of evaluating the merits and
risk of the prospective investment. Each Forte Shareholder's financial
condition and investments are such that he or she is in a financial position to
hold the Genesys Common Stock for an indefinite period of time and to bear the
economic risk of, and withstand a complete loss of, his or her investment in the
Genesys Common Stock.
3.3 Available Information. Each Forte Shareholder has carefully
---------------------
examined the Genesys SEC Documents (as defined in Section 4.4). Each Forte
Shareholder acknowledges that Genesys has made available to each Forte
Shareholder all documents and information that he or she has requested relating
to Genesys and has provided answers to all of his or her questions concerning
Genesys and the Genesys Common Stock. In evaluating the suitability of the
acquisition of the Genesys Common Stock hereunder, each Forte Shareholder has
not relied upon any representations or other information (whether oral or
written) other than as set forth in the Genesys SEC Filings or as contained
herein.
3.4 Tax Representations. After consulting with its own counselors and
-------------------
advisors regarding the meaning of and factual support for the following
representations, each Forte Shareholder hereby certifies and represents that the
following facts are now true and will continue to be true as of the Effective
Time of the Merger.
(a) Each Forte Shareholder currently is the direct beneficial
owner of that number of shares of Common Stock of Forte set forth opposite
his/her name on the signature page hereto and did not acquire any such shares in
contemplation of the Merger.
(b) None of the Forte Shareholders has engaged in a Sale (as
defined below) of any shares of Forte Common Stock in contemplation of the
Merger.
(c) There is no plan or intention ("Plan") on the part of any
Forte Shareholder to exercise dissenter's rights in connection with the Merger.
(d) There is no Plan on the part of any Forte Shareholder to
engage in a sale, exchange, transfer, distribution (including a distribution by
a partnership to its partners or by a corporation to its shareholders),
redemption or reduction in any way of such Forte Shareholder's risk of ownership
(by short sale or otherwise), or other disposition, directly or indirectly (such
actions being collectively referred to herein as a "Sale") of Forte Common
Stock, or Sales of the shares of Genesys Common Stock to be received in the
Merger. For purposes of the preceding sentence, shares of Forte Common Stock (or
the portion thereof) (i) with respect to which a shareholder of Forte receives
consideration in the Merger other than shares of Genesys Common Stock
(including, without limitation, cash received pursuant to the exercise of
dissenters' rights or in lieu of a fractional share of Genesys Common Stock) or
(ii) with respect to which a Sale occurs prior to and in
23
contemplation of the Merger, shall be considered shares of outstanding Forte
Common Stock exchanged for shares of Genesys Common Stock in the Merger and then
disposed of pursuant to a Plan.
(e) Each Forte Shareholder represents that he or she has no knowledge
of and believes that there does not exist any Plan on the part of the remaining
Forte Common Stock shareholders, to engage in a sale, exchange, transfer,
distribution (including a distribution by a partnership to its partners or by a
corporation to its shareholders), redemption or reduction in any way of the
remaining Forte Common Stock shareholders' risk of ownership (by short sale or
otherwise), or other disposition, directly or indirectly (such actions being
collectively referred to herein as a "Sale") of Forte Common Stock, or Sales of
the shares of Genesys Common Stock to be received in the Merger, such that the
aggregate fair market value, as of the Effective Time, of shares subject to such
sales would exceed fifty percent (50%) of the aggregate fair market value of all
shares of outstanding Forte Common Stock immediately prior to the Merger. For
purposes of the preceding sentence, shares of Forte Common Stock (or the portion
thereof) (i) with respect to which a shareholder of Forte receives consideration
in the Merger other than shares of Genesys Common Stock (including, without
limitation, cash received pursuant to the exercise of dissenters' rights or in
lieu of a fractional share of Genesys Common Stock) or (ii) with respect to
which a Sale occurs prior to and in contemplation of the Merger, shall be
considered shares of outstanding Forte Common Stock exchanged for shares of
Genesys Common Stock in the Merger and then disposed of pursuant to a Plan.
(f) Each Forte Shareholder has been provided with a copy of this
Agreement (including all schedules and exhibits thereto) and has consulted with
such legal and financial counsel as such Forte Shareholder deems appropriate in
connection with the execution of this Agreement.
(g) Except to the extent written notification to the contrary is
received by each of the parties to this Agreement from any Forte Shareholder
prior to the Merger, the representations, warranties and certifications
contained herein shall be true and correct at all times from the date hereof
through the Effective Time of the Merger. Each Forte Shareholder agrees to
promptly notify each of the parties to this Agreement prior to the Merger if at
any time after the date hereof and prior to the Merger, such Forte Shareholder
would no longer be able to make the representations, warranties and covenants
set forth herein.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF GENESYS AND MERGER SUB
--------------------------------------------------------
Except as disclosed in a document of even date herewith and delivered
by Genesys to Forte prior to the execution and delivery of this Agreement and
referring to the
24
representations and warranties in this Agreement (the "Genesys Disclosure
Schedule"), Genesys and Merger Sub represent and warrant to Forte as follows.
All representations and warranties of Merger Sub set forth below are made solely
as of the Closing Date.
4.1 Organization, Standing and Power. Each of Genesys and its
--------------------------------
subsidiaries, including Merger Sub, is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each of Genesys and its subsidiaries has the corporate power to
own its properties and to carry on its business as now being conducted and is
duly qualified to do business and is in good standing in each jurisdiction in
which the failure to be so qualified and in good standing would have a Material
Adverse Effect on Genesys. Genesys has made available a true and correct copy
of the Articles of Incorporation and Bylaws or other charter documents, as
applicable, of Genesys and Merger Sub to Forte. Neither Genesys nor any of its
subsidiaries is in violation of any of the provisions of its Articles of
Incorporation or Bylaws or equivalent organizational documents. Genesys is the
owner of all outstanding shares of capital stock of each of its subsidiaries and
all such shares are duly authorized, validly issued, fully paid and
nonassessable. All of the outstanding shares of capital stock of each such
subsidiary are owned by Genesys free and clear of all liens, charges, claims or
encumbrances or rights of others. There are no outstanding subscriptions,
options, warrants, puts, calls, rights, exchangeable or convertible securities
or other commitments or agreements of any character relating to the issued or
unissued capital stock or other securities of any such subsidiary, or otherwise
obligating Genesys or any such subsidiary to issue, transfer, sell, purchase,
redeem or otherwise acquire any such securities. Except as disclosed in the
Genesys SEC Documents, Genesys does not directly or indirectly own any equity or
similar interest in, or any interest convertible or exchangeable or exercisable
for, any equity or similar interest in, any corporation, partnership, joint
venture or other business association or entity.
4.2 Capital Structure. The authorized capital stock of Genesys
-----------------
consists of 120,000,000 shares of Common Stock, no par value, of which there
were 19,850,509 issued and outstanding as of October 15, 1997, and 5,000,000
shares of Preferred Stock, no par value, none of which are outstanding. No
shares of Common Stock have been issued subsequent to October 15, 1997 other
than in connection with the exercise of outstanding stock options. The shares
of Genesys Common Stock to be issued pursuant to the Merger will be duly
authorized, validly issued, fully paid, and non-assessable and will be free of
any liens or encumbrances created by or resulting from the actions of Genesys
(assuming for purposes hereof that the Forte Shareholders acquire such Shares
without notice of any adverse claim), and will not be subject to preemptive
rights or rights of first refusal created by statute, the Articles of
Incorporation or Bylaws of Genesys, or any agreement to which Genesys is a party
or by which it is bound.
4.3 Authority. Genesys and Merger Sub have all requisite corporate
---------
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action
25
on the part of Genesys and Merger Sub. This Agreement has been duly executed
and delivered by Genesys and Merger Sub and constitutes the valid and binding
obligations of Genesys and Merger Sub. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
will not, conflict with, or result in any violation of, or default under (with
or without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a benefit
under (i) any provision of the Articles of Incorporation or Bylaws of Genesys or
any of its subsidiaries, as amended, or (ii) any material mortgage, indenture,
lease, contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Genesys or any of its subsidiaries or their properties or assets,
except where such conflict, violation, default, termination, cancellation or
acceleration with respect to the foregoing provisions of (ii) would not have had
and would not reasonably be expected to have a Material Adverse Effect on
Genesys. No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required by or with
respect to Genesys or any of its subsidiaries in connection with the execution
and delivery of this Agreement by Genesys and Merger Sub or the consummation by
Genesys and Merger Sub of the transactions contemplated hereby, except for (i)
the filing of the Merger Agreement as provided in Section 1.2, (ii) if required,
the filing of a Form 8-K with the Securities and Exchange Commission ("SEC")
within 15 days after the Closing Date, (iii) any filings as may be required
under applicable state securities laws and the securities laws of any foreign
country, (iv) the filing with the Nasdaq National Market of a Notification Form
for Listing of Additional Shares with respect to the shares of Genesys Common
Stock issuable upon conversion of the Forte Common Stock in the Merger and upon
exercise of the options under the Forte Stock Option Plan assumed by Genesys,
and (v) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, would not have a Material Adverse
Effect on Genesys and would not prevent or materially alter or delay any of the
transactions contemplated by this Agreement.
4.4 SEC Documents; Financial Statements. Genesys has made available
-----------------------------------
to Forte a true and complete copy of each statement, report, registration
statement (with the prospectus in the form filed pursuant to Rule 424(b) of the
Securities Act, definitive proxy statement, and other filing filed with the SEC
by Genesys since April 3, 1997, and, prior to the Effective Time, Genesys will
have furnished Forte with true and complete copies of any additional documents
filed with the SEC by Genesys prior to the Effective Time (collectively, the
"Genesys SEC Documents"). All documents required to be filed as exhibits to the
Genesys SEC Documents have been so filed, and all material contracts so filed as
exhibits are in full force and effect, except those which have expired in
accordance with their terms, and neither Genesys nor any of its subsidiaries is
in default thereunder. As of their respective filing dates, the Genesys SEC
Documents complied in all material respects with the requirements of the
Securities Exchange Act of 1934 and the Securities Act, and none of the Genesys
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent
26
corrected by a subsequently filed Genesys SEC Document.
4.5 Absence of Certain Changes. Since September 30, 1997 (the
--------------------------
"Genesys Balance Sheet Date"), Genesys has conducted its business in the
ordinary course consistent with past practice and there has not occurred: (i)
any change, event or condition (whether or not covered by insurance) that has
resulted in, or might reasonably be expected to result in, a Material Adverse
Effect to Genesys; (ii) any acquisition, sale or transfer of any material asset
of Genesys or any of its subsidiaries other than in the ordinary course of
business and consistent with past practice; (iii) any material change in
accounting methods or practices (including any change in depreciation or
amortization policies or rates) by Genesys or any revaluation by Genesys of any
of its assets; (iv) any declaration, setting aside, or payment of a dividend or
other distribution with respect to the shares of Genesys, or any direct or
indirect redemption, purchase or other acquisition by Genesys of any of its
shares of capital stock; or (v) any agreement by Genesys or any of its
subsidiaries to do any of the things described in the preceding clauses (i)
through (iv) (other than agreements with Forte regarding the transactions
contemplated by this Agreement).
4.6 Absence of Undisclosed Liabilities. Genesys has no material
----------------------------------
obligations or liabilities of any nature (matured or unmatured, fixed or
contingent) other than (i) those set forth or adequately provided for in the
Balance Sheet included in Genesys's Quarterly Report on Form 10-Q for the period
ended September 30, 1997 (the "Genesys Balance Sheet"), (ii) those incurred in
the ordinary course of business and not required to be set forth in the Genesys
Balance Sheet under generally accepted accounting principles, and (iii) those
incurred in the ordinary course of business since the Genesys Balance Sheet Date
and consistent with past practice.
4.7 Additional Tax Representations.
------------------------------
(a) The assets transferred to Forte pursuant to the Merger will
represent at least ninety percent (90%) of the fair market value of the net
assets and at least seventy percent (70%) of the fair market value of the gross
assets held by Merger Sub immediately prior to the Merger. In addition, at
least ninety percent (90%) of the fair market value of the net assets and at
least seventy percent (70%) of the fair market value of the gross assets held by
Forte immediately prior to the Merger will continue to be held by Forte
immediately after the Merger. For the purpose of determining the percentage of
Forte's and Merger Sub's net and gross assets held by Forte immediately
following the Merger, the following assets will be treated as property held by
Merger Sub or Forte, as the case may be, immediately prior to but not subsequent
to the Merger: (i) assets used by Forte or Merger Sub (other than assets
transferred from Genesys to Merger Sub for such purpose) to pay shareholders
perfecting dissenter's rights or other expenses or liabilities incurred in
connection with the Merger and (ii) assets used to make distributions,
redemptions or other payments in respect of Forte Common Stock (except for
regular, normal distributions) or in respect of rights to acquire such stock
(including payments treated as for tax purposes) that are made in contemplation
of the Merger or that are related thereto.
27
(b) Merger Sub was formed solely for the purpose of consummating the
transactions contemplated by the Agreement and at no time will Merger Sub
conduct any business activities or other operations, or dispose of any of its
assets, other than pursuant to its obligations under this Agreement.
(c) The Merger is being undertaken by Genesys and Merger Sub for valid
business purposes and not for the purpose of tax avoidance, and the terms of the
Merger are the product of arm's length negotiations.
(d) Prior to the Merger, Genesys will be in "Control" of Merger Sub.
As used in this Section 4.7, "Control" shall consist of direct ownership of
shares of stock possessing at least eighty percent (80%) of the total combined
voting power of all classes of stock entitled to vote and at least eighty
percent (80%) of the total number of shares of all other classes of stock of the
corporation. For purposes of determining Control, a person shall not be
considered to own shares of voting stock if rights to vote such shares (or to
restrict or otherwise control the voting of such shares) are held by a third
party (including a voting trust) other than an agent of such person.
(e) In the Merger, shares of Forte Common Stock representing Control
of Forte will be exchanged solely for shares of Genesys Common Stock. For
purposes of this paragraph, shares of stock of Forte exchanged in the Merger for
cash and other property (other than shares of Genesys Common Stock) (including,
without limitation, cash paid to shareholders of Forte perfecting dissenters'
rights or in lieu of fractional shares of Genesys voting stock) originating with
Genesys will be treated as shares of Forte Common Stock outstanding on the date
of the Merger.
(f) Except with respect to cash payments made to holders of Dissenting
Shares or in lieu of issuing fractional shares of Genesys Common Stock, 100% of
the Forte Common Stock outstanding immediately prior to the Merger will be
exchanged pursuant to this Agreement solely for Genesys Common Stock. Thus,
except as set forth in the preceding sentences, Genesys intends that no
consideration be paid or received (directly or indirectly, actually or
constructively) for Forte Common Stock other than Genesys Common Stock.
(g) The payment of cash in lieu of fractional shares of Genesys Common
Stock is solely for the purpose of avoiding the expense and inconvenience to
Genesys of issuing fractional shares and does not represent separately bargained
for consideration. The total cash consideration that will be paid in the Merger
to the Shareholders in lieu of fractional shares of Genesys Common Stock will
not exceed one (1) percent of the total consideration that will be issued in the
Merger to Shareholders in exchange for their Forte Common Stock. The fractional
share interests of each Forte shareholder will be aggregated, and no Forte
Shareholder will receive cash in an amount equal to or greater than the value of
one full share of Genesys Common Stock.
28
(h) Genesys has no plan or intention to cause Forte to issue
additional shares of stock after the Merger, or take any other action, that
would result in Genesys losing Control of Forte.
(i) Genesys has no plan or intention to reacquire any of its stock
issued pursuant to the Merger.
(j) Genesys has no plan or intention to liquidate Forte; to merge
Forte with or into another corporation, including Genesys or its affiliates; to
sell, distribute or otherwise dispose of the stock of Forte; or to cause Forte
to sell or otherwise dispose of any of its assets or of any assets acquired from
Merger Sub, except for dispositions made in the ordinary course of business or a
transfer of assets to a corporation control by Forte.
(k) Genesys and Merger Sub have no knowledge of any plan or intention
("Plan") on the part of shareholders of Forte to engage in a sale, exchange,
transfer, distribution (including, without limitation, a distribution by a
partnership to its partners or by a corporation to its shareholders), pledge,
disposition or any other transaction which results in a reduction in the risk of
ownership or a direct or indirect disposition (a "Sale") of shares of Genesys
Common Stock received in the Merger.
(l) In the Merger, Merger Sub will have no liabilities assumed by
Forte and will not transfer to Forte any assets subject to liabilities, except
to the extent incurred in connection with the transaction contemplated by the
Agreement.
(m) Following the Merger, Genesys will cause Forte to continue its
historic business or use a significant portion of its historic business assets
in a business.
(n) During the past five (5) years, none of the outstanding shares of
Forte Common Stock, including the right to acquire or vote any such shares, have
directly or indirectly been owned by Genesys.
(o) Neither Genesys nor Merger Sub is nor will be at the Effective
Time an "investment company" within the meaning of Sections 368(a)(2)(F)(iii)
and (iv) of the Code.
(p) The fair market value of the Genesys Common Stock received by each
shareholder of Forte will be approximately equal to the fair market value of the
stock of Forte surrendered in exchange therefore, and the aggregate
consideration received by shareholders of Forte in exchange for their stock of
Forte will be approximately equal to the fair market value of all of the
outstanding shares of stock of Forte immediately prior to the Merger.
(q) Merger Sub, Genesys, Forte and the shareholders of Forte will each
pay separately its or their own expenses relating to the Merger.
29
(r) There is no intercorporate indebtedness existing between Genesys
and Forte or between Merger Sub and Forte that was issued, acquired, or will be
settled at a discount as a result of the Merger.
(s) No shareholder of Forte is acting as an agent of Genesys in
connection with the Merger or approval thereof, and Genesys will not reimburse
any Forte shareholder for Forte capital stock such shareholder may have
purchased for Genesys, or for other obligations such shareholder may have
incurred on behalf of Genesys.
(t) None of the compensation received by any shareholder-employee of
Forte will be separate consideration for, or allocable to, any of their shares
of stock of Forte Common Stock; none of the shares of Genesys Common Stock
received by an shareholder-employee of Forte will be separate consideration for,
or allocable to, any employment agreement; and the compensation paid to any
shareholder-employee of Forte will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's-length for
similar services.
(u) Following the Merger, Genesys will comply with the record-keeping
and information filing requirements of Treasury Regulations Section 1.368-3.
4.8 Governmental Authorization. Genesys and each of its subsidiaries have
--------------------------
obtained each federal, state, county, local or foreign governmental consent,
license, permit, grant, or other authorization of a Governmental Entity (i)
pursuant to which Genesys or any of its subsidiaries currently operates or holds
any interest in any of its properties or (ii) that is required for the operation
of Genesys's or any of its subsidiaries' business or the holding of any such
interest ((i) and (ii) herein collectively called "Genesys Authorizations"), and
all of such Genesys Authorizations are in full force and effect, except where
the failure to obtain or have any of such Genesys Authorizations could not
reasonably be expected to have a Material Adverse Effect on Genesys.
4.9 Compliance With Laws. Each of Genesys and its subsidiaries has
--------------------
complied with, are not in violation of, and have not received any notices of
violation with respect to, any federal, state, local or foreign statute, law or
regulation with respect to the conduct of its business, or the ownership or
operation of its business, except for such violations or failures to comply as
could not be reasonably expected to have a Material Adverse Effect on Genesys.
4.10 Broker's and Finders' Fees. Genesys has not incurred, nor will it
--------------------------
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
4.11 Board Approval. The Board of Directors of Genesys has unanimously (i)
--------------
approved this Agreement and the Merger and (ii) determined that the Merger is in
the best
30
interests of its shareholders and is on terms that are fair to such
shareholders.
4.12 Representations Complete. None of the representations or
------------------------
warranties made by Genesys or Merger Sub herein or in any Schedule hereto,
including the Genesys Disclosure Schedule, or certificate furnished by Genesys
or Merger Sub pursuant to this Agreement, or the Genesys SEC Documents, when all
such documents are read together in their entirety, contains or will contain at
the Effective Time any untrue statement of a material fact, or omits or will
omit at the Effective Time to state any material fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading.
ARTICLE V.
CONDUCT PRIOR TO THE EFFECTIVE TIME
-----------------------------------
5.1 Conduct of Business of Forte and Genesys. During the period from
----------------------------------------
the date of this Agreement and continuing until the earlier of the termination
of this Agreement or the Effective Time, each of Forte and Genesys agrees
(except to the extent expressly contemplated by this Agreement or as consented
to in writing by the other), to carry on its and its subsidiaries' business in
the usual, regular and ordinary course in substantially the same manner as
heretofore conducted, to pay and to cause its subsidiaries to pay debts and
Taxes when due subject to good faith disputes over such debts or taxes, to pay
or perform other obligations when due, and to use all reasonable efforts
consistent with past practice and policies to preserve intact its and its
subsidiaries' present business organizations, use its best efforts consistent
with past practice to keep available the services of its and its subsidiaries'
present officers and key employees and use its best efforts consistent with past
practice to preserve its and its subsidiaries' relationships with customers,
suppliers, distributors, licensors, licensees, and others having business
dealings with it or its subsidiaries, to the end that its and its subsidiaries'
goodwill and ongoing businesses shall be unimpaired at the Effective Time. Each
of Forte and Genesys agrees to promptly notify the other of any event or
occurrence not in the ordinary course of its or its subsidiaries' business, and
of any event which could have a Material Adverse Effect. Notwithstanding
anything in this Section 5.1 to the contrary, Genesys may negotiate and
consummate acquisitions of businesses or assets without providing notice to or
obtaining the consent of Forte. Without limiting the foregoing, except as
expressly contemplated by this Agreement, neither Forte nor Genesys shall do,
cause or permit any of the following, or allow, cause or permit any of its
subsidiaries to do or cause or permit any of the following, without the prior
written consent of the other:
(a) Charter Documents. Cause or permit any amendments to its
-----------------
Articles of Incorporation or Bylaws;
(b) Dividends; Changes in Capital Stock. Declare or pay any
-----------------------------------
dividends on or make any other distributions (whether in cash, stock or
property) in respect of
31
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 repurchase 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 it or its subsidiaries; or
(c) Other. Take, or agree in writing or otherwise to take, any of the
-----
actions described in Sections 5.1(a) and (b) above, or any action which would
make any of its representations or warranties contained in this Agreement untrue
or incorrect or prevent it from performing or cause it not to perform its
covenants hereunder.
5.2 Conduct of Business of Forte. During the period from the date of this
----------------------------
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, Forte shall consult with Purchaser on a weekly basis
concerning operating decisions not otherwise in the ordinary course of business.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Effective Time, except as
expressly contemplated by this Agreement, Forte shall not do or cause or permit
any of the following, without the prior written consent of Genesys, which
consent shall not be unreasonably withheld:
(a) Material Contracts. Enter into any contract or commitment, or
------------------
violate, amend or otherwise modify or waive any of the terms of any of its
contracts, other than in the ordinary course of business consistent with past
practice and in no event shall such contract, commitment, amendment,
modification or waiver be in excess of $25,000;
(b) Issuance of Securities. Issue, deliver or sell or authorize or
----------------------
propose the issuance, delivery or sale of, or purchase or propose the purchase
of, any shares of its capital stock or securities convertible into, 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 the issuance of shares of its Common Stock
pursuant to the exercise of stock options, warrants or other rights therefor
outstanding as of the date of this Agreement;
(c) Stock Option Plans, Etc. Accelerate, amend or change the period
------------------------
of exercisability or vesting of options or other rights granted under its
employee stock plans or director stock plans or authorize cash payments in
exchange for any options or other rights granted under any of such plans;
(d) Intellectual Property. Transfer to any person or entity any
---------------------
rights to its Intellectual Property or Software other than in the ordinary
course of business consistent with past practice;
(e) Exclusive Rights. Enter into or amend any agreements pursuant
----------------
32
to which any other party is granted exclusive marketing or other exclusive
rights of any type or scope with respect to any of its products or technology;
(f) Dispositions. Sell, lease, license or otherwise dispose of or
------------
encumber any of its properties or assets which are material, individually or in
the aggregate, to its business, taken as a whole, except in the ordinary course
of business consistent with past practice;
(g) Indebtedness. Incur any indebtedness for borrowed money or
------------
guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others;
(h) Leases. Enter into any operating lease in excess of an aggregate
------
of $10,000;
(i) Payment of Obligations. Pay, discharge or satisfy in an amount in
----------------------
excess of $10,000 in any one case or $100,000 in the aggregate, any claim,
liability or obligation (absolute, accrued, asserted or unasserted, contingent
or otherwise) arising other than in the ordinary course of business, other than
the payment, discharge or satisfaction of liabilities reflected or reserved
against in the Forte Financial Statements;
(j) Capital Expenditures. Make any capital expenditures, capital
--------------------
additions or capital improvements in excess of $10,000 except in the ordinary
course of business and consistent with past practice;
(k) Insurance. Materially reduce the amount of any material insurance
---------
coverage provided by existing insurance policies;
(l) Employee Benefit Plans; New Hires; Pay Increases. Adopt or amend
------------------------------------------------
any employee benefit or stock purchase or option plan, or hire any new director
level or officer level employee (except that it may hire a replacement for any
current director level or officer level employee if it first provides Genesys
advance notice regarding such hiring decision), pay any special bonus or special
remuneration to any employee or director, or increase the salaries or wage rates
of its employees;
(m) Severance Arrangements. Grant any severance or termination pay
----------------------
(i) to any director or officer or (ii) to any other employee except (A) payments
made pursuant to standard written agreements outstanding on the date hereof or
(B) grants which are made in the ordinary course of business in accordance with
its standard past practice;
(n) Lawsuits. Commence a lawsuit other than (i) for the routine
--------
collection of bills, (ii) in such cases where it in good faith determines that
failure to commence suit would result in the material impairment of a valuable
aspect of its business, provided that it consults with Genesys prior to the
filing of such a suit, (iii) for a breach of
33
this Agreement, or (iv) otherwise to declare or enforce rights or obligations
under this Agreement;
(o) Acquisitions. Acquire or agree to acquire by merging or
------------
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, association
or other business organization or division thereof, or otherwise acquire or
agree to acquire any assets which are material, individually or in the
aggregate, to its business, or acquire or agree to acquire any equity securities
of any corporation, partnership, association or business organization;
(p) Taxes. Other than in the ordinary course of business, make or
-----
change any material election in respect of Taxes, adopt or change any accounting
method in respect of Taxes, file any material Tax Return or any amendment to a
material Tax Return, enter into any closing agreement, settle any claim or
assessment in respect of Taxes, or consent to any extension or waiver of the
limitation period applicable to any claim or assessment in respect of Taxes;
(q) Notices. Fail to give all notices and other information required
-------
to be given to the employees of Forte, any collective bargaining unit
representing any group of employees of Forte, and any applicable government
authority under the WARN Act, the National Labor Relations Act, the Internal
Revenue Code, the Consolidated Omnibus Budget Reconciliation Act, and other
applicable law in connection with the transactions provided for in this
Agreement;
(r) Revaluation. Revalue any of its assets, including without
-----------
limitation writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business; or
(s) Other. Take or agree in writing or otherwise to take, any of the
-----
actions described in Sections 5.2(a) through (r) above, or any action which
would make any of its representations or warranties contained in this Agreement
untrue or incorrect or prevent it from performing.
5.3 No Solicitation. Forte and its subsidiaries and the officers,
---------------
directors, employees or other agents of Forte and its subsidiaries will not,
directly or indirectly, (i) take any action to solicit, initiate or encourage
any Takeover Proposal (defined below) or (ii) subject to the terms of the
immediately following sentence, engage in negotiations with, or disclose any
nonpublic information relating to Forte or any of its subsidiaries to, or afford
access to the properties, books or records of Forte or any of its subsidiaries
to, any person that has advised Forte that it may be considering making, or that
has made, a Takeover Proposal. Notwithstanding the immediately preceding
sentence, if an unsolicited Takeover Proposal, or an unsolicited written
expression of interest that can reasonably be expected to lead to a Takeover
Proposal, shall be received by the Board of Directors of Forte, then, to the
extent the Board of Directors of Forte believes in good faith (after
consultation with its financial
34
advisor) that such Takeover Proposal would, if consummated, result in a
transaction more favorable to Forte's shareholders from a financial point of
view than the transaction contemplated by the Agreement (any such more favorable
Takeover Proposal being referred to in this Agreement as a "Superior Proposal")
and the Board of Directors of Forte determines in good faith after consultation
with outside legal counsel that it is necessary for the Board of Directors of
Forte to comply with its fiduciary duties to shareholders under applicable law,
Forte and its officers, directors, employees, investment bankers, financial
advisors, attorneys, accountants and other representatives retained by it may
furnish in connection therewith information and take such other actions as are
consistent with the fiduciary obligations of Forte's Board of Directors, and
such actions shall not be considered a breach of this Section 5.3 or any other
provisions of this Agreement, provided that in each such event Forte notifies
Genesys of such determination by the Forte Board of Directors and provides
Genesys with a true and complete copy of the Superior Proposal received from
such third party, if the Superior Proposal is in writing, or a complete written
summary thereof, if it is not in writing, and provides Genesys with all
documents containing or referring to non-public information of Forte that are
supplied to such third party; provided further, that (A) the Board of Directors
-------- -------
of Forte has determined, with the advice of Forte's investment bankers, that
such third party is capable of making a Superior Proposal upon satisfactory
completion of such third party's review of the information supplied by Forte,
(B) the third party has stated that it intends to make a Superior Proposal, (C)
Forte may not provide any non-public information to any such third party if it
has not prior to the date thereof provided such information to Genesys or
Genesys's representatives, (D) Forte notifies Genesys in advance of any
disclosure of non-public information to any such third party, with a description
of the information proposed to be disclosed, and (E) Forte provides such non-
public information pursuant to a non-disclosure agreement at least as
restrictive as the Confidentiality Agreement (as defined in Section 6.3). Forte
will promptly notify Genesys after receipt of any Takeover Proposal or any
notice that any person is considering making a Takeover Proposal or any request
for non-public information relating to Forte or any of its subsidiaries or for
access to the properties, books or records of Forte or any of its subsidiaries
by any person that has advised Forte that it may be considering making, or that
has made, a Takeover Proposal and will keep Genesys fully informed of the status
and details of any such Takeover Proposal notice, request or any correspondence
or communications related thereto and shall provide Genesys with a true and
complete copy of such Takeover Proposal notice or request or correspondence or
communications related thereto, if it is in writing, or a complete written
summary thereof, if it is not in writing. For purposes of this Agreement,
"Takeover Proposal" means any offer or proposal for, or any indication of
interest in, a merger or other business combination involving Forte or any of
its subsidiaries or the acquisition of any significant equity interest in, or a
significant portion of the assets of, Forte or any of its subsidiaries, other
than the transactions contemplated by this Agreement.
35
ARTICLE VI.
ADDITIONAL AGREEMENTS
---------------------
6.1 Shareholders' Consent. Forte shall promptly after the date
---------------------
hereof and prior to the Effective Time take all action necessary in accordance
with the CGCL and its Articles of Incorporation and Bylaws to solicit the
written consent or approval of the holders of a majority of the Forte Common
Stock, and use all reasonable efforts and shall not postpone such solicitation
without the consent of Genesys.
6.2 Access to Information.
---------------------
(a) Forte shall afford Genesys and its accountants, counsel and
other representatives, reasonable access during normal business hours during the
period prior to the Effective Time to (i) all of Forte's properties, books,
contracts, commitments and records, and (ii) all other information concerning
the business, properties and personnel of Forte as Genesys may reasonably
request. Forte agrees to provide to Genesys and its accountants, counsel and
other representatives copies of internal financial statements promptly upon
request. Genesys shall afford Forte and its accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to (i) all of Genesys's and its subsidiaries'
properties, books, contracts, commitments and records, and (ii) all other
information concerning the business, properties and personnel of Genesys and its
subsidiaries as Forte may reasonably request. Genesys agrees to provide to Forte
and its accountants, counsel and other representatives copies of internal
financial statements promptly upon request.
(b) Subject to compliance with applicable law, from the date
hereof until the Effective Time, each of Genesys and Forte shall confer on a
regular and frequent basis with one or more representatives of the other party
to report operational matters of materiality and the general status of ongoing
operations.
(c) No information or knowledge obtained in any investigation
pursuant to this Section 6.2 shall affect or be deemed to modify any
representation or warranty contained herein or the conditions to the obligations
of the parties to consummate the Merger.
6.3 Confidentiality. The parties acknowledge that each of Genesys
---------------
and Forte has previously executed a non-disclosure agreement (the
"Confidentiality Agreement"), which Confidentiality Agreement shall continue in
full force and effect in accordance with its terms.
6.4 Public Disclosure. Unless otherwise permitted by this Agreement,
-----------------
Genesys and Forte shall consult with each other before issuing any press release
or otherwise making any public statement or making any other public (or non-
confidential) disclosure
36
(whether or not in response to an inquiry) regarding the terms of this Agreement
and the transactions contemplated hereby, and neither shall issue any such press
release or make any such statement or disclosure without the prior approval of
the other (which approval shall not be unreasonably withheld), except as may be
required by law or by obligations pursuant to any listing agreement with any
national securities exchange or with the NASD.
6.5 Consents; Cooperation.
---------------------
(a) Each of Genesys and Forte shall promptly apply for or
otherwise seek, and use its best efforts to obtain (i) all consents and
approvals required to be obtained by it for the consummation of the Merger, (ii)
all necessary consents, waivers and approvals under any of its material
contracts listed on Schedule 2.3 in connection with the Merger for the
------------
assignment thereof or otherwise; (iii) qualification of the Merger as a tax-free
reorganization under the provisions of Sections 354(a) and 368(a) of the United
States Internal Revenue Code of 1986, as amended; and (iv) for accounting
purposes, treatment of the Merger as a pooling of interests.
(b) Notwithstanding anything to the contrary in Section 6.5(a),
(i) neither Genesys nor any of its subsidiaries shall be required to divest any
of their respective businesses, product lines or assets, or to take or agree to
take any other action or agree to any limitation that could reasonably be
expected to have a Material Adverse Effect on Genesys or of Genesys combined
with the Surviving Corporation after the Effective Time or (ii) Forte shall not
be required to divest any of its businesses, product lines or assets, or to take
or agree to take any other action or agree to any limitation that could
reasonably be expected to have a Material Adverse Effect on Forte.
(c) Genesys shall use reasonable efforts to ensure that former
Forte employees of the Surviving Corporation become eligible to participate in
Genesys' employee benefit plans (as defined in Section 13(3) of ERISA), on an
equal basis with Genesys' employees.
6.6 Legal Requirements. Each of Genesys, Merger Sub and Forte will,
------------------
and will cause their respective subsidiaries to, take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed on
them with respect to the consummation of the transactions contemplated by this
Agreement and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon such
other party in connection with the consummation of the transactions contemplated
by this Agreement and will take all reasonable actions necessary to obtain (and
will cooperate with the other parties hereto in obtaining) any consent,
approval, order or authorization of, or any registration, declaration or filing
with, any Governmental Entity or other person, required to be obtained or made
in connection with the taking of any action contemplated by this Agreement.
6.7 Blue Sky Laws. Genesys shall take such steps as may be necessary
-------------
to
37
comply with the securities and blue sky laws of all jurisdictions which are
applicable to the issuance of the Genesys Common Stock in connection with the
Merger. Forte shall use its best efforts to assist Genesys as may be necessary
to comply with the securities and blue sky laws of all jurisdictions which are
applicable in connection with the issuance of Genesys Common Stock in connection
with the Merger.
6.8 Treatment of Employees; Benefit Plans.
-------------------------------------
(a) At the Effective Time, the Forte Stock Option Plan and each
outstanding option to purchase shares of Forte Common Stock under the Forte
Stock Option Plan, whether vested or unvested, will be assumed by Genesys.
Schedule 6.8 hereto sets forth a true and complete list as of the date hereof of
------------
all holders of outstanding options under the Forte Stock Option Plan, including
the number of shares of Forte capital stock subject to each such option, the
exercise or vesting schedule, the exercise price per share and the term of each
such option. On the Closing Date, Forte shall deliver to Genesys an updated
Schedule 6.8 hereto current as of such date.
------------
(b) Each such option so assumed by Genesys under this Agreement shall
continue to have, and be subject to, the same terms and conditions set forth in
the Forte Stock Option Plan, immediately prior to the Effective Time, except
that (i) each such option will be exercisable for that number of whole shares of
Genesys Common Stock equal to the product of the number of shares of Forte
Common Stock that were issuable upon exercise of such option immediately prior
to the Effective Time multiplied by the Exchange Ratio and rounded down to the
nearest whole number of shares of Genesys Common Stock, and (ii) the per share
exercise price for the shares of Genesys Common Stock issuable upon exercise of
such assumed option will be equal to the quotient determined by dividing the
exercise price per share of Forte Common Stock at which such option was
exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded up to the nearest whole cent.
(c) Consistent with the terms of the Forte Stock Option Plan and the
documents governing the outstanding options under those Plans, the Merger will
not terminate any of the outstanding options under such Plans or accelerate the
exercisability or vesting of such options or the shares of Genesys Common Stock
which will be subject to those options upon the Genesys's assumption of the
options in the Merger. Within 10 business days after the Effective Time, Genesys
will issue to each person who, immediately prior to the Effective Time was a
holder of an outstanding option under the Forte Stock Option Plan a document in
form and substance satisfactory to Forte evidencing the foregoing assumption of
such option by Genesys; provided, however, that a form of such document shall be
-------- -------
provided to Forte no later than four (4) business days prior to the Effective
Time.
(d) For purposes of Genesys employee benefit plans, Forte employees
will receive full credit for years of service with Forte.
38
6.9 Form S-8. Genesys agrees to file, no later than thirty (30) days
--------
after the Closing, a registration statement on Form S-8 covering the shares of
Genesys Common Stock issuable pursuant to outstanding options under the Forte
Stock Option Plan assumed by Genesys. Forte shall cooperate with and assist
Genesys in the preparation of such registration statement.
6.10 Listing of Additional Shares. Genesys shall file with the Nasdaq
----------------------------
National Market a Notification Form for Listing of Additional Shares with
respect to the shares to be issued in the Merger.
6.11 SBA Loan. Genesys agrees to cause Forte to promptly repay the
--------
existing indebtedness pursuant to the loan made to Forte by the United States
Small Business Administration, as and when said loan shall become due and
payable in accordance with its terms, upon acceleration or otherwise.
6.12 Forte Tax Returns. The parties agree that the Forte Shareholders
-----------------
shall prepare and file final tax returns at their expense. The Forte
Shareholders shall provide Genesys reasonable opportunity to review and comment
on such tax returns and shall not file such tax returns until Genesys shall have
consented thereto in writing, such consent not to be unreasonably withheld.
ARTICLE VII.
INDEMNIFICATION
---------------
7.1 Indemnification by Forte and the Forte Shareholders.
---------------------------------------------------
(a) Survival of Representations, Etc. All representations,
--------------------------------
warranties, and covenants of Forte and the Forte Shareholders contained in this
Agreement shall survive Closing and the Effective Time of the Merger and remain
in full force and effect until one (1) year from the date of closing.
(b) Indemnifiable Losses. Forte and the Forte Shareholders, to
--------------------
the extent of the Escrow Shares will indemnify and hold harmless Genesys, and
its officers, directors, agents and each Person, if any, who controls or may
control Genesys within the meaning of the Securities Act (each, an "Indemnified
Person" and collectively, the "Indemnified Persons"), from and against any and
all actions, causes of actions, losses, costs, damages, liabilities and expenses
including, without limitation, reasonable legal fees and expenses ("Losses")
arising out of or relating to any misrepresentation or breach of or default in
connection with either (i) any of the representations, warranties and covenants
given or made by Forte or the Forte Shareholders, as the case may be, in this
Agreement, and any exhibit or schedule hereto or any certificate, document or
instrument delivered by or on behalf of Forte or the Forte Shareholders pursuant
hereto, or (ii) any and all actions, suits, claims or
39
legal, administrative, arbitrative, governmental or other proceedings or
investigations against any Indemnified Person incident to any of the foregoing.
Any claim for indemnification hereunder must be made in writing on or prior to
the termination of the escrow pursuant to the terms of the Escrow Agreement.
(c) Claims; Threshold Amount. Notwithstanding the foregoing, neither
------------------------
Forte nor the Forte Shareholders shall have any liability with respect to the
matters described in paragraph (a) above unless and until the aggregate amount
of Losses of which Forte and the Holders' Agent (as defined in Section 10.1)
receive written notice exceeds $50,000.00 (the "Threshold Amount"), but still
subject to the limitations set forth in Section 7.1(d). At such time as the
aggregate Losses exceed the Threshold Amount, Genesys shall be indemnified to
the full extent of all such Losses (including Losses counted in determining
whether the aggregate Losses equal or exceed the Threshold Amount), but still
subject to the limitation set forth in Section 7.1(e); provided, however, that
this paragraph shall not apply to any intentional or fraudulent breach of any
representation, warranty, covenant or obligation.
(d) Escrow. As security for the obligation to indemnify Genesys
------
hereunder, the Escrow Shares shall be deposited with the Escrow Agent pursuant
to the terms of that certain Escrow Agreement, pursuant to Section 1.7(d) of
this Agreement.
(e) Remedies. (i) Anything herein to the contrary notwithstanding,
--------
except for gross negligence, recklessness or fraud, (x) neither Forte nor the
Forte Shareholders shall be liable to Genesys or to any Indemnified Person under
this Article VII or otherwise other than to the extent of the Escrow Shares,
which for such purposes, shall include all dividends, distributions, payments,
in respect of or in exchange for such Escrow Shares (together with the Escrow
Shares referred to as the "Escrow Funds") and (y) any and all Losses to be
indemnified pursuant to this Section 7.1 shall be limited to and paid solely
with Escrow Funds. Any Losses to be indemnified pursuant to this Section 7.1
shall be reimbursed by transferring to Genesys or to the Indemnified Persons, as
the case may be, a number of Escrow Shares, subject to the preceding sentence,
calculated by dividing the amount of such claim by the Genesys Stock Price,
together with all other Escrow Funds received in respect of all such Escrow
Shares as may be necessary to satisfy such claim; (ii) Genesys and the
Indemnified Persons shall not be entitled to recover under this Section 7.1 to
the extent the subject matter of the claim is reimbursed by insurance proceeds
(including title insurance) held by the Surviving Corporation or Genesys; and
(iii) the amount of any recovery by Genesys and the Indemnified Persons pursuant
to Section 7.1 shall be net of any actual Tax benefits inuring to Genesys or
Forte to the extent such Tax benefits result from such claim.
(f) Claim Procedure.
---------------
(i) If an Indemnified Person shall have any claim against
Forte and/or the Forte Shareholders pursuant to this Agreement for which it
seeks remedy under this Article VII, it shall promptly give written notice
thereof to the Holders' Agent and the
40
Escrow Agent including in such notice a brief description of the facts upon
which such claim is based and, to the extent known, the amount thereof;
provided, that the failure to promptly give any such notice in accordance with
--------
the terms specified in this Agreement shall not affect the Indemnified Person's
right to obtain indemnity therefor to the extent that such failure does not
materially prejudice Forte; and, provided, that, in each case, notice of such
--------
claim shall have been given before the date provided in Section 7.1(a). If,
after the amount of the claim is specified by the Indemnified Person, the
Holders' Agent objects to any such claim, it may give written notice to the
Indemnified Person and the Escrow Agent within thirty (30) days of the later of
receipt of the Indemnified Person's notice of claim or the specification by the
Indemnified Person of the amount of the claim, advising the Indemnified Person
of its objection. If no such notice is timely received from the Holders' Agent
by the Indemnified Person, the Indemnified Person will be entitled to payment
from the Escrow Funds pursuant to Section 7.2, in the amount of the Loss arising
out of the claim specified in its notice of claim. If the Holders' Agent
advises the Indemnified Person within such thirty-day period that it objects to
such claim, the Indemnified Person and the Holders' Agent shall promptly meet
and use their best efforts to settle the dispute in writing. If the Indemnified
Person and the Holders' Agent are unable to reach agreement within thirty days
after the Holders' Agent objects to the claim, then the disputed portion of the
claim shall be submitted to arbitration in accordance with Section 10.9. If the
Arbitrator shall determine that the Indemnified Person is entitled to
indemnification with respect to the dispute submitted, the Indemnified Person
will be entitled to obtain payment from the Escrow Funds pursuant to Section 7,
in the amount determined by the arbitrator.
(ii) If a claim by a third party is made against an Indemnified
Person for which the Indemnified Person is entitled to indemnification under
this Article VII, the Indemnified Person shall promptly notify the Holders'
Agent in writing of such claim. Such notice shall set forth such information
with respect to such claim as is then available to the Indemnified Person,
including the liability asserted in the claim or the Indemnified Person's good
faith estimate thereof. In the event the liability asserted in such claim, or
reasonably estimated by an Indemnified Person with respect thereto, shall not
exceed the then existing balance of the Escrow Funds, then the Holders' Agent
shall have the lesser of (x) twenty (20) days after the receipt of such notice,
or (y) the period ending five (5) days before a responsive pleading is required,
to undertake to conduct and control, through counsel of its own choosing, and at
its sole risk and expense, the good faith settlement and/or defense of such
claim, and the Indemnified Person shall cooperate fully with the Holders' Agent
in connection therewith; provided: (a) the Indemnified Person shall be entitled
--------
to participate in such settlement or defense through counsel of its own
choosing, provided that the fees and expense of such counsel shall be fully
borne by the Indemnified Person, and (b) the Holders' Agent shall have, within
such aforementioned period, notified the Indemnified Person in writing of its
election to undertake the settlement or defense and confirmed in writing the
obligation of Forte to indemnify the Indemnitee for the liability asserted in
such claim. The Holders' Agent shall obtain the written consent of the
Indemnified Person, which consent shall not be unreasonably withheld, before the
Holder's Agent ceases to defend, settle or otherwise dispose of such claim if,
as a result thereof, the Indemnified Person would become
41
subject to injunctive or other equitable relief or the business of the
Indemnified Person would be materially adversely affected in any manner. So
long as the Holders' Agent is reasonably contesting any such claim in good
faith, the Indemnified Person shall fully cooperate with the Holders' Agent in
the defense or settlement of such claim as is reasonably required by the
Holders' Agent, and the Indemnified Person shall not pay or settle such claim
without the consent of the Holders' Agent; provided, however, that
-------- -------
notwithstanding the foregoing, the Indemnified Person shall have the right to
pay or settle any such claim at any time without the consent of the Holders'
Agent if, and only if, in such event, the Indemnified Person shall have waived
in writing any right to indemnification therefor. If the Holders' Agent does
not give the Indemnified Person the timely written notice of the undertaking
referred to in clause (b) of this subsection (ii) the Indemnified Person shall
thereafter have the right to contest, defend, settle or compromise the claim at
its exclusive discretion, and may recover its Losses as otherwise provided in
this Article VII.
(iii) For purposes of this Article VII, any Loss shall be
computed net of any insurance proceeds with respect thereto which reduced the
Loss that would otherwise be sustained; provided, however, that in all cases,
-------- -------
the timing of the receipt or realization of insurance proceeds shall be taken
into account in determining the amount of reduction of the Loss. In any case
where an indemnifiable claim is made and the Surviving Corporation (i) receives
a tax benefit (such as a deduction or credit) in the tax year or years following
the Effective Time of the Merger as a result of the adjustment or adjustments
giving rise to the tax claim, and/or (ii) an Indemnified Person receives tax
benefits applicable to the period prior to the Effective Time of the Merger
which either arise from the adjustment or adjustments giving rise to such claim,
or which were not carried on Forte's books as an asset on the Effective Time of
the Merger, then the amount of any such claim shall be reduced by the amount of
such tax benefits; provided, however, that, in all cases, the timing of the
-------- ------- ----
receipt or realization arising from the tax adjustment or adjustments and the
tax benefits received shall be taken into account in determining the amount of
reduction of the Loss.
(g) Escrow Distributions. Distribution of the Escrow Shares shall be
--------------------
made in the manner provided in the Escrow Agreement.
7.2 Indemnification by Genesys. For a period of one (1) year from the
--------------------------
date of Closing, Genesys will indemnify and hold harmless Forte and the Forte
Shareholders and their respective Indemnified Persons from and against any and
all Losses, arising out of or relating to any misrepresentation or breach of or
default or other action or omission in connection with either any of the
representations, warranties and covenants given or made by Genesys or Merger Sub
in this Agreement, and any exhibit or schedule hereto or any certificate,
document or instrument delivered by or on behalf of Genesys pursuant hereto, or
(ii) any and all actions, suits, claims or legal, administrative, arbitration,
governmental or other proceedings or investigations against any Indemnified
Person incident to any of the foregoing.
42
7.3 Assignments. The provisions of this Article VII are intended to
-----------
be for the benefit of, and shall be enforceable by, each Indemnified Party and
his or her heirs and representatives.
7.4 Reasonable Best Efforts and Further Assurances. Each of the
----------------------------------------------
parties to this Agreement shall use its reasonable best efforts to effectuate
the transactions contemplated hereby and to fulfill and cause to be fulfilled
the conditions to closing under this Agreement. Each party hereto, at the
reasonable request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
ARTICLE VIII.
CONDITIONS TO THE MERGER
------------------------
8.1 Conditions to Obligations of Each Party to Effect the Merger.
------------------------------------------------------------
The respective obligations of each party to this Agreement to consummate and
effect this Agreement and the transactions contemplated hereby shall be subject
to the satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by agreement of all the
parties hereto:
(a) Shareholder Approval. This Agreement and the Merger shall
--------------------
have been approved and adopted by the holders of a majority of the shares of
Forte Common Stock.
(b) Opinions. Genesys shall have received from Xxxx Xxxx Xxxx &
--------
Freidenrich, a Professional Corporation, and Forte shall have received from
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, respectively, a written opinion, dated as of
the Closing Date substantially in the forms attached hereto as Exhibits C and D
----------------
respectively.
(c) No Injunctions or Restraints; Illegality. No temporary
----------------------------------------
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Merger shall be in effect, nor
shall any proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any action taken, or any statute,
rule, regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal. In the event an
injunction or other order shall have been issued, each party agrees to use its
reasonable diligent efforts to have such injunction or other order lifted.
(d) Governmental Approval. Genesys, Forte and Merger Sub and
---------------------
43
their respective subsidiaries shall have timely obtained from each Governmental
Entity all approvals, waivers and consents, if any, necessary for consummation
of or in connection with the Merger and the several transactions contemplated
hereby, including such approvals, waivers and consents as may be required under
the Securities Act and under state Blue Sky laws.
(e) Escrow Agreement. The parties shall have executed and delivered
----------------
the Escrow Agreement in the form attached hereto as Exhibit B.
---------
(f) No Dissenting Shares. No Forte Shareholder shall have demanded
--------------------
appraisal for any shares of Forte Common Stock in accordance with Section 1300
of the CGCL.
8.2 Additional Conditions to Obligations of Forte. The obligations of
---------------------------------------------
Forte to consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing, by
Forte:
(a) Representations, Warranties and Covenants. (i) The
-----------------------------------------
representations and warranties of Genesys and Merger Sub in this Agreement shall
be true and correct in all material respects (except for such representations
and warranties that are qualified by their terms by a reference to materiality
which representations and warranties as so qualified shall be true in all
respects) on and as of the Effective Time as though such representations and
warranties were made on and as of such time and (ii) Genesys and Merger Sub
shall have performed and complied in all material respects with all covenants,
obligations and conditions of this Agreement required to be performed and
complied with by them as of the Effective Time.
(b) Certificate of Genesys. Forte shall have been provided with a
----------------------
certificate executed on behalf of Genesys by its Chief Financial Officer to the
effect that, as of the Effective Time:
(i) all representations and warranties made by Genesys and Merger
Sub under this Agreement are true and complete in all material respects; and
(ii) all covenants, obligations and conditions of this Agreement
to be performed by Genesys and Merger Sub on or before such date have been so
performed in all material respects.
(c) No Material Adverse Changes. There shall not have occurred any
---------------------------
material adverse change in the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, operations, results
of operations or prospects of Genesys and its subsidiaries, taken as a whole.
44
(d) Injunctions or Restraints on Conduct of Business. No temporary
------------------------------------------------
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint
provision limiting or restricting Genesys's business following the Merger shall
be in effect, nor shall any proceeding brought by an administrative agency or
commission or other Governmental Entity, domestic or foreign, seeking the
foregoing be pending.
(e) Registration Rights Agreement. The parties shall have executed
-----------------------------
and delivered a registration rights agreement in substantially the form attached
hereto as Exhibit E.
---------
(f) Tax Free Reorganization. For federal income tax purposes, the
-----------------------
Merger will qualify as a reorganization under the provisions of Section 368(a)
of the United States Internal Revenue Code of 1986, as amended.
8.3 Additional Conditions to the Obligations of Genesys and Merger Sub.
------------------------------------------------------------------
The obligations of Genesys and Merger Sub to consummate and effect this
Agreement and the transactions contemplated hereby shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, by Genesys:
(a) Representations, Warranties and Covenants. (i) The
-----------------------------------------
representations and warranties of Forte in this Agreement shall be true and
correct in all material respects (except for such representations and warranties
that are qualified by their terms by a reference to materiality, which
representations and warranties as so qualified shall be true in all respects) on
and as of the Effective Time as though such representations and warranties were
made on and as of such time and (ii) Forte shall have performed and complied in
all material respects with all covenants, obligations and conditions of this
Agreement required to be performed and complied with by it as of the Effective
Time.
(b) Certificate of Forte. Genesys shall have been provided with a
--------------------
certificate executed on behalf of Forte by its President to the effect that, as
of the Effective Time:
(i) all representations and warranties made by Forte under this
Agreement are true and complete in all material respects; and
(ii) all covenants, obligations and conditions of this Agreement
to be performed by Forte on or before such date have been so performed in all
material respects.
(c) Injunctions or Restraints on Conduct of Business. No temporary
------------------------------------------------
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint
provision limiting or restricting
45
Genesys's conduct or operation of the business of Forte, following the Merger
shall be in effect, nor shall any proceeding brought by an administrative agency
or commission or other Governmental Entity, domestic or foreign, seeking the
foregoing be pending.
(d) No Material Adverse Changes. There shall not have occurred any
---------------------------
material adverse change in the condition (financial or otherwise), properties,
assets (including intangible assets), liabilities, business, operations, results
of operations or prospects of Forte.
(e) Delivery of Forte Stock Certificates. The Forte Shareholders
------------------------------------
shall have delivered to Genesys or the Exchange Agent at the Closing
certificates for all shares of Forte Common Stock.
(f) Investor Questionnaire; Investment Representation Letter and
------------------------------------------------------------
Affiliate Agreement. Each Forte Shareholder shall have executed and delivered
-------------------
in substantially the forms attached hereto as Exhibits F, G and H, respectively.
-------------------
(g) Pooling Letter. Genesys shall have received a letter from Xxxxxx
--------------
Xxxxxxxx LLP, in form and substance reasonably satisfactory to Genesys, to the
effect that the transactions contemplated by this Agreement will be accounted
for by Genesys as a "pooling of interests" under generally acceptable principles
and the rules, regulations and polices of the SEC.
(h) Non-Competition and Non-Interference Agreements. Each person
-----------------------------------------------
listed on Schedule 8.3(i)-1 shall have entered into and delivered a Non-
Competition and Non-Interference Agreement in the form attached hereto as
Exhibit I and each person listed on Schedule 8.3(i)-2 shall have entered into
---------
and delivered a Non-Competition and Non-Interference Agreement in the form
attached as Exhibit J.
---------
ARTICLE IX.
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
9.1 Termination. At any time prior to the Effective Time, whether before
-----------
or after approval of the matters presented in connection with the Merger by the
shareholders of Forte, this Agreement may be terminated:
(a) by mutual consent of Genesys and Forte;
(b) by either Genesys or Forte, if, without fault of the terminating
party, the Closing shall not have occurred on or before December 31, 1997 (or
such later date as may be agreed upon in writing by the parties hereto);
46
(c) by Genesys, if (i) Forte shall breach any of its representations,
warranties or obligations hereunder and such breach shall not have been cured
within ten business days of receipt by Forte of written notice of such breach or
(ii) the Board of Directors of Forte shall have withdrawn or modified its
recommendation of this Agreement or the Merger in a manner adverse to Genesys or
shall have resolved to do any of the foregoing;
(d) by Forte, if Genesys shall breach any of its representations,
warranties or obligations hereunder and such breach shall not have been cured
within ten days following receipt by Genesys of written notice of such breach;
(e) by either Genesys or Forte 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 or (ii) if any required
approval of the shareholders of Forte shall not have been obtained by reason of
the failure to obtain the required vote upon a vote held at a duly held meeting
of shareholders or at any adjournment thereof or any shareholder consent.
9.2 Effect of Termination. In the event of termination of this Agreement
---------------------
as provided in Section 9.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Genesys, Merger Sub or Forte
or their respective officers, directors, shareholders or affiliates, except to
the extent that such termination results from the breach by a party hereto of
any of its representations, warranties or covenants set forth in this Agreement;
provided that, the provisions of Section 6.3 (Confidentiality), Section 9.3
(Expenses) and this Section 9.2 shall remain in full force and effect and
survive any termination of this Agreement.
9.3 Expenses.
--------
(a) Subject to subsections (b) and (c) of this Section 9.3, whether or
not the Merger is consummated, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby (including, without
limitation, the fees and expenses of its advisers, accountants and legal
counsel) shall be paid by the party incurring such expense, except the listing
of additional shares pursuant to Section 6.10 and fees, costs and expenses
associated with compliance with applicable state securities laws in connection
with the Merger shall be paid by Genesys; provided however that Forte or the
Surviving Corporation shall not become obligated to pay any fees or expenses
incurred by its advisors, accountants and legal counsel in excess of $50,000.00.
(b) In the event that (i) Genesys shall terminate this Agreement
pursuant to Section 9.1(c) or (ii) Genesys shall terminate this Agreement
pursuant to Section 9.1(e)(ii), Forte shall promptly reimburse Genesys for all
of the out-of-pocket costs and expenses incurred by Genesys in connection with
this Agreement and the transactions contemplated hereby (including, without
limitation, the fees and expenses of its advisors, accountants and legal
counsel).
47
(c) In the event that (i) Forte shall terminate this Agreement
pursuant to Section 9.1(d), Genesys shall promptly reimburse Forte for all of
the out-of-pocket costs and expenses incurred by Forte in connection with this
Agreement and the transactions contemplated hereby (including, without
limitation, the fees and expenses of its advisors, accountants and legal
counsel).
9.4 Amendment. The boards of directors of the parties hereto may
---------
cause this Agreement to be amended at any time by execution of an instrument in
writing signed on behalf of each of the parties hereto; provided that an
amendment made subsequent to adoption of the Agreement by the shareholders of
Forte or Genesys shall not (i) alter or change the amount or kind of
consideration to be received on conversion of the Forte Common Stock, (ii) alter
or change any term of the Articles of Incorporation of the Surviving Corporation
to be effected by the Merger, or (iii) alter or change any of the terms and
conditions of the Agreement if such alteration or change would adversely affect
the holders of Forte Common Stock or Genesys Common Stock.
9.5 Extension; Waiver. At any time prior to the Effective Time any
-----------------
party hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE X.
GENERAL PROVISIONS
------------------
10.1 Holders' Agent.
--------------
(a) The Forte Shareholders shall be represented hereunder by
Xxxxxxx Dazler Xxxxx (the "Holders' Agent"), and the Holders' Agent is hereby
irrevocably constituted and appointed as the true and lawful agent and attorney-
in-fact of the Forte Shareholders to act on behalf of the Forte Shareholders as
provided herein. The Holders' Agent is authorized to take any actions deemed by
it appropriate or necessary to carry out the provisions of, and to determined
the rights of the Forte Shareholders to, this Agreement. The Holders' Agent is
designated as the sole and exclusive agent for the Forte Shareholders for all
purposes related to this Agreement (including, without limitation, (i) service
of process upon the Forte Shareholders, (ii) receipt of all notices on behalf of
the Forte Shareholders with respect to any matter, suit, claim, action or
proceeding arising with respect to the Merger or any arbitration or transaction
contemplated by this Agreement, including, without limitation, the defense,
settlement or compromise of any claim, action, or proceeding for which any
48
Indemnified Person pursuant to Article VII hereof or which may be brought
against any Forte Shareholder to enforce such indemnity), and the Forte
Shareholders may act only through the Holders' Agent. Following the Effective
Time of the Merger, Merger Sub and Forte shall be entitled to rely on the
Holders' Agent's authority as the agent of the Forte Shareholders for all
purposes hereunder and shall have no liability for any such reliance. The Forte
Shareholders may not revoke the authority of the Holders' Agent unless a
majority in interest of the Forte Shareholders notify Genesys at least thirty
(30) days in advance of such revocation and appoint a new Holders' Agent to
serve in its place. Each Forte Shareholder hereby ratifies and confirms, and
hereby agrees to ratify and confirm, any action taken by the Holders' Agent in
the exercise of the power-of-attorney granted to the Holders' Agent pursuant to
this Section 10.1, which power-of-attorney, being coupled with an interest, is
irrevocable and shall survive the death, incapacity or incompetence of such
Forte Shareholder.
(b) The Holders' Agent (i) shall not be liable to any of the Forte
Shareholders for any action taken in accordance with the written consent of the
Forte Shareholders who, prior to the Merger, owned a majority of the shares of
Common Stock of the Forte Shareholders, or for any error of judgment, act done
or omitted by it in good faith, or mistake of fact or law unless caused by its
own gross negligence or willful misconduct; (ii) shall be entitled to treat any
letter or other document furnished by Genesys, Merger Sub, the Surviving
Corporation or any Forte Shareholder as genuine and having been signed and
presented by the proper party or parties; and (iii) shall be reimbursed by the
Forte Shareholders for counsel fees and other out-of-pocket expenses incurred by
it in connection with this Agreement.
(c) The Holders' Agent may be removed by a majority vote or consent of
the Forte Shareholders. In the event of the death of removal of the Holders'
Agent, a new Holders' Agent shall be elected by a majority vote or consent of
the Forte Shareholders. The Holders' Agent shall promptly inform Genesys in
writing upon the election of a new Holders' Agent. If at any time there shall
not be a Holders' Agent or the Forte Shareholders shall fail to appoint a
Holders' Agent, then either the Surviving Corporation or a Forte Shareholder may
have a court of competent jurisdiction appoint a Holders' Agent.
10.2 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following address (or at such other address for a party as shall be
specified by like notice):
49
(a) if to Genesys or Merger Sub, to:
Genesys Telecommunications Laboratories, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
Xxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) if to Forte or the Holders' Agent, to:
Forte Advanced Management Software, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Dazler Xxxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
Xxxx Xxxx Xxxx & Freidenrich
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: J. Xxxxxx Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
10.3 Interpretation. When a reference is made in this Agreement to
--------------
Exhibits or Schedules, such reference shall be to an Exhibit or Schedule to this
Agreement unless otherwise indicated. The words "include," "includes" and
"including" when used herein shall be deemed in each case to be followed by the
words "without limitation." The 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.
10.4 Counterparts. This Agreement may be executed in one or more
------------
50
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
10.5 Entire Agreement; Nonassignability; Parties in Interest. This
-------------------------------------------------------
Agreement and the documents and instruments and other agreements specifically
referred to herein or delivered pursuant hereto, including the Exhibits, the
Schedules, including the Forte Disclosure Schedule and the Genesys Disclosure
Schedule (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, except for the Confidentiality Agreement, which shall continue in full
force and effect, and shall survive any termination of this Agreement or the
Closing, in accordance with its terms; (b) are not intended to confer upon any
other person any rights or remedies hereunder, except as set forth in Article
VII; and (c) shall not be assigned by operation of law or otherwise except as
otherwise specifically provided.
10.6 Severability. In the event that any provision of this Agreement,
------------
or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
10.7 Remedies Cumulative. Except as otherwise provided herein, any
-------------------
and all remedies herein expressly conferred upon a party will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
law or equity upon such party, and the exercise by a party of any one remedy
will not preclude the exercise of any other remedy.
10.8 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California. Each of the parties
hereto irrevocably consents to the exclusive jurisdiction of any court located
within the State of California in connection with any matter based upon or
arising out of this Agreement or the matters contemplated herein, agrees that
process may be served upon them in any manner authorized by the laws of the
State of California for such persons and waives and covenants not to assert or
plead any objection which they might otherwise have to such jurisdiction and
such process.
10.9 Arbitration.
-----------
(a) For purposes of arbitration pursuant to Section 7.1(f), the
Surviving Corporation and the Holders' Agent shall each select an arbitrator to
serve on a three party arbitration panel and the arbitrators so selected shall
select the third arbitrator to
51
serve on such panel. If the selected arbitrator declines or is unable to serve
for any reason, the appointed arbitrators shall select another arbitrator. Upon
their failure to agree on another arbitrator, the jurisdiction of any court of
the State of California shall be invoked to make such selection.
(b) Any arbitration pursuant to Section 7.1(f), shall be
conducted as follows:
(i) The arbitrator shall follow the Commercial Arbitration
Rules of the American Arbitration Association, except as otherwise provided
herein. The arbitrator shall substantially comply with the rules of evidence;
shall grant essential but limited discovery; shall provide for the exchange of
witness lists and exhibit copies; and shall conduct a pretrial and consider
dispositive motions. Each party shall have the right to request the arbitrator
to make findings of specific factual issues.
(ii) The arbitrator shall complete its proceedings and
render its decision within 40 days after submission of the dispute to it, unless
both parties agree to an extension. Each party shall cooperate with the
arbitrator to comply with procedural time requirements and the failure of either
to do so shall entitle the arbitrator to extend the arbitration proceedings
accordingly and to impose sanctions on the party responsible for the delay,
payable to the other party. In the event the arbitrator does not fulfill its
responsibilities on a timely basis, either party shall have the right to require
a replacement and the appointment of a new arbitrator.
(iii) The decision of the arbitrator shall be final and
binding upon the parties and accordingly a judgment by any court of the State of
California or any other court of competent jurisdiction may be entered in
accordance therewith.
(iv) Any arbitration shall be conducted in the State of
California.
(c) The costs of the arbitration conducted pursuant to this Agreement
shall be borne equally by the parties to such arbitration, except that each
party shall bear its own legal and accounting expenses and other expenses
relating to its participation in such arbitration.
10.10 Rules of Construction. The parties hereto agree that they have
---------------------
been represented by counsel during the negotiation, preparation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
52
IN WITNESS WHEREOF, Forte and Genesys have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized,
all as of the date first written above.
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
By /s/ Xxxxxxx X. XxXxxxxxx
---------------------------------
Xxxxxxx X. XxXxxxxxx
Chief Operating Officer, Chief Financial
Officer, Vice President, Finance and
International
FORTE ADVANCED MANAGEMENT
SOFTWARE, INC.
By /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx
President
FORTE SHAREHOLDERS:
NUMBER OF SHARES HELD
/s/ Xxxxxxxxx X. Xxxxx
------------------ ---------------------------------
Name: Xxxxxxxxx X. Xxxxx, formerly Xxxx X.
Xxxxxxxxxx
/s/ Xxxxx Xxxxx
------------------ ---------------------------------
Name: Xxxxx Xxxxx
/s/ Xxxxxxxxxxx Xxxx
------------------ ---------------------------------
Name: Xxxxxxxxxxx Xxxx
/s/ Xxxxx X. Xxxxxxxxxx
------------------ ---------------------------------
Name: Xxxxx X. Xxxxxxxxxx
/s/ Xxxx Xxxxxxxxx
------------------ ---------------------------------
Name: Xxxx Xxxxxxxxx
/s/ Xxxxxxx Xxxxx
------------------ ---------------------------------
Name: Xxxxxxx Xxxxx
/s/ Xxxx Xxxxxx
------------------ ---------------------------------
Name: Xxxx Xxxxxx
[SIGNATURE PAGE TO MERGER AGREEMENT]
53
TABLE OF DEFINED TERMS
Page
----
"Agreement".................................. 1
"CGCL"....................................... 2
"Closing".................................... 2
"Closing Date"............................... 2
"COBRA"...................................... 20
"Confidentiality Agreement".................. 36
"Effective Time"............................. 2
"ERISA"...................................... 18
"Exchange Agent"............................. 4
"Forte"...................................... 1
"Forte Balance Sheet"........................ 8
"Forte Balance Sheet Date"................... 8
"Forte Common Stock"......................... 1
"Forte Disclosure Schedule".................. 6, 22
"Forte Employee Plans"....................... 18
"Forte Financial Statements"................. 8
"Forte Shareholders"......................... 1
"Forte Stock Option Plan".................... 3
"GAAP"....................................... 19
"Genesys Common Stock"....................... 1
1
"Genesys".................................... 1
"Genesys Balance Sheet"...................... 27
"Genesys Balance Sheet Date"................. 27
"Genesys Disclosure Schedule"................ 25
"Genesys SEC Documents"...................... 26
"Governmental Entity"........................ 8
"Indemnified Persons"........................ 39
"Intellectual Property"...................... 10
"Losses"..................................... 39
"Merger"..................................... 1
"Merger Agreement"........................... 2
"Merger Sub"................................. 1
"Merger Sub Common Stock".................... 3
"Rule 144"................................... 22
"SEC"........................................ 26
"Securities Act"............................. 4
"Software"................................... 12
"Surviving Corporation"...................... 2
"Third Party Intellectual Property Rights"... 10
"Threshold Amount"........................... 40
2
Schedule 8.3(i)-1
Party to Executive Non-Competition and Non-Interference Agreement
-----------------------------------------------------------------
Xxxxxxx Dazler Xxxxx
Schedule 8.3(i)-2
Parties to Employee Non-Competition and Non-Interference Agreement
------------------------------------------------------------------
Xxxxx Xxxxx
Xxxxxxxxxxx Xxxx
Xxxx Xxxxxxxxx
Xxxx Xxxxxx
EXHIBIT A
AGREEMENT OF MERGER
OF
FORTE ADVANCED MANAGEMENT SOFTWARE, INC.
GENESYS-F SUB, INC.
AND
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
This Agreement of Merger, dated as of the 31st day of December, 1997
("Merger Agreement") is made by and among Forte Advanced Management Software,
----------------
Inc., a California corporation ("Forte" or the "Surviving Corporation") and
----- ---------------------
Genesys-F Sub, Inc. ("Merger Sub"), a California corporation and a wholly owned
----------
subsidiary of Genesys Telecommunications Laboratories, Inc., a California
corporation ("Genesys").
-------
RECITALS
--------
X. Xxxxx was incorporated in the State of California on May 3, 1977
and on the date hereof has outstanding 3,419,529 shares of Common Stock ("Forte
-----
Common Stock") and 463,315 shares of Forte Common Stock which are subject to
------------
issuance upon the exercise of Forte's outstanding stock options.
B. Merger Sub was incorporated in the State of California on December
18, 1997 and on the date hereof has 1,000 shares of its Common Stock
outstanding, all which are owned by Genesys.
X. Xxxxx, Genesys, Merger Sub and the Shareholders of Forte (the
"Forte Shareholders") have entered into an Agreement and Plan of Reorganization
-------------------
(the "Agreement of Reorganization") providing for certain representations,
---------------------------
warranties, covenants and agreements in connection with the transactions
contemplated hereby. This Merger Agreement and the Agreement of Reorganization
are intended to be construed together to effectuate their purpose.
D. The Boards of Directors of Forte, Merger Sub, and Genesys deem it
advisable and in their mutual best interests and in the best interests of the
shareholders of Forte and Merger Sub, respectively, that Forte be acquired by
Genesys through a merger ("Merger") of Merger Sub with and into Forte.
------
E. The Boards of Directors of Forte, Genesys, and Merger Sub and the
shareholders of Forte and Merger Sub have approved the Merger.
AGREEMENTS
----------
The parties hereto hereby agree as follows:
1. Merger Sub shall be merged with and into Forte, and Forte shall
be the surviving corporation.
2. The Merger shall become effective at such time (the "Effective
---------
Time" of the Merger) as this Merger Agreement and the officers' certificates of
----
Merger Sub and Forte are filed with the Secretary of State of the State of
California pursuant to Section 1103 of the Corporations Code of the State of
California.
3. By virtue of the Merger and without any action on the part of
Merger Sub, Forte or the holders of any of the following securities, subject to
the provisions of this Section 3:
(a) Conversion of Forte Common Stock. At the Effective Time, each
--------------------------------
share of Forte Common Stock issued and outstanding immediately prior to the
Effective Time (other than any shares of Forte Common Stock to be canceled
pursuant to Section 3(b)) will be canceled and extinguished and be converted
automatically into the right to receive 0.195086 shares of common stock of
Genesys (the "Genesys Common Stock"). At the Effective Time, all rights in
--------------------
respect of such shares of Forte Common Stock shall cease to exist, other than
the right to receive shares of Genesys Common Stock as provided above. Until
surrendered, each outstanding certificate, if any, which prior to the Effective
Time represented issued and outstanding shares of Forte Common Stock shall be
deemed for all corporate purposes to evidence the right to receive such amount
of Genesys Common Stock. The number of shares of Genesys Common Stock to be
issued pursuant hereto in exchange for each share of Forte Common Stock shall be
referred to as the "Exchange Ratio."
--------------
(b) Cancellation of Forte Common Stock Owned by Genesys or Forte. At
------------------------------------------------------------
the Effective Time, all shares of Forte Common Stock that are owned by Forte as
treasury stock and each share of Forte Common Stock owned by Genesys or any
direct or indirect wholly owned subsidiary of Genesys immediately prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.
(c) Forte Stock Option Plan. At the Effective Time, the 1996 Stock
-----------------------
Option Plan (the "Forte Stock Option Plan") and all options or rights to
-----------------------
purchase Forte Common Stock then outstanding under the Forte Stock Option Plan
shall be assumed by Genesys in accordance with Section 6.8 of the Agreement of
Merger and Plan of Reorganization.
2.
(d) Capital Stock of Merger Sub. At the Effective Time, each share of
---------------------------
Common Stock, $.10 par value, of Merger Sub ("Merger Sub Common Stock")
-----------------------
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of Common Stock, $.10 par value, of the Surviving
Corporation. Each stock certificate of Merger Sub evidencing ownership of any
such shares shall continue to evidence ownership of such shares of capital stock
of the Surviving Corporation.
(e) Certain Adjustments to Exchange Ratio. The Exchange Ratio shall
-------------------------------------
be adjusted to reflect fully the effect of any stock split, reverse split, stock
dividend (including any dividend or distribution of securities convertible into
Genesys Common Stock or Forte Common Stock), reorganization, recapitalization or
other like change with respect to Genesys Common Stock or Forte Common Stock
occurring after the date hereof and prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Genesys Common Stock
-----------------
will be issued in the Merger. In lieu of any fractional shares that would
otherwise be issuable in the Merger in exchange for shares of Forte Common
Stock, Genesys shall pay in cash the proportionate amount of such fractional
share.
(g) Private Placement. The Genesys Common Stock to be issued in the
-----------------
Merger are intended to be exempt from registration requirements of the
Securities Act of 1933 (the "Securities Act") pursuant to the private placement
--------------
exemption provided by Section 4(2) of the Securities Act and applicable state
securities laws. Each Forte Shareholder hereby agrees to take all reasonable
actions and execute all documents to qualify issuance of the Genesys Common
Stock for such exemptions.
4. Any Dissenting Shares shall not be converted into Genesys Common
Stock but shall be converted into the right to receive such consideration as may
be determined to be due with respect to such Dissenting Shares pursuant to the
law of the State of California. If after the Effective Time any Dissenting
Shares shall lose their status as Dissenting Shares, then as of the occurrence
of the event which causes the loss of such status, such shares shall be
converted into Genesys Common Stock in accordance with Section 3.
5. The conversion of Forte Common Stock into Genesys Common Stock as
provided by this Merger Agreement shall occur automatically at the Effective
Time of the Merger without action by the holders thereof. Each holder of Forte
Common Stock shall thereupon be entitled to receive shares of Genesys Common
Stock in accordance with Section 3. Such shareholder shall receive certificates
that represent that number of shares of Genesys Common Stock in accordance with
the following procedures:
(a) Exchange Agent. Boston Equiserve shall act as exchange agent (the
--------------
"Exchange Agent") in the Merger.
--------------
3.
(b) Genesys to Provide Common Stock and Cash. At the closing, Genesys
----------------------------------------
shall deliver to the Exchange Agent for exchange in accordance with Section 3,
(i) the shares of Genesys Common Stock issuable in exchange for shares of Forte
Common Stock and (ii) cash in an amount sufficient to permit payment of cash in
lieu of fractional shares pursuant to Section 3.
(c) Delivery of Certificates for Forte Common Stock. At the Closing,
-----------------------------------------------
each Forte Shareholder shall deliver to the Exchange Agent the certificate or
certificates for all shares of Forte Common Stock owned by such Forte
Shareholder to be exchanged for certificates for shares of Genesys Common Stock
issuable in the Merger.
(d) Issuance, Delivery and Deposit of Escrow Shares. At the Closing,
-----------------------------------------------
the Exchange Agent shall cause to be issued in the name of each Forte
Shareholder a certificate for ten percent (10%) of the aggregate number of
shares of Genesys Common Stock to be received by such Forte Shareholder in the
Merger (the "Escrow Shares"), and shall cause such Escrow Shares to be
-------------
deposited, on behalf of such Forte Shareholders, with Boston Equiserve, in its
capacity as escrow agent ("Escrow Agent") pursuant to the Escrow Agreement
------------
attached as Exhibit B to the Agreement of Reorganization (the "Escrow
--------- ------
Agreement"), to be held in escrow in accordance with the terms and conditions of
---------
the Escrow Agreement.
(e) Issuance and Delivery of Shares; Payment in Lieu of Fractional
--------------------------------------------------------------
Shares. At the Closing, the Exchange Agent shall cause to be issued in the name
------
of each Forte Shareholder a certificate for ninety percent (90%) of the
aggregate number of shares of Genesys Common Stock to be received by such Forte
Shareholder in the Merger, and shall cause such shares to be delivered to such
Forte Shareholder, and shall pay to such Forte Shareholder the amount which such
Forte Shareholder has the right to receive in lieu of fractional shares, if any,
pursuant to Section 3.
(f) Transfer Restrictions; Legends. The shares of Genesys Common Stock
------------------------------
issued in the Merger shall not be transferable in the absence of an effective
registration statement under the Securities Act or an exemption therefrom. In
the absence of an effective registration statement under the Securities Act,
neither such shares of Genesys Common Stock nor any interest therein shall be
sold, transferred, assigned or otherwise disposed of, unless Genesys shall have
previously received an opinion of counsel knowledgeable in federal securities
law, in form and substance reasonably satisfactory to Genesys and accompanied by
such supporting documents as Genesys may reasonably request, to the effect that
registration under the Securities Act is not required in connection with such
disposition. Genesys shall be entitled to give stop transfer instructions to
its transfer agent with respect to such shares of Genesys Common Stock in order
to enforce the foregoing restrictions.
The certificate or certificates representing the shares of Genesys
Common Stock issued in the Merger shall bear the following legend restricting
the transfer thereof, in addition to any other legend required by applicable
law:
4.
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."
6. At the Effective Time, the effect of the Merger shall be as
provided in this Merger Agreement, the Agreement of Reorganization and the
applicable provisions of the California General Corporation Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of Forte and
Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities
and duties of Forte and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
7. This Merger Agreement is intended as a plan of reorganization
within the meaning of Sections 354(a) and 368(a) of the Internal Revenue Code of
1986, as amended.
8. The Articles of Incorporation of Forte in effect immediately
prior to the Effective Time shall be the Articles of Incorporation of Forte as
the Surviving Corporation after the Merger.
9. (a) Notwithstanding the approval of this Merger Agreement by the
shareholders of Forte and Merger Sub, this Merger Agreement may be terminated at
any time prior to the Effective Time of the Merger by mutual agreement of the
Merger Sub and Forte.
(b) This Merger Agreement shall terminate forthwith in the event that
the Agreement of Reorganization shall be terminated as therein provided.
(c) In the event of the termination of this Merger Agreement as
provided above, this Merger Agreement shall forthwith become void and there
shall be no liability on the part of Forte, Genesys or Merger Sub or their
respective officers or directors, except as otherwise provided in the Agreement
of Reorganization.
(d) This Merger Agreement may be signed in one or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
agreement.
(e) This Merger Agreement may be amended by the parties hereto any
time before or after approval hereof by the shareholders of Forte and Merger
Sub, but, after such approval, no amendments shall be made which by law require
the further approval of such shareholders without obtaining such approval. This
Merger Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
5.
IN WITNESS WHEREOF, the parties have executed this Merger Agreement as
of the date first written above.
FORTE ADVANCED MANAGEMENT
SOFTWARE, INC.
By:
-----------------------------------------------
Name:
Title:
By:
-----------------------------------------------
Name:
Title:
GENESYS-F SUB, INC.
By:
-----------------------------------------------
Name:
Title:
By:
-----------------------------------------------
Name:
Title:
6.
OFFICERS' CERTIFICATE
OF
FORTE ADVANCED MANAGEMENT SOFTWARE, INC.
Xxxxxxx Dazler Xxxxx, President, and Xxxxx Xxxxx, Secretary, of Forte
Advanced Management Software, Inc., a corporation duly organized and existing
under the laws of the State of California (the "Corporation"), do hereby
-----------
certify:
1. That they are the duly elected, acting and qualified President
and the Secretary, respectively, of the Corporation.
2. There is one authorized class of shares, consisting of 10,000,000
shares of Common Stock. There were 3,419,529 shares of Common Stock outstanding
and entitled to vote on the Agreement of Merger in the form attached.
3. The Agreement of Merger in the form attached was duly approved by
the board of directors of the Corporation in accordance with the General
Corporation Law of the State of California.
4. Approval of the Agreement of Merger by the holders of at least
51% of the outstanding shares of Common Stock was required. The percentage of
the outstanding shares of the only class of the Corporation's shares entitled to
vote on the Agreement of Merger which voted to approve the Agreement of Merger
equaled or exceeded the vote required.
Each of the undersigned declares under penalty of perjury that the
statements contained in the foregoing certificate are true of their own
knowledge. Executed in San Francisco, California, on ______________, 1997.
Name:
Title:
Name:
Title:
2.
OFFICERS' CERTIFICATE
OF
GENESYS-F SUB, INC.
Xxxxxxx XxXxxxxx, President and Xxxxx Xxxxx, Secretary of Genesys-F
Sub, Inc., a corporation duly organized and existing under the laws of the State
of California (the "Corporation"), do hereby certify:
-----------
1. That they are the duly elected, acting and qualified President
and Secretary, respectively, of the Corporation.
2. There is only one authorized class of shares, consisting of 1000
shares of Common Stock, and the total number of issued and outstanding shares is
1000.
3. The Agreement of Merger in the form attached was approved by the
board of directors and the shareholder of the Corporation in accordance with the
General Corporation Law of the State of California.
4. The shareholder approval was by the holder of 100% of the
outstanding shares of the Corporation.
5. No vote of the shareholders of Genesys Telecommunications
Laboratories, Inc. (the sole shareholder of the Corporation and the parent of
the Corporation) was required.
Each of the undersigned declares under penalty of perjury that the
statements contained in the foregoing certificate are true of their own
knowledge. Executed in San Francisco, California, on __________________, 1997.
Name:
Title:
Name:
Title:
2.
Exhibit B
ESCROW AGREEMENT
----------------
This ESCROW AGREEMENT (the "Agreement") is made as of December 31,
---------
1997 by and among GENESYS TELECOMMUNICATIONS LABORATORIES, INC., a California
corporation ("Buyer"), XXXXXXX DAZLER XXXXX, as representative ("Shareholders'
----- -------------
Representative") for the holders of common and preferred stock of Seller (as
--------------
defined) (the "Shareholders") and State Street Bank and Trust Company, a
------------
Massachusetts banking corporation, as escrow agent (the "Escrow Agent").
------------
RECITALS
--------
WHEREAS, this Agreement is being entered into by the parties pursuant
to Section 1.7(d) of that certain Agreement and Plan of Reorganization, dated as
of December 31, 1997, by and among Buyer, Genesys-F Sub, Inc. ("Merger Sub"), a
----------
California corporation and a wholly-owned subsidiary of Buyer and Forte Advanced
Management Software, Inc., a California corporation ("Seller") (the "Agreement
------ ---------
of Reorganization"; terms defined in the Agreement of Reorganization and not
-----------------
otherwise defined herein being used herein as therein defined), pursuant to
which (i) Merger Sub will be merged with and into Seller (the "Merger") with
------
Seller being the surviving corporation (the "Surviving Corporation") and each
---------------------
outstanding share of common stock of Seller ("Seller Stock") will be cancelled
------------
and converted into a right to receive shares of common stock, no par value per
share, of Buyer ("Buyer Common") and (ii) Buyer shall acquire from the
------------
Shareholders all of the outstanding capital stock of Seller, all on the terms
and conditions set forth in the Agreement of Reorganization;
WHEREAS, as a condition of Buyer's execution and performance of the
Agreement of Reorganization, Seller and the Shareholders are required to
indemnify Buyer and its respective officers, directors, agents and affiliates
(collectively, the "Buyer Parties") for certain Losses (as defined in the
-------------
Agreement of Reorganization) that the Buyer Parties may incur;
WHEREAS, pursuant to the Agreement of Reorganization, the Shareholders
shall cause to be transferred to the Escrow Agent, as security for potential
Losses incurred by Buyer, the shares of Buyer Common set forth on Exhibit 1
hereto, constituting an aggregate of 66,707 shares of Buyer Common (which amount
represents approximately 10% of the aggregate number of shares of Buyer Common
into which such Seller Stock has been converted pursuant to the Agreement of
Reorganization and which are issuable to such Shareholders pursuant to the
Agreement of Reorganization, rounded down to the nearest whole number of shares
of Buyer Common for each Shareholder), to be held by the Escrow Agent upon the
terms and conditions set forth herein (for purposes of this Agreement, the term
"Escrow Fund" shall refer to the shares of Buyer Common held by the Escrow Agent
-----------
from time to time pursuant to this agreement, including any Stock Dividends (as
defined below) that may be held by the Escrow Agent from time to time); and
WHEREAS, pursuant to the Agreement of Reorganization, Xxxxxxx Dazler
Xxxxx has duly been appointed as the Shareholders' Representative.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties agree as follows:
SECTION 1. Establishment of Escrow.
-----------------------
(a) Buyer and, on behalf of the other Shareholders, the Shareholders'
Representative, hereby appoint the Escrow Agent to serve as agent for the
purpose of holding and distributing the Escrow Fund upon the terms and
conditions herein set forth and the Escrow Agent accepts such appointment
subject to the terms and conditions hereof. Simultaneously with the execution
of this Agreement, each Shareholder has deposited with the Escrow Agent, for
credit to a book entry account for each such Shareholder maintained by the
Escrow Agent (each, an "Account"), a certificate (each such certificate, as the
-------
same may be replaced by Returned Certificates (as defined below), from time to
time, collectively the "Deposited Certificates") registered in the name of such
----------------------
Shareholder representing the number of shares of Buyer Common set forth opposite
such Shareholder's name on Exhibit 1 hereto (collectively, the "Deposit"). Each
--------- -------
such certificate has been accompanied by a stock transfer power endorsed in
blank that has been executed by the Shareholder in whose name the certificate is
registered and such stock transfer powers have been deposited with the Escrow
Agent. The Escrow Agent shall maintain updated Accounts for each Shareholder,
reflecting the increases or decreases in the number of shares of Buyer Common
registered in the name of such Shareholder and which are delivered to the Escrow
Agent for deposit in the Escrow Fund hereunder.
(b) If at any time during the term of this Agreement, a stock
dividend, reclassification, readjustment or other change is declared or made in
the capital structure of Buyer, Buyer shall notify the Escrow Agent in writing
of such event, identifying the number of new, substituted or additional shares
or other securities to be issued to each Shareholder (together with a revised
Exhibit 1 hereto) and cause delivery to the Escrow Agent of stock certificates
---------
evidencing all new, substituted or additional shares or other securities issued
by reason of any such change with respect to the shares of Buyer Common to be
deposited in escrow hereunder (each such delivery a "Stock Dividend"), and such
--------------
shares or other securities shall be deposited with the Escrow Agent and for all
purposes constitute part of the Escrow Fund hereunder and be deemed to attach to
such shares of Buyer Common for which such Stock Dividend was delivered as such
term is used herein. At the time of such deposit, each Shareholder shall
deposit with the Escrow Agent a stock power, duly executed in blank by such
Shareholder, covering such deposit. Any cash dividends declared in respect of
Buyer Common shall constitute part of the Escrow Fund, and shall be subject to
the escrow created hereby on the same basis as any non-cash Stock Dividends
otherwise delivered hereunder.
(c) Notwithstanding the delivery of the Deposited Certificates to the
Escrow Agent pursuant to the terms hereof, the Escrow Agent shall have no
obligation to preserve,
2
protect or exercise any rights of any Shareholder under or in respect of the
Deposited Certificates.
SECTION 2. Distribution of the Escrow Fund.
-------------------------------
(a) Buyer shall provide the Escrow Agent and the Shareholders'
Representative with written notice (each, a "Claims Notice") of any claim for
-------------
indemnification for Losses incurred by any of the Buyer Parties (each, a "Buyer
-----
Claim") that Buyer seeks to recover, in whole or in part, from the Escrow Fund,
-----
specifying the amount of Losses and including (i) a brief summary of the basis
for such Buyer Claim and (ii) an Allocation and Valuation Statement (as defined
below).
(b) (i) If within thirty (30) calendar days of the Escrow Agent's
receipt of any such Claims Notice (the "Objection Period") the Escrow Agent has
----------------
not received written notice from the Shareholders' Representative objecting to
such Buyer Claim (an "Objection Notice"), and provided the Escrow Agent has not
----------------
received an order of an arbitration panel pursuant to the Agreement of
Reorganization ("Arbitration Panel") prohibiting distribution of the Escrow
-----------------
Fund, the Shareholders' Representative will be deemed to have agreed to such
Claims Notice (and the Buyer Claim set forth therein), and the Escrow Agent
shall make a distribution out of the Escrow Fund in payment of such Buyer Claim
pursuant to the terms of Section 2(b)(iv) below.
(ii) If the Escrow Agent does receive such an Objection Notice
with respect to a Claims Notice within the related Objection Period, the
Escrow Agent shall make no distribution out of the Escrow Fund in payment
of such Claims Notice unless and until:
(A) the Escrow Agent receives (I) written notice from Buyer
or the Shareholders' Representative stating that such Buyer Claim has
been submitted to and decided in favor of Buyer by an Arbitration
Panel in a final, non-appealable award or decision and that a copy of
the final award or judgment issued by such Arbitration Panel in favor
of Buyer (specifying the amount of recovery) is attached thereto,
accompanied by (II) a copy of such final, non-appealable award or
decision and an Allocation and Valuation Statement (as defined below)
from Buyer with respect thereto; or
(B) the Escrow Agent receives joint written notice from each
of Buyer and the Shareholders' Representative, confirming that such
Buyer Claim has been settled by mutual written agreement of Buyer and
the Shareholders' Representative, specifying the amount of recovery
for Buyer agreed to therein, containing (or accompanied by) an
Allocation and Value Statement (as defined
below) from Buyer in respect thereof, and directing the Escrow Agent
to make a distribution to Buyer from the Escrow Fund in payment of the
amount specified therein pursuant to the terms of
3
Section 2(b)(iv) below.
(iii) Prior to any payment from the Escrow Fund, Buyer shall
provide the Escrow Agent with the written calculations (an "Allocation and
--------------
Valuation Statement") setting forth the amount of shares to be delivered
-------------------
from each Account in respect of the related Buyer Claim (giving effect to
the limitations set forth in the Agreement of Reorganization) and valuing a
share of Buyer Common at the Genesys Stock Price (as defined in the
Agreement of Reorganization, and herein the "Share Value") as determined
-----------
pursuant to Section 6.1(d) of the Agreement of Reorganization, upon which
the Escrow Agent shall be entitled to rely conclusively without further
inquiry of any kind; provided, however, that such amount of shares for each
-------- -------
Account shall be rounded down to the nearest whole number of shares, such
that no fractional shares shall be delivered on account of any Buyer Claim;
and further provided that each such Allocation and Valuation Statement
shall be subject to the terms of Section 2(c) below.
(iv) Any distribution made from the Escrow Fund pursuant to
Section 2(b)(i) or Section 2(b)(ii) shall be made by the Escrow Agent by
delivering to Buyer's transfer agent, Boston Equiserve (the "Transfer
--------
Agent") such of the Deposited Certificates (and/or by delivering to Buyer
-----
any Stock Dividends or Fractional Share Cash) then held in the related
Account or Accounts from which such payment is to be made, as necessary to
make payment of the related Buyer Claim (according to the related Claims
Notice, Arbitration Panel award or judgment, or agreement, as the case may
be, and in accordance with the Share Value as set forth in the related
Allocation and Valuation Statement received by the Escrow Agent), together
with the related stock transfer powers. Upon receipt thereof, if any
positive balance of Buyer Common remains after deducting from the Deposited
Certificates so surrendered the appropriate amount of Buyer Common (in
accordance with the terms of this Section 2(b) and Section 2(c) below),
Buyer shall, or shall cause its Transfer Agent to, issue and return
promptly to the Escrow Agent certificates ("Returned Certificates") of
---------------------
Buyer Common representing such remaining balance (each such Returned
Certificate to be registered in the name of the registered owner of the
surrendered Deposited Certificate to which it corresponds) pursuit to
Section 2(d) below; and in the event that such reduction and allocation
would result in any Fractional Shares, Buyer shall promptly pay to the
Escrow Agent the appropriate amount of Fractional Share Cash pursuant to
Section 2(e) below, for deposit into the appropriate Shareholder's Account.
(c) Any distribution of shares of Buyer Common to satisfy a Buyer
Claim pursuant to Section 2(b) hereof shall be made from the respective Accounts
of the Shareholders in proportion to each Shareholder's pro rata portion of the
Buyer Common originally deposited in the Escrow Fund.
(d) In order that the Escrow Agent may distribute the shares of Buyer
4
Common from the Escrow Fund as provided in this Agreement, Buyer agrees to cause
the Transfer Agent to deliver to the Escrow Agent upon surrender of a Deposited
Certificate then held by the Escrow Agent (i) a new certificate or certificates
representing the shares of Buyer Common to be distributed hereunder, issued in
the name of the distributee and (ii) if necessary, new certificates representing
shares of Buyer Common issued in the name of the appropriate Shareholders to be
retained by the Escrow Agent as part of the Escrow Fund. The Shareholders'
Representative shall, from time to time, execute and deliver such instruments of
transfer, stock powers and instructions to the Escrow Agent as may be reasonably
requested to give effect to the provisions of this Agreement.
(e) In any instance in which a requested division (whether by
reduction, transfer or exchange) of Deposited Certificates would produce or
result in fractional shares of Buyer Common, cash will be paid by Buyer in lieu
of fractions of Buyer Common in an amount equal to the product of such fraction
multiplied by the applicable Share Value (as reflected in the applicable
Allocation and Valuation Statement). Upon receipt by the Escrow Agent of any
such cash ("Fractional Share Cash"), such amounts shall be credited by the
---------------------
Escrow Agent to, and held in, such Shareholder's Account. The Escrow Agent
shall have no obligation to invest (or otherwise pay interest on), or otherwise
segregate from its other assets, any such cash allocated to any Account from
time to time.
(f) If and to the extent any Stock Dividends in the nature of any
securities or other property other than Buyer Common (collectively, "Non-Common
----------
Stock Dividends") is delivered to and held by the Escrow Agent hereunder,
---------------
valuation of such Non-Common Stock Dividends, for purposes of any release
pursuant to Section 2(b) or Section 2(c) hereof, shall be determined pursuant to
such method as is instructed to the Escrow Agent by mutual written instruction
of Buyer and the Shareholders' Representative; and absent its timely receipt of
such instruction, the Escrow Agent shall have no obligation to value or release
any such Non-Common Stock Dividends pursuant to Section 2(b) or Section 2(c)
hereof.
SECTION 3. Termination.
-----------
(a) Termination Procedures. This Agreement shall terminate on
----------------------
December 31, 1998 (the "Termination Date"). Notwithstanding anything to the
----------------
contrary herein, on the Termination Date, the Escrow Agent shall distribute the
remaining Escrow Fund, if any, to the Shareholders based on the number of shares
of Buyer Common, if any, in each such Shareholder's Account (whether or not
there may then be pending any Buyer Claim pursuant to Section 2).
(b) Responsibility for Distributions. Except to the extent otherwise
--------------------------------
expressly provided herein, Buyer shall not have any responsibility to distribute
all or any portion of the Escrow Fund to the Shareholders but shall provide
written instructions to the Escrow Agent to do so.
5
SECTION 4. Indemnity, Performance; Limitation of Liability of Escrow
---------------------------------------------------------
Agent.
-----
(a) Buyer and the Shareholders' Representative, acting on behalf of
the Shareholders, acknowledge and agree that the Escrow Agent (i) shall not be
responsible for any of the agreements referred to hereby, including the
Agreement of Reorganization, but shall only be obligated for the performance of
such duties as are specifically set forth in this Agreement; (ii) shall not be
obligated to take any legal or other action hereunder which might in its
judgment involve any expense or liability on its part unless it shall have been
furnished with acceptable indemnification; (iii) shall be entitled to rely on
any document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons or on other evidence or information deemed
by it to be reliable and shall have no responsibility for determining the
accuracy thereof; (iv) shall have no responsibility whatsoever with respect to
the undertakings of any other party hereto or to any notice or undertakings of
anyone not a party hereto; and (v) may consult counsel satisfactory to it,
including in-house counsel, and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the opinion of
such counsel.
(b) Buyer and the Shareholders' Representative, acting on behalf of
the Shareholders, jointly and severally agree to indemnify and hold harmless the
Escrow Agent and each of its directors, officers and agents appointed and acting
in accordance with this Agreement (collectively, the "Indemnified Parties")
-------------------
against all claims, losses, damages, costs, penalties, fines and reasonable
expenses (including reasonable expenses of the Escrow Agent's legal counsel)
which may be paid, incurred or suffered by any Indemnified Party by reason of or
as a result of the Escrow Agent's compliance with its duties set forth in this
Agreement, or any written instructions delivered to the Escrow Agent by the
parties pursuant hereto, except to the extent that any such claim, loss, damage,
cost, penalty, fine or expense results from fraud, gross negligence, wilful
misconduct or bad faith on the part of such Indemnified Party. In no event
shall the Escrow Agent be liable for indirect, punitive, special or
consequential damages. In no case shall Buyer or the Shareholders be liable
under this indemnity for any claim against any of the Indemnified Parties unless
Buyer and the Shareholders shall be notified by the Escrow Agent of the written
assertion of a claim or of any action commenced against the Indemnified Parties,
promptly after a Responsible Officer (as defined below) of the Escrow Agent
shall have received any such written assertion of a claim or shall have been
served with a summons or other first legal process giving information as to the
nature and basis of the claim. As used herein, "Responsible Officer" shall mean
-------------------
an officer of the Escrow Agent assigned to and working in its Corporate Trust
Department. Buyer and the Shareholders, acting through the Shareholders'
Representative, shall be entitled to participate at their own expense in the
defense and, if Buyer and the Shareholders' Representative so elect at any time
after receipt of such notice, Buyer and the Shareholders, acting through the
Shareholders' Representative, may assume the defense of any suit brought to
enforce any such claim. The Escrow Agent shall have the right but shall be
under no obligation to employ separate counsel in any such suit and participate
in the defense thereof.
6
Buyer and the Shareholders' Representative, acting on behalf of the
Shareholders, jointly and severally agree to assume any and all obligations
imposed now or hereafter by any applicable tax law with respect to the payment
of Escrow Funds under this Agreement, and to indemnify and hold the Escrow Agent
harmless from and against any taxes, additions for late payment, interest,
penalties and other expenses, that may be assessed against the Escrow Agent in
any such payment or other activities under this Agreement. Buyer and the
Shareholders' Representative undertake to instruct the Escrow Agent in writing
with respect to the Escrow Agent's responsibility for withholding and other
taxes, assessments or other governmental charges, certifications and
governmental reporting in connection with its acting as Escrow Agent under this
Agreement. Buyer and the Shareholders' Representative, acting on behalf of the
Shareholders, jointly and severally, agree to indemnify and hold the Escrow
Agent harmless from any liability on account of taxes, assessments or other
governmental charges, including without limitation the withholding or deduction
or the failure to withhold or deduct the same, any liability for failure to
obtain proper certifications or to properly report to governmental authorities,
to which the Escrow Agent may be or become subject in connection with or which
arises out of this Agreement, including costs and expenses (including reasonable
legal fees and expenses), interest and penalties. Notwithstanding the
foregoing, in no event shall Buyer or the Shareholders be required to indemnify
the Escrow Agent for any liability arising out of fraud, gross negligence,
willful misconduct or bad faith on the part of the Escrow Agent. As between
Buyer and the Shareholders, to the extent that there is any liability for
obligations to the Escrow Agent under this paragraph, Buyer and the
Shareholders' Representative, acting on behalf of the Shareholders, agree that
they shall equitably apportion such liabilities as agreed to by Buyer and the
Shareholders' Representative (provided, however, that this sentence shall not
-------- -------
alter the joint and several nature of such parties' obligations to the Escrow
Agent pursuant to this Section 4(b)).
The indemnifications set forth in this Section 3(b) shall survive the
termination of (and any resignation or removal of the Escrow Agent under) this
Agreement.
(c) The Escrow Agent shall have not more or less responsibility or
liability on account of any action or omission of any book-entry depository or
subescrow agent employed by the Escrow Agent than any such book-entry depository
or subescrow agent has to the Escrow Agent, except to the extent that such
action or omission of any book-entry depository or subescrow agent was caused by
the Escrow Agent's own fraud, gross negligence, bad faith or willful misconduct.
(d) It is further agreed that if any controversy arises, between the
parties hereto or with any third person, with respect to the Escrow Fund or any
part of the subject matter of this Agreement, its terms or conditions, the
Escrow Agent shall not be required to determine the same or take any action in
the premises, but may await the settlement of any such controversy by final
appropriate legal proceedings or otherwise as it may require, notwithstanding
anything in this Agreement to the contrary, and in such event the Escrow Agent
shall not be liable for interest or damages. The Escrow Agent shall not be
obliged to
7
institute or defend any legal proceedings which relate to the Escrow Fund.
(e) The Escrow Agent is not responsible for the genuineness, validity
or title of any Deposited Certificates or other property received by it from
time to time pursuant to this Agreement.
(f) The Escrow Agent shall have no liability for any action or
omissions of any other party, or any failure or delay by any other party in
performing or observing its duties hereunder (including without limitation any
failure or delay by Buyer, the Transfer Agent or the Shareholders'
Representative, in any instance which prevents or impairs the performance by the
Escrow Agent in accordance with the terms hereof).
SECTION 5. Resignation, Removal, Successor.
-------------------------------
(a) The Escrow Agent may resign as escrow agent under this Agreement
and thereby become discharged from the obligations hereby created, by notice in
writing given to Buyer and the Shareholders' Representative not less than thirty
(30) days before such resignation is to take effect.
(b) The Escrow Agent may be removed at any time by an instrument or
concurrent instruments in writing delivered to the Escrow Agent and signed by
Buyer and the Shareholders' Representative.
(c) If at any time hereafter the Escrow Agent shall give notice of
its resignation pursuant to Section 5(a) hereof, shall be removed pursuant to
Section 5(b) hereof, or shall be dissolved or otherwise become incapable of
acting, or the position of the Escrow Agent shall become vacant for any other
reason, Buyer and the Shareholders' Representative shall promptly appoint a
mutually acceptable successor Escrow Agent. Upon such appointment such successor
shall execute, acknowledge and deliver to its predecessor, and also to Buyer and
the Shareholders' Representative, an instrument in writing accepting such
appointment hereunder and agreeing to be bound by the terms and provisions of
this Agreement. Thereupon such successor Escrow Agent, without any further act,
shall become fully vested with all the rights, immunities, and powers, and shall
be subject to all of the duties and obligations of its predecessor and such
predecessor Escrow Agent shall promptly deliver the Escrow Fund to such
successor pursuant to written instructions from Buyer or the Shareholders'
Representative.
(d) In the event that a successor Escrow Agent has not been appointed
within thirty days of the date of any such resignation, removal, dissolution,
incapacity or vacancy, the Escrow Agent or its legal representative shall
deposit the Escrow Fund with the clerk of a court of competent jurisdiction and
shall interplead all of the parties hereto. Upon so depositing the Escrow Fund
and filing its pleading, this Agreement shall terminate as to the Escrow Agent.
8
(e) In the event the Escrow Agent is merged or consolidated with any
other entity, and as a result thereof the Escrow Agent ceases to exist as a
separate entity, or the Escrow Agent sells substantially all of its corporate
trust business to another entity, then such surviving entity, without any
further act shall become fully vested with all the rights, immunities, and
powers, and shall be subject to all of the duties and obligations of the Escrow
Agent.
SECTION 6. Voting. Notwithstanding that a share of Buyer Common is
------
held in the Escrow Fund, nothing contained in this Agreement shall in any way
limit the rights of the Shareholders to exercise the votes and rights of consent
attaching to such shares of Buyer Common.
SECTION 7. Fees and Expenses. Buyer shall pay to the Escrow Agent
-----------------
reasonable compensation for its normal services hereunder in accordance with the
fee schedule attached hereto as Exhibit 2 which may be subject to change on an
---------
annual basis and shall reimburse the Escrow Agent hereunder for all reasonable
expenses, disbursements and advances incurred or made by the Escrow Agent in
performance of its duties hereunder (including reasonable fees, expenses and
disbursements of its counsel). Any such compensation and reimbursement to which
the Escrow Agent is entitled shall be borne by Buyer and shall be due and
payable as billed.
SECTION 8. Notices. All notices, consents, waivers and other
-------
communications under this Agreement must be in writing and will be deemed to
have been duly given when (i) delivered by hand (with written confirmation of
receipt), (ii) sent by facsimile (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(iii) when received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and facsimile numbers set forth below (or to such other addresses and
facsimile numbers as a party may designate by notice to the other parties):
To the Buyer: Genesys Telecommunications Laboratories, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President and Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxxxxx, Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9
To the Shareholders' Xxxxxxx Dazler Xxxxx
Representative: Forte Advanced Management Software, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxx Xxxx Xxxx & Friedenrich
000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: J. Xxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Escrow Agent: State Street Bank and Trust Company
Corporate Trust Xxxxxxxxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: Corporate Trust Department,
Ref: Genesys Telecom. Escrow
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 9. Counterparts; Facsimile. This Agreement may be executed in
-----------------------
one or more counterparts, each of which will be deemed to be an original and all
of which, when taken together, will be deemed to constitute one and the same
Agreement. This Agreement may be executed by facsimile, with such facsimile copy
to serve as conclusive evidence of the consent and ratification of the matters
contained herein by the parties hereto.
SECTION 10. Section Headings; Construction. The headings of sections
------------------------------
in this Agreement are provided for convenience only and will not affect its
construction or interpretation. The words "include," "includes" and "including"
when used herein shall be deemed in each case to be followed by the words
"without limitation."
SECTION 11. Waiver. The rights and remedies of the parties to this
------
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power or privilege under the documents
referred to in this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable law, (i) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party, (ii) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given
10
and (iii) no notice to or demand on one party will be deemed to be a waiver of
any obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
SECTION 12. Exclusive Agreement; Modification; Assignment. This
---------------------------------------------
Agreement and the Agreement of Reorganization supersede all prior agreements
among the parties with respect to its subject matter and constitute (along with
the documents referred to in this Agreement and the Agreement of Reorganization)
a complete and exclusive statement of the terms of the respective agreements
between the parties to such documents with respect to the subject matter hereof.
This Agreement may not be amended except by a written agreement executed by or
on behalf of Buyer, Shareholders' Representative and the Escrow Agent. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
SECTION 13. Governing Law. This Agreement shall be governed by the
-------------
laws of the Commonwealth of Massachusetts, without regard to conflicts of law
principles.
SECTION 14. Miscellaneous.
-------------
(a) It is understood and agreed that should any dispute arise with
respect to the delivery, ownership, right of possession, and/or disposition of
the Escrow Fund, or should any claim be made upon the Escrow Fund by a third
party, the Escrow Agent upon receipt of written notice of such dispute or claim
by the parties hereto or by a third party, is authorized and directed to retain
in its possession without liability all or any of said Fund until such dispute
shall have been settled either by the mutual written agreement of the parties
involved or by a final order, decree or judgment of a Court in the United States
of America, the time for perfection of an appeal of such order, decree or
judgment having expired. The Escrow Agent may, but shall be under no duty
whatsoever to, institute or defend any legal proceedings which relate to the
Escrow Fund.
(b) The Buyer hereby absolutely and irrevocably consents and submits
to the jurisdiction of the courts in the Commonwealth of Massachusetts and of
any Federal court located in said Commonwealth in connection with any actions or
proceedings brought against the Buyer by the Escrow Agent arising out of or
relating to this Escrow Agreement. In any such action or proceeding, the Buyer
hereby absolutely and irrevocably waives personal service of any summons,
complaint, declaration or other process and hereby absolutely and irrevocably
agrees that the service thereof may be made by certified or registered first-
class mail directed to the Buyer, at its address in according with Section 8
hereof.
(c) The Escrow Agent shall not be responsible for delays or failures
in performance resulting from acts beyond its control. Such acts shall include
but not be limited to acts of God, strikes, lockouts, riots, acts of war,
epidemics, governmental regulations superimposed after the fact, fire
communication line failures, computer viruses, power failures,
11
earthquakes or other disasters.
(d) This Agreement and all documents relating thereto, including
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, and (b) certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
optical disk, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding relating to this
Agreement, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
(e) Upon request by the Escrow Agent made at any time, the Buyer
shall provide to the Escrow Agent a true and complete copy of the Agreement of
Reorganization (provided, however that the Escrow Agent shall be under no
obligation hereunder to request, otherwise obtain or review the same).
(Remainder of page intentionally left blank.)
12
IN WITNESS WHEREOF, the parties have delivered this Escrow Agreement
as of the date first written above.
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
By: ___________________________________
Name:
Title:
SHAREHOLDERS' REPRESENTATIVE
By: ___________________________________
ESCROW AGENT
State Street Bank and Trust Company
By: ______________________________
Name:
Title:
13
SCHEDULE A
----------
Number of Shares of
Name of Shareholder Buyer Common in Escrow
------------------- ----------------------
Xxxxxxx Dazler Xxxxx 18,990
Xxxxx Xxxxx 18,990
Xxxxxxxxx Xxxxxxxxxx Stone 8,360
Xxxxx Xxxxxxxxxx 8,360
Xxxxxxxxxxx Xxxx 8,005
Xxxx Xxxxxx 3,335
Xxxx Xxxxxxxxx 667
EXHIBIT C
[Form of GCW&F Opinion]
December 31, 1997
Genesys Telecommunications Laboratories, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
We have acted as special counsel to Forte Advanced Management Software,
Inc., a California corporation ("Forte"), with respect to the negotiation and
execution of that certain Agreement of Merger and Reorganization dated December
31, 1997 (the "Merger Agreement") by and among Forte, Genesys-F Sub, Inc., a
California corporation ("Sub"), and Genesys Telecommunications Laboratories,
Inc., a California corporation ("Genesys"). This opinion is furnished to you
pursuant to Section 8.1(b) of the Merger Agreement. Capitalized terms not
otherwise defined herein have the meaning given to them in the Merger Agreement.
In rendering the opinions set forth herein, as to factual matters not
directly within our actual knowledge, we have relied upon, and have assumed the
accuracy, completeness and genuineness of, certificates of and oral confirmation
by public officials, and certificates of officers of Forte.
I
Documents Reviewed
------------------
As special counsel to Forte, we have examined copies of only the following
documents:
1. The Merger Agreement;
2. The Articles of Incorporation of Forte and all amendments thereto,
certified by the California Secretary of State to be true and complete as of a
recent date;
3. The Bylaws of Forte and all amendments thereto, certified by an officer
of Forte to be true and complete as of the date hereof;
4. Certificate of the President of Forte concerning certain facts, dated
as of even date herewith, together with certified copies of resolutions of the
Board of Directors and shareholders of Forte authorizing the execution, delivery
and performance of the Merger Agreement (the "Officer's Certificate");
December 31, 1997
Page Two
5. A certificate of the California Secretary of State, as of a recent
date, attesting to the continued corporate existence and good standing of Forte
in the State of California;
6. A certificate of the California Franchise Tax Board, as of recent date,
attesting to the tax good standing of Forte in the State of California; and
7. The corporate minute book and stock records of Forte, represented by an
officer of Forte to be true and complete as of the date hereof.
We have not examined or reviewed any documents except as set forth above.
II
Assumptions; Scope
------------------
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Merger Agreement and the Officer's Certificate. We have not
undertaken to independently verify the accuracy of any of the facts set forth in
such representations and warranties or in the Officer's Certificate. Our
opinions are necessarily based upon our assumption that all of the facts
contained in such representations and warranties and Officer's Certificate were
true as of the date made or given and continue to be true on the date hereof.
Matters stated herein to be "to our knowledge" are based solely, without
further investigation, upon (i) our examination of the foregoing documents, and
(ii) the actual knowledge (without independent check or verification) of Xxxx X.
Xxxxxx, J. Xxxxxx Xxxxxx, Xxxxx X. Xxxxx and Xxxxxxxxx Xxxxx, the attorneys of
this firm who are primarily engaged in the representation of Forte in connection
with this matter (the "Pertinent Attorneys).
Except as may be expressly and specifically described herein, we have not
examined the public records (including court records) or books and records of
Forte nor have we independently verified information obtained from others and
expressly disclaim any obligation to do so. No inference as to our knowledge of
the existence of facts or circumstances shall be drawn merely from our
representation of Forte. To the extent we are relying on the representations as
to factual matters contained in and made pursuant to the Merger Agreement and
the Officer's Certificate in rendering this opinion, the Pertinent Attorneys
have no current actual knowledge that such representations are false; however,
we have not undertaken any special investigation of the facts to which such
representations related and we do not undertake any obligation to do so.
We express no opinion as to the effect of noncompliance by any party to the
Merger Agreement with any state, federal or other laws or regulations applicable
to the transactions which are the subject of this opinion letter.
December 31, 1997
Page Three
We express no opinion regarding the enforceability of any covenant not to
compete entered into pursuant to, or related to, any provision contained in the
Merger Agreement.
Our opinions expressed herein as to compliance with certain laws, statutes,
rules and regulations are based upon a review of those laws, statutes, rules and
regulations of the United States of America and the State of California which in
our experience are normally applicable to the transactions of the type
contemplated by the Merger Agreement. However, we are not rendering any opinion
regarding compliance with the antitrust laws of the United States of America or
any State.
For the purpose of rendering this opinion, we have assumed (i) the
genuineness and authenticity of all signatures (other than Forte) on original
documents, (ii) the authenticity of all documents submitted to us as originals,
(iii) the conformity to originals of all documents submitted to us as copies,
(iv) the accuracy, completeness and authenticity of certificates of public
officials, (v) the due authorization of all documents by all of the parties
thereto (other than Forte) where authorization is a prerequisite to the
effectiveness of such documents, (vi) the due execution and delivery of all
documents by all of the parties thereto (other than Forte) where execution and
delivery are prerequisites to the effectiveness of such documents, (vii) there
are no extrinsic agreements or understandings among the parties to the Merger
Agreement that would modify or interpret the terms of the Merger Agreement or
the respective rights or obligations of the parties thereunder, and (viii) the
legal capacity of all individuals with whom we have dealt.
For the purpose of rendering this opinion, we have assumed (i) that Genesys
and Sub have the requisite power and authority and have taken all necessary
corporate and other action to execute and deliver the Merger Agreement and to
execute and deliver all of the documents and to effect all of the transactions
related thereto or contemplated thereby to which Genesys and Sub are a party,
(ii) that Genesys and Sub have duly and validly executed and delivered the
Merger Agreement, (iii) that the Merger Agreement is a legal, valid and binding
obligation of and is enforceable against Genesys and Sub, in accordance with its
terms, and (iv) that Genesys and Sub are in good standing in the State of
California.
In connection with this opinion, we have assumed that each of the parties
has acted in good faith and that there has been no mutual mistake of fact or
misunderstanding, fraud, duress or undue influence involved in the negotiation
or execution of the Merger Agreement.
We express no opinion as to compliance with financial covenants in any
agreement.
We are admitted to practice law only in the State of California, and we
express no opinion concerning any other law other than the law of the State of
California and the federal law of the United States.
December 31, 1997
Page Four
III
Qualifications and Exceptions
-----------------------------
The opinions expressed in this opinion letter are further qualified to
the extent that the validity, binding nature or enforceability of any provision
of the Merger Agreement may be limited or otherwise affected by:
Limitations imposed by any state or federal law or equitable
principles on the availability of specific enforcement or other equitable
remedies, whether such enforcement is brought in an action at law or in equity;
Reorganization, insolvency, arrangement, bankruptcy, moratorium, or
similar laws generally affecting creditors' rights including, but not limited
to, any laws relating to fraudulent conveyances;
The unenforceability under certain circumstances of provisions to the
effect that rights and remedies are not exclusive, that every right or remedy is
cumulative and may be exercised in addition to or with any other rights or
remedies or that the failure to exercise or delay in exercising rights or
remedies will not operate as a waiver of such rights or remedies;
The unenforceability under certain circumstances under state or
federal law or court decisions of provisions releasing or indemnifying a party
against liability for acts where such release or indemnification is contrary to
public policy;
Provisions waiving broadly or vaguely stated rights or unknown future
rights, or rights which may not be waived on constitutional, statutory or public
policy grounds, or provisions stating that rights or remedies are not exclusive,
that every right or remedy is cumulative and may be exercised in addition to or
with any other right or remedy, or that the election of some particular remedy
or remedies does not preclude recourse to one or more others may be
unenforceable;
We express no opinion as to the availability of the remedy of specific
performance with respect to any provision of the Merger Agreement which requires
Forte or other persons to execute, in the future, additional documents or
instruments or to enter into additional agreements;
The effect of any law that provides, where a contract permits one
party to a contract to recover attorneys' fees, the prevailing party in any
action to enforce any provision of the contract shall be entitled to recover its
reasonable attorneys' fees;
The unenforceability of the Merger Agreement by any person other than
Genesys, Sub or their permitted assignees in privity of contract with Genesys or
Sub (in the case of permitted assignees);
December 31, 1997
Page Five
Decisions by courts admitting evidence extrinsic to a written
agreement between the parties thereto that the parties intended a meaning
contrary to that expressed by the parties in writing;
The unenforceability of waivers or the relinquishment of unknown
future rights or defenses to obligations, or of rights granted by law, where
contrary to public policy or otherwise prohibited, limited or made unenforceable
by law;
The unenforceability of contractual provisions or contracts found by a
court to be or to have been unconscionable or contrary to public policy; and
The unenforceability of any rights or remedies to the extent not
exercised in good faith or in a commercially reasonable manner.
IV
Opinions
--------
On the basis of the foregoing, and subject to the assumptions,
qualifications, exceptions and limitations contained herein, we are of the
opinion that:
1. Forte is duly organized and validly existing and in good
standing under the laws of the State of California, and Forte has the requisite
power and authority to own its properties and to conduct its businesses as it is
presently conducted.
2. The authorized capital stock of Forte consists of 10,000,000
shares of Common Stock, no par value, 3,419,529 shares of which are outstanding
as of the date hereof. The outstanding shares of capital stock of Fort are duly
authorized, validly issued, fully paid and non-assessable.
3. Forte has the requisite power and authority to execute, deliver
and perform the Merger Agreement. The Merger Agreement has been duly and
validly authorized by Forte, has been duly executed and delivered by an
authorized officer of Forte and constitutes a legal, valid and binding
obligation of Forte, enforceable by Buyer against Forte in accordance with its
terms subject to (i) bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent transfer and other similar laws affecting the rights of
creditors generally; and (ii) general equitable principles.
4. Neither the execution or delivery by Forte of the Merger
Agreement nor the consummation by Forte of the transactions contemplated thereby
will (i) violate any provision of the Articles of Incorporation or Bylaws of
Forte, (ii) violate or be in conflict with any federal or California laws which
to our knowledge are applicable to Forte; or (iii) to our knowledge, violate or
contravene any judgment, decree, injunction or order of any federal or
California court, or any arbitrator or governmental agency or authority, having
jurisdiction over Forte or its properties or by which Forte may be bound.
December 31, 1997
Page Six
5. No consents, approvals or authorizations of or filings with any
governmental authority are required or necessary on the part of Forte in
connection with the execution, delivery and performance at the Effective Time by
Forte of the Merger Agreement, except for (i) the filing to be made of the
Merger Certificate with the California Secretary of State; (ii) the filing of
the application for a Tax Clearance Certificate with the California Franchise
Tax Board; and (iii) such other consents, approvals, authorizations or filings
which have been obtained, waived or made prior to the date hereof.
6. To our knowledge, except as described or disclosed in the
Disclosure Schedule, there is no action, proceeding or governmental
investigation pending, or threatened in writing, against Forte which questions
the validity or enforceability of the Merger Agreement or the right of Forte to
enter into the Merger Agreement.
We express no opinions other than as expressly set forth herein, nor
do we opine with respect to any future modifications, amendments or additional
documents or instruments that may be entered into by or among the parties to
this transaction on or following the date of this letter. The opinions expressed
in this letter are given only as of this date, and we do not undertake to
express any opinion or factual assurance as to any matter or to advise any
person with respect to any events or changes of fact or law occurring subsequent
to the date hereof.
This opinion is being rendered solely for the benefit of Genesys in
connection with the transaction described herein and may not be relied upon for
any other purpose nor may it be relied upon by, or may any copies of it be
delivered to (although copies may be delivered to Genesys' legal and financial
advisors and disclosed as required by applicable law), any other entity without
our express written approval.
XXXX XXXX XXXX & FREIDENRICH,
A Professional Corporation
[FORM OF BPH OPINION]
EXHIBIT D
December 31, 1997
Forte Advanced Management Software, Inc.
0000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Ladies and Gentlemen:
We have acted as counsel for Genesys Telecommunications Laboratories, Inc.,
a California corporation ("Genesys"), and Genesys-F Sub, Inc., a California
corporation ("Merger Sub"), in connection with the acquisition by Genesys of
Forte Advanced Management Software, Inc., a California corporation ("Forte"), by
means of a merger of Merger Sub with and into Forte pursuant to the terms and
conditions set forth in the Agreement and Plan of Reorganization dated as of
December 31, 1997 between Genesys, Merger Sub, Forte and the shareholders of
Forte (the "Forte Shareholders") (the "Agreement"). This opinion is being
rendered to you pursuant to Section 8.1(b) of the Agreement. Capitalized terms
used herein and not otherwise defined shall have the same meaning given to such
terms in the Agreement.
In connection with the opinions expressed herein, we have reviewed the
following:
(i) the Agreement;
(ii) the Escrow Agreement, dated as of December 31, 1997 by
and among Genesys, Xxxxxxx Dazler Xxxxx, as the
Holders' Agent thereunder, and State Street Bank and
Trust Company (the "Escrow Agreement");
(iii) the Registration Rights Agreement, dated as of December
31, 1997, by and among Genesys and the Forte
Shareholders (the "Registration Rights Agreement");
(iv) the certificate, dated December 31, 1997, of the Chief
Financial Officer of Genesys (the "Officer's
Certificate");
Forte Advanced Management Software, Inc. Page 2
December 31, 1997
(v) originals or copies of such corporate documents or
records of the Companies and such other documents as we
have deemed necessary or appropriate as a basis for the
opinions hereinafter expressed.
In connection with the opinions expressed herein we have made such
examination of matters of law and of fact as we considered appropriate or
advisable for purposes hereof. As to matters of fact material to the opinions
expressed herein, we have relied upon the representations and warranties as to
factual matters contained in and made by Genesys, Merger Sub and Forte pursuant
to the Agreement and upon certificates and statements of government officials
and of officers of Genesys, Merger Sub and Forte. We have assumed for the
purposes of this opinion letter the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of the documents submitted to us
as originals, the conformity to the original documents of all documents
submitted to us as certified, facsimile or photostatic copies, and the
authenticity of the originals of such copies.
In rendering these opinions, we have also assumed that the Agreement
and all other agreements executed in connection therewith have been duly and
validly executed and delivered by or on behalf of Forte and the Forte
Shareholders, that Forte and each Forte Shareholder has the power to enter into
and perform its obligations thereunder and that the Agreement and such other
agreements constitute legal, valid, binding and enforceable obligations of Forte
and each Forte Shareholder.
Whenever a statement herein is qualified by the expressions "known to
us," "to our knowledge," "we are not aware" or a similar phrase or expression
with respect to our knowledge of matters of fact, it is intended to mean that
our knowledge is based upon the records, documents, instruments and certificates
described above and the current actual knowledge of the attorneys in this firm
who have devoted substantive attention to the transactions contemplated by the
Transaction Documents (but not including any constructive or imputed notice of
any information) and that we have not otherwise undertaken any independent
investigations for the purpose of rendering this opinion.
This opinion letter relates solely to the laws of the State of
California and applicable federal laws of the United States, and we express no
opinion with respect to the effect or applicability of the laws of other
jurisdictions.
Based upon and subject to the foregoing, and subject to the further
assumptions, limitations, qualifications and exceptions set forth herein, we are
of the opinion that:
1. Genesys and Merger Sub (the "Companies") are each corporations
duly organized, validly existing and in good standing under the laws of the
State of California, and
Forte Advanced Management Software, Inc. Page 3
December 31, 1997
the Companies have the requisite corporate power and authority to own their
properties and to conduct their businesses as, to our knowledge, they are
presently conducted.
2. The authorized capital stock of Genesys consists of 120,000,000
shares of Common Stock, no par value, and 5,000,000 shares of Preferred Stock,
no par value. To our knowledge, (i) 19,850,509 shares of Common Stock were
outstanding as of October 15, 1997 and (ii) no shares of Preferred Stock are
currently outstanding. The outstanding shares of capital stock of Genesys are
duly authorized, validly issued, fully paid and non-assessable.
3. The Companies each have the requisite corporate power and
authority to execute, deliver and perform the Agreement, the Escrow Agreement
and the Registration Rights Agreement (the "Transaction Documents"). Each of
the Transaction Documents have been duly and validly authorized by the
Companies, have been duly executed and delivered by an authorized officer of the
Companies and constitute a legal, valid and binding obligation of the Companies.
4. Neither the execution or delivery by the Companies of the
Transaction Documents nor the consummation by the Companies at the Effective
Time of the transactions contemplated thereby will (i) violate any provision of
the Companies' Articles of Incorporation or Bylaws, (ii) violate or be in
conflict with any law which to our knowledge is applicable to the Companies, or
(iii) to our knowledge, violate or contravene any judgment, decree, injunction
or order of any court, or any arbitrator or governmental agency or authority,
having jurisdiction over the Companies or their properties or by which the
Companies may be bound.
5. No consents, approvals or authorizations of or filings with any
governmental authority are required or necessary on the part of the Companies in
connection with the execution, delivery and performance at the Effective Time by
the Companies of the Transaction Documents.
6. We are not aware that there is any action, proceeding or
governmental investigation pending, or threatened in writing, against the
Companies which questions the validity or enforceability of the Transaction
Documents or the right of the Companies to enter into the Transaction Documents.
The foregoing opinions are subject to the following additional
limitations, qualifications, assumptions and exceptions:
(a) The enforceability of the Companies' obligations under the
Transaction Documents may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent transfer and
other similar laws affecting the rights of creditors generally; and (ii) general
equitable principles (whether relief is sought in a proceeding
Forte Advanced Management Software, Inc. Page 4
December 31, 1997
at law or in equity), including, without limitation, concepts of materiality,
reasonableness, good faith, and fair dealing.
(b) We also express no opinion as to:
(i) provisions relating to indemnification, contribution or
exculpation, to the extent any such provision is contrary to public policy or
prohibited by law (including, without limitation, federal and state securities
laws);
(ii) any provision providing for the exclusive jurisdiction of a
particular court or purporting to waive rights to trial by jury, service of
process or objections to the laying of venue or to forum on the basis of forum
non conveniens, in connection with any litigation arising out of or pertaining
--- ----------
to the Transaction Documents;
(iii) provisions purporting to waive either illegality as a defense to
the performance of contract obligations or any other defense to such performance
which cannot, as a matter of law, be effectively waived;
(iv) any provision permitting modification of the Transaction
Documents only by means of an agreement in writing signed by the parties
thereto;
(v) any provision requiring payment of attorneys' fees, except to
the extent a court determines such fees to be reasonable;
(d) Our opinions in clause (ii) of paragraph 4 above and in
paragraph 5 above are limited to laws and regulations normally applicable to
transactions of the type contemplated in the Transaction Documents and do not
extend to licenses, permits and approvals necessary for the conduct of the
Companies' business. In addition and without limiting the previous sentence, we
express no opinion herein with respect to the effect of any land use,
environmental or similar law, any state or federal antitrust law or any local
law. Further, we express no opinion as to the effect of or compliance with any
state or federal laws or regulations applicable to the transactions contemplated
by the Transaction Documents because of the nature of the business of any party
thereto other than the Companies.
This opinion is rendered as of the date first written above solely for
your benefit in connection with the Agreement and may not be delivered to,
quoted or relied upon by any person other than you, or for any other purpose,
without our prior written consent. Our opinion is expressly limited to the
matters set forth above and we render no opinion, whether by
Forte Advanced Management Software, Inc. Page 5
December 31, 1997
implication or otherwise, as to any other matters relating to the Companies. We
assume no obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinions expressed herein.
Very truly yours,
XXXXXXX, XXXXXXX & XXXXXXXX LLP
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (the "Agreement") is entered into as of
December 31, 1997, by and among Genesys Telecommunications Laboratories, Inc., a
California corporation (the "Company") and the holders of the Common Stock (the
"Common Stock") of Forte Advanced Management Software, Inc., a California
corporation ("Forte"), listed on the signature page herein (each a "Stockholder"
and collectively, the "Stockholders").
WHEREAS, pursuant to that certain Agreement and Plan of Reorganization by
and among the Company, Genesys-F Sub, Inc., a California corporation and a
direct wholly-owned subsidiary of the Company ("Merger Sub") and Forte, a
California corporation ("Seller") and the Stockholders dated as of December 31,
1997 (the "Agreement of Reorganization"), (i) Merger Sub shall be merged with
and into Seller (the "Merger"), and (ii) by virtue of the Merger, the
Stockholders shall receive an amount of shares of the Company's Common Stock
(the "Shares") in exchange for each issued and outstanding share of Forte Common
Stock owned by the Stockholders.
WHEREAS, pursuant to certain Investment Representation Letter Agreements,
the Stockholders have each made customary representations and warranties in
order for the issuance of the Shares by the Company to be exempt from the
registration requirements of the Securities Act pursuant to the private
placement exemption provided by Section 4(2) promulgated thereunder, and
applicable state securities laws.
WHEREAS, the Company desires to grant certain registration rights for an
aggregate of twenty-five percent (25%) of the Shares, and the Company and the
Stockholders desire that this Agreement shall govern the rights of the
Stockholders to cause the Company to register an aggregate of twenty-five
percent (25%) of the Shares, as well as certain other matters as set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged by each signatory hereto, it is agreed as follows:
1. Definitions.
-----------
(a) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (1) an aggregate of
twenty-five percent (25%) of the Shares issued to the Stockholders pursuant to
the Agreement of Reorganization and (ii) any Common Stock issued or issuable
with respect to the securities
referred to in clause (i) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular Holder, and subject to the terms
and conditions of this Agreement, "Registrable Securities" means twenty-five
percent (25%) of the Shares issued to such Holder pursuant to the Agreement of
Reorganization. As to any particular Registrable Securities, such securities
will cease to be Registrable Securities when they have been distributed to the
public pursuant to an offering registered under the Securities Act or sold to
the public through a broker, dealer or market maker in compliance with any
exemption under the Securities Act, including, without limitation, Rule 144
promulgated by the SEC under the Securities Act (or any similar rule then in
force);
(c) A person will be deemed to be a "Holder" of Registrable Securities
whenever such person owns or has the right to acquire directly or indirectly
such Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitation upon the exercise of such right,) whether or not such acquisition has
actually been effected.
(d) The term "Form S-1" means such form under the Securities Act as in
effect on the date hereof or any comparable or successor form under the
Securities Act subsequently adopted by the SEC;
(e) The term "Securities Act" means the Securities Act of 1933, as
amended;
(f) The term "1934 Act" means the Securities Exchange Act of 1934, as
amended;
(g) The term "SEC" means the Securities and Exchange Commission.
2. Obligations of the Company. In connection with the registration of
--------------------------
the Registrable Securities, the Company shall have the following obligations:
(a) The Company shall prepare and file with the SEC no later than
thirty (30) days after the effective date of the Merger (the "Merger Effective
Date") a registration statement or Form S-1 with respect to the Registrable
Securities, and thereafter shall use its best efforts to cause such registration
statement to become effective as soon as practicable after filing, and keep such
registration statement effective at all times for a period of two (2) years
after the effective date of such registration statement; provided, however, that
-------- -------
the foregoing obligation to keep such registration statement effective shall
terminate at such time that all the Holders of Registrable Securities are
eligible to sell, transfer or otherwise convey all of the Registrable Securities
pursuant to Rule 144 in any three month period; provided, further, that
-------- -------
notwithstanding the foregoing, if the Company shall furnish to the Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and
2
its shareholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period of not more than ninety (90)
days from the date of such Certificate. The Company may not utilize this
deferral right more than once.
(b) The Company shall prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to keep the
Registration Statement effective at all times and to comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such registration statement.
(c) The Company shall furnish to each Holder and its legal counsel
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of the registration statement and any
amendment thereto, and each preliminary prospectus and prospectus and each
amendment or supplement thereto. The Company shall furnish to the Holders such
numbers of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them. The Company will immediately notify each
Holder of the effectiveness of the registration statement or any post-effective
amendment. The Company will promptly respond to any and all comments received
from the SEC, with a view towards causing any registration statement or any
amendment thereto to be declared effective by the SEC as soon as practicable and
shall promptly file an acceleration request as soon as practicable following the
resolution or clearance of all SEC comments, or, if applicable, following
notification by the SEC that the registration statement or any amendment thereto
will not be subject to review.
(d) The Company shall use its best efforts (i) to register and qualify
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders, (ii) prepare and file in those jurisdictions such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof, and (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) As promptly as practicable, the Company shall notify each Holder
of Registrable Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing and the Company shall use its best
efforts to promptly prepare
3
a supplement or amendment to the registration statement to correct such untrue
statement or omission, and deliver such number of copies of such supplement or
amendment to each Holder as such Holder may reasonably request.
(f) In the event Holders that hold a majority-in-interest of the
Registrable Securities being offered in the offering select underwriters for the
offering (such determination to be binding upon all Holders), the Company shall
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligations, with the underwriters of such offering.
(g) The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a registration statement,
and, if such an order is issued, to obtain the withdrawal of such order as soon
as practicable and to notify each Holder who holds Registrable Securities being
sold (or, in the event of an underwritten offering, the managing underwriters)
of the issuance of such order and the resolution thereof.
(h) The Company shall permit a single firm of counsel designated by
the Holders to review the registration statement and all amendments and
supplements thereto (as well as all requests for acceleration or effectiveness
thereof) a reasonable period of time prior to their filing with the SEC, and not
file any document in a form to which such counsel reasonably objects and will
not request acceleration of the registration statement without prior notice to
such counsel. The sections of the registration statement covering information
with respect to the Holders, the Holders' beneficial ownership of securities of
the Company or the Holders' intended method of disposition of Registrable
Securities shall conform to the information provided to the Company by each of
the Holders.
(i) At the request of any Holder, the Company shall (i) furnish, on
the date that Registrable Securities are delivered to an underwriter, if any,
for sale in connection with the registration statement or, if such securities
are not being sold by an underwriter, on the date of effectiveness thereof, an
opinion, dated as of such date, from counsel representing the Company for
purposes of such registration statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
underwriters, if any, and the Stockholders and (ii) use its best efforts to
furnish, on the date that Registrable Securities are delivered to an
underwriter, if any, for sale in connection with the registration statement or,
if such securities are not being sold by an underwriter, on the date of
effectiveness thereof, a letter, dated such date, from the Company's independent
certified public accountants in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and the Holders.
(j) The Company shall hold in confidence and not make any disclosure
of information concerning any Holder provided to the Company unless (i)
disclosure of such
4
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any registration statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
of governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this or any other agreement. The Company agrees that it shall,
upon learning that disclosure of such information concerning a Holder is sought
in or by a court of governmental body of competent jurisdiction or through other
means, give prompt notice to such Holder prior to making such disclosure, and
allow the Holder, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
(k) The Company shall (i) cause all the Registrable Securities covered
by the registration statement to be listed on each national securities exchange
on which securities of the same class or series issued by the Company are then
listed, if any, if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) secure the designation and quotation
of all the Registrable Securities covered by the registration statement on the
Nasdaq National Market or, if not eligible for the Nasdaq National Market and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register with the National Association of Securities Dealers,
Inc. ("NASD") as such with respect to such Registrable Securities.
(l) The Company shall provide a transfer agent and registrar, which
may be a single entity, for the Registrable Securities not later than the
effective date of the registration statement.
(m) The Company shall cooperate with the Holders who hold Registrable
Securities being offered and the managing underwriter or underwriters, if any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Registrable Securities to be offered
pursuant to the registration statement and enable such certificates to be in
such denominations or amounts, as the case may be, as the managing underwriter
or underwriters, if any, or the Holders may reasonably request and registered in
such names as the managing underwriter or underwriters, if any, or the Holders
may request, and within three (3) business days after a registration statement
which includes Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel selected by the Company to
deliver, to the transfer agent for the Registrable Securities (with copies to
the Holders whose Registrable Securities are include in such registration
statement) a letter of instruction and an opinion of such counsel in usual and
customary form and reasonably satisfactory to such transfer agent.
3. Furnish Information.
-------------------
It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding
5
itself, the Registrable Securities held by it, and the intended method of
disposition of such securities as shall be reasonably required to effect the
registration of such Holder's Registrable Securities.
4. Expenses of Registration.
------------------------
(a) All expenses incident to the Company's performance or compliance
with the Agreement, including, without limitation, all registration, filing,
listing and qualification fees, printer's fees and fees and disbursements of
counsel, independent certified public accountants and all other persons retained
by the Company and all fees and expenses for separate counsel, if any, retained
by the holders of the Registrable Securities in connection with such
registration (collectively, the "Registration Expenses"), will be borne by the
Company.
(b) Notwithstanding the foregoing, the Holders of the Registrable
Securities shall be obligated to pay, pro rata among the Holder of the
Registrable Securities on the basis of the number of securities owned by each
such Holder, the underwriting discounts and commission relating to the
Registrable Securities included in any registration hereunder.
5. Delay of Registration. No Holder shall have any right to obtain or
---------------------
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of the Agreement.
6. Indemnification. In the event any Registrable Securities are included
---------------
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify, hold
harmless and defend (i) each Holder, (ii) any underwriter (as defined in the
Securities Act) for the Holders, and (iii) the directors, officers, partners,
employees and each person who controls any such Holder of underwriter within the
meaning of the Securities Act or the 1934 Act, if any (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or expenses (joint or
several) (collectively, together with actions, proceedings or inquiries by any
regulatory or self-regulatory organization, whether commenced or threatened, in
respect thereof, "Claims") to which any of them may become subject, insofar as
such Claims arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading or (iii) any violation
or alleged violation by the Company of the Securities Act, the 1934 Act, any
state securities law or other law or any rule or regulation promulgated under
the Securities Act or the 1934 Act or any state securities law or other law; and
the Company will pay to each such Indemnified Person, as incurred, any legal
6
or other expenses reasonably incurred such Indemnified Person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
6(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder.
(b) In connection with any registration statement in which a Holder is
participating, to the extent permitted by law, each such selling Holder
severally and not jointly will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement;
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter, any other Holder selling securities in such
registration statement and any controlling person of any such underwriter or
other Holder against any losses, claims, damages or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Securities Act or the 1934 Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation by such Holder, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in connection with such registration; and each such Holder
will pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 6(b), in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this subsection 6(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld, provided, further, however, that the Holder shall be liable under this
-------- ------- -------
Agreement (including this Section 6(b) and Section 7) only for that amount as
does not exceed the net proceeds to such Holder as a result of the sale of
Registrable Securities pursuant to such registration statement.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel (to
be selected by Holders holding a majority of the Registrable Securities included
in the Registration Statement), with the fees and expenses to be paid by
7
the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party to the extent of such prejudice of
any liability to the indemnified party under this Section 6, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 6.
(d) No indemnifying party, in the defense of any claim arising out of
a Violation shall, except with the consent of each indemnified party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation and, in the event the terms of such judgment or settlement include
any term other than the payment by the indemnifying party of money damages, the
indemnifying party shall not so consent or enter into such a settlement without
the consent of each indemnified party (which will not be unreasonably withheld)
whether or not the terms thereof include such a release.
(e) The obligations of the Company and Holders under this Section 6
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
7. Contribution.
------------
To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that (i) no
-------- -------
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6, (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of such fraudulent misrepresentation, and (iii) contribution (together
with any indemnification or other obligations under this Agreement) by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.
8. Reports Under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to:
8
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the 1934 Act; and
(c) Furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144, Securities Act
and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested in availing any
Holder of any rule or regulation of the SEC which permits the selling of any
such securities without registration.
9. Assignment of Registration Rights. A Holder may assign its rights
---------------------------------
under this Agreement (but only with all related obligations) to a transferee or
assignee of all of such Holder's Registrable Securities, provided that, within a
reasonable time after such transfer, the Company is furnished with written
notice of the name and address of such transferee or assignee and the securities
with respect to which such registration rights are being assigned; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act.
10. Amendment of Registration Rights. Any provision of the Agreement may
--------------------------------
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each Holder of any Registrable
Securities then outstanding, each future holder of all such Registrable
Securities and the Company.
11. Miscellaneous.
-------------
(a) Successors and Assigns. All covenants and agreements in the
----------------------
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of the Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.
(b) Counterparts; Facsimile. This Agreement may be executed in any
-----------------------
number of counterparts and any party hereto may execute any such counterpart,
each of which when executed and delivered shall be deemed to be an original and
all of which counterparts taken together shall constitute but one and the same
instrument.
9
(c) Descriptive Headings; Interpretation. The descriptive headings of
------------------------------------
this Agreement are inserted for convenience only and do not constitute a section
of this Agreement.
(d) Severability. Whenever possible each provision and term of this
------------
Agreement will be interpreted in a manner to be effective and valid but if any
provision or term of this Agreement is held to be prohibited by law or invalid,
then such provision or term will be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining provisions
or terms of this Agreement. If any of the covenants set forth in this Agreement
are held to be unreasonable, arbitrary or against public policy, such covenants
will be considered divisible with respect to scope, time and geographic area,
and in such lesser scope, time and geographic area, will be effective, binding
and enforceable against the parties hereto.
(e) Governing Law. The Agreement shall be governed by the laws of the
-------------
State of California, without regard to the conflicts of law principles.
(f) Entire Agreement. This Agreement and the Agreement of
----------------
Reorganization constitute the entire agreement between the parties with respect
to the subject matter of this Agreement and supersede all prior written and oral
agreements and understandings between the Company, on the one hand, and the
Stockholders, on the other hand, with respect to the subject matter of this
Agreement. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
(g) Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon receipt by the party to be notified at such party's
address set forth at the end of this Agreement or at such other address as such
party shall have furnished the Company in writing, or, until any such party so
furnishes an address to the Company, then to and at the address of the last
holder of the shares covered by this Agreement who has so furnished an address
to the Company.
(h) Delays or Omissions; Remedies Cumulative. It is agreed that no
----------------------------------------
delay or omission to exercise any right, power or remedy accruing to the
parties, upon any breach or default of the Company under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach of default, or any acquiescence therein, or of any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character by a party of any breach or default under
this Agreement, or any waiver by a party of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to a party, shall be cumulative
10
and not alternative.
(i) Further Assurances. Each party shall do and perform, or cause to
------------------
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(j) Actions by Holders. Whenever any action, consent or other
------------------
determination is required on the part of the Holders to be made pursuant to this
Agreement, such determination shall be made by the Holders of the majority of
Registrable Securities then outstanding.
(Remainder of Page Intentionally Left Blank)
11
IN WITNESS WHEREOF, the parties have duly executed this Registration Rights
Agreement as of the date first written above.
GENESYS TELECOMMUNICATIONS LABORATORIES,
INC.
Address: By:
---------------------------
Name:
Title:
STOCKHOLDERS
Addresses: By:
---------------------------
By:
---------------------------
By:
---------------------------
By:
---------------------------
By:
---------------------------
By:
---------------------------
By:
---------------------------
12
EXHIBIT F
Name of Prospective Investor: ________________________
(Please Print)
State of Domicile: ________________________
Daytime Telephone Number: ________________________
Daytime FAX Number: ________________________
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
______________________
INVESTOR QUESTIONNAIRE
______________________
INSTRUCTIONS: PLEASE COMPLETE THIS INVESTOR QUESTIONNAIRE BY FILLING IN THE
INFORMATION CALLED FOR, CHECKING THE APPROPRIATE BOXES AND SIGNING AT PAGE 2.
PLEASE RETURN THE COMPLETED QUESTIONNAIRE TO XXXXX X. XXXXX, ESQ., XXXX XXXX
XXXX & FRIEDENRICH, 0000 XXXXXXXXX XXXXX, XXXXX 0000, XXX XXXXX, XXXXXXXXXX
00000-0000.
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
______________________
INVESTOR QUESTIONNAIRE
______________________
TO: GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
Ladies and Gentlemen:
The undersigned hereby represents as follows:
1. REPRESENTATIONS AS TO ACCREDITED INVESTOR STATUS. The undersigned has
------------------------------------------------
read the definition of "Accredited Investor" from Rule 501 of Regulation D
attached hereto as Exhibit "A," and certifies that either (check one):
------------
[_] The undersigned is an "Accredited Investor"; or
[_] The undersigned is not an "Accredited Investor" but has completed
the statement concerning his/her knowledge and experience in
financial and business matters included in Exhibit "B" hereto.
-----------
Please provide sufficient detail so that Genesys Telecommunications
Laboratories, Inc. ("Genesys") and/or its legal counsel may conclude
that the undersigned is capable of evaluating the merits and risks
of investment in Genesys.
If the answer to Question 1 is that the undersigned is an "Accredited
Investor," the questionnaire is complete and please simply sign page 2 hereof.
Any potential investor who is not an "Accredited Investor" also must complete
the supplemental questionnaire attached hereto as Exhibit "B" to assure
-----------
compliance with state and federal securities laws. ALL INFORMATION PROVIDED BY
ANY POTENTIAL INVESTOR ON EXHIBIT "B" HERETO SHALL BE TREATED AS CONFIDENTIAL
-----------
AND SHALL BE DISCLOSED ONLY TO THOSE PERSONS WHO HAVE A REASONABLE NEED OR
REASON TO KNOW SUCH INFORMATION FOR PURPOSES OF DETERMINING WHETHER THE
POTENTIAL INVESTOR IS AN "ACCREDITED INVESTOR" OR WHETHER THE POTENTIAL INVESTOR
IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF INVESTMENT IN GENESYS.
The foregoing representation is true and accurate as of the date hereof.
1.
THE UNDERSIGNED ACKNOWLEDGES AND AGREES THAT GENESYS WILL BE ENTITLED TO
RELY ON THE TRUTH AND ACCURACY OF ALL INFORMATION FURNISHED BY THE UNDERSIGNED
PURSUANT TO OR IN CONNECTION WITH THIS INVESTOR QUESTIONNAIRE.
Very truly yours,
____________________________________
Print Name of Investor
Dated: __________, 1997 By _________________________________
Signature
____________________________________
Print Title (if applicable)
_____________________________________
Print Name of Joint Investor or other
person whose signature is required
By ___________________________________
Signature
______________________________________
Print Title (if applicable)
2.
EXHIBIT A
---------
RULE 501. DEFINITIONS AND TERMS USED IN REGULATION D.
------------------------------------------
As used in Regulation D, the following terms have the meaning indicated:
(a) ACCREDITED INVESTOR. "Accredited investor" shall mean any person who
-------------------
comes within any of the following categories, or who the issuer reasonably
believes comes within any of the following categories, at the time of the sale
of the securities to that person:
(1) Any bank as defined in section 3(a)(2) of the Act or any savings
and loan association or other institution as defined in Section
3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934; any insurance
company as defined in Section 2(13) of the Act; any investment
company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of
that Act; any Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958; any employee benefit
plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by
a plan fiduciary, as defined in Section 3(21) of such Act, which
is either a bank, savings and loan association, insurance company,
or registered investment adviser, or if the employee benefit plan
has total assets in excess of $5,000,000; or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors;
(2) Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000;
(4) Any director, executive officer or general partner of the issuer
of the securities being offered or sold, or any director,
executive officer or general partner of a general partner of that
issuer;
(5) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(6) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level
in the current year;
(7) Any trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described
in Rule 506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited
investors.
EXHIBIT B
---------
CONFIDENTIAL SUPPLEMENTAL INFORMATION STATEMENT
(TO BE COMPLETED BY INDIVIDUAL INVESTORS)
In order to assure compliance with applicable federal and state securities laws,
it is necessary to obtain information regarding the financial position and
experience of individual investors in Genesys.
I. GENERAL INFORMATION (attach additional sheets if necessary)
A. PURCHASERS
1. Name: ______________________________________________
______________________________________________
2. Address: ______________________________________________
Business: ______________________________________________
______________________________________________
______________________________________________
______________________________________________
Residence: ______________________________________________
______________________________________________
______________________________________________
3. Telephone:
Business: (____) _______________________________
Residence: (____) _______________________________
4. State where registered to vote: __________________________
5. Social Security Number: __________________________________
6. Date of Birth: ___________________________________________
7. Country of citizenship, if
other than the United States: ____________________________
8. Marital status: __________________________________________
9. Please state your education and degrees earned:
Degree School Year
------ ------ ----
_________ _____________________________________ ________
_________ _____________________________________ ________
_________ _____________________________________ ________
B-1
10. Current occupation (if retired, please described your last
occupation):
Employer: ____________________________________________________
Nature of Business: __________________________________________
Position and/or duties: ______________________________________
______________________________________________________________
Period Employed: _____________________________________________
11. If current employment is less than five years, please complete
the following chart on your employment history for the past five
(5) years:
Employer and Title Primary Duties From To
------------------ -------------- -------- ------
__________________ ______________ ________ ______
__________________ ______________ ________ ______
__________________ ______________ ________ ______
12. Please list all professional qualifications that you have held or
currently hold, including bar admissions, accounting certificates,
brokerage licenses and other professional licenses or certificates:
Year
Professional Qualifications Received Still Effective
-----------------------------------------------------------------
________________________________ ______________ Yes [_] No [_]
________________________________ ______________ Yes [_] No [_]
________________________________ ______________ Yes [_] No [_]
II. FINANCIAL INFORMATION
A. To confirm that each individual investor meets the financial
requirements established for this offering, please answer the questions
set forth below, as appropriate.
1. Please indicate your net worth (including spouse, if applicable),
including home, home furnishings and automobiles:
$ 75,000 - 150,000 [_] $150,000 - 250,000 [_]
$250,000 - 500,000 [_] $500,000 - 1,000,000 [_]
Greater than $1,000,000 [_]
2. Did you have income (exclusive of any income attributable to your
spouse) in excess of $200,000 for 1995 and 1996 and do you
reasonably expect to have income in excess of $200,000 in 1997?
Yes [_] No [_]
3. Did you and your spouse have joint income in excess of $300,000 for
1995 and 1996 and do you reasonably expect to have joint income in
excess of $300,000 in 1997?
Yes [_] No [_]
B-2
4. Trusts and Other Entities as Purchasers
(a) Certain trusts generally may not qualify as accredited investors
except under special circumstances. Therefore, if you intend to
acquire the common stock of QuadraMed in whole or in part
through a trust, please answer each of the following questions.
(1) Is the trustee of the trust a national or state bank that is
acting in its fiduciary capacity in making the investment on
behalf of the trust?
Yes [_] No [_]
(2) Can the trust be amended or revoked at any time by its
grantors:
Yes [_] No [_]
(b) If the answer to Question 4(a)(1) above is yes, please answer
the following questions relating to each grantor:
(1) Grantor (A) Net worth of grantor (including
spouse, if applicable), including
home, home furnishings and
automobiles:
___________________ $ 75,000 - 150,000 [_]
(Name)
$150,000 - 250,000 [_]
$250,000 - 500,000 [_]
$500,000 - 1,000,000 [_]
greater than $1,000,000 [_]
(B) Income (exclusive of any income
attributable to spouse) was in
excess of $200,000 for 1995 and
1996 and is reasonably expected to
be in excess of $200,000 for 1997?
Yes [_] No [_]
(C) Income (including income xxxxx
butable to spouse) was in excess of
$300,000 for 1995 and 1996 and is
reasonably expected to be in excess
of $300,000 for 1997?
Yes [_] No [_]
B-3
(2) Grantor (A) Net worth of grantor (including
spouse, if applicable), including
home, home furnishings and
automobiles:
_________________ $ 75,000 - 150,000 [_]
(Name)
$150,000 - 250,000 [_]
$250,000 - 500,000 [_]
$500,000 - 1,000,000 [_]
greater than $1,000,000 [_]
(B) Income (exclusive of any income
attributable to spouse) was in
excess of $200,000 for 1995 and
1996 and is reasonably expected to
be in excess of $200,000 for 1997?
Yes [_] No [_]
(C) Income (including income xxxxx-
butable to spouse) was in excess of
$300,000 for 1995 and 1996 and is
reasonably expected to be in excess
of $300,000 for 1997?
Yes [_] No [_]
(c) If the purchaser is a pension plan or benefit plan, does such
plan have assets greater than $5 million?
Yes [_] No [_]
(d) Was the purchaser organized for the specific purpose of
acquiring common stock of Genesys?
Yes [_] No [_]
(e) If the purchaser is a general partnership or corporation, please
list on a separate page the partners or shareholders and
approximate net worth (including spouse, if applicable) of each
such partner or shareholder, including home, home furnishings
and automobiles.
B-4
III. INVESTMENT EXPERIENCE REPRESENTATIONS
A. Indicate how often you invest in:
1. Marketable Securities/1/
Often [_] Occasionally [_] Seldom [_] Never [_]
2. Restricted Securities/2/
Often [_] Occasionally [_] Seldom [_] Never [_]
3. Venture Capital Limited Partnership Funds
Often [_] Occasionally [_] Seldom [_] Never [_]
----------------------
/1/ The term "Marketable Securities" shall mean securities (e.g. stocks, bonds,
debentures) for which a public trading market exists (e.g. New York Stock
Exchange, American Stock Exchange or quoted for trading on The Nasdaq National
Market).
/2/ The term "Restricted Securities" shall mean securities (e.g. real estate,
limited partnership units) for which no public trading market exists or which
are subject to restrictions on trading even if a public trading market does
exist.
B-5
4 Please list below your most recent private investments (attach a
separate sheet if necessary):
Private When Amount of
Offering Type of Investment Purchased Investment
-------- ---------------------------- --------- ----------
$
-------- ---------------------------- --------- ----------
$
-------- ---------------------------- --------- ----------
$
-------- ---------------------------- --------- ----------
$
-------- ---------------------------- --------- ----------
B. Please answer each of the following questions regarding your
investment experience:
1. Do you have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of an investment in Genesys?
Yes [_] No [_]
2. Do you, either alone by reason of your business or financial
experience or together with your professional advisor or
advisors, have the capacity to protect your own interests in
connection with an acquisition of the common stock of Genesys?
Yes [_] No [_]
3. Are you (or the trust beneficiary for which you are the
fiduciary) able to bear the economic risk of the investment,
including a complete loss of the investment?
Yes [_] No [_]
B-6
I confirm that the foregoing statements are complete and accurate to the
best of my knowledge and belief, and that I undertake to notify Genesys
regarding any material change in the information set forth above prior to the
closing of the exchange by me of any securities of Genesys.
_______________________________________
Print Name of Purchaser
By: ___________________________________ ____________________
Signature Date
_______________________________________
Print Title
_______________________________________
Print Name of Joint Purchaser or other
person whose signature is required
By: ___________________________________ ____________________
Signature Date
_______________________________________
Print Title (if applicable)
B-7
EXHIBIT G
[INVESTMENT REPRESENTATION LETTER]
Genesys Telecommunications Laboratories, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
Re: Acquisition of Forte Advanced Management Software, Inc. by
Genesys Telecommunications Laboratories, Inc.
----------------------------------------------------------
Dear Sirs:
Genesys Telecommunications Laboratories, Inc. ("Genesys") and Forte
Advanced Management Software, Inc. ("Forte") have entered into an Agreement and
Plan of Reorganization, dated as of December 31, 1997 (the "Agreement of
Reorganization"), pursuant to which Genesys is proposing to acquire all the
outstanding capital stock of Forte. Pursuant to the Agreement of
Reorganization, the holders of the outstanding capital stock of Forte shall be
entitled to receive shares of Genesys Common Stock (the "Genesys Shares"). In
order for the issuance of Genesys Shares to be exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to the private placement exemption provided by Section 4(2) thereunder,
I, the undersigned, a stockholder of Forte, hereby represent and warrant to
Genesys as follows:
1. I have carefully read the definition of "Accredited Investor"
from Rule 501 of Regulation D (set forth on Exhibit A attached hereto) and have
determined that I am__/am not__ [CHECK ONE] an "accredited investor" within the
meaning of Rule 501(a) of the Securities Act.
2. I am aware that the Genesys Shares have not been registered under
the Securities Act or any applicable state securities laws, and agree that the
Genesys Shares will not be offered or sold in the absence of registration under
the Securities Act and any applicable state securities laws or an exemption from
the registration requirements of the Securities Act and any applicable state
securities laws. I will not transfer the Genesys Shares in violation of the
provisions of any applicable federal or state securities laws.
3. I understand that the offering and sale of the Genesys Shares is
exempt from registration under the Securities Act, by virtue of Section 4(2) of
the Securities Act based, in part, upon the representation, warranties and
agreements contained in the Agreement of Reorganization and Genesys may rely on
such representations, warranties and agreements in connection therewith.
4. I am acquiring the Genesys Shares for my own account and for
investment, and not with a view to the distribution thereof or with any present
intention of distributing or selling any of the Shares except in compliance with
the Securities Act. I represent that by reason of my business and financial
experience, and the business and financial experience of those persons, if any,
retained by me to advise me with respect to my investment in the Shares, I,
together with such advisors, have knowledge, sophistication and experience in
business and financial matters as to be capable of evaluating the merits and
risk of the prospective investment. My financial condition and investments are
such that I am in a financial position to hold the Shares for an indefinite
period of time and to bear the economic risk of, and withstand a complete loss
of, my investment in the Shares.
5. I have carefully examined all documents, reports and other
filings made by Genesys with the Securities and Exchange Commission (the
"Genesys SEC Filings"). I acknowledge that Genesys and Forte have made
available to me all documents and information that I have requested relating to
Genesys and have provided answers to all of my questions concerning Genesys and
the Genesys Shares. In evaluating the suitability of the acquisition of the
Genesys Shares hereunder, I have not relied upon any representations or other
information (whether oral or written) other than as set forth in the Genesys SEC
Filings or as contained in the Agreement of Reorganization.
The foregoing representations are true and accurate as of the date
hereof and shall be true and accurate as of the effective date of the proposed
transaction.
Dated:
------------------------------------------------
Print Name of Stockholder:
------------------------------------------------
Authorized Signature:
------------------------------------------------
Print Title (if applicable):
------------------------------------------------
Print name of any
or other person whose
signature is required:
------------------------------------------------
Signature:
------------------------------------------------
Title (if applicable):
------------------------------------------------
EXHIBIT A
---------
Rule 501. Definitions and Terms Used in Regulation D.
------------------------------------------
As used in Regulation D, the following terms have the meaning indicated:
(a) Accredited Investor. "Accredited investor" shall mean any person who
-------------------
comes within any of the following categories, or who the issuer reasonably
believes comes within any of the following categories, at the time of the sale
of the securities to that person:
(1) Any bank as defined in section 3(a)(2) of the Act or any savings
and loan association or other institution as defined in Section
3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; any broker dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934; insurance
company as defined in Section 2(13) of the Act; investment company
registered under the Investment Company Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act;
Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958; employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974, if the investment decision is made by a plan fiduciary,
as defined in Section 3(21) of such Act, which is either a bank,
savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total
assets in excess of $5,000,000; or, if a self-directed plan, with
investment decisions made solely by persons that are accredited
investors;
(2) Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) Any organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, with total assets in excess of
$5,000,000;
(4) Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of that
issuer;
(5) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(6) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level
in the current year;
(7) Any trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person as described
in Rule 506(b)(2)(ii); and
(8) Any entity in which all of the equity owners are accredited
investors.
[If Investor is relying on this item, each equity owner must
complete and submit a separate copy of this Investor
Questionnaire]
[Remainder of Rule 501 omitted]
EXHIBIT H
FORM OF AFFILIATE AGREEMENT
December 31, 1997
Genesys Telecommunications Laboratories, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Esq.
Affiliate Agreement
-------------------
Ladies and Gentlemen:
Reference is made to the Agreement of Merger and Reorganization, dated
as of December 31, 1997 (the "Agreement of Reorganization") by and among Genesys
Telecommunications Laboratories, Inc., a California corporation ("Genesys"),
Genesys-F Sub, Inc. a California corporation and wholly-owned subsidiary of
Genesys, and Forte Advanced Management Software, Inc., a California corporation
("Forte"), and the Shareholders of Seller. Capitalized terms used and not
otherwise defined herein are used herein as defined in the Agreement of
Reorganization.
Pursuant to the terms of the Agreement of Reorganization, at the
Effective Time, outstanding shares of Forte Common Stock will be converted into
and become exchangeable for shares of Genesys Common Stock on the basis set
forth in the Agreement of Reorganization.
The undersigned has been advised that as of the date hereof he/she may
be deemed to be an "affiliate" of Forte, as such term is defined for purposes of
paragraph (a)(1) of Rule 144 ("Rule 144") of the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act").
The undersigned understands that the representations, warranties and
covenants set forth herein will be relied upon by Genesys.
The undersigned hereby represents and warrants to and agrees with
Genesys that:
1. The undersigned has full power and authority to execute and
deliver this letter agreement and to make the representations and
warranties set forth herein and to perform his/her obligations hereunder;
2. The undersigned has carefully read this letter agreement and
the
1
Agreement of Reorganization and, to the extent the undersigned felt
necessary, discussed the requirements of such documents and other
applicable limitations upon his/her ability to sell, transfer, pledge or
otherwise dispose of Genesys Common Stock with his/her counsel or counsel
for Forte;
3. The undersigned is the beneficial owner of (has sole or
shared voting or investment power with respect to) the shares of Forte
Common Stock and options to purchase Forte Common Stock specified beneath
his/her name on the signature page hereto (the "Forte Securities"), and has
not, within the thirty (30) day period prior to the date of this letter,
sold, conveyed or otherwise transferred any other shares of Forte Common
Stock or options, warrants or other rights to purchase Forte Common Stock,
or any interest therein. Except for Forte Securities, the undersigned does
not own beneficially any shares of Forte Common Stock or any other equity
securities of Forte or any options, warrants or other rights to acquire any
equity securities of Forte;
4. The undersigned will not make any sale, transfer, pledge or
other disposition of Genesys Common Stock in violation of the Securities
Act or the Rules and Regulations;
5. The undersigned has been advised that Genesys has agreed to
use its best efforts to register twenty-five percent (25%) of the Genesys
Common Stock to be issued to the undersigned in connection with the Merger
with the Commission under the Securities Act on a Registration Statement on
Form S-1. However, the undersigned has also been advised that, since at
the time the Merger was or will be submitted for a vote of the stockholders
of Forte the undersigned may be deemed to be or have been an affiliate of
Forte and the distribution by the undersigned of any Genesys Common Stock
has not been registered under the Securities Act, the undersigned may not
sell, transfer, pledge or otherwise dispose of Genesys Common Stock issued
to him/her in the Merger unless (i) such sale, transfer, pledge or other
disposition has been registered under the Securities Act, (ii) such sale,
transfer, pledge or other disposition is made in conformity with the volume
and other limitations of Rule 144 or (iii) in the opinion of counsel
reasonably acceptable to him/her, such sale, transfer, pledge or other
disposition is otherwise exempt from registration under the Securities Act;
6. The undersigned understands that, except as provided in the
Agreement of Reorganization, Genesys is under no obligation to register the
sale, transfer, pledge or other disposition of Genesys Common Stock by the
undersigned or on his/her behalf under the Securities Act or to take any
other action necessary in order to make compliance with an exemption from
such registration available;
7. The undersigned also understands that stop transfer
instructions will be given to Genesys's transfer agents with respect to
Genesys Common Stock issued to him/her and that there will be placed on the
certificates for Genesys Common Stock
2
issued to him/her, or any substitutions therefor, a legend stating in
substance:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, AND NO REGISTRATION OF TRANSFER
OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE ISSUER, UNLESS
SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSAL IS MADE IN CONNECTION WITH AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS OR IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT, THE RULES AND REGULATIONS IN EFFECT
THEREUNDER AND ANY APPLICABLE STATE SECURITIES LAWS";
8. The undersigned also understands that, unless the sale,
transfer, pledge or other disposition by him/her of Genesys Common Stock
issued to him/her has been registered under the Securities Act or is a sale
made in conformity with the provisions of Rule 144, Genesys reserves the
right to put the legend set forth in paragraph 7 above on the certificates
issued to any transferee of the undersigned.
9. Except to the extent written notification to the contrary is
received by Genesys from the undersigned prior to the Merger, the
representations contained herein will be true, complete and correct at all
times from the date hereof through the Effective Time; and
10. Notwithstanding the foregoing, the undersigned agrees that
he/she will not, without the prior written consent of Genesys, sell, offer
to sell, solicit and offer to buy, contract to sell, grant any option to
purchase, or otherwise transfer or dispose of any shares of Genesys Common
Stock, or any securities convertible into or exercisable or exchangeable
for shares of Genesys Common Stock, for a period from the Effective Time of
the Agreement of Reorganization through and including the second business
day following the release by Genesys of its financial results for the third
quarter ending March 31, 1998. The undersigned agrees that the provisions
of this Section 10 shall be binding also upon the successors, assigns,
heirs and personal representatives of the undersigned.
3
Execution of this letter should not be considered an admission on the
part of the undersigned that he/she is an affiliate of Forte as described above,
or as a waiver of any rights the undersigned may have to object to any claim
that he/she is such an affiliate on or after the date of this letter.
Very truly yours,
--------------------------------------------
[AFFILIATE]
[AFFILIATE]
By:
-----------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Number of shares of Forte Common Stock beneficially owned:___________________
Number of shares of Forte Common Stock subject to options to acquire Forte
Common Stock beneficially owned: ______________________________
ACCEPTED AND AGREED
as of December __, 1997:
GENESYS TELECOMMUNICATIONS LABORATORIES, INC.
By:
------------------------------
Name:
Title:
4
EXHIBIT I
EXECUTIVE NON-COMPETITION AND NON-INTERFERENCE AGREEMENT
--------------------------------------------------------
This Executive Non-Competition and Non-Interference Agreement (this
"Agreement") is entered into as of December 31, 1997 by and among Genesys
----------
Telecommunications Laboratories, Inc., a California corporation ("Genesys"),
-------
Genesys-F Sub, Inc., a California corporation, and a wholly-owned subsidiary of
Genesys ("Merger Sub") and Forte Advanced Management Software, Inc., a
----------
California corporation ("Forte") and Xxxxxxx Dazler Xxxxx ("Executive").
----- ---------
WHEREAS, pursuant to that certain Agreement and Plan of
Reorganization, dated as of December 31, 1997, by and among Genesys, Merger Sub,
Forte and the Shareholders of Seller (the "Agreement of Reorganization"), Merger
---------------------------
Sub will be merged with and into Forte (the "Merger") and each share of Forte
------
Common Stock will be cancelled and converted into a right to receive shares of
Common Stock of Genesys ("Genesys Shares"), all on the terms and conditions set
--------------
forth in the Agreement of Reorganization.
WHEREAS, Executive, as a senior executive of Forte, has heretofore
engaged in the business of computer telephony integration applications or e-
mail.
WHEREAS, Genesys, Forte and Merger Sub desire to assure themselves
that Executive will not compete with Genesys and Merger Sub for the period set
forth in this Agreement in a business which is the same as, substantially
similar to, or in competition with, Genesys', Forte's and Merger Sub's business
in all of the states and territories of the United States.
WHEREAS, this Agreement is a material inducement to Genesys and Merger
Sub to enter into the Agreement of Reorganization, and Executive is agreeable to
entering into this Agreement with Genesys, Forte and Merger Sub on the terms
herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each signatory hereto, it is agreed as
follows:
SECTION 1. Subject to the terms and conditions hereof, Executive
covenants and agrees that, for the Restricted Period (as defined below),
Executive shall not, either directly or indirectly, through an affiliated or
controlled entity or person, on his own behalf or as a partner, consultant,
proprietor, principal, agent, creditor, security holder, trustee or otherwise
(except by ownership of five percent (5%) or less of the outstanding stock of
any publicly held corporation) or in any other capacity, own, manage, operate,
finance, control, invest, participate or engage in, lend his name to, lend
credit to, render services or advice to, or devote any material endeavor or
effort to, an entity engaged in a business which is the same as, substantially
similar to, or in competition with, Genesys's, Forte's and Merger Sub's business
of computer telephony integration applications or e-mail (the "Restricted
----------
Business") in all of the states and territories of the United States (the
--------
"Restricted Territory"). The term
---------------------
"Restricted Period" shall mean the period commencing on the date of this
Agreement and continuing until the later of (i) three (3) years following the
date of this Agreement and (ii) eighteen (18) months following the date on which
Executive is no longer employed by Genesys or any of its subsidiaries; provided,
--------
however, that such period shall not in any event extend beyond five (5) years
-------
following the date of this Agreement.
SECTION 2. Executive acknowledges that Executive has knowledge of
information of substantial value regarding the Restricted Business, which is not
generally known and which gives Forte, Genesys and Merger Sub an advantage over
competitors who do not know it, including, without limitation, computer
programs, names and expertise of employees and consultants, know-how, trade
secrets, formulae, processes, ideas, inventions and other sales, business,
financial, customer and product developments, plans, lists, forecasts,
strategies and information of Forte, Genesys and Merger Sub (the "Confidential
------------
Information"). The term "Confidential Information" shall not include
-----------
information which is (i) generally or readily obtainable by the public or the
trade, (ii) publicly known or becomes known, through no fault or activity of
Executive, (iii) independently developed by Executive without use, directly or
indirectly, of the Confidential Information or (iv) required to be disclosed by
Executive or any relative or affiliate pursuant to deposition, interrogatory,
request for documents, order, subpoena, civil investigative demand or similar
legal compulsion; provided, however, that prompt written notice of such
-------- -------
requirement shall be provided to Genesys so that it may seek a protective order
or other appropriate remedy and/or may waive compliance with this Section 2; and
provided, further, that if such protective order or other remedy is not
-------- -------
obtained, and whether or not such waiver is given, only such portion of the
Confidential Information which the person subject to such legal compulsion is
advised in writing by its counsel is legally required to be disclosed shall be
disclosed and reasonable effort shall be made to obtain assurances that
confidential treatment will be accorded such Confidential Information. Executive
hereby expressly acknowledges and agrees that the Confidential Information
constitutes confidential and valuable trade secret business information of
Forte, Genesys and Merger Sub. Executive agrees, at all times during the
Restricted Period, to regard and preserve as confidential such Confidential
Information, and, subject to the provisions hereof, to refrain from publishing
or disclosing any part of it or from using, copying or duplicating it in any way
or by any means or for any purposes other than those expressly set forth in the
Agreement of Reorganization. Subject to the provisions hereof, Executive
further agrees, at all times during the Restricted Period, that such
Confidential Information will not be disclosed by Executive to any person or
entity without the prior written consent of Genesys, which may be withheld in
its sole discretion. Executive acknowledges that the disclosure or use or any
Confidential Information in violation of this Agreement could gravely affect the
effective and successful conduct of the Restricted Business of Forte, Genesys
and Merger Sub and the value of the goodwill of Forte acquired pursuant to the
Agreement of Reorganization, and that breach of the terms of this Section 2 is a
material breach of the terms of this Agreement.
SECTION 3. During the Restricted Period, Executive shall not, whether
for Executive's own account or for the account of any other individual,
partnership, firm,
2
corporation or other business organization, divert or attempt to divert,
directly or indirectly, or otherwise interfere in a material fashion with any
orders for the products or services of the Restricted Business, or any customers
or contractors of the Restricted Business or induce or attempt directly or
indirectly, any person to terminate his or her employment or other business
association with the Restricted Business.
SECTION 4. Executive shall refrain from making disparaging or
derogatory comments or references regarding the business, practices, competence
and/or services of the Restricted Business.
SECTION 5. The covenants contained herein shall be construed as if
each covenant is divided into separate and distinct covenants in respect of the
Restricted Business, each capacity in which Executive is prohibited from
competing and each part of the Restricted Territory in which Forte, Genesys and
Merger Sub are carrying on the Restricted Business. Each such covenant shall
constitute separate and several covenants distinct from all other such
covenants.
SECTION 6. Each of the parties hereto recognizes that the territorial
restrictions contained in this Agreement are properly required for the adequate
protection of the Restricted Business and that in the event any covenant or
other provision contained herein shall be deemed to be illegal, unenforceable or
unreasonable by a court or other tribunal of competent jurisdiction with respect
to any part of the Restricted Territory, such covenant or provision shall not be
affected with respect to any other part of the Restricted Territory, and each of
the parties hereto agrees and submits to the reduction of said territorial
restriction to such an area as said court shall deem reasonable.
SECTION 7. Each of the parties acknowledge that (i) the covenants and
the restrictions contained in this Agreement are necessary, fundamental and
required for the protection of the Restricted Business, (ii) such covenants
relate to matters which are of a special, unique and extraordinary character
that gives each of such covenants a special, unique and extraordinary value and
(iii) a breach of any of such covenants or any other provision of this Agreement
will result in irreparable harm and damage to the Restricted Business which
cannot be adequately compensated by a monetary award. Accordingly, it is
expressly agreed that in addition to all other remedies available at law or in
equity (including, without limitation, money damages from Executive), Forte,
Genesys, and Merger Sub shall be entitled to seek the remedy of a temporary
restraining order, preliminary injunction or such other form of injunctive or
equitable relief as may be used by any court of competent jurisdiction to
restrain or enjoin any of the parties hereto from breaching any such covenant or
provision or to specifically enforce the provisions hereof.
SECTION 8. All defined terms utilized in this Agreement shall have
the meanings ascribed to them in the Agreement of Reorganization unless
otherwise indicated.
3
SECTION 9. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered in the fashion and at the
addresses as specified in Section 9.2 of the Agreement of Reorganization or to
such other addresses as any party hereto may specify by notice in writing to the
other.
SECTION 10. This Agreement and any dispute arising under or related
to this Agreement or the transactions contemplated herein shall be governed by
and construed in accordance with California law.
SECTION 11. This Agreement is the valid and legally binding
obligation of the parties hereto, enforceable against each party in accordance
with its terms, and shall inure to the benefit of such parties and their
respective successors and assigns.
SECTION 12. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties by
facsimile transmission or otherwise.
SECTION 13. This Agreement and the Agreement of Reorganization
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior written and oral agreements and
understandings between Forte, Genesys, and/or Merger Sub, on the one hand, and
Executive, on the other hand, with respect to the subject matter of this
Agreement. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
SECTION 14. Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and valid, but if any
provision or term of this Agreement is held to be prohibited by law or invalid
then such provision or term will be ineffective only to the extent of such
prohibition or invalidity without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the remaining provisions
or terms of this Agreement. If any of the covenants set forth in this Agreement
are held to be unreasonable, arbitrary or against public policy, such covenants
will be considered divisible with respect to scope, time and geographic area,
and in such lesser scope, time and geographic area, will be effective, binding
and enforceable against Executive.
SECTION 15. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power or privilege under this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law,
(i) no
4
claim or right arising out of this Agreement can be discharged by one party, in
whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party, (ii) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given and
(iii) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement.
SECTION 16. Each party hereto acknowledges that it has either been
represented by independent legal counsel or that it has waived its right to
obtain advice of legal counsel in connection with the transactions contemplated
by the Agreement of Reorganization.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
5
IN WITNESS WHEREOF, the parties have duly executed this Non-Competition and
Non-Interference Agreement as of the date first written above.
FORTE ADVANCED MANAGEMENT
SOFTWARE, INC.
By:
--------------------------------------------
Xxxxxxx Dazler Xxxxx
President
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
By:
--------------------------------------------
Xxxxxxx X. XxXxxxxxx
Vice President, Finance and International,
Chief Financial Officer, Chief Operating
Officer and Secretary
GENESYS-F SUB, INC.
By:
--------------------------------------------
Xxxxxxx X. XxXxxxxxx
President
EXECUTIVE
-----------------------------------------------
Print name:
6
Exhibit J
EMPLOYEE NON-COMPETITION AND NON-INTERFERENCE AGREEMENT
-------------------------------------------------------
This Employee Non-Competition and Non-Interference Agreement (this
"Agreement") is entered into as of December 31, 1997 by and among Genesys
----------
Telecommunications Laboratories, Inc., a California corporation ("Genesys"),
-------
Genesys-F Sub, Inc., a California corporation, and a wholly-owned subsidiary of
Genesys ("Merger Sub") and Forte Advanced Management Software, Inc., a
----------
California corporation ("Forte") and _____________ ("Employee").
----- --------
WHEREAS, pursuant to that certain Agreement and Plan of Reorganization,
dated as of December 31, 1997, by and among Genesys, Merger Sub, Forte and the
Shareholders of Seller (the "Agreement of Reorganization"), Merger Sub will be
---------------------------
merged with and into Forte (the "Merger") and each share of Forte Common Stock
------
will be cancelled and converted into a right to receive shares of Common Stock
of Genesys ("Genesys Shares"), all on the terms and conditions set forth in the
--------------
Agreement of Reorganization.
WHEREAS, Employee, as a senior executive of Forte, has heretofore engaged
in the business of computer telephony integration applications or e-mail.
WHEREAS, Genesys, Forte and Merger Sub desire to assure themselves that
Employee will not compete with Genesys and Merger Sub for the period set forth
in this Agreement in a business which is the same as, substantially similar to,
or in competition with, Genesys', Forte's and Merger Sub's business in all of
the states and territories of the United States.
WHEREAS, this Agreement is a material inducement to Genesys and Merger Sub
to enter into the Agreement of Reorganization, and Employee is agreeable to
entering into this Agreement with Genesys, Forte and Merger Sub on the terms
herein set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged by each signatory hereto, it is agreed as follows:
SECTION 1. Subject to the terms and conditions hereof, Employee covenants
and agrees that, for the Restricted Period (as defined below), Employee shall
not, either directly or indirectly, through an affiliated or controlled entity
or person, on his own behalf or as a partner, consultant, proprietor, principal,
agent, creditor, security holder, trustee or otherwise (except by ownership of
five percent (5%) or less of the outstanding stock of any publicly held
corporation) or in any other capacity, own, manage, operate, finance, control,
invest, participate or engage in, lend his name to, lend credit to, render
services or advice to, or devote any material endeavor or effort to, an entity
engaged in a business which is the same as, substantially similar to, or in
competition with, Genesys's, Forte's and Merger Sub's business of computer
telephony integration applications or e-mail (the "Restricted Business")
-------------------
in all of the states and territories of the United States (the "Restricted
----------
Territory"). The term "Restricted Period" shall mean the period commencing on
---------
the date of this Agreement and continuing until twelve (12) months following the
date on which Employee is no longer employed by Genesys or any of its
subsidiaries; provided, however, that such period shall not in any event extend
-------- -------
beyond five (5) years following the date of this Agreement.
SECTION 2. Employee acknowledges that Employee has knowledge of
information of substantial value regarding the Restricted Business, which is not
generally known and which gives Forte, Genesys and Merger Sub an advantage over
competitors who do not know it, including, without limitation, computer
programs, names and expertise of employees and consultants, know-how, trade
secrets, formulae, processes, ideas, inventions and other sales, business,
financial, customer and product developments, plans, lists, forecasts,
strategies and information of Forte, Genesys and Merger Sub (the "Confidential
------------
Information"). The term "Confidential Information" shall not include
-----------
information which is (i) generally or readily obtainable by the public or the
trade, (ii) publicly known or becomes known, through no fault or activity of
Employee, (iii) independently developed by Employee without use, directly or
indirectly, of the Confidential Information or (iv) required to be disclosed by
Employee or any relative or affiliate pursuant to deposition, interrogatory,
request for documents, order, subpoena, civil investigative demand or similar
legal compulsion; provided, however, that prompt written notice of such
-------- -------
requirement shall be provided to Genesys so that it may seek a protective order
or other appropriate remedy and/or may waive compliance with this Section 2; and
provided, further, that if such protective order or other remedy is not
-------- -------
obtained, and whether or not such waiver is given, only such portion of the
Confidential Information which the person subject to such legal compulsion is
advised in writing by its counsel is legally required to be disclosed shall be
disclosed and reasonable effort shall be made to obtain assurances that
confidential treatment will be accorded such Confidential Information. Employee
hereby expressly acknowledges and agrees that the Confidential Information
constitutes confidential and valuable trade secret business information of
Forte, Genesys and Merger Sub. Employee agrees, at all times during the
Restricted Period, to regard and preserve as confidential such Confidential
Information, and, subject to the provisions hereof, to refrain from publishing
or disclosing any part of it or from using, copying or duplicating it in any way
or by any means or for any purposes other than those expressly set forth in the
Agreement of Reorganization. Subject to the provisions hereof, Employee further
agrees, at all times during the Restricted Period, that such Confidential
Information will not be disclosed by Employee to any person or entity without
the prior written consent of Genesys, which may be withheld in its sole
discretion. Employee acknowledges that the disclosure or use or any
Confidential Information in violation of this Agreement could gravely affect the
effective and successful conduct of the Restricted Business of Forte, Genesys
and Merger Sub and the value of the goodwill of Forte acquired pursuant to the
Agreement of Reorganization, and that breach of the terms of this Section 2 is a
material breach of the terms of this Agreement.
SECTION 3. During the Restricted Period, Employee shall not, whether for
Employee's own account or for the account of any other individual, partnership,
firm,
corporation or other business organization, divert or attempt to divert,
directly or indirectly, or otherwise interfere in a material fashion with any
orders for the products or services of the Restricted Business, or any customers
or contractors of the Restricted Business or induce or attempt directly or
indirectly, any person to terminate his or her employment or other business
association with the Restricted Business.
SECTION 4. Employee shall refrain from making disparaging or derogatory
comments or references regarding the business, practices, competence and/or
services of the Restricted Business.
SECTION 5. The covenants contained herein shall be construed as if each
covenant is divided into separate and distinct covenants in respect of the
Restricted Business, each capacity in which Employee is prohibited from
competing and each part of the Restricted Territory in which Forte, Genesys and
Merger Sub are carrying on the Restricted Business. Each such covenant shall
constitute separate and several covenants distinct from all other such
covenants.
SECTION 6. Each of the parties hereto recognizes that the territorial
restrictions contained in this Agreement are properly required for the adequate
protection of the Restricted Business and that in the event any covenant or
other provision contained herein shall be deemed to be illegal, unenforceable or
unreasonable by a court or other tribunal of competent jurisdiction with respect
to any part of the Restricted Territory, such covenant or provision shall not be
affected with respect to any other part of the Restricted Territory, and each of
the parties hereto agrees and submits to the reduction of said territorial
restriction to such an area as said court shall deem reasonable.
SECTION 7. Each of the parties acknowledge that (i) the covenants and the
restrictions contained in this Agreement are necessary, fundamental and required
for the protection of the Restricted Business, (ii) such covenants relate to
matters which are of a special, unique and extraordinary character that gives
each of such covenants a special, unique and extraordinary value and (iii) a
breach of any of such covenants or any other provision of this Agreement will
result in irreparable harm and damage to the Restricted Business which cannot be
adequately compensated by a monetary award. Accordingly, it is expressly agreed
that in addition to all other remedies available at law or in equity (including,
without limitation, money damages from Employee), Forte, Genesys, and Merger Sub
shall be entitled to seek the remedy of a temporary restraining order,
preliminary injunction or such other form of injunctive or equitable relief as
may be used by any court of competent jurisdiction to restrain or enjoin any of
the parties hereto from breaching any such covenant or provision or to
specifically enforce the provisions hereof.
SECTION 8. All defined terms utilized in this Agreement shall have the
meanings ascribed to them in the Agreement of Reorganization unless otherwise
indicated.
SECTION 9. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered in the fashion and at the
addresses as specified in Section 9.2 of the Agreement of Reorganization or to
such other addresses as any party hereto may specify by notice in writing to the
other.
SECTION 10. This Agreement and any dispute arising under or related to
this Agreement or the transactions contemplated herein shall be governed by and
construed in accordance with California law.
SECTION 11. This Agreement is the valid and legally binding obligation of
the parties hereto, enforceable against each party in accordance with its terms,
and shall inure to the benefit of such parties and their respective successors
and assigns.
SECTION 12. This Agreement may be executed in any number of counterparts
and any party hereto may execute any such counterpart, each of which when
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
This Agreement shall become binding when one or more counterparts taken together
shall have been executed and delivered by the parties by facsimile transmission
or otherwise.
SECTION 13. This Agreement and the Agreement of Reorganization constitute
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersede all prior written and oral agreements and
understandings between Forte, Genesys, and/or Merger Sub, on the one hand, and
Employee, on the other hand, with respect to the subject matter of this
Agreement. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
SECTION 14. Whenever possible each provision and term of this Agreement
will be interpreted in a manner to be effective and valid, but if any provision
or term of this Agreement is held to be prohibited by law or invalid then such
provision or term will be ineffective only to the extent of such prohibition or
invalidity without invalidating or affecting in any manner whatsoever the
remainder of such provision or term or the remaining provisions or terms of this
Agreement. If any of the covenants set forth in this Agreement are held to be
unreasonable, arbitrary or against public policy, such covenants will be
considered divisible with respect to scope, time and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Employee.
SECTION 15. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Agreement will operate as
a waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege. To the maximum extent permitted by applicable law, (i) no
claim or right arising out of this Agreement can be discharged by one party, in
whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party, (ii) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given and
(iii) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement.
SECTION 16. Each party hereto acknowledges that it has either been
represented by independent legal counsel or that it has waived its right to
obtain advice of legal counsel in connection with the transactions contemplated
by the Agreement of Reorganization.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
IN WITNESS WHEREOF, the parties have duly executed this Non-Competition and
Non-Interference Agreement as of the date first written above.
FORTE ADVANCED MANAGEMENT
SOFTWARE, INC.
By: ______________________________________
Xxxxxxx Dazler Xxxxx
President
GENESYS TELECOMMUNICATIONS
LABORATORIES, INC.
By: ______________________________________
Xxxxxxx X. XxXxxxxxx
Vice President, Finance and International, Chief
Financial Officer, Chief Operating Officer and
Secretary
GENESYS-F SUB, INC.
By: ______________________________________
Xxxxxxx X. XxXxxxxxx
President
Employee
___________________________________________
Print name:
